Your Business Buying Team – Get the Best Advisors!

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welcome to headbands and handkerchiefs where business buying banter meets no BS

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reality get ready to dive into the world of buying and selling businesses without the fluff and fancy jargon we cut

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through the BS to bring you raw unfiltered insights from industry experts seasoned entrepreneurs and no

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hold bar discussions they get straight to the point whether you're a seasoned

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

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real talk happens buckle up for headbands and handkerchiefs because in

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business there's no room for sugar pooting let's get down to the Brass

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TXS I love that music I picked it you did maybe we should have something that

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you sing you know I picked it I wanted something that sounded bluesy and rock

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like Aerosmith because that's one of my favorite bands now we just gotta get stepen Tyler back on the road again for

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their farewell tour oh right right right what is he in the rehab or where's he gone a little of both I think so yeah

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hey you know bands are small business right or their big business yeah yes

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they are Taylor Swift tours I think grossed a billion dollars so oh yeah she's doing a lot for the NFL too that's

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for sure oh yeah no doubt that's a business they're like Bring It On in there's an affiliate for us yeah I mean

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I think you know think she's great you know as far as P personality is concerned I couldn't name one of her songs if you put a 100 Grand in front of

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me but you know it only bothers me when during the games like you know what you could in instead of keep cutting to her

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cheering you could show a few more replays like like this let's let's

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remember what we're here for oh yeah I Super Bowl should be interesting I wonder if uh Usher I think he's the

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halftime um wonder if he'll ask Taylor to sing a song or two at halftime right because she's I guess touring in Japan I

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read and then she's flying in for for the the game so yeah I don't know I think he'll I'll think I think he'll be

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happy to keep the stage to himself everything's a business Richard isn't it everything's a business and there's a

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business for every business yes well welcome it's good to see you good to see you my friend I

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missed you last week Thursday but you are back and thank you good to be back had a great trip I think I told you and

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anybody listening should look up regener R of capital group what they're doing in they're up based in Canada what they're doing is unbelievable we talked about it

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briefly they're underwriting five um aspiring business buyers paying them for

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a year um they had 172 applicants chose five people and they're putting them

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through a rigorous training program they flew him to Mexico for this boot camp which was like I mean first class five

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star I mean the way to took care of everybody was unbelievable and the founder of regenerative bought my course

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a number of years ago he and his Partners started Buy bu some small businesses and they built it up to over $200 million in revenue and sold out for

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$100 million and he's taking part of that cuz such a good guy and with this other gentleman Cordell Jack and um

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they're underwriting these five people um to acquire businesses so they're they're they turned them into Marines so they brought me in for the educational

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component leaving aside the insurance and somebody the accountant accounting but it was nine hours of boot camp and they had all read the course beforehand

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and it was it was great sessions these are really really impressive people and it was a terrific back and forth and um

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so the business part was great and had a lot of fun it was they they treated us like royalty it was just incredible I am

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more amazed at the fact Richard that it all started with your course what what were they doing before the course I mean

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yeah one was a small time on um Mike was in the financial business years ago and

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then um decided was became a little more entrepreneurial uh preneurial the fellow he brought in Iggy domagalski brought

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him as a young fellow um basically did in a different way what he's doing now which brought him and say let's look to

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acquire business they bought a small company I think one of the first ones they bought I think was doing like 600 Grand in revenue and um brought in and

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run the business then they bought some other um similar ones um that they Amalgamated um not all of them into the

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fold but a number of them I'll have uh Iggy's actually commentary at a long video session with them testimonial go

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on our website um but they started just you know putting these pieces of businesses together obviously very good

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operators and it's great because you know with with everything still says you know when he talks about he says your

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course how to buy a good business a great price is the Bible it's our Bible it's Timeless he still uses the same

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seller question still uses um you know the negotiating pieces I mean there's just a huge component he says that

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that's their Bible when they're still buying businesses so it's I mean it's it's unbelievably gratifying I played

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just a little little role these guys you know obviously but it's it's really gratifying to see what you know you put

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down words in a program and and look what it leads to for these these guys and you can find nicer people so the

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whole story is is terrific I love it and what a great segue for today's episode I

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mean team putting together a team for your business byy side and you were part of that team right out of the GetGo for

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them and you're still their team all these years later um on the buyer side

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right Richard you on the buy side on the buy side

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which for me my biggest frustration and for those of you listening who are

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aspiring business buyers thinking about going on this journey you're going to be a Searcher and we'll talk about search

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fund.com a little bit start forming your team before you start searching that's

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what I got to say would you agree yeah and you know it's it's so crazy to me because I do some cell-side

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representation very often when I meet you know a respective client or they become you know an engaged client and we

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go through who their attorney and who their accountant is and often times you know they say yeah we have an attorney and they're I've mentioned this before

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you know it's their their brother and sister-in-law the patent attorney and say that won't work we need an m&a attorney and they're always yeah we I I

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get it you know that makes perfect sense and we make sure the accounting the accountant sometimes they're working with a smaller account and it's not the

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right firm for a transaction and we say we engage a bigger firm and they're always amenable I never ever ever get

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push back on the sell side it comes to buy side it's like people's brains drop out of their head when they're thinking

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about this I don't know why they think that they could either do it on their own um or they don't put enough value

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into their team as far as an accountant attorney AI you know a such as yourself

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um and you know or an advisor mentor on the buy side I just it just blows my mind that there's not the same um level

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of understanding on the buy side that the sell side understands people jump

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well you know and a lot of that plays into the fact that you know 94% of the people who begin the search to buy a business never buy one you know I always

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over 90% but it's actually 94% is the exact number and they just don't put their team together and yes 100% you got

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to do this at the beginning doesn't mean you have to hire them pay them engage them retain them on the but you have to

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at least know who they are right rolling in the conversation going and that includes you know someone such as

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yourself who said the legal and financial piece and buyer advisory side

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yeah there's a lot of confusion out there as well on the buy side it has

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been for years the difference between a small business transaction versus a

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middle Market transaction I've seen buyers come to the table with Middle

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Market corporate attorneys that represent the large transactions and they charge a lot of money for for their

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work and they're and they're engage they're engaged by a small business buyer it's like wait a minute and then

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then the total opposite I've seen buyers just use a a legal template that um the

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seller side provided maybe the seller broker said just use this they found it online yeah I mean you you get from one

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Spectrum to the other I don't think there's any in between out there and somehow Richard we have got to change

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this market and shake it up a bit because quite frankly I'm tired of

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buyers coming to these transactions completely unprepared and not knowing

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where to go and the sellers side I could say the same too in the small business Spectrum so um where should we start I

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mean if I if what I mean as your course teaches like the uh investment firm that

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you just flew out and and and uh did a presentation for them what is the first

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thing that your course is telling people to do well if we you know if we're going to Le you know keep the subject matter

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consistent with the buying team you know one of the points you mentioned if any if you're going to air on the if you're

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going to be um you're better off to air on the side of having too many brains at the table then not enough so if you're

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look if someone happens to hire a firm that's a little out of the league per se related to the size of the transaction

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so a big Law Firm relative to a small acquisition well that's certainly much better than a small firm for a big any

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for the wrong size acquisition so always air on the side of brains is what I tell people you can never have enough brain

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power at the table on your side whether you're a buyer or a seller that for your accountant your attorney an advisor such

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as yourself um so where they should start is if they don't understand they're no going to

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need an attorney they're going to need an accountant the rule of thumb related to attorneys you don't sign send or

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submit any legal documents without it having to um be uh reviewed by an attorney and so get them on board you

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can have the discussions without retaining them tell me you're you're looking to buy a business um here's 's the size you you work on deals that size

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perhaps they don't maybe it's another firm that they'll recommend but get them teed up you don't necessarily have to engage them and pay them a retainer but

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get them teed up and ready and the same thing with the accountant make sure you know ideally you want an attorney who's

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done work in the sector that you're looking to acquire potentially especially if it's specialized if

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there's you know I um IP or environmental issues but making sure it's the right attorney and again you

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don't have to give the money and have a retainer if you're just at the beginning of the search similarly with an

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accounting firm to make sure that they're and understand their schedule within an accounting firm because it come when it comes to certain tax

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periods or end of quarters accountants are are beyond belief busy every accounting firm so if all of a sudden

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you're going to turn to them to due diligence you know at the you know in September 15th when they have to submit

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all the um Extended filings for corporate returns they're not going to have any time for you so make sure you understand what their schedule is going

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to be like and the same thing are they you know are they familiar this type of business get their cost you can meet

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with several few see who you're most comfortable with but get them teed up and as it relates to the financing side

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with someone such as yourself you know just give you you know um sound like a good down and dirty plug for Deb Curtis

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but the reality is you know you don't wait until you have a deal to figure out where the hell you're getting the money

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and so getting someone on board such as yourself that you do immediately yeah

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because the financing is going to take time it's not like a phone call to an attorney and say we're ready to go send

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me the send me the engagement agreement you've got to do you got them to pre-qualify you've got to let them know

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the criteria so that piece of the equation for advisors is immediate and then the knowledgeable piece whether

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it's related knowledge related to buying um you know on the advisory side um you know I've been teaching and preaching

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people you know before you get going get informed be knowledgeable yeah you know I had one you mentioned search fund I

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saw a post the other day someone was talking about an Loi and the response was something like you know just you know put in whatever you want it's

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non-binding and that's complete full of because an Loi can can be binding it depend what's in there and um you

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know maybe after we we cover this point we could talk a little bit more about the search funder type of websites of

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the world but yeah you got to get that you got to get your people in place immediately doesn't mean you have to

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start spending money but from the getg go that's your team you want them in place that's right um I'd like to add

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that regarding talking with attorneys and before engaging them I've seen some

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buyers come to me for find in and they already engaged the attorney and put

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down a deposit Y and then and then they show me the listing and we don't have anything we don't it's not a qualified

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business that will pass Bank financing and you already put money down on an

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attorney which I get it I get it but check first where the like you said

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earlier where's the capital coming from how do you know where it's coming from and not all banks are created equal

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right yeah they're not all created equal and some deals can't go a lot of them can't

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go Bank financing so how are you going to go about doing there there are other avenues but understand you don't wait

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till the 11th hour to figure out the financing and that's what becomes so problematic with some of these buyers is

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people have this you know either um either their complete lack of knowledge or delusion that the banks are just

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going to open up the vaults and write them checks to to make this acquisition and you see it especially on the ites

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like a search fun where you have these are unfunded Searchers I mean they give them the name Searcher I mean let's

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let's call it what it is they're a business buyer I mean they're you know gave themselves a fancy name which is which is which is fine but you know if

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you have you've never bought a business you have no knowledge you have no track record you have no expertise you have no

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experience who's financing you okay and then you get onto some of these forums where you have all these people with no

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knowledge no expertise no experience no track record no nothing and they're dispensing receiving and submitting and

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accepting advice from the same group Community that's got no experience no knowledge no expertise no track record

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and so it's like you know it it's it's it's a turning into a show you're getting you know the the the the amount

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of misinformation um wrong guidance is it's just crazy it's like the blind

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leading the blind you said it best it is a show it's a show I I I've

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gone on that platform and seen some replies that buyers POS questions and

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the replies are just my head just spins at what I see I'm like where are they coming up with this and it's either left

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or right I mean it's all over the hell it's certainly not Bullseye now you know it is a terrific platform I will say

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that I mean there there's a lot of value for members in there and I've spent a lot of time on there more recently than

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before I mean there is a lot of value and people can you know put together some good connections but understand

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take advice from believable parties right right on right you know it's so and and that's where I see that

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becoming a really dangerous path when you're starting to take advice from

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people who are completely um you know incapable they just don't have the track record to be providing advice it's like

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two people standing outside the mechanic shop both their cars are in the shop and they're each diagnosing each other's cars and neither one of them knows

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anything more than to get in and putting in drive like just take find believable parties in financing like yourself and

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attorneys accountants the best possible people you can afford because this is what's going to help you get to the Finish Line that's right there there was

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one question posed on the platform and I went against the norm um as to what my

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thoughts were uh on on the answer and um the the buyer reached out to me

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separately and thanked me because everyone was going with the grain which was in my opinion the wrong answer and I

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I was vulnerable I knew because you know there's a lot of men in this space not

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too many women and I knew this girl coming on into the thread throwing her feedback would probably rais some

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eyebrows and well you know what the buyer was smart enough to contact me and think great um because he recognized

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that the advice that I gave was exactly what he was thinking about because it

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probably makes sense and they wanted from but you're the believable party and you brought up the point related to women you know years ago when I went

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into the buy side of this my program my clients used to be like 95% male MH now

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it's about: 7030

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not a general like I don't like to throw these General statements okay but I will tell you that women by and large much

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better business buyers not even close and it's true and I'm not just saying it because you're on the call

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we're out here together it's and I've seen it repeatedly and I think it's probably because a lot of the women that

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are looking to potentially buy businesses they know they're going into the world like the world of Finance it's the world of like the old boys network

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right and they're going to there's going to be a lot of men around the table and so you know there's there I'm not so

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sure let's say they're being looked at a little differently maybe that is the case but they're fighting this forever

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and so what they do to combat that is they just make sure that they bolster

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their skill set and equip themselves with as much knowledge POS as possible

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so that they go in and there's never a question about whether or not they should be sitting at the table it's no

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doubt it's no doubt I mean and again I I I don't want to be so such a generalist

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about it but any one of my client female Consulting clients over the years have been more methodical from the the

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acquisition of knowledge and the constant questioning and of yes am I doing this the right way and I don't

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think it's not from insecurity it's from understanding that you know what there sometimes you know females start in

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second place just just the real world the way people look you know look at within the world of of of Commerce because so it's so male-dominated and so

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they they solve for that by making sure they become they ramp up their their their their knowledge base quickly and

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they go into this as as a much better prepared buyer and i' again I've seen it over and over again yeah I think it's

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their due diligence they ask more questions they're not they're not embarrassed to ask any question no I

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find that too um which is good oh it's great it is it is great um and they're

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they're great I think it's the mama bear in them Richard that you know women typically are Mama bears and

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you know we we we are moms or we were obviously you know children and we've

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seen mom taking care of us we're just a little bit different on how we look at things um probably I would say women

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move a bit slower for the right reasons where men want to move a lot faster to

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get the deal done and and just make the money yeah I mean could very well be or they're just smarter you know just ask

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you know just ask my ex-wife she'll tell you that we like to spend money though too so we want to make the money don't

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even go there please oh although my wife my wife is like mean she she runs a title office in

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uh in bone for big firm out of your area the woods Night Barry and um you know she's she's 100% self-sufficient pays

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her bills her car she wants nicer car whatever she takes of everything so it's it's NE that that is as as equal as it

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gets so I definitely could not say that shot to uh to my wife at

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all oh boy so do we have any questions that have come through yet I'm maybe

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I'll look at to put on my glasses and see where Kel probably probably has a question yes yeah yeah nope Raquel's

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thank you for being here Raquel we really appreciate you um most of the time she says a good observation that

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most of the time we fail to do our own due diligence yeah well if it's related to self assessment you're probably

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correct yeah for sure for sure so search F women's Safeguard yes search

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fund let's go let's talk about search fun I think it is a great platform

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there's a lot of um mixed bag

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transactions from the highend to the low end I think more highend though would you agree I don't know I mean I've seen

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I thought that originally too but as I I started looking at I mean must have looked at a 100 posts or questions and

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um there's I see a lot on the lower end what I think the initial perception is

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is because there's a disproportionate amount of people with fancy degrees and I don't on any degree it's nice if

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you got a you know an IV League degree and a and a and and and an MBA I mean I don't know how much value it brings you

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to the to this process but um I think you get a preconceived notion that it's a higher-end business but there's a lot

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of lower Market businesses I mean they're not institutional buyers you know to me I'd say that the vast

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majority of them our businesses certainly $10 million in under and plenty of them lower than that yeah I'm

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just gonna give a quick answer uh Jack Cox in our thread here ask what is the

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platform we're talking about search fund.com just FS like that that they're

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related to search funds they're buyers you know the community of prospective business buyers search funders probably

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the most prominent one but there are some other ones as well I guess you know that have some those type of

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communities and Jack there's a lot of uh advisers on that as well people such as Deb myself ETA actually no s at the end

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search fund.com yes that that's the right website search fund.com and I have

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seen everything from SBA lenders to uh private Equity uh firms to people

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looking for an investment um partner because they want to buy the business

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and be the manager the the the operator onsite I mean there's just a mixed bag

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of all kinds of opportunities on that platform so there is a lot of value and

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you can learn a lot but just understand where are you obtaining the source of

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your learning from 100% that's exactly it it's this it's this believable party

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syndrome they're going back and forth about SBA Loans I saw one the other day when they were talking about earn outs

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and um and it was a a component to deal and one person was talking about the SBA

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allows it another one says they don't allow it a third one was telling them how to structure it to make sure it passes the SBA and I wanted to tell them

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hey time out idiots just let's stop here for a second okay you're not going to dictate to the um to the lenders how

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things work I that I could guarantee you the lender is going to tell you how they work and every lender is different so

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you know what would be much better off is ask the question to someone like yourself and you'd set the record

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straight as to what is true that's right and so there's just so much there's just a lot of you know um there's a lot of

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speculation there's a lot of misinformation and again I don't want to keep I don't want to sh appear like I'm on this website because it is a

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terrific platform but you know but the underlying theme that we're talking about here ties to what we're talking

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you know get your information from the right people matter if it's financing if

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it's business advisory if it's accounting if it's uh legal get your

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advice from the right people you know if you have a toothache don't go to the Shoemaker so if you go to the dentist

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and so that's where this gets goes goes off the rails right and and you know just get your advice from believable

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parties and and just because the SBA sop standard operating procedures tells you

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so on earn outs because there have been some changes as of the new release last

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fall doesn't mean the bank you're working with with is going to approve it and agree with what the SBA says there

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the new changes that came out in fall uh with SBA sop the banks can say no we

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don't want to do it that way and and I some banks and some of the new changes I agree with them I wouldn't want to do it

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that way either if I was given out 90% capital on a transaction that's un

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unsecured it's unsecured right and you know what I think people should understand the the SOP is the guideline

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of which what they're allowed to do but it doesn't mean that they're going to do it these are the things that they're

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allowed to do but every lender is different I mean how many times have you you you stated that you know and and

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you're right we're talking sop I get a little you you get all all as they

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say on SNL All cled you get all choked up so you know you've made the point so often that you know being able

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to understand and diagnose the buyer and the business is you're able to direct

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people to the lender that or the lendor L that are most likely going to be um

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going to accept that that scenario of that buyer and that business but it doesn't mean they all will by any means

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so the scope of you know this this what do you call it the uh standard operating procedures we keep thinking scope will

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work but standard operating those are parameters yes if One bank can can do all that and the SBA will underwrite it

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but doesn't mean that they're all going to do it and they all don't do it so I mean that's the thing right you don't

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have I I imagine you don't have everyone who complies with every it's got to you know it's got to be a 10 out of 10 buyer a 10 out of 10 business and still that

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doesn't mean they may have their own internal rules that's right and then there are the SOP guidelines that the

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banks must follow and if if the deal goes bad they lose their guarantee right

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if the bank didn't follow and as crazy as it sounds there are some banks that

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will take a little shortcut to get a deal done depending upon the relationship or what have you right no

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Rhyme or Reason in business acquisition lending not at all let's talk about if we can for the attorneys and accountants

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piece of things please so you know my um my position is always when we talked about it earlier you know a few things

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that you should have in place meet with them early referrals are wonderful especially if it's someone who has sold

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a business not every accountant or every attorney is going to be qualified to do your deal and so some of the things

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understanding of course they're any experience within similar related Industries um sometimes they're they're

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they're valuable assets sometimes an attorney can recommend an accountant and vice versa um you know um what is there

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what have they done any work in this particular industry what size business is there any specialty what's you know

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if it's a more complex business with um certain components like you need um multiple leases or anything

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environmental or the like you typically need a larger firm where they have the resources inhouse

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that's that's part of it um so again it's a level experience familiarity and you also want to know that the that the

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attorneys have been people that do transaction law and their goal is to get the deal to the finish line that they're

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deal makers and not deal breakers every attorney will tell you they're a dealmaker not a deal breaker but you'll

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find out very quickly on in the conversation if they're dominant um you know you don't want someone who you want

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them to impart their wisdom and recommendation but they're not The Negotiator you don't want them negotiating the deal the buyer and

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seller negot iate the deal and the attorney is ascribed they put down on paper what the buyer and seller have

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agreed to and over and above that put legal Clauses in place to make sure your ass is covered and also may bring some

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other awareness to you the accountant is someone who will do the due diligence but he'll also make sure the entity

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structure is right and we'll look at certain things to make sure when they do their due diligence to make sure that they've done this before on this size

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business that they're very thorough they know what to look for what issues they may be because they'll help validate the

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information um the financial information one thing I've told people you know when you get the First Financial package if

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it doesn't make sense to you as the buyer sure as hell ain't going to make sense to the the accountant so you review it first yourself and you don't

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want to have to keep going to them to look at the pnls tell me what this what this looks like what are your comments

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because accountants typically value businesses you know on a from the balance sheet and you small businesses

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are are valued based on the income statement tax return and so you know those and getting your team together

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interview a lot of accountants you know three four accountants attorneys recommendations are great but make sure that you're compatible with them okay

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you know and you want people that are going to help you get to the Finish Line you they're always an element of risk

28:36

you don't want to be so crazy and neurotic about it that you can never get a deal done because you you know the attorney keeps telling I'd never do this

28:42

I'd never do this attorneys typ you know some attorneys want a lot of them want want to win every point and that's not the case a good transaction attorney

28:50

understands you're pulling levers it's it's a give and take and some things you have to agree to other ones to let you know what your risk is and whether or

28:56

not you're prepared to live with that but you the buyer you know you you drive the train that's right and I would like

29:01

to add in about the attorneys as well if you are going to use the SBA as the as

29:06

the buyer and and have a bank loan back by the SBA make sure your attorney

29:12

number one knows SBA and number two wants to take on your transaction

29:17

knowing that it is a loan back by the SBA yes there have been some attorneys

29:23

out there that I have seen and heard when they hear us they're like I don't

29:28

want to do anything with that that's a headache right yeah they think it's a headache or it's overwhelming jod asked the question is it okay to ask for

29:33

references When selecting advisers Jody I'm glad you're on this call because yes 100% like and I should have mentioned

29:39

that you absolutely want to get references absolutely and especially I mean ideally if they have someone who

29:45

had someone in a similar situation business size or or or what have you type of Industry yes there's no fear do

29:51

you know I understand the intimidation someone who's dealt with attorney to go to fancy office nice old wood paneling

29:57

maybe it's a little you know it's it it can be intimidating but that's that sort of ties into you the buyer you control

30:05

you control this deal and yes absolutely 100% ask for references unless it's you

30:11

know the referral is someone who you trust implicitly and said I've used this person to buy X number business like one

30:17

of you know there's a few accounting firms that I used down here in South Florida have done for all my transactions you know I I would

30:23

recommend them to anybody and say if you know as long as they trusted me I say

30:28

you don't need references these are terrific people why one guy did 20 20 transactions with but yes ask for

30:35

references by all means I and anybody who won't provide them run there you go

30:40

I had a short list of uh buyer representation attorneys and there was one fell on the list that I had referred

30:47

to over the years and he was really really good he worked for a firm did a great job understood SBA loved the guy

30:54

then he went out on his own he left the firm he worked work for to start up his own firm and it just got messy and then

31:01

he got delayed and then there were some personal issues at home which slowed things down and I had to pull him off

31:08

the list Richard he just he was slowing my transactions down and the buyers were

31:14

disappointed if I'm going to recommend anybody you better be good and if I get any feedback that something has changed

31:20

you're coming off the list yeah and you know what and also important you know to that point is sometimes you get in bed

31:26

with an attorney not getting a job done they're too slow and I'm not saying just you know brushing every attorney with

31:31

this uh paintbrush or whatever but or taring every attorney with this with this brush which is you know it

31:36

sometimes it's not right and you find out early enough and you have to find someone else and you know what you don't want to do where I find that always

31:44

happens not with accountants accountants typically you know they've been well trained in auditing they've been well

31:49

trained in due diligence they understand entity structure tax structure and that pretty much repeats itself firm to firm

31:56

even a smaller firm I mean that that's the core skill set you know of an accountant attorneys on the other side

32:02

you get a lot of these door attorneys you know what a door attorney is tell us Richard a door attorney is they practice

32:10

law of whatever walks through the door right that's a door attorney and it's I

32:16

love it and it and it's common so you want a transactional attorney right that's that's that's their skill set

32:22

that's what they do they may be too large for you but you want a transactional attorney they know the

32:27

paperwork they know what has to be done they know the documentation they know the issues to look for you want a an a

32:33

transactional attorney not a door attorney I remember there's one attorney down here it it it's like it it seemed

32:39

like every couple of years there was new signage on her building right like when the forclosures were busy with foreclosures then it was lawsuits

32:45

against some you know some uh publicly listed companies that it was like with was the door attorney you you don't want

32:52

one of those for sure I do want to toss in quick as we're wrapping up our our time here uh another advisor on your

33:00

team if you're a buyer and you're obtaining Bank financing back by the SBA is the life insurance piece which always

33:08

will slow down a transaction if your front-end lender is not educating you to

33:14

get the ball rolling on the policy that's going to um cover the unsecured

33:19

portion of your SBA loan uh and everybody assumes going to my American

33:25

Family agent or State Farm agent that I've been doing my personal and business

33:30

insurance with for over 20 years is the answer and they're going to be the fastest and I'm just going to call them

33:35

it's gonna happen it doesn't work that way it just doesn't work that way you

33:41

have to make sure you're finding uh agents that understand how to put a

33:46

collateral assignment on the policy and the and the SBA parameters around it and it has to be fast because some of these

33:54

big companies Richard they can take months if it's a $2 million policy

34:00

there's going to be blood drawn and health questions and searches done on

34:05

the health of the borrower and so the borrow so just so I understand the unsecured portion of an SBA loan has to

34:12

have a matching uh life insurance policy on the borrower that is correct and it

34:17

it so that way it doesn't TR the obligation doesn't transfer to their estate it's paid off in the event of

34:23

their death that's right exactly the banks want that protection uh some banks it just depends upon the

34:29

underwriter they may call for the whole loan amount even if there is some collateral other banks will look at the

34:35

unsecured portion and and condition it to be the unsecured amount again get

34:41

started early every bank's different yeah so you got to get that process started early absolutely yeah all right

34:48

I think we're done with questions Miss Deb this was really engaging and great how do you approach unconventional or

34:53

challenging situations during the acquisition process well rcky that's probably about 10 shows

35:00

combined right um because there and but I think that's probably a good subject

35:06

for one of our next ones to maybe pull a bunch of examples and maybe uh uh she

35:11

could send us some direct message of some specific examples but I think maybe it would be a good show pulling out some

35:18

some examples of challenges that have happened that people don't anticipate well it's all the challenge is always stuff you don't anticipate but but stuff

35:24

that have have come up in situations where um you know how do how do you navigate your way around that's probably a great

35:30

question that is a great question I think of life insurance the borrower forgot get the ball rolling or the

35:36

American Family agent we're on month two and we still don't have a policy assigned what do we do well I I have

35:44

contacts that will put it together quickly and and put a policy in place

35:49

within a couple of days will your premium be a little bit higher probably because you're paying for that's okay

35:55

and the other thing budy when you're talking about insurance reps and warranty insurance which usually only was reserved for very large deal but

36:02

when you have a a purchase agreement with a seller there's Clauses related to representations and warranties that the

36:07

seller makes that you're you're you're both making to one another related to um

36:13

things that you've said or documents you've provided it's called reps and warranties and urge people to learn more about that but you can get insurance for

36:20

reps and warranties that cover any breaches in the Reps and warranty it used to only be for big deals now you could do it for much smaller deals as

36:26

well I have some terrific cont I have one terrific contact actually one above all the other ones who's who's who's

36:32

really good if anybody needs that to let me know but that's another thing you want to start early because as soon as my understanding that as soon as you

36:38

have an Loi and the financials they can get to work and they they they turn it around quickly but they need that

36:43

documentation so it's something that you know a seller um buyers look at it sellers look at it um to to Really um to

36:51

really think about because it may it in most cases the cost for that insurance

36:56

is is really inconsequential relative to the potential issues that could arise if

37:01

there is a breach in the Reps um representations and warranties wow wow

37:07

see in America there's a business for every business you write a deal you have reps and warranty now you have reps and warranty insurance and I'm sure there's

37:13

a law firm in America that specializes in nothing but suing rep and warranty insurance companies you know there's a

37:19

business for every business that should have been the title of this episode we started it with there's a business for

37:24

every business and we're ending it that way it is so true Amen to that you're the best I keep hearing from you as

37:31

we're g to wrap up the show here uh I have got contacts I have contacts too

37:37

we've been doing this Richard for a long time and we've seen The Good the Bad and

37:43

everything in between yes indeed and that is where buyers need to slow

37:50

down get connected with Richard or myself or you know some body that you

37:57

know that you can get references on that that you are comfortable that they've

38:02

been doing this for a while and they're going to set you up the right way before

38:07

you start your search before absolutely the connections and and just having The

38:12

credibility of those references and certainly anybody who has specific requests I mean by all means can get in

38:18

touch with you or myself um and even if it's not someone you know it may not be within the jurisdiction of what we

38:25

familiar with some of these an attorney in you know in Virginia who I may not know but if they can provide some

38:31

background and people that they've spoken to we could you and I can both help them make sure that they get to the

38:36

right people of questions to ask or whatever I have a whole chapter in the course related to hiring professionals and questions you need to ask and I'm

38:42

sure when you you know someone is asking you for a reputable attorney related to closing a transaction with or without

38:47

SBA I'm sure you can give them you know very specific people that that you would use absolutely I know exactly that would

38:54

be yeah and that's another topic another episode the various laws in all the

39:00

states that's a whole another can of worms woohoo y that's right that's right

39:06

maybe we'll bring one on as a guest yes yes that's that's actually a great idea and I think you know some of the

39:12

geographical differences would be very important the good news for buyers is you know by and large the transactions

39:19

and the processes repeat themselves very closely state to state there are certain

39:24

things with bulk sales taxes or other issues um you know that can be GE geographically specific and that's why

39:31

you want someone who's done a transaction in that area or at least be vetted if you have a decent enough siiz firm even if they're outside the area

39:38

they have generally counsil that they can um um lean on within a certain um state or what have you and again it all

39:45

circles back to getting the the right team the right advisers the right professionals you got it yeah there are

39:51

there are searches on the subject business to be acquired um um searches

39:56

is as far as like tax leans payrolls stuff like that and in every state it's

40:02

a different place to go to get those certificates that have to be collected and reviewed by the underwriter and

40:08

cleared that it's approved and we can close oh my God I can tell you stories about oh yeah and it's huge and there's

40:15

that sales tax issue I guess the NEX issue where you have to TA charge tax in certain States over a certain amount to revenue and a lot of companies haven't

40:21

done it and there's clawbacks and buyers have to be aware of that because that that doesn't expire and so that can come

40:27

back to bite him in the ass so all these things I we could list you know a laundry list of of potential issues they

40:33

can all be solved for yes all of them you but you have to be aware of them and

40:40

if so if you're you're you know if you're not knowledgeable about the process and you don't surround yourself

40:46

with the right people I guarantee you you're going to go about 150 miles an hour into a brick wall head first that's

40:51

a great way to close out the show Richard I mean seriously I would I want to see everybody listening to what his

40:58

words just were because most of you Searchers out there are doing it too

41:04

fast and getting swooped up in on the wrong side of the transaction giving you

41:10

recommendations on what to do and where to go start with the people on your side

41:15

that's where you got to start then go search yeah yeah and you know it's what the you know the other thing is what

41:21

they what they teach in business school has nothing to do with buying a business that's that's the reality and I

41:26

don't you know there there's I've met a lot of brilliant people with with mbas and graduate degrees but the reality is

41:32

you know in some cases just because you're Highly Educated doesn't mean you know about acquiring a business I mean that's just the reality so you know

41:39

dedicate yourself um with the same Vigor that you put into your schooling to learn about the process and then then

41:46

you turn yourself into a you know into a superpower I love it well all right Miss

41:52

Deb I think we wrapped it up here in in good timing 40 minutes just over a little bit here and we got another one

41:59

coming up next Thursday 2 pm Eastern streaming live on all your favorite

42:04

social channels Richard you are the best um you can't say that because that was

42:10

my line to you you know I really I I you know I the last couple weeks have been disjointed and been traveling whatever

42:17

you know so we've only spoken on the the shows versus in between I love spending time with you you're wealth and

42:22

knowledge you're great you're you're fun you're you're you're smart as hell and your heart is in the right place to help

42:28

people and I I just really I you know that how much how crazy I am about you I feel the same about you you make me

42:33

smile I missed you last week so I'm glad to have you back it's good to be back

42:38

all right ladies and gentlemen thank you for listening in and tune in next Thursday 2 pm we'll be

42:47

back see you

42:53

[Music] later [Music]