Matt Andersen - Intentional Growth: Building a Business Buyers Want

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Hey there, and welcome to From the Ground
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done that, and are still getting it done,
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hearts,
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their hands, and their hustle.
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It's shop.fromtheGroundupshow.com.
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Today ~ I am pretty excited.
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I have Matt Andersen joining me,
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and ~ Matt's background is a little bit
different than our typical guest.
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He specializes in mergers and
acquisitions.
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~ capitalization and and growing
businesses kind of for the purpose of ~
exiting.
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So Matt is a best-selling author,
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a two-time best-selling author.
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~ he's an international speaker.
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He's closed over five billion dollars
worth of MA transactions
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and worked with many businesses,
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large and small, to increase enterprise
value.
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~
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prepare for that exit event and then
walking them through that.
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So Matt should be a wealth of knowledge of
how we can best grow our businesses,
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how we can capitalize our businesses.
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And when the time comes, how we can
prepare for an exit.
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So Matt, thanks for joining us.
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glad to be here. Thanks for having me.
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I'd also say I I actually have had real
operating experience.
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part of that hit collective history was I
ran a division of
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a publicly traded company and then am
fortunate to be an operator
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for my own business. So yeah, it's kind of
full full cycle,
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yeah.
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so to speak.
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Awesome. Well, I will be excited to hear
about that and we might pick your brain
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a little bit of leadership and insight
from your time running your
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own business as well. So we like to start
every show kind of going back
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to the beginning and ~ learning about the
the life that got you to where you are.
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So going clear back to the beginning,
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do you mind telling us a little bit about
your childhood and kind
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of early education?
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Yeah, happy to do it. So I was kinda born
and raised just outside of Chicago,
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so the western suburbs, and spent kind of
my my early years there.
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for those that are Chicago Blackhawks
fans,
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if they saw Coach Q's house getting tepeed
when the Blackhawks won the Stanley Cups,
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that was the childhood childhood house I
grew up in.
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So it was a great, great upbringing,
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great area to we lived on a pond.
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We had a summer place kind of out in the ~
kind of more rural areas of Illinois.
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So really enjoyed a lot of kind of both
things that the city of Chicago
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had to offer, suburban growing up,
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and then ~ kind of more rural.
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Rural
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areas where I kind of found some of my
passions in the sense of outside of work,
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things that I did when I was younger,
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I still enjoy today, riding horses and
things of that nature.
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Fishing's a big passion of mine still to
this day.
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And so yeah, it was a pretty well-rounded
upbringing.
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I played both golf and lacrosse on our
high school team,
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and I showed horses actually competitively
through kind of my early 20s.
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But that's kind of where
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Life started for me even though I I now
live just outside of Austin,
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Texas.
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that's quite a diverse background.
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There's probably not a lot of Chicago kids
that grew up showing horses.
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So I my you know, my aunt on my mom's side
was very into it.
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And you know, having spent a lot of time
kind of outside of the city,
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you know, probably two and a half hours
outside of Chicago.
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And when you get kind of that far,
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I mean, it you know, Illinois is fairly
rural outside of just
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the immediate Chicagoland area.
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And so there was a a lot of kind of that
sort of activity going on,
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but yeah, just a little fur outside of the
city.
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And so and then when I was going,
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~ you know, w when we were in the suburbs
kind of you know for school
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and things of that nature.
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you know I there was several riding
stables nearby and so I had the chance
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to kind of continue
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that's a a great hobby and really cool
that you can share that with multiple
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generations there.
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Are you in the construction industry and
super excited about the services
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you get from your material supplier?
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Did your material supplier pay to take you
on an all-inclusive vacation this year?
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Do you always have what you need when and
where you need it?
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If you answer no to any of those
questions,
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make sure you check out MacArthur,
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MacArthurCode.com. Give them a call and
find the branch nearest you.
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Top materials, the best prices,
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and only the best service, and ask them
about their customer incentive trips.
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So coming out of kind of your primary
education,
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~ did you pursue a college education?
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What did education look like for you?
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Yeah, I did, although because of the first
part of my journey,
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I really wanted to go to school to become
a veterinarian.
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so about a year in and and by the way,
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I share this fairly op I do a lot of
university talks and sometimes
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the attendees are freshmen and sophomore.
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And so I share with them if you're not a
hundred percent sure of what
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you want to do, ~ use my story as an
example or case study for how things
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can work out. It's okay not to know
exactly what you want to do
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at eighteen or nineteen years old.
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So wanna be a veterinarian,
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After a year of that though, I realized
seven more years of school and
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Probably accumulating some debt and then
maybe working for not a lot of money
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for a couple years after graduation wasn't
probably the thing I wanted to do.
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And so what I did was I kind of went on a
little bit of a soul searching journey,
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and I attended every talk that went on at
my university.
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If there was an outside speaker coming in,
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I went to it. I did a series of
internships.
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The last internship I had before I picked
a career in finance
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was a somewhat interesting one.
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I did an internship for a CPA firm,
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and it was
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Amazing. It was spring semester,
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and there was gosh, there was just a lot
of ~ you know great kind
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of camaraderie around the office,
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I would say, in January. And then sometime
around April 1st,
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I noticed a little bit of a dark haze that
developed around the office.
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For those that may not be familiar,
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that's tax time, which for CPAs is highly
stressful,
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especially back then when a lot there was
a lot of manual items going on.
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And so I
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Really enjoyed the internship,
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but I kind of came to grips that that's
may not be for me altogether.
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And it was after tax season there was an
office mixer.
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And it was at that office mixer where I'd
met somebody who was in
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the ~ investment universe, if you will,
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worked for a very large ~ US investment
bank and investment firm.
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And so I ended up doing an internship with
that organization and from there
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my career was kind of set forward.
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I I started my career kind of in
institutional investments and kind of went
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on from there. But it was that kind of
soul searching experience that that really
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kind of led to the career path.
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I would say out of all the talks that I
went to from having outside speakers come
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to my university that I attended,
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there's there's one speaker in particular.
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It was a gentleman who had scaled a
business from kind of a couple couple
million
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to a hundred million. And again,
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this is, you know, a hundred million,
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this is back in the day, right?
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So this was like when a hundred million
was was real money.
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~
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You know, not not inflation adjusted.
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inflation adjusted, that's probably a
quarter billion today.
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~ so so you'd scale this business up and
one of the things that he said
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and stuck with me to this day was about
journaling.
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And that's something I took away from that
talk that to this day I'm
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a very active journaler, but I'm really
thankful for
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The two experiences I'd say that had a
profound impact on my life.
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~ number one was that that talk that I
heard,
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there was more to it that I took away,
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but that talk that I heard about
journaling,
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and then the internship with the CPA CPA
firm that led to the internship with
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the investment bank and investment firm.
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Those were life-changing experiences for
me.
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man. Yeah, that's that's awesome that you
can kinda roll back and have
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~ a few pivotal moments that ~ made such a
high impact.
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That's that's cool to be able to
incorporate that into your story.
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Yeah, for sure. And so that's one thing.
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Like whenever I'm talking with folks at
universities,
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I'm always encouraging them to,
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you know, try the internships,
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listen to the guest speakers, ~ take
notes.
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I've got a talk that I share with
universities that ~ it's really called
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the 11 tips for finding success in a
career in finance.
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Mostly I give that talk to university
associations that are student-led.
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I've given a couple that are ~
organizationally led by the university,
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but most are gonna be like student-led
organizations.
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But it's one one of the things I share.
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share them is is about journaling and how
important it is to kind
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of track progress over time. And again,
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that goes back to when I was nineteen.
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So which was yesterday. Right.
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That was that was
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Yeah. Yeah, that's great.
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that's a a practice I feel like I could
have benefited from or maybe s should
still.
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It was something I did not do well,
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but I find it very helpful sometimes to to
look back and see where you came from
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and what you've come through as you're
facing the the next set of problems.
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it it's very helpful.
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Yeah, I think it's it's super important.
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And I I the one thing I share with
somebody as they close out a journal
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is to read back through it and to take
forward the ten best ideas from your
previous
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journal into your new journal.
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it'll let you kind of give closure to the
old journal,
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yeah.
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but it also brings forward your best ideas
and your best to-dos
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and the most ambitious things that you
want to accomplish forward into your
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new your new journal. so that's something
I do religiously.
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that's cool.
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Yeah.
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Yeah, that's awesome. Well, ~ as somebody
that ~ has some college and
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is kinda in the more white collar space,
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you brought up a couple things there.
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You you didn't want to do seven years of
school and and take on
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the additional debt and postpone your
working career that much further.
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based on your own experience and kind of
the way you look at the world now.
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What advice would you have for a young
person that's coming to the end
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of their high school career or ~ maybe
just rethinking things?
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would you still push them into some
college,
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no college? Does it depend on where they
wanna go,
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what they wanna do? What are your thoughts
on education?
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Yeah, and you know, look, everyone's path
is so unique.
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I think especially today, it's very
difficult to give a probably a
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one size fits all. But let me share just a
few maybe overarching thought processes
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that I might have today if I was if
somebody were to ask me.
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And I guess number one is if somebody,
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you know, has the opportunity to ~ maybe
scholastically,
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financially, they're able to go to,
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you know, a you know university.
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I I definitely would not discourage them
from that.
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But
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But I would prepare them well in the sense
that it's going to be probably
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a great experience, but they need to
supplement that kind of core curriculum
with
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what I would call more alternative
education sources.
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So kind of getting a better understanding
of you know human psychology,
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probably getting a better understanding of
AI,
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probably getting ~ more time and focus on
communications,
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both verbally ~ and non-verbally.
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I think those things are going to be
really,
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really important, especially in a you know
in an age where you can kind
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of belly up to a computer and there's
235
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There's a lot of questions that you can
now ask things like ChatGPT,
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Claude, and you can get some unbelievable
responses to.
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And so I think in in that sense,
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if you're gonna go when you're gonna go.
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It's important to make sure you're
supplementing maybe a traditional
education with
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00:12:35,759 --> 00:12:38,920
other sources. It's also really important
to kind of again,
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00:12:38,920 --> 00:12:40,782
if there's speakers coming, go.
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If there's internship opportunities,
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take them. those extra add-ons around
things that you can create yourself,
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00:12:47,765 --> 00:12:50,746
things that are brought to you through
your university that you can be a part of,
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00:12:50,746 --> 00:12:53,972
and then things that you seek outside of
the university through kind
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of internship programs, that combination
is what will make that
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00:12:56,929 --> 00:13:00,080
a very productive four years. ~ I think
for some.
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Who's maybe just you know,
249
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kind of struggling to get that university
fig,
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or there's gonna be a lot of debt
associated with the university experience?
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I probably would encourage to give some
greater thought to how they go about it.
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And I'm not suggesting that they just
bypass it all together,
253
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~ but maybe be more creative. There's a
lot of you know great colleges
254
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out there that aren't super expensive.
255
00:13:23,108 --> 00:13:26,308
There's a lot of things that you can
supplement with online classes
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in summer that are very low cost to speed
up the process to go.
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Go
258
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from starting to graduation without kind
of racking up ~ large amounts
259
00:13:33,886 --> 00:13:36,317
of debt and kind of setting you back
before you even get started.
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~ and then for somebody who it's just not
a pure option for,
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I would just really be thoughtful about
what it is that they're gonna go for.
262
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So if you're going from high school
directly in the workforce,
263
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I do think kind of really preparing
yourself.
264
00:13:49,318 --> 00:13:52,210
There's so there's honestly never been an
easier time
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00:13:52,210 --> 00:13:54,762
to self-educate through alternative
education programs.
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And so really being thoughtful about that,
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whether it's you're if you're gonna go
into welding,
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00:13:58,996 --> 00:13:59,996
I mean there's
269
00:13:59,296 --> 00:14:03,288
You don't have to wait 15 years to be you
know skilled at welding.
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There's things that you can do to
supplement your knowledge base.
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If you want to go to work in an office
setting,
272
00:14:08,372 --> 00:14:11,964
~ there's things that you can do from an
AI perspective to really
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00:14:12,124 --> 00:14:15,646
you know increase your skills or YouTube
videos or podcasts like this
274
00:14:15,646 --> 00:14:18,909
one to really kind of increase your works
working knowledge.
275
00:14:18,909 --> 00:14:22,411
And then if you wanted to start your own
business in any one of these stretches,
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00:14:22,411 --> 00:14:25,773
I would just say it's never been easier to
start a business,
277
00:14:25,773 --> 00:14:28,395
but it's probably been it's getting
278
00:14:28,505 --> 00:14:30,897
It's going to be getting tougher and
tougher to succeed.
279
00:14:30,897 --> 00:14:34,129
And I do think kind of one of the cores
around this,
280
00:14:34,129 --> 00:14:37,121
whether you're gonna go from high school
straight in the workforce
281
00:14:37,121 --> 00:14:40,543
or if you're gonna go from high school
into a traditional four-year university,
282
00:14:40,543 --> 00:14:45,286
is making sure you're building the
accountability to outcomes in yourself.
283
00:14:45,286 --> 00:14:49,389
And again, that's that's just one thing
that ~ I think that kind
284
00:14:49,389 --> 00:14:53,772
of universal kind of three-pronged view of
of how to view university life
285
00:14:53,772 --> 00:14:57,264
or or directly going to the workforce all
underpinned with accountability
286
00:14:57,264 --> 00:14:58,335
to outcomes is is
287
00:14:58,737 --> 00:15:02,289
guidance that I would probably say would
be helpful to a lot of people today.
288
00:15:02,865 --> 00:15:03,865
there's a lot
289
00:15:03,416 --> 00:15:06,117
of wisdom there. And I really appreciate
what you were saying about
290
00:15:06,117 --> 00:15:07,949
the supplementing that education.
291
00:15:07,949 --> 00:15:10,931
~ that's something we've not really
discussed here on the show,
292
00:15:10,931 --> 00:15:14,505
but you know, I'm sure we all know those
people that are highly educated
293
00:15:14,505 --> 00:15:17,097
and very smart but don't function very
well.
294
00:15:17,097 --> 00:15:21,180
It it's not effective education because it
they don't know how to apply it.
295
00:15:21,180 --> 00:15:24,463
And I think some of those soft skills
you're talking about,
296
00:15:24,463 --> 00:15:27,786
getting out into the world, interfacing
with people,
297
00:15:27,786 --> 00:15:29,317
developing those soft skills.
298
00:15:29,992 --> 00:15:33,166
going to seminars and talks and getting to
see different perspectives.
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00:15:33,166 --> 00:15:36,361
that's what's really gonna make that
education applicable and make
300
00:15:36,361 --> 00:15:39,586
the difference between somebody that knows
a lot and somebody that's really
301
00:15:39,586 --> 00:15:42,019
successful. So I appreciate that
viewpoint.
302
00:15:42,019 --> 00:15:43,281
I think there's a lot of wisdom there.
303
00:15:44,673 --> 00:15:46,744
Well, no, and and thank you for the
commentary,
304
00:15:46,744 --> 00:15:49,104
and I agree. And it's just one of these
things over you think about
305
00:15:49,104 --> 00:15:53,169
a traditional four year program and where
technology is today and where it's going
306
00:15:53,169 --> 00:15:55,850
to be four years from now, it's really
almost hard to say,
307
00:15:55,850 --> 00:16:01,194
but we can one thing we do know for
certain is AI is the worst it's ever gonna
308
00:16:01,194 --> 00:16:02,194
be right now.
309
00:16:03,229 --> 00:16:05,860
And so the changes that are going to come
are going to continue
310
00:16:05,860 --> 00:16:09,382
to be fairly prolific, but things that
won't change are
311
00:16:09,582 --> 00:16:13,144
you know personal experience, the ability
to connect with somebody,
312
00:16:13,144 --> 00:16:15,645
~ your presence in front of somebody else,
313
00:16:15,645 --> 00:16:19,626
specific knowledge that you have in terms
of practical application,
314
00:16:19,626 --> 00:16:22,078
~ you know, ~ tangible skills,
315
00:16:22,078 --> 00:16:25,580
like you had mentioned, you you had a very
successful build the sale
316
00:16:25,580 --> 00:16:28,065
of a roofing company. ~ you know,
317
00:16:28,065 --> 00:16:31,653
it it being a good roofer isn't gonna be
replaced anytime soon.
318
00:16:31,653 --> 00:16:32,653
And so there are things
319
00:16:32,613 --> 00:16:36,286
That you can supplement your knowledge
with that I think will be really important
320
00:16:36,286 --> 00:16:38,618
to kind of marry up with a traditional,
321
00:16:38,618 --> 00:16:42,281
even a non-traditional education kind of
program post-high school.
322
00:16:42,450 --> 00:16:43,450
Yeah.
323
00:16:43,421 --> 00:16:46,971
Wonderful. Well let's transition a little
bit.
324
00:16:46,971 --> 00:16:49,624
~ you got your four year degree,
325
00:16:49,624 --> 00:16:54,707
started working in finance. Can you walk
us through maybe early career and
326
00:16:54,767 --> 00:16:56,808
up to ~ running your own business?
327
00:16:58,420 --> 00:17:04,193
Sure. So I got finished with college and
went to went to work.
328
00:17:04,193 --> 00:17:07,374
I I spent kind of the first 15 years of my
career working
329
00:17:07,374 --> 00:17:11,296
for three different companies with kind of
progressive increases in responsibility.
330
00:17:11,296 --> 00:17:16,038
So I started my career with kind of fixed
income institutional sales
331
00:17:16,038 --> 00:17:17,519
to banks and insurance companies,
332
00:17:17,519 --> 00:17:19,880
and then I ran parts of companies that did
that,
333
00:17:19,880 --> 00:17:23,961
and then ultimately was operating a
division of a publicly traded company.
334
00:17:23,961 --> 00:17:27,323
And that last role I was in for about
seven years.
335
00:17:27,745 --> 00:17:28,745
That's
336
00:17:27,915 --> 00:17:32,078
a role that brought me from Chicago to
Central Texas back in 2007.
337
00:17:32,078 --> 00:17:34,487
And it was a great role. I really enjoyed
it.
338
00:17:34,487 --> 00:17:39,514
It was a company that had gone from 10
million in revenue back in the late
339
00:17:39,514 --> 00:17:44,041
90s to ~ over 2 billion in revenue kind of
shortly after I had joined.
340
00:17:44,041 --> 00:17:46,240
And so it was a really exciting journey.
341
00:17:46,240 --> 00:17:48,842
it was I learned a lot during that seven
years.
342
00:17:48,842 --> 00:17:51,474
It was something that kind of left an
imprint on me.
343
00:17:51,474 --> 00:17:56,609
And I think if I look back at that first
kind of 15 years of my career.
344
00:17:56,769 --> 00:17:58,570
The first three companies I worked for,
345
00:17:58,570 --> 00:18:02,111
I mean, one went from 14 million to 350
million in revenue.
346
00:18:02,111 --> 00:18:05,545
It went public. The next one went from
about 2 million in revenue
347
00:18:05,545 --> 00:18:08,057
to about 125 million in revenue.
348
00:18:08,057 --> 00:18:12,219
And the last one went from about 10
million in revenue to about 2.1 billion.
349
00:18:12,219 --> 00:18:16,062
And, you know, kind of at the time when
you're in the thick of it,
350
00:18:16,062 --> 00:18:18,004
I didn't totally appreciate you know,
351
00:18:18,004 --> 00:18:20,816
what those CEOs had done and what those
management teams had done and what
352
00:18:20,816 --> 00:18:24,138
I was doing to help create those unique
outcomes.
353
00:18:24,138 --> 00:18:25,279
And taking a step
354
00:18:25,289 --> 00:18:26,730
Step back all these years later,
355
00:18:26,730 --> 00:18:31,913
I really appreciate those experiences and
learned a lot from what those companies
356
00:18:31,913 --> 00:18:36,186
did to achieve massive growth over fairly
short periods of time.
357
00:18:36,186 --> 00:18:39,088
And it was, they were neat experiences to
be a part of,
358
00:18:39,088 --> 00:18:42,430
but with each one, I was able to kind of
get successive layers
359
00:18:42,430 --> 00:18:44,112
of management and responsibility.
360
00:18:44,112 --> 00:18:49,676
And then ultimately, when the last company
I was working for sold in 2013,
361
00:18:49,676 --> 00:18:54,169
about 10 months later, I ~ decided to do
something different with my life,
362
00:18:54,169 --> 00:18:55,169
but
363
00:18:54,309 --> 00:18:55,850
wanted to stay in central Texas.
364
00:18:55,850 --> 00:18:59,704
And so that kind of ultimately led me to
joining Westlake Securities.
365
00:18:59,704 --> 00:19:02,927
But those first 15 years were were pretty
impactful.
366
00:19:02,927 --> 00:19:05,679
And I almost feel like in some ways every
year that's gone by,
367
00:19:05,679 --> 00:19:09,072
they've been almost a greater impact on
what I do today.
368
00:19:09,653 --> 00:19:13,138
Yeah, that's ~ that's quite the impressive
pedigree there.
369
00:19:13,138 --> 00:19:19,157
And like you mentioned, that's ~ to be in
one company that blows up on that scale,
370
00:19:19,157 --> 00:19:22,561
would be quite an experience. To have done
it three or four times,
371
00:19:22,561 --> 00:19:24,654
that's quite an education in itself.
372
00:19:26,363 --> 00:19:28,955
It it is and one thing I share in a lot of
my talks,
373
00:19:28,955 --> 00:19:33,949
especially so I give these talks kind of
internationally to CEO groups like WPO,
374
00:19:33,949 --> 00:19:38,273
YPO, Vista, CEO, etc., ~ the alternative
board.
375
00:19:38,273 --> 00:19:44,898
The the one thing I share in those talks
is you can have and you should want
376
00:19:44,898 --> 00:19:48,741
to have big plans and those things can be
achieved through big planning.
377
00:19:49,978 --> 00:19:52,779
I would say if I learned anything from
those first 15 years,
378
00:19:52,779 --> 00:19:57,221
it was, you know, if you want to do
something highly impactful with your
379
00:19:57,221 --> 00:19:58,902
organization, with your career,
380
00:19:58,902 --> 00:20:00,693
with a company, it's possible.
381
00:20:00,693 --> 00:20:03,835
I don't I mean, I was working around a lot
of very smart people,
382
00:20:03,835 --> 00:20:05,385
I would say very capable people,
383
00:20:05,385 --> 00:20:10,328
also very driven people. But I would say
the one kind of consistent through there
384
00:20:10,888 --> 00:20:14,120
was, you know, they had big plans and they
were willing to go through
385
00:20:14,120 --> 00:20:17,961
big planning and also to take massive
action on execution.
386
00:20:17,961 --> 00:20:19,312
I mean it you you know you
387
00:20:19,342 --> 00:20:21,333
Can think big and you can kind of plan,
388
00:20:21,333 --> 00:20:23,775
but you ultimately have to execute very
well.
389
00:20:23,775 --> 00:20:28,108
but those three things are just you know
fundamental ~ ingredients,
390
00:20:28,108 --> 00:20:30,500
I think, to achieving something like that.
391
00:20:30,500 --> 00:20:33,082
And it was very consistent throughout all
three companies.
392
00:20:33,082 --> 00:20:37,825
But other than that, I wouldn't say that
those organizations
393
00:20:37,825 --> 00:20:41,427
had like ultimately totally unique angles
on things.
394
00:20:41,427 --> 00:20:46,090
It's just they really did, they walk the
walk and talk the talk every day,
395
00:20:46,090 --> 00:20:48,542
but their path that they were on was
396
00:20:51,140 --> 00:20:53,773
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412
00:21:39,789 --> 00:21:42,789
So ~ for a a young business owner,
413
00:21:42,789 --> 00:21:47,835
a small business owner, i I'm assuming
probably the earlier the better,
414
00:21:47,835 --> 00:21:51,538
but at at what point in time do you start
setting those big,
415
00:21:51,538 --> 00:21:53,319
ambitious goals? And y you know,
416
00:21:53,319 --> 00:21:56,041
I think a lot of especially blue collar
business owners,
417
00:21:56,041 --> 00:21:59,103
they they get into a trade, they're good
at it,
418
00:21:59,103 --> 00:22:02,205
they get frustrated with their job or
maybe get get laid off,
419
00:22:02,205 --> 00:22:04,297
see a better way to do something and they
kinda
420
00:22:05,439 --> 00:22:10,082
start on their own and it it's more this
transition from practitioner
421
00:22:10,082 --> 00:22:13,685
to business owner. At what point in time
do they really need to
422
00:22:13,685 --> 00:22:17,663
get serious about setting some goals and
setting a plan of how do we get from
423
00:22:17,663 --> 00:22:21,531
or wh where are we going and how do we get
from here to there?
424
00:22:23,126 --> 00:22:27,841
Yeah, so ~ great question. And we work
with a lot of companies that I would
425
00:22:27,841 --> 00:22:30,689
say do real things, right? So concrete.
426
00:22:30,962 --> 00:22:34,812
Roofing, electrical, I mean, all those
sorts of businesses are
427
00:22:34,812 --> 00:22:36,334
the kinds of companies that we work with,
428
00:22:36,334 --> 00:22:41,696
food manufacturing. And so I would say
there tends to be a crossover to where,
429
00:22:41,696 --> 00:22:45,418
like you mentioned, you go from an
individual kind of practitioner
430
00:22:45,418 --> 00:22:47,849
or professional to having a business.
431
00:22:47,849 --> 00:22:50,080
And that sometimes occurs, you know,
432
00:22:50,080 --> 00:22:52,972
it looks like something where you know,
433
00:22:52,972 --> 00:22:54,762
there's a few hundred thousand a profit,
434
00:22:54,762 --> 00:22:57,164
you're starting to have multiple
employees,
435
00:22:57,164 --> 00:22:59,014
you've kind of gotten beyond just
yourself,
436
00:22:59,014 --> 00:23:00,115
one other person in a truck.
437
00:23:00,465 --> 00:23:03,948
to you know really having the crux of you
know what's starting to look like
438
00:23:03,948 --> 00:23:05,729
a business, maybe a physical presence,
439
00:23:05,729 --> 00:23:09,288
a website, et cetera. And once that starts
to occur,
440
00:23:09,288 --> 00:23:13,854
we usually kind of encourage people to get
to a certain level of success where
441
00:23:14,635 --> 00:23:16,716
in one way it's feeling very easy,
442
00:23:16,716 --> 00:23:18,577
and in another way it's feeling very
difficult.
443
00:23:18,577 --> 00:23:22,300
And when you've hit that moment and it's a
little different for everybody,
444
00:23:22,300 --> 00:23:26,063
it's starting, it starts to be the time to
think about bigger pictures and planning.
445
00:23:26,063 --> 00:23:29,425
And so the easy part tends to be like the
business and
446
00:23:29,495 --> 00:23:33,618
Of itself. So there was probably a part
where a lot of people that we've worked
447
00:23:33,618 --> 00:23:36,099
with, whether it was roofing, electric,
448
00:23:36,099 --> 00:23:38,468
food manufacturing, the actual kind of
product part,
449
00:23:38,468 --> 00:23:39,698
you know, pretty easy. I mean,
450
00:23:39,698 --> 00:23:41,653
they get it, they understand how to put a
shingle on,
451
00:23:41,653 --> 00:23:43,414
they understand how to connect wires,
452
00:23:43,414 --> 00:23:44,815
they understand how to make a tortilla,
453
00:23:44,815 --> 00:23:47,707
but the business starts to become more
complex.
454
00:23:47,707 --> 00:23:51,860
And the reason tends to be for that is
they're working maybe too much
455
00:23:51,860 --> 00:23:53,961
in their business and not on their
business.
456
00:23:53,961 --> 00:23:56,943
And when that crossover starts to come
about,
457
00:23:56,943 --> 00:23:59,365
that's really the pivotal point for.
458
00:23:59,337 --> 00:24:00,337
For
459
00:23:59,737 --> 00:24:03,881
a lot of people to start engaging with
maybe the book I've got coming
460
00:24:03,881 --> 00:24:08,124
up called Intentional Growth to start
thinking about architecting what's next.
461
00:24:08,124 --> 00:24:13,354
And there's different kind of life cycles
in an organization where this concept that
462
00:24:13,354 --> 00:24:14,479
I'm gonna talk about makes sense,
463
00:24:14,479 --> 00:24:18,492
but this is one. Another one kind of tends
to be for larger businesses that
464
00:24:18,492 --> 00:24:20,393
are maybe trying to go from, you know,
465
00:24:20,393 --> 00:24:23,616
a million or two of profit to three to
five million of profit,
466
00:24:23,616 --> 00:24:26,118
and then from 10 to 25 and 25 to 50.
467
00:24:26,118 --> 00:24:28,630
So those are different kind of pivotal
points where I think.
468
00:24:28,880 --> 00:24:31,302
something like intentional growth can be
really helpful.
469
00:24:31,302 --> 00:24:35,935
But one of the first concepts we talk
about in the book is this concept
470
00:24:35,935 --> 00:24:39,287
of reverse engineering what you want to
have happen.
471
00:24:39,287 --> 00:24:41,649
And we talk about it in two different
ways.
472
00:24:41,649 --> 00:24:45,051
One is time and one is financial outcome.
473
00:24:45,051 --> 00:24:50,314
And so it could be that the it could be
that the the business really should have
474
00:24:50,314 --> 00:24:54,406
a view towards a three to seven year kind
of time window.
475
00:24:54,406 --> 00:24:56,878
That's going to be a time window that we
think is measurable.
476
00:24:57,198 --> 00:24:59,660
From the perspective of, you know,
477
00:24:59,660 --> 00:25:02,642
anything kind of less than three years is
difficult to kind of plan for.
478
00:25:02,642 --> 00:25:04,753
Anything more than seven starts to feel
like,
479
00:25:04,753 --> 00:25:06,304
well, just kind of too far out there.
480
00:25:06,304 --> 00:25:07,895
So three to three to seven years,
481
00:25:07,895 --> 00:25:10,086
pretty good. Five being a peg in the
ground.
482
00:25:10,086 --> 00:25:14,729
And then kind of picking a financial
outcome that would be impactful
483
00:25:14,729 --> 00:25:17,221
to the business. So let's say you've got a
business,
484
00:25:17,221 --> 00:25:19,182
you're getting started, you're a million
of revenue,
485
00:25:19,182 --> 00:25:22,945
and you start to say, hey, over the next
kind of five years,
486
00:25:22,945 --> 00:25:25,987
I'd really like to take the business from
a million in revenue to five million.
487
00:25:26,037 --> 00:25:28,958
revenue that would be an ambitious kind of
financial goal that you'd
488
00:25:28,958 --> 00:25:33,582
set and then what we start to do is plan
back all the things that have
489
00:25:33,582 --> 00:25:37,094
to happen over the next five years for the
business to get to one to five
490
00:25:37,094 --> 00:25:41,586
or from five to ten or from ten to thirty
etc and you can kind of keep going that
491
00:25:41,586 --> 00:25:46,250
way but that reverse engineering course is
really pivotal to setting both
492
00:25:46,250 --> 00:25:50,773
a timeline expectation and a financial
outcome that we can really start planning
493
00:25:50,773 --> 00:25:54,373
from. And lastly on this topic I'll say
the the biggest mistake
494
00:25:54,385 --> 00:25:57,796
People tend to make is either not planning
or planning in small increments.
495
00:25:57,796 --> 00:26:01,188
You know, a lot of times we sit down and
talk about somebody like a maybe even
496
00:26:01,188 --> 00:26:04,559
a budgeting process. They're really just
kind of looking kind of what's
497
00:26:04,559 --> 00:26:07,540
out ahead of them in terms of revenue or
what's out ahead of them in terms
498
00:26:07,540 --> 00:26:09,421
of maybe bringing out another hire.
499
00:26:09,421 --> 00:26:13,532
But what they're not doing is thinking
about planning a budget that's going
500
00:26:13,532 --> 00:26:16,343
to keep them on track with a five-year
goal or ambition,
501
00:26:16,343 --> 00:26:19,754
and then working back through what would
the business have to become in order
502
00:26:19,754 --> 00:26:20,754
to hit that.
503
00:26:20,920 --> 00:26:24,632
I can relate to all of that. I think ~ you
you're kind of describing
504
00:26:24,632 --> 00:26:27,773
all of the things I did wrong when I was
in that stage.
505
00:26:27,973 --> 00:26:33,456
So you you brought us up in your story
through kind of working
506
00:26:33,456 --> 00:26:37,938
in in finance and the company you were
working for ~ sold,
507
00:26:37,938 --> 00:26:40,400
which was kind of the the next pivot
point,
508
00:26:40,400 --> 00:26:41,711
the next point in your career.
509
00:26:41,711 --> 00:26:45,213
You mentioned from there you went to work
for WestLake can you tell us
510
00:26:45,213 --> 00:26:46,213
a little bit about that?
511
00:26:47,637 --> 00:26:48,637
Yeah, so
512
00:26:48,758 --> 00:26:52,300
Really at that point in time, I knew I
wanted to stay in Central Texas.
513
00:26:52,300 --> 00:26:57,082
I had a friend who had founded Westlake
Securities back in 2003.
514
00:26:57,082 --> 00:27:00,284
And so he said, Well, hey, you you've been
working with these large companies,
515
00:27:00,284 --> 00:27:03,645
helping them acquire and integrate small
smaller businesses.
516
00:27:03,645 --> 00:27:09,238
Why don't you come to Westlake and help us
organize some thoughts around helping
517
00:27:09,238 --> 00:27:12,920
our comp client companies raise capital
and and go through merger
518
00:27:12,920 --> 00:27:16,051
and acquisition processes? And so I
originally joined Westlake
519
00:27:16,051 --> 00:27:17,972
as a managing director in twenty fourteen.
520
00:27:17,984 --> 00:27:22,868
And then over time became a the CEO in
about 2018 time period.
521
00:27:22,868 --> 00:27:25,831
And then I acquired the company in 2019.
522
00:27:25,831 --> 00:27:28,032
But the company dated back to 03.
523
00:27:28,032 --> 00:27:29,323
So we've been around for about 23,
524
00:27:29,323 --> 00:27:33,947
24 years. But then I acquired it in 2019
and been leading it as both owner
525
00:27:33,947 --> 00:27:37,860
and operator since then. But it was a
really fun journey for me.
526
00:27:37,860 --> 00:27:42,373
There was an early transaction where I had
joined in 2014,
527
00:27:42,373 --> 00:27:44,755
kind of not totally knowing what to
expect.
528
00:27:44,755 --> 00:27:46,643
I was not a career ~ career.
529
00:27:46,927 --> 00:27:48,528
kind of investment banker per se.
530
00:27:48,528 --> 00:27:51,429
I mean investments, finance, leadership,
531
00:27:51,429 --> 00:27:54,150
capital, MA, integration, operations,
532
00:27:54,150 --> 00:27:58,562
yes, all that. But was a little bit of a
career shift for me,
533
00:27:58,562 --> 00:27:59,893
not a career change, but a career shift.
534
00:27:59,893 --> 00:28:03,491
And so when I came in and that first
transaction went through kind
535
00:28:03,491 --> 00:28:07,286
of the restless history, it was a $52
million recapitalization
536
00:28:07,286 --> 00:28:08,286
of a restaurant group.
537
00:28:08,599 --> 00:28:11,431
And ~ after that enjoyed the business
every day since.
538
00:28:11,431 --> 00:28:14,275
I mean, I'm kind of one of those people
that like Warren Buffett says,
539
00:28:14,275 --> 00:28:15,857
he skips into the office every day.
540
00:28:15,857 --> 00:28:19,571
And for me, I I really appreciate and
enjoy what we do every day
541
00:28:19,571 --> 00:28:21,513
in in several different senses.
542
00:28:21,513 --> 00:28:23,095
I love kind of giving back to companies,
543
00:28:23,095 --> 00:28:24,577
creating opportunity for employees.
544
00:28:24,577 --> 00:28:26,609
it's been it's been a lot of fun and a fun
journey.
545
00:28:27,225 --> 00:28:31,528
that's great. So you you got to go ~ got
to go shopping in the beginning
546
00:28:31,528 --> 00:28:33,549
of your career for smaller businesses,
547
00:28:33,549 --> 00:28:37,611
for your employer to buy and and finally
wound up buying one yourself
548
00:28:37,611 --> 00:28:42,564
and stepping into that role. I I'm sure
that was an exciting time,
549
00:28:42,564 --> 00:28:47,877
but also a little bit of a fearful time
stepping into ~ that much liability,
550
00:28:47,877 --> 00:28:49,858
you know, kind of being the guy at the
top.
551
00:28:49,858 --> 00:28:52,460
Can you tell us a little bit about the
thought process there?
552
00:28:53,086 --> 00:28:54,736
some of the excitement, some of the fears.
553
00:28:56,135 --> 00:28:58,516
Yeah, so it was interesting timing.
554
00:28:58,516 --> 00:29:00,446
So that occurred, I think, around
September,
555
00:29:00,446 --> 00:29:03,817
August of twenty nineteen. And then you
think about what happened just
556
00:29:03,817 --> 00:29:06,758
a few short months later, ~ March of
twenty twenty,
557
00:29:06,758 --> 00:29:08,868
right? So I would say in the beginning,
558
00:29:08,868 --> 00:29:12,859
I was just so busy with all my ideas and
thoughts that and and excitement
559
00:29:12,859 --> 00:29:16,540
for what was next that I was just kind of
busy kind of in the in the trenches,
560
00:29:16,540 --> 00:29:17,841
sort of speak, for a few months.
561
00:29:17,841 --> 00:29:21,222
But I will say shortly after in April of
twenty twenty,
562
00:29:21,222 --> 00:29:23,155
that's kind of when it hit me in the sense
of,
563
00:29:23,155 --> 00:29:24,583
golly, you know.
564
00:29:24,663 --> 00:29:29,275
Sitting sitting there kinda thirty days
into a a giant question mark over,
565
00:29:29,275 --> 00:29:32,262
you know, what was really gonna happen and
where things were gonna go.
566
00:29:32,262 --> 00:29:33,837
~ that was kind of one of those
567
00:29:34,175 --> 00:29:36,477
really ~ deeper soul searching moments.
568
00:29:36,477 --> 00:29:38,488
I think for me it was kind of like around
April 10th.
569
00:29:38,488 --> 00:29:41,841
I was like, hmm, so now I understand all
this stuff about,
570
00:29:41,841 --> 00:29:45,003
you know, risk of being a business owner
and what it really means and
571
00:29:45,163 --> 00:29:48,216
how you may have to put back you know into
your business before you
572
00:29:48,216 --> 00:29:50,027
you get things out of it, et cetera.
573
00:29:50,027 --> 00:29:53,189
So that was kind of definitely one of the
more of those gut check moments,
574
00:29:53,189 --> 00:29:55,371
although I would say it was pretty
short-lived.
575
00:29:55,371 --> 00:29:57,733
I, you know, was highly committed to what
we were doing,
576
00:29:57,733 --> 00:29:59,715
highly passionate about it. We
577
00:29:59,933 --> 00:30:01,934
really kind of doubled down on activity.
578
00:30:01,934 --> 00:30:04,708
I would say one of the things that kind of
came out of that,
579
00:30:04,708 --> 00:30:08,553
you know, very brief moment of ~ maybe
questioning life a little
580
00:30:08,553 --> 00:30:10,809
bit was throwing myself back into,
581
00:30:10,809 --> 00:30:12,250
you know, creating value for others.
582
00:30:12,250 --> 00:30:15,303
So we shortly after, around that time
period,
583
00:30:15,303 --> 00:30:17,703
we were just flooded with inbound
inquiries from
584
00:30:18,375 --> 00:30:21,517
college ~ folks who've had their
internships canceled.
585
00:30:21,517 --> 00:30:23,748
And so one of the things that we said,
586
00:30:23,748 --> 00:30:25,549
hey, we're gonna we're gonna stay busy,
587
00:30:25,549 --> 00:30:27,967
we're gonna give back, we're gonna be
active.
588
00:30:27,967 --> 00:30:30,791
~ we started a remote internship program.
589
00:30:30,791 --> 00:30:35,333
And since 2020, we've had five or six
hundred folks go through
590
00:30:35,333 --> 00:30:37,164
it from five different continents.
591
00:30:37,164 --> 00:30:40,245
And it's really been kind of an impactful
give back for us.
592
00:30:40,245 --> 00:30:43,107
So even in the kind of that brief kind of
dark gray moment,
593
00:30:43,107 --> 00:30:44,641
so to speak, I'm not gonna call it black
moment,
594
00:30:44,641 --> 00:30:47,829
but dark gray moment, we tended to kind of
find something that
595
00:30:48,009 --> 00:30:51,220
you know, kept us busy, kept us giving
back and kept our name in front
596
00:30:51,220 --> 00:30:53,026
of ~ the industry, so to speak.
597
00:30:53,026 --> 00:30:59,436
So what was the most difficult step in
that process of taking over Westlake
598
00:30:59,436 --> 00:31:05,085
and and going from employee to owner and
and being the guy at the top,
599
00:31:05,085 --> 00:31:06,085
the guy in charge?
600
00:31:05,926 --> 00:31:10,388
So I think the most difficult step was
really just around prioritization.
601
00:31:10,388 --> 00:31:15,424
I think whenever you step into an
entrepreneurial setting,
602
00:31:15,424 --> 00:31:20,436
there's so many things that you can
actually do with a company that it almost
603
00:31:20,436 --> 00:31:24,363
can be overwhelming and can be confusing
in the sense of what
604
00:31:24,363 --> 00:31:26,929
are the real priorities. And so for me,
605
00:31:26,929 --> 00:31:32,422
that was definitely a moment where I had
to think through what I really wanted
606
00:31:32,422 --> 00:31:35,283
the company to become and then how to
again just use.
607
00:31:35,353 --> 00:31:38,125
This reverse engineering, I think one of
the benefits you know I had
608
00:31:38,125 --> 00:31:41,647
is I'd been using this reverse engineering
strategy for years,
609
00:31:41,647 --> 00:31:45,760
and so I applied those tactics to myself.
610
00:31:45,760 --> 00:31:49,422
We apply it still to this day in terms of
thinking through kind of what
611
00:31:49,422 --> 00:31:50,953
do I really want to see happen,
612
00:31:50,953 --> 00:31:54,606
and then what are the most kind of
important elements that really needed
613
00:31:54,606 --> 00:31:57,178
to come out of that? And so I did have a
brief moment where I
614
00:31:57,178 --> 00:31:59,189
was almost overwhelmed with, you know,
615
00:31:59,189 --> 00:32:01,210
we could do the website, we could raise
money ourselves,
616
00:32:01,210 --> 00:32:02,581
we could go look for acquisitions,
617
00:32:02,581 --> 00:32:05,123
we could hire people. There's all these
different levers
618
00:32:05,283 --> 00:32:07,705
Of growth started kind of flooding into
myself,
619
00:32:07,705 --> 00:32:09,106
and I had to take a deep breath and say,
620
00:32:09,106 --> 00:32:11,957
okay, if we do them all, I'm gonna be
fatigued,
621
00:32:11,957 --> 00:32:13,348
our organization's gonna be fatigued,
622
00:32:13,348 --> 00:32:15,180
and we're gonna start failing at multiple
levels.
623
00:32:15,180 --> 00:32:19,062
And so what we did was really take a step
back and prioritize.
624
00:32:19,062 --> 00:32:21,464
We we knew we wanted to build a brand,
625
00:32:21,464 --> 00:32:25,670
and so that was something that we really
doubled down and reinvested in
626
00:32:25,670 --> 00:32:29,930
in terms of building a brand and building
~ a real you know recognizable face
627
00:32:29,930 --> 00:32:33,943
to the company, so to speak. we knew
certain things about we want to have
628
00:32:34,002 --> 00:32:35,123
a business that wasn't
629
00:32:35,223 --> 00:32:39,026
just about selling companies, but also
about helping companies grow.
630
00:32:39,026 --> 00:32:42,878
And so today our business is kind of ~
equally split between those that
631
00:32:42,878 --> 00:32:44,929
are seeking growth and seeking liquidity.
632
00:32:44,929 --> 00:32:47,721
And so a lot of the things that we are
today,
633
00:32:47,721 --> 00:32:49,833
kind of these years later, seven years
later,
634
00:32:49,833 --> 00:32:54,956
those little seeds and kernels were
started to ~ form all the way back to
2019.
635
00:32:54,956 --> 00:32:59,009
But I would say I, you know, had my own
moment of of just almost being overwhelmed
636
00:32:59,009 --> 00:33:03,202
by all the different directions you can go
in and needing to kind of step back
637
00:33:03,202 --> 00:33:04,963
and and that own kind of
638
00:33:05,123 --> 00:33:08,130
reverse engineering path was actually
helpful to me at that time too.
639
00:33:08,529 --> 00:33:12,818
Yeah, you get to practice what you preach
and ~ put it to work and i
640
00:33:12,818 --> 00:33:14,743
it appears like that worked well for you.
641
00:33:16,220 --> 00:33:18,421
Yeah, I I I would say so. You know,
642
00:33:18,421 --> 00:33:21,522
a lot of the things that we set out to
accomplish over the first five years
643
00:33:21,522 --> 00:33:23,992
of the company, I'd say we did an
excellent job at.
644
00:33:23,992 --> 00:33:29,216
We have ~ I reset our next five year plan
kind of going forward about a year ago,
645
00:33:29,216 --> 00:33:32,337
~ where we've got even more ambition in
terms of growth.
646
00:33:32,337 --> 00:33:35,349
And, you know, I think it's it's been
exciting for our team.
647
00:33:35,349 --> 00:33:37,340
We've done some things that are pretty
cool of late.
648
00:33:37,340 --> 00:33:41,883
and so we've, you know, w won a industry
award in Houston for deal of the year.
649
00:33:41,883 --> 00:33:43,930
We next book coming out, we ~
650
00:33:44,124 --> 00:33:48,246
the speaking is kind of really mushroomed
from where it was ~ three years
651
00:33:48,246 --> 00:33:50,377
ago compared to a year ago compared to
right now.
652
00:33:50,377 --> 00:33:55,089
and so just a lot of things that have been
organizationally exciting to to see.
653
00:33:55,089 --> 00:33:58,680
And I think, you know, one of the reasons
why that reverse engineering
654
00:33:58,680 --> 00:34:02,653
is so important is is and where I've seen
it kind of firsthand is just kind
655
00:34:02,653 --> 00:34:04,754
of cultural excitement for what it is
you're doing.
656
00:34:04,754 --> 00:34:08,576
And it really doesn't matter if again
you've got a plumbing business,
657
00:34:08,576 --> 00:34:11,556
roofing business, electrical, food
manufacturing,
658
00:34:11,556 --> 00:34:12,556
~
659
00:34:12,608 --> 00:34:14,309
If you're making kind of imprinted
t-shirts,
660
00:34:14,309 --> 00:34:15,620
whatever it is that you're doing,
661
00:34:15,620 --> 00:34:20,062
retail, online, et cetera, doesn't really
if you've got people around you,
662
00:34:20,062 --> 00:34:21,922
you've got employees, you know,
663
00:34:21,922 --> 00:34:25,975
having a kind of a reverse-engineered plan
and then celebrating some
664
00:34:25,975 --> 00:34:30,056
of the wins along the way, you'll see what
ends up happening is that your your
665
00:34:30,056 --> 00:34:33,438
organizational culture will just continue
to blossom and you'll start
666
00:34:33,438 --> 00:34:34,870
to develop a culture of winning.
667
00:34:34,870 --> 00:34:40,783
And I think that's one thing that our team
is really kind of excited about
668
00:34:40,783 --> 00:34:42,454
is like we I think we all like to win.
669
00:34:42,487 --> 00:34:44,397
We like to close transactions,
670
00:34:44,397 --> 00:34:45,628
we like to bring on new clients,
671
00:34:45,628 --> 00:34:47,108
we like to set new milestones.
672
00:34:47,108 --> 00:34:50,768
And so it's kind of organizationally fun
for us when we achieve,
673
00:34:50,768 --> 00:34:52,149
you know, one of those elements.
674
00:34:52,149 --> 00:34:54,789
And again, I'll go back to 2019 early
days.
675
00:34:54,789 --> 00:34:57,090
that just seems so far off at that point.
676
00:34:57,090 --> 00:35:01,260
But, you know, if you map that course and
you're just consistent,
677
00:35:01,260 --> 00:35:03,391
it just these things kind of tend to
flywheel.
678
00:35:03,391 --> 00:35:07,111
And it's hard to describe, but but victory
brings kind of more victory
679
00:35:07,111 --> 00:35:09,212
in lot of senses. And just like a sports
team,
680
00:35:09,212 --> 00:35:10,212
sort of speak.
681
00:35:10,401 --> 00:35:12,532
Yeah, people like to be winners.
682
00:35:12,532 --> 00:35:14,113
They like to be on the winning team.
683
00:35:14,113 --> 00:35:16,775
The the more you win, the more support you
get,
684
00:35:16,775 --> 00:35:18,766
the more you win, the more buy-in you get.
685
00:35:18,766 --> 00:35:23,019
And it definitely has a a kind of an
immeasurable momentum,
686
00:35:23,019 --> 00:35:27,432
I think. So well that that makes a great
segue.
687
00:35:25,192 --> 00:35:26,192
Yeah.
688
00:35:27,432 --> 00:35:30,944
we talked about kind of your early career
and how you were ~ kind
689
00:35:30,944 --> 00:35:35,397
of uniquely trained to do what you're
doing now with the experiences you have.
690
00:35:35,747 --> 00:35:39,569
~ buying and selling businesses for other
businesses and being part
691
00:35:39,569 --> 00:35:41,230
of some pretty phenomenal growth.
692
00:35:41,230 --> 00:35:44,952
And then you got the opportunity to put
that into practice yourself as
693
00:35:44,952 --> 00:35:48,944
CEO with you at the helm buying a bit at
buying and growing a business.
694
00:35:48,944 --> 00:35:54,397
so now my understanding is that is kind of
exactly what you do for your clients.
695
00:35:54,397 --> 00:35:56,238
Can you help us understand a little
better?
696
00:35:56,238 --> 00:35:58,819
I know there's a a lot of financial
jargon,
697
00:35:58,819 --> 00:36:01,351
~ liquidity and exits and
698
00:36:01,583 --> 00:36:03,953
Mergers and acquisitions, and A,
699
00:36:03,953 --> 00:36:09,698
you know, enterprise value, but kind of
for the the layman in plain terms,
700
00:36:09,698 --> 00:36:11,471
what are the services that you provide?
701
00:36:11,471 --> 00:36:12,774
What do you do for your clients?
702
00:36:14,517 --> 00:36:17,627
So great question. We do two things at its
essence.
703
00:36:17,627 --> 00:36:20,516
we have about half of our clients are
704
00:36:20,905 --> 00:36:24,026
Folks who are seeking what we call
intentional growth.
705
00:36:24,026 --> 00:36:28,829
So they're seeking to grow their business
over a measured period of time using
706
00:36:28,829 --> 00:36:30,389
a predictable framework to do it.
707
00:36:30,389 --> 00:36:32,530
So that's about half of what we do.
708
00:36:32,530 --> 00:36:34,992
And then the other half of what we do is
people that
709
00:36:34,992 --> 00:36:37,343
are ultimately seeking intentional
liquidity.
710
00:36:37,343 --> 00:36:40,764
And that can come in either a smaller
chunk or a minority deal,
711
00:36:40,764 --> 00:36:45,416
or it can come from a larger, kind of
either low majority all the way through
712
00:36:45,416 --> 00:36:49,408
a full full exit scenario. And so that
really makes up our clients as again,
713
00:36:49,408 --> 00:36:50,719
people that are interested in growth.
714
00:36:50,812 --> 00:36:52,553
People that are interested in liquidity.
715
00:36:52,553 --> 00:36:55,015
For people that are interested in growth,
716
00:36:55,015 --> 00:37:01,600
we really utilize the ~ framework from
intentional growth to help them work
through
717
00:37:01,600 --> 00:37:05,023
a journey of getting from where they are
to where they want to be,
718
00:37:05,023 --> 00:37:09,126
using kind of that three to seven year
time period and achieving
719
00:37:09,126 --> 00:37:12,068
a financial outcome that would be
motivational to both them
720
00:37:12,068 --> 00:37:16,312
and their key stakeholders. And so we do
that with a combination of you know,
721
00:37:16,312 --> 00:37:19,294
advisory, consulting, potentially capital
raising,
722
00:37:19,294 --> 00:37:20,695
potentially buying other companies.
723
00:37:20,695 --> 00:37:23,457
Companies, growing their business
organically,
724
00:37:23,457 --> 00:37:25,278
maybe greenfielding new locations,
725
00:37:25,278 --> 00:37:29,281
products, or services. But we can really
help them organize their thoughts around
726
00:37:29,321 --> 00:37:32,963
how they can best achieve a great outcome,
727
00:37:32,963 --> 00:37:37,086
maybe an outcome that's far in excess of
the current trajectory of their business.
728
00:37:37,086 --> 00:37:42,149
So that's the growth side. The liquidity
side really has to do with when people
729
00:37:42,189 --> 00:37:44,611
are starting to think about, you know,
730
00:37:44,611 --> 00:37:48,003
what what what what does their business
really start to translate
731
00:37:48,003 --> 00:37:50,355
to them personally? And that may mean.
732
00:37:50,715 --> 00:37:52,426
That somebody's kind of mid-career.
733
00:37:52,426 --> 00:37:55,038
And so rather than selling the entirety of
their business,
734
00:37:55,038 --> 00:37:59,631
they may want to look at selling a third
of their business to take some chips
735
00:37:59,631 --> 00:38:02,303
off the table or to get some capital out
of their business personally,
736
00:38:02,303 --> 00:38:05,725
but then also to have more capital to
reinvest in the business to grow.
737
00:38:05,725 --> 00:38:08,367
And so sometimes a transaction like that
could be,
738
00:38:08,367 --> 00:38:12,147
you know, selling again a third of their
business and taking half the capital
739
00:38:12,147 --> 00:38:16,182
for ~ personal means and then the other
half to to go on balance sheet
740
00:38:16,182 --> 00:38:18,972
of the company, or it may mean all the way
through a full exit.
741
00:38:19,242 --> 00:38:21,303
And when somebody's ready for a full exit,
742
00:38:21,303 --> 00:38:24,976
we really kind of work with them on the
proper preparation to get
743
00:38:24,976 --> 00:38:27,226
to a premium valuation. And that's really
where,
744
00:38:27,226 --> 00:38:30,860
you know, we tend to shine is helping
companies better prepare
745
00:38:30,860 --> 00:38:34,012
for a transaction that they're going to be
truly proud of.
746
00:38:34,012 --> 00:38:36,033
And that's about half our, you know,
747
00:38:36,033 --> 00:38:37,865
half of our practice. And we've worked
with a number of,
748
00:38:37,865 --> 00:38:41,937
we've been fortunate to work with a number
of really amazing companies over time
749
00:38:41,937 --> 00:38:47,381
that have had sensational, sensational
kind of exits or majority transactions.
750
00:38:47,381 --> 00:38:48,962
And so that part's really fun for us too.
751
00:38:48,975 --> 00:38:51,667
So the whole life cycle for us has really
been fun,
752
00:38:51,667 --> 00:38:55,649
but we feel like each business has kind of
a unique kind of journey.
753
00:38:55,649 --> 00:39:00,902
And so generally speaking, our growth
journey is going to start maybe about
halfway
754
00:39:00,902 --> 00:39:03,513
through somebody's kind of entrepreneurial
~ journey,
755
00:39:03,513 --> 00:39:06,505
potentially just on average, and then our
kind of
756
00:39:07,293 --> 00:39:10,685
intentional liquidity is going to start
maybe three quarters or closer to
757
00:39:10,685 --> 00:39:13,047
the end of somebody's kind of career
journey.
758
00:39:13,047 --> 00:39:16,039
So I kind of call it like we're back half
of the career services.
759
00:39:16,039 --> 00:39:18,961
So when somebody's gonna build a platform
that's ready to scale,
760
00:39:18,961 --> 00:39:22,303
we can help them do it. And when
somebody's ready to take a scale platform
761
00:39:22,303 --> 00:39:24,185
and think about what's next, we can do it.
762
00:39:24,699 --> 00:39:28,350
man, that's perfect. Well, I know I wanna
spend a considerable amount
763
00:39:28,350 --> 00:39:32,472
of time here talking about kind of
preparing for exit and that kind of thing.
764
00:39:32,472 --> 00:39:35,152
I think something that's something that's
really hot right now
765
00:39:35,152 --> 00:39:38,804
in the industries that ~ our listenership
is probably made up of.
766
00:39:38,804 --> 00:39:43,915
But I want to roll back ~ one more
question kind of about the the coaching
767
00:39:43,915 --> 00:39:45,646
or growth side of your business.
768
00:39:45,646 --> 00:39:48,767
you know, you said you typically kind of
take people in
769
00:39:49,469 --> 00:39:52,721
on the the second half of their
entrepreneurial journey,
770
00:39:52,721 --> 00:39:57,094
your services are probably more on that
that growth and development,
771
00:39:57,094 --> 00:40:00,205
not getting the business initially started
or off the ground.
772
00:40:00,205 --> 00:40:04,387
What would be some key signs for a
business owner that they're ready
773
00:40:04,387 --> 00:40:07,759
for that next step? That they kind of have
their business established,
774
00:40:07,759 --> 00:40:11,971
they're ready to start, focusing on growth
or or maybe they need
775
00:40:12,642 --> 00:40:14,453
the type of services that you offer.
776
00:40:15,793 --> 00:40:17,563
Sure. So we're
777
00:40:17,755 --> 00:40:22,187
For us, we're typically starting to see
kind of a combination of people,
778
00:40:22,187 --> 00:40:25,449
process, and system in place that you can
really say,
779
00:40:25,449 --> 00:40:27,560
hey, there's a there's a real business
there.
780
00:40:27,560 --> 00:40:30,841
And so generally we're gonna start to see
some employees,
781
00:40:30,841 --> 00:40:33,943
generally, we're gonna start to see
multiple customers,
782
00:40:33,943 --> 00:40:36,194
we're gonna start to see multiple
stakeholders,
783
00:40:36,194 --> 00:40:40,756
we're gonna start to see you know the
beginnings of you know an accounting
system,
784
00:40:40,756 --> 00:40:43,057
we're gonna see some of the beginnings of
you know,
785
00:40:43,057 --> 00:40:45,828
employee processes, maybe a little bit on
training,
786
00:40:45,828 --> 00:40:47,699
things of that nature. So a little bit of
financial.
787
00:40:47,651 --> 00:40:48,651
Financial
788
00:40:48,041 --> 00:40:52,155
scale, so we're really gonna start to see
that the business has achieved
789
00:40:52,475 --> 00:40:56,658
a certain level of performance to where
its existence isn't in total question,
790
00:40:56,658 --> 00:40:59,390
right? You've you've already got you know
some things kind of working
791
00:40:59,390 --> 00:41:02,283
for you where you've got people process
systems in place.
792
00:41:02,283 --> 00:41:07,937
From there, we we tend to scale up in
terms of organizations.
793
00:41:07,937 --> 00:41:09,228
That's about our starting place,
794
00:41:09,228 --> 00:41:12,071
but a lot of companies that we're working
with are really trying to
795
00:41:12,071 --> 00:41:16,924
get from that place to being a place at a
place where they would be ~ able
796
00:41:16,924 --> 00:41:17,924
to have an
797
00:41:17,555 --> 00:41:19,175
Institutional investor come in,
798
00:41:19,175 --> 00:41:22,238
and that typically starts to move into
seven figures of profit.
799
00:41:22,238 --> 00:41:24,997
And then a lot of the times the companies
that we're working with
800
00:41:24,997 --> 00:41:29,193
are also companies that are much deeper
into their life cycles where they're
trying
801
00:41:29,193 --> 00:41:32,916
to get from you know three million of
profit to seven million or seven million
802
00:41:32,916 --> 00:41:34,727
to twelve million or twelve million to
twenty-five.
803
00:41:34,727 --> 00:41:37,619
And so we work with companies kind of
throughout that spectrum.
804
00:41:37,619 --> 00:41:40,381
But for us, in terms of working with an
organization,
805
00:41:40,381 --> 00:41:43,773
we really need to start to see some of the
semblances of like
806
00:41:43,773 --> 00:41:46,835
a business that's that's really trying to
get to scale.
807
00:41:47,035 --> 00:41:51,419
Although I'll say the book and some of our
online materials and things that
808
00:41:51,419 --> 00:41:54,328
we have at our website will help companies
from day one,
809
00:41:54,328 --> 00:41:56,342
you know, in terms of thinking through
some of these topics.
810
00:41:56,342 --> 00:41:59,669
But in terms of like where we can be
helpful to our organization
811
00:41:59,669 --> 00:42:02,086
and start to interact with them
one-on-one,
812
00:42:02,086 --> 00:42:06,069
~ we're we're starting to see again some
signs of like the the business kind
813
00:42:06,069 --> 00:42:10,382
of really starting to look like ~ a
business as opposed to a soul soul sole
814
00:42:10,382 --> 00:42:11,692
practitioner practitioner.
815
00:42:11,837 --> 00:42:13,898
And I w I would bet that you you know,
816
00:42:13,898 --> 00:42:17,551
there's a fee associated with the type of
assistance you guys provide.
817
00:42:17,551 --> 00:42:22,584
And so there probably has to be a level of
success that kind of justifies that
818
00:42:22,584 --> 00:42:26,427
fee where y you guys are going to be able
to provide the benefits that
819
00:42:26,567 --> 00:42:31,801
~ outweigh that fee. ~ is there kind of a
a baseline there that
820
00:42:31,801 --> 00:42:35,603
you would recommend when it really makes
sense to start paying for a coach,
821
00:42:35,603 --> 00:42:37,454
paying for help and growing your business,
822
00:42:37,454 --> 00:42:39,696
rather than, you know, grabbing
823
00:42:41,315 --> 00:42:43,217
I guess I don't have a better word than
cheaper,
824
00:42:43,217 --> 00:42:48,044
but the more do-it-yourself resources like
reading a book or listening to podcasts,
825
00:42:48,044 --> 00:42:50,327
something that's more readily available.
826
00:42:51,841 --> 00:42:53,382
Yeah, I think that's a great point.
827
00:42:53,382 --> 00:42:55,893
And and you know, when you're early in a
business,
828
00:42:55,893 --> 00:43:02,216
the competition for resources and your
personal compensation
829
00:43:02,216 --> 00:43:03,216
is pretty real.
830
00:43:03,197 --> 00:43:05,948
yeah, most business startups, cash is
tight.
831
00:43:05,948 --> 00:43:07,888
They don't have a lot of money to spread
around.
832
00:43:07,888 --> 00:43:08,888
So
833
00:43:08,759 --> 00:43:10,530
Yeah, cash is tight. When cash is tight,
834
00:43:10,530 --> 00:43:14,111
when your resources and your compensation
are in competition for each other,
835
00:43:14,111 --> 00:43:17,733
you really have to take advantage of all
the things that are available,
836
00:43:17,733 --> 00:43:19,304
like you know, podcasts, books,
837
00:43:19,304 --> 00:43:21,985
et cetera, things that are high value,
838
00:43:21,985 --> 00:43:26,777
low cost. So then what happens is you get
to a place to where
839
00:43:27,398 --> 00:43:28,838
the business has scale, and again,
840
00:43:28,838 --> 00:43:30,659
you've got these people processing
systems,
841
00:43:30,659 --> 00:43:35,742
to where all of a sudden you start to see
a little bit of a diminishing return
842
00:43:35,742 --> 00:43:38,063
for low-cost elements.
843
00:43:38,063 --> 00:43:39,463
Value in it, right? There's always value.
844
00:43:39,463 --> 00:43:43,487
Like I buy books, I mean, I'll I'm the
first one to go to half-price books
845
00:43:43,487 --> 00:43:47,519
and I'll I'll buy a $7 book. I'll I'll go
to you know Amazon or Barnes Noble
846
00:43:47,519 --> 00:43:50,017
and I'll get a $30 hardcover brand new.
847
00:43:50,017 --> 00:43:52,953
And you know, I'm the first one that will
buy you know a book and and kind
848
00:43:52,953 --> 00:43:56,435
of use it to help grow on something that
is really a topic of interest to
849
00:43:56,435 --> 00:43:59,547
me at that time. But at some point there
tends to be a little
850
00:43:59,547 --> 00:44:01,258
bit of diminishing returns to that,
851
00:44:01,258 --> 00:44:06,132
in the sense of at some point you need in
a lot of entrepreneurial journeys,
852
00:44:06,132 --> 00:44:07,983
someone who's been there and done that who
can.
853
00:44:08,023 --> 00:44:11,175
Help shortcut getting from here to there.
854
00:44:11,175 --> 00:44:16,028
And so, you know, a lot of times kind of ~
lower cost content is just
855
00:44:16,429 --> 00:44:17,669
not going to ultimately get you there.
856
00:44:17,669 --> 00:44:19,501
It may get you started in the thought
process,
857
00:44:19,501 --> 00:44:20,691
but it's not going to get you all the way
there.
858
00:44:20,691 --> 00:44:24,924
And so that tends to be where ~
organizations like ours can kind of start
859
00:44:24,924 --> 00:44:29,828
to play a role. ~ I would also say CEO
peer groups can also play a role in that.
860
00:44:29,828 --> 00:44:34,371
There's some great you know organizations
out there that aren't terribly expensive
861
00:44:34,371 --> 00:44:37,855
but can give you ~ a little bit of a peer
network to start to grow from.
862
00:44:37,855 --> 00:44:42,908
But those sorts of things when all your
financial resources start to grow
863
00:44:42,908 --> 00:44:46,410
and you start to kind of place higher and
higher value on your time and
864
00:44:46,410 --> 00:44:49,782
you want to find short, ~ shorter paths to
success,
865
00:44:49,782 --> 00:44:52,404
that's really where like CEO peer groups,
866
00:44:52,404 --> 00:44:55,086
firms like ours, consultants, etc.,
867
00:44:55,086 --> 00:44:57,287
coaches can really come into play to help
you,
868
00:44:57,287 --> 00:44:59,908
know, short circuit kind of that that
growth path.
869
00:45:01,329 --> 00:45:05,411
And I know ~ clearly with y your guys'
background,
870
00:45:05,411 --> 00:45:07,792
your personal background, experience,
871
00:45:07,792 --> 00:45:09,231
the success you guys have seen.
872
00:45:09,231 --> 00:45:12,364
It appears you guys provide extreme value,
873
00:45:12,364 --> 00:45:17,776
real value. But we we live in a time where
it seems like almost everyone that gets
874
00:45:17,816 --> 00:45:23,879
~ laid off or ~ downsized is all of a
sudden a coach or a consultant.
875
00:45:23,879 --> 00:45:26,120
maybe without the background and the
experience.
876
00:45:26,120 --> 00:45:28,001
What advice would you have for someone
877
00:45:28,641 --> 00:45:32,823
that is that at that point where they need
a little bit more specific advice,
878
00:45:32,823 --> 00:45:35,204
they need some coaching, they need that
shortcut.
879
00:45:35,204 --> 00:45:37,945
how do they find and vet a a coach,
880
00:45:37,945 --> 00:45:42,588
a consultant, a firm like yours that's
gonna provide real value rather than
somebody
881
00:45:42,588 --> 00:45:46,079
that just decided being a coach was better
than finding a new job?
882
00:45:47,607 --> 00:45:49,548
Yeah, so I that's a great point.
883
00:45:49,548 --> 00:45:52,709
And I do think you have to be a little bit
of careful where you spend your time
884
00:45:52,709 --> 00:45:54,240
and money and particularly your time,
885
00:45:54,240 --> 00:45:56,561
especially almost at any stage of
business,
886
00:45:56,561 --> 00:46:00,233
time is our greatest asset and our most
expensive ~ resource.
887
00:46:00,233 --> 00:46:05,996
So where I generally tend to coach folks
is you want to have kind of mentors,
888
00:46:05,996 --> 00:46:08,727
if you will, or advisors, however you want
phrase it,
889
00:46:08,727 --> 00:46:12,299
somebody who's on your team, kind of at
three different levels,
890
00:46:12,299 --> 00:46:15,720
and each different level is going to be
weighted towards where you're
891
00:46:15,720 --> 00:46:17,471
at in your life cycle. So for
892
00:46:17,633 --> 00:46:21,777
Three levels are theory, next is witness,
893
00:46:21,777 --> 00:46:25,180
and last is the practitioner.
894
00:46:25,180 --> 00:46:30,864
And so theory is somebody who you can
learn from who actually has studied the
topic,
895
00:46:30,864 --> 00:46:33,056
they have put books out on it,
896
00:46:33,056 --> 00:46:36,008
they may have classes on it, but they
they're teaching in theory,
897
00:46:36,008 --> 00:46:40,422
meaning they've studied it, they may have
even had some relative experiences,
898
00:46:40,422 --> 00:46:42,834
but they've never actually probably done
it themselves.
899
00:46:42,834 --> 00:46:46,217
And this is going to be the type of
mentorship that's the easiest to access,
900
00:46:46,217 --> 00:46:47,217
and it's probably
901
00:46:46,897 --> 00:46:48,278
going to be the least expensive,
902
00:46:48,278 --> 00:46:50,199
right? But it can be very helpful.
903
00:46:50,199 --> 00:46:53,161
And that's available in different kind of
formats,
904
00:46:53,161 --> 00:46:55,383
all the way from traditional university,
905
00:46:55,383 --> 00:46:58,285
all the way through non-traditional
education.
906
00:46:58,285 --> 00:47:04,349
Then you have the witness and the witness
is somebody who really has been close
907
00:47:04,349 --> 00:47:08,612
to somebody who's done it. And so that
person that maybe got laid
908
00:47:08,612 --> 00:47:12,554
off that started their own practice who
was CFO for an organization
909
00:47:12,614 --> 00:47:14,655
or somebody who was an operating executive
910
00:47:14,775 --> 00:47:16,186
or partner inside of organization.
911
00:47:16,186 --> 00:47:18,177
Maybe they weren't like the guy or girl,
912
00:47:18,177 --> 00:47:20,009
but they they weren't, you know,
913
00:47:20,009 --> 00:47:22,480
they're not far from it. They kind of
witnessed what happened.
914
00:47:22,480 --> 00:47:25,152
That's another form of mentor advisor you
can get.
915
00:47:25,152 --> 00:47:27,484
And that's going to probably ink up,
916
00:47:27,484 --> 00:47:29,195
you know, eke up a little bit in,
917
00:47:29,195 --> 00:47:33,367
you know, cost, but probably somebody
who's a little bit closer to what it
takes.
918
00:47:33,367 --> 00:47:35,588
And then the last is the actual
practitioner,
919
00:47:35,588 --> 00:47:37,419
the person that's been there and done it.
920
00:47:37,419 --> 00:47:41,342
And I really encourage people to anytime
you're going to spend time
921
00:47:41,342 --> 00:47:44,064
and money to think about where they fit in
that spectrum.
922
00:47:44,134 --> 00:47:48,528
and to make sure you're allocating your
time and financial resources
appropriately.
923
00:47:48,528 --> 00:47:51,771
And so one of the biggest mistakes we tend
to see people make is to
924
00:47:51,891 --> 00:47:56,636
put too much time and money into mentors
or advisors that are theorists
925
00:47:56,636 --> 00:47:58,948
as opposed to you know actual
practitioners.
926
00:47:58,948 --> 00:48:02,361
You've got to weigh each one of those
things with time and money appropriately.
927
00:48:03,258 --> 00:48:05,229
That's a good way to break that down.
928
00:48:05,229 --> 00:48:08,402
I like that. And ~ yeah, I c I can relate
to those.
929
00:48:08,402 --> 00:48:11,585
I think I've benefited from ~ all three
types of advisors,
930
00:48:11,585 --> 00:48:13,446
but I've never heard it broken down like
that.
931
00:48:13,547 --> 00:48:14,810
I'll sign up for all this stuff,
932
00:48:14,810 --> 00:48:18,469
like I I I love it, but I am going to have
a sharp lens for
933
00:48:18,940 --> 00:48:22,412
Is this something that maybe I can listen
to on my own time when I'm working
934
00:48:22,412 --> 00:48:25,333
out or driving, etc.? And, you know,
935
00:48:25,333 --> 00:48:27,814
use in that fashion, or is it something
I'm gonna actually take?
936
00:48:27,814 --> 00:48:30,986
If I'm gonna take an hour out of my day to
do something kind of in the eight
937
00:48:30,986 --> 00:48:33,537
to five realm, it's gotta be, you know,
938
00:48:33,537 --> 00:48:36,658
it it's gotta be somebody whom I find
impressive.
939
00:48:36,658 --> 00:48:38,649
~ you know, outside of those hours,
940
00:48:38,649 --> 00:48:40,040
I'll kind of wait different ways,
941
00:48:40,040 --> 00:48:42,910
but that's kind of how I guard my time and
you know,
942
00:48:42,910 --> 00:48:44,442
financial wallet, if you will,
943
00:48:44,442 --> 00:48:47,974
and that stuff is if it's gonna enter my
nine to five or my eight to five,
944
00:48:47,974 --> 00:48:48,974
it's gotta be.
945
00:48:49,144 --> 00:48:51,776
You know, it's gotta be somebody who's
been someplace and done something pretty
946
00:48:51,776 --> 00:48:54,288
important for me to dedicate an hour
during the day.
947
00:48:54,288 --> 00:48:56,100
Outside of that, I'm a little bit more,
948
00:48:56,100 --> 00:48:58,472
you know, I'll take a little bit of risk
in terms of time.
949
00:48:58,472 --> 00:49:00,934
But you know, during that window in
particular,
950
00:49:00,934 --> 00:49:04,417
I'm I'm you know, it's it's gotta be
important.
951
00:49:04,562 --> 00:49:07,144
you gotta have that value add and I I love
that.
952
00:49:07,144 --> 00:49:08,624
While you're driving, working out,
953
00:49:08,624 --> 00:49:12,207
the podcast, the audio books, things like
that are are awesome.
954
00:49:12,207 --> 00:49:13,927
Very little risk, very little cost,
955
00:49:13,927 --> 00:49:18,450
but to give up time that could be spent
growing your business,
956
00:49:18,450 --> 00:49:23,243
making money, that that's valuable and
they better give you some value there.
957
00:49:23,403 --> 00:49:27,751
Yeah, exactly. I mean I'll I'll go to the
education buffet ~ you know before
958
00:49:27,751 --> 00:49:30,806
and after work, but during the the main
hours I I you know,
959
00:49:30,806 --> 00:49:33,551
I want a particular meal served a certain
way if I'm gonna give up an hour.
960
00:49:32,570 --> 00:49:34,872
Yeah. That's meat and potatoes
961
00:49:34,872 --> 00:49:39,084
time, not salad time. man.
962
00:49:39,324 --> 00:49:43,055
you know that that steak medium and frites
although they're French fries
963
00:49:43,055 --> 00:49:46,157
I'm not sure why they call them frites but
yeah that's that's the way I like it.
964
00:49:44,018 --> 00:49:45,018
Yeah.
965
00:49:46,157 --> 00:49:48,688
That's that's the only meal I want to eat
between nine and five when it comes
966
00:49:48,688 --> 00:49:50,689
to ~ education so to speak.
967
00:49:50,870 --> 00:49:56,368
yeah, for sure. W well I wanted to move
into the ~ and A side of things
968
00:49:56,368 --> 00:49:58,701
and talk about that half of your business.
969
00:49:58,701 --> 00:50:04,764
For the entrepreneur, the business owner
that's out there that ~ is either ready
970
00:50:04,764 --> 00:50:09,426
to start looking at an exit or is just
trying to plan ahead that three
971
00:50:09,426 --> 00:50:12,778
to seven years ahead, they know they're
kind of getting ready for that,
972
00:50:12,778 --> 00:50:17,440
entering that market. What sort of things
can they do to best be preparing
973
00:50:17,680 --> 00:50:22,102
to to have a a solid valuation and have a
business that is buyable
974
00:50:24,166 --> 00:50:28,750
So again, great question. And I'm gonna
give a couple different answers here.
975
00:50:28,750 --> 00:50:33,153
So one time I was asked what time frame
should I think about if
976
00:50:33,153 --> 00:50:37,827
I want full liquidity for my business both
financially and time wise?
977
00:50:37,827 --> 00:50:42,611
And I wanna be thoughtful and achieve a
premium valuation.
978
00:50:42,611 --> 00:50:44,222
How should I think about that timeline?
979
00:50:44,222 --> 00:50:45,944
And I took a deep breath. Eight years.
980
00:50:46,714 --> 00:50:50,826
And I think the the the guy that asked you
the question almost fainted.
981
00:50:50,826 --> 00:50:56,709
but but it really is a long journey in the
sense of if you want full liquidity from
982
00:50:56,709 --> 00:51:00,671
your business from a time and financial
perspective,
983
00:51:00,671 --> 00:51:02,772
and you want to do it in a premium way.
984
00:51:02,772 --> 00:51:06,399
And there's all kinds of answers that I'll
get to here that shorten this timeline,
985
00:51:06,399 --> 00:51:08,174
but I want to give you the premium answer
first.
986
00:51:08,174 --> 00:51:11,046
So let's break that down. Eight years,
987
00:51:11,046 --> 00:51:14,517
you know, typically one year for internal
prep.
988
00:51:14,517 --> 00:51:15,678
So that's team.
989
00:51:15,928 --> 00:51:18,720
Right, do we have the right people on the
bus process?
990
00:51:18,720 --> 00:51:20,451
Do we have the right systems in place,
991
00:51:20,451 --> 00:51:24,023
etc.? We want to make sure that we've got
some of those things buttoned
992
00:51:24,023 --> 00:51:28,236
up long before we ever go into a process
so that we got history in terms
993
00:51:28,236 --> 00:51:32,799
of them working. Secondly, once we get
through that first year of internal prep,
994
00:51:32,799 --> 00:51:35,331
now we're thinking about external prep and
transaction.
995
00:51:35,331 --> 00:51:37,492
That's going to be finding an advisor,
996
00:51:37,492 --> 00:51:39,073
right, to help market the business,
997
00:51:39,073 --> 00:51:43,757
help you get it sold. That's gonna be
finding a MA attorney who really focuses
998
00:51:43,757 --> 00:51:45,558
on ~ MA work.
999
00:51:45,808 --> 00:51:47,829
And so again, I can share a little bit
about that,
1000
00:51:47,829 --> 00:51:52,262
but it's really important to have advisors
that focus only on MA and the type
1001
00:51:52,262 --> 00:51:53,913
of MA that you're looking at doing.
1002
00:51:53,913 --> 00:51:56,785
tax, I mean, when it comes to
transactions,
1003
00:51:56,785 --> 00:52:00,007
tax is much different than just general ~
annual tax.
1004
00:52:00,007 --> 00:52:02,399
Even for business owners, it can be quite
a bit different.
1005
00:52:02,399 --> 00:52:04,050
So you want to assemble that team,
1006
00:52:04,050 --> 00:52:06,141
you want to go to market, you're actually
gonna transact.
1007
00:52:06,141 --> 00:52:09,744
So once you transact, now we're two years
into this process.
1008
00:52:09,744 --> 00:52:14,407
For most CEOs, they're gonna end up kind
of transitioning over a two.
1009
00:52:14,409 --> 00:52:17,902
To three year period, right? So either
there's gonna be an internal candidate
1010
00:52:17,902 --> 00:52:21,315
or an external candidate. It's gonna take
some time to bring that person
1011
00:52:21,315 --> 00:52:23,306
up to make sure that they're gonna
succeed.
1012
00:52:23,306 --> 00:52:26,799
And then ultimately you start to see the
first component of kind
1013
00:52:26,799 --> 00:52:30,412
of liquidity from time is maybe two to
three years post-transaction.
1014
00:52:30,412 --> 00:52:32,934
And then you're you're gonna see.
1015
00:52:32,934 --> 00:52:35,916
So it when you transact it, most for most
people,
1016
00:52:35,916 --> 00:52:39,709
~ they're going to have some sort of
contingent consideration,
1017
00:52:39,709 --> 00:52:41,601
largely in the form of rolled equity.
1018
00:52:41,601 --> 00:52:43,733
And so when you transact again,
1019
00:52:43,733 --> 00:52:44,733
sorry, I'm gonna go back.
1020
00:52:44,283 --> 00:52:46,815
Back a little bit here. you're probably
you may be asked to leave 10
1021
00:52:46,815 --> 00:52:48,676
to 30 percent of equity on the table.
1022
00:52:48,676 --> 00:52:51,817
you got that CEO transition,
1023
00:52:51,817 --> 00:52:54,640
so you've transitioned your role,
1024
00:52:54,640 --> 00:52:56,321
so your time's starting to drop off,
1025
00:52:56,321 --> 00:52:59,383
but you may still own 10 to 30 percent of
the business,
1026
00:52:59,383 --> 00:53:03,806
and the next transaction may be five years
after your first transaction.
1027
00:53:03,806 --> 00:53:05,498
And so let's kind of backtrack here.
1028
00:53:05,498 --> 00:53:07,349
We've got a Europrep internal,
1029
00:53:07,349 --> 00:53:09,300
we've got our team and transaction,
1030
00:53:09,300 --> 00:53:12,822
we've got three years of CEO transition
and probably two more.
1031
00:53:12,892 --> 00:53:16,073
Years of kind of ultimate growth,
1032
00:53:16,073 --> 00:53:18,064
readiness, and final transaction.
1033
00:53:18,064 --> 00:53:20,954
And you add all that up, and it's it's
eight years start to finish to
1034
00:53:20,954 --> 00:53:22,465
get a premium transaction done.
1035
00:53:22,465 --> 00:53:26,127
And a lot of times people they end up
there,
1036
00:53:26,127 --> 00:53:28,047
but they don't realize they're going to.
1037
00:53:28,047 --> 00:53:32,509
And so we try to preach a little bit of
message of awareness is start
1038
00:53:32,509 --> 00:53:36,040
to think about that earlier so that you're
not you know tied up
1039
00:53:36,040 --> 00:53:39,271
in your business kind of time-wise and
financially wise longer than
1040
00:53:39,271 --> 00:53:40,542
you may otherwise want to be.
1041
00:53:41,326 --> 00:53:44,888
And look, we we do transactions where you
know somebody comes in and says,
1042
00:53:44,888 --> 00:53:46,829
hey, I'm ready to sell and I'd like to be,
1043
00:53:46,829 --> 00:53:49,038
you know, I'd like to conclude a
transaction.
1044
00:53:49,038 --> 00:53:53,082
You know, we even have ~ that conversation
going on right now where that somebody
1045
00:53:53,082 --> 00:53:56,073
would like to conclude conclude a
transaction before year end.
1046
00:53:56,073 --> 00:54:00,275
~ but it just whenever we're limited on
preparations,
1047
00:54:00,275 --> 00:54:04,657
that's going to potentially have some sort
of impact on ultimate valuation
1048
00:54:04,657 --> 00:54:09,149
and how a process goes. And there's still
likely gonna be ~ several months
1049
00:54:09,149 --> 00:54:10,440
or even years of kind of
1050
00:54:11,022 --> 00:54:16,874
financial and time ~ tied up in the
business even post-transaction ~ even
1051
00:54:16,874 --> 00:54:20,896
if we start today transact at the end of
the year so but it does i guess
1052
00:54:20,896 --> 00:54:24,497
in the in short it does take time to you
know thoughtfully transact
1053
00:54:24,497 --> 00:54:28,059
and the number of transactions where we
see people close and the next
1054
00:54:28,059 --> 00:54:31,520
day they're you know doing something else
is pretty low there usually
1055
00:54:31,520 --> 00:54:35,541
is some sort of transition period from
transaction to transition
1056
00:54:36,286 --> 00:54:41,080
I would imagine ~ you know, every
transaction is a a negotiation.
1057
00:54:41,080 --> 00:54:43,542
there's probably a trade off with those
two things.
1058
00:54:43,542 --> 00:54:47,434
is there kind of a generic relationship
there between the the trade
1059
00:54:47,434 --> 00:54:52,347
off of valuation for you know a a two or
three year time commitment
1060
00:54:52,347 --> 00:54:54,579
or that that roll over equity,
1061
00:54:54,579 --> 00:54:57,821
or is that pretty unique to each
transaction?
1062
00:54:59,581 --> 00:55:01,182
You know, again, great question.
1063
00:55:01,182 --> 00:55:04,714
You came well prepared today. So I think ~
you know,
1064
00:55:04,714 --> 00:55:07,726
it's probably not a sharp,
1065
00:55:07,726 --> 00:55:11,281
you know, immediate answer or kind of go
to.
1066
00:55:11,281 --> 00:55:16,030
What I would say though is generally
helpful is when we're running a process,
1067
00:55:16,030 --> 00:55:20,142
if somebody's willing to roll a little bit
of equity and to stay
1068
00:55:20,142 --> 00:55:22,353
on through a reasonable transition period,
1069
00:55:22,353 --> 00:55:26,416
what that do what that's doing is it's
reducing risk to the buyer.
1070
00:55:27,008 --> 00:55:29,509
And anytime we're reducing risk for
somebody,
1071
00:55:29,509 --> 00:55:34,021
they're probably willing to be a little
bit more competitive in their offer
compared
1072
00:55:34,021 --> 00:55:37,903
to if somebody is not willing to roll or
they want to walk away from
1073
00:55:37,903 --> 00:55:40,294
the company within a month after the
close,
1074
00:55:40,294 --> 00:55:45,467
what that is doing is positioning more
risk in a transact transaction because
1075
00:55:45,467 --> 00:55:49,088
the buyer knows that the seller no longer
has any financial incentives
1076
00:55:49,088 --> 00:55:50,899
for the business to continue to succeed,
1077
00:55:50,899 --> 00:55:55,421
and they're not really willing to put in
any time to ensure the continued success
1078
00:55:55,421 --> 00:55:56,912
of the business. And so that
1079
00:55:56,874 --> 00:55:57,874
That
1080
00:55:57,064 --> 00:56:01,358
actually heightens risk and probably
lowers the ability for that buyer
1081
00:56:01,358 --> 00:56:03,119
to be competitive with their offer.
1082
00:56:03,119 --> 00:56:08,123
And so and a lot of times it's not really
the seen in the sense of,
1083
00:56:08,123 --> 00:56:09,904
you know, the buyer won't share with you,
1084
00:56:09,904 --> 00:56:11,966
hey, if you're willing to roll and stick
around,
1085
00:56:11,966 --> 00:56:14,328
we're gonna give you more. And if you're
not,
1086
00:56:14,328 --> 00:56:18,421
we're gonna give you less. It really is
just almost implied in the valuations.
1087
00:56:18,421 --> 00:56:21,123
And I would say we see it and it we feel
it,
1088
00:56:21,123 --> 00:56:25,987
but it's looking at kind of just pointing
to a raw data point is pretty difficult.
1089
00:56:25,987 --> 00:56:26,987
But
1090
00:56:26,277 --> 00:56:30,251
If I were to, and again, you this is all
kind of gut feel.
1091
00:56:30,251 --> 00:56:31,902
There's not like a lot of hard data,
1092
00:56:31,902 --> 00:56:33,403
given that this may live forever,
1093
00:56:33,403 --> 00:56:36,625
and I do want to caveat this. If we were
to say the difference,
1094
00:56:36,625 --> 00:56:41,299
I mean, it can be as much as fifty percent
difference in valuation from somebody
1095
00:56:41,299 --> 00:56:45,001
who's willing to roll equity and really
hard charge and transition well
1096
00:56:45,001 --> 00:56:47,363
to somebody who's kind of coming to the
table saying,
1097
00:56:47,363 --> 00:56:50,636
kind of I'm tired and I just want my money
and I'm gonna be,
1098
00:56:50,636 --> 00:56:52,276
you know, out after the close,
1099
00:56:52,276 --> 00:56:54,888
it can be as much as fifty percent
intuitively,
1100
00:56:54,888 --> 00:56:55,888
I would say.
1101
00:56:55,386 --> 00:56:58,217
Wow. I I would not have guessed that much.
1102
00:56:58,217 --> 00:57:00,937
~ as y you and I discussed earlier,
1103
00:57:00,937 --> 00:57:04,388
~ we just recently concluded an exit of
our business and
1104
00:57:04,388 --> 00:57:06,968
we negotiated and entertained a number of
offers,
1105
00:57:06,968 --> 00:57:11,189
a few structured both ways with some
pretty considerable rollover
1106
00:57:11,189 --> 00:57:15,040
and time commitment and some that were
kind of just a check and walk away
1107
00:57:15,040 --> 00:57:19,352
and and a few that had a a balance
somewhere in the middle and we didn't
1108
00:57:19,352 --> 00:57:21,542
see that quite that big of a split.
1109
00:57:21,542 --> 00:57:23,973
That's a a number that surprises me a
little bit,
1110
00:57:23,973 --> 00:57:24,973
but
1111
00:57:25,051 --> 00:57:28,632
For for the owner that ~ is in that,
1112
00:57:25,440 --> 00:57:26,440
Yeah.
1113
00:57:28,632 --> 00:57:31,713
you know, maybe they've waited too long.
1114
00:57:31,713 --> 00:57:34,024
they're just done, they're over it,
1115
00:57:34,024 --> 00:57:38,376
they're ready to get out. Is there any
hope to have a successful transaction
1116
00:57:38,376 --> 00:57:42,667
if they're unwilling to leave that
liquidity on the table or or that
1117
00:57:42,667 --> 00:57:47,059
~ rollover equity, or if they're unwilling
to give that time commitment?
1118
00:57:48,611 --> 00:57:52,715
Yes, th there are things that can be done
and well go back to one kind
1119
00:57:52,715 --> 00:57:53,836
of comment you said with disparities.
1120
00:57:53,836 --> 00:57:56,148
So I would say that was kind of the widest
range,
1121
00:57:56,148 --> 00:57:57,380
you know, they can be narrower.
1122
00:57:56,341 --> 00:57:57,341
Yeah.
1123
00:57:57,380 --> 00:58:00,543
So I think that's and every process is
unique.
1124
00:58:00,543 --> 00:58:02,715
It also depends on scale and buyer,
1125
00:58:02,715 --> 00:58:06,410
et cetera. And and so and also if you're
involving strategics,
1126
00:58:06,410 --> 00:58:08,591
I mean sometimes a strategic in particular
1127
00:58:08,877 --> 00:58:12,169
So if you're selling your company into a
company that's already doing what you do,
1128
00:58:12,169 --> 00:58:16,471
~ there may be kind of a reduced emphasis
on the importance of the owner,
1129
00:58:16,471 --> 00:58:18,531
which can be helpful to somebody who's,
1130
00:58:18,531 --> 00:58:21,113
you know, wanting to kind of transition
more quickly.
1131
00:58:21,113 --> 00:58:22,944
So again, those are some caveats,
1132
00:58:22,944 --> 00:58:26,175
but it can be as wide as 50%. It can be as
narrow as,
1133
00:58:26,175 --> 00:58:27,776
you know, zero or ten percent too.
1134
00:58:27,776 --> 00:58:30,317
It just depends kind of across the board
there.
1135
00:58:30,317 --> 00:58:33,309
So and then switching gears into your
question,
1136
00:58:33,309 --> 00:58:36,020
I think there are a lot of things people
can do.
1137
00:58:36,020 --> 00:58:38,261
One of the things that we start all of our
1138
00:58:38,331 --> 00:58:44,425
Projects start off with a QVG assessment
that's a Westlake trademarked quality
value
1139
00:58:44,425 --> 00:58:48,598
growth or QVG assessment where we really
look at certain gaps inside
1140
00:58:48,598 --> 00:58:51,590
of the business from an investor's or
buyer's lens.
1141
00:58:51,590 --> 00:58:55,152
And what we're trying to do kind of in
those early days when we're working with
1142
00:58:55,152 --> 00:58:58,875
a company is to take the buyer's lens or
investor's lens and really kind
1143
00:58:58,875 --> 00:59:02,507
of identify what they're gonna see and to
try to shore up those gaps
1144
00:59:02,507 --> 00:59:07,241
as quickly as possible. And so one of the
things that we could do if you're kind
1145
00:59:07,241 --> 00:59:08,241
of been at the business.
1146
00:59:08,211 --> 00:59:10,493
Business. we again I'll take a case study.
1147
00:59:10,493 --> 00:59:12,704
We had somebody who was in those exact
shoes.
1148
00:59:12,704 --> 00:59:16,386
They were at the business in the business
for a long time and kind of getting tired,
1149
00:59:16,386 --> 00:59:19,128
maybe had a little bit of health issues
starting to go on.
1150
00:59:19,128 --> 00:59:23,951
And what we ended up kind of doing is
starting conversations with
1151
00:59:24,172 --> 00:59:28,144
the number two person in their company in
very early in
1152
00:59:28,144 --> 00:59:31,977
the process about potentially kind of
rising up to be president
1153
00:59:31,977 --> 00:59:34,058
and then ultimately CEO in the
organization.
1154
00:59:34,058 --> 00:59:36,270
And so by the time we got to market,
1155
00:59:36,270 --> 00:59:37,961
we actually had an identified
1156
00:59:38,103 --> 00:59:39,103
Leader
1157
00:59:38,523 --> 00:59:40,635
of the business who is a known quantity.
1158
00:59:40,635 --> 00:59:42,807
I think they had been there 17 or 18
years.
1159
00:59:42,807 --> 00:59:46,540
And so they had built a lot of historical
operating knowledge.
1160
00:59:46,540 --> 00:59:48,952
They had relationships with all the
customers and employees,
1161
00:59:48,952 --> 00:59:51,354
et cetera. They were kind of a natural
go-to.
1162
00:59:51,354 --> 00:59:55,367
And so we really were able to tell a
reduced risk story that even though
1163
00:59:55,367 --> 00:59:57,789
our founder may be going away shortly
after the close,
1164
00:59:57,789 --> 01:00:01,852
we actually had this next person in line
who is the natural leader fit,
1165
01:00:01,852 --> 01:00:05,295
so to speak. And so there's things we can
do throughout the business
1166
01:00:05,335 --> 01:00:07,977
to communicate reduced risks that.
1167
01:00:08,057 --> 01:00:10,684
That you know, it ideally we'd have more
time,
1168
01:00:10,684 --> 01:00:14,904
but if we don't, there's still things that
can be done to present a better story
1169
01:00:14,904 --> 01:00:15,957
to a potential buyer.
1170
01:00:16,469 --> 01:00:19,391
that's great. And ~ my specific example,
1171
01:00:19,391 --> 01:00:21,312
~ the one firm we were looking at,
1172
01:00:21,312 --> 01:00:22,913
that was kind of their business model.
1173
01:00:22,913 --> 01:00:27,607
They actually they would not allow the
owner to stay on.
1174
01:00:27,607 --> 01:00:32,200
They they ran an in house CEO training
organization.
1175
01:00:32,200 --> 01:00:34,211
And so when they bought a business,
1176
01:00:34,211 --> 01:00:37,403
they had a CEO kind of waiting in the
wings ready to go and the
1177
01:00:37,403 --> 01:00:40,756
old owner stepped out, the new owner came
in and took over and and that
1178
01:00:40,756 --> 01:00:42,137
was kind of their business model.
1179
01:00:42,137 --> 01:00:43,137
So
1180
01:00:43,216 --> 01:00:45,059
I thought that was a unique business
model.
1181
01:00:45,059 --> 01:00:46,672
That's not something you see all the time,
1182
01:00:46,672 --> 01:00:47,672
is it?
1183
01:00:48,781 --> 01:00:52,853
No, you know, but again, the the wonderful
thing about this environment today
1184
01:00:52,853 --> 01:00:58,446
is the universe for buyers has expanded so
much that I would say ten years ago,
1185
01:00:58,446 --> 01:01:01,197
rules of thumb were a little bit more
applicable.
1186
01:01:01,197 --> 01:01:02,938
~ and you could speak to maybe,
1187
01:01:02,938 --> 01:01:05,469
you know, eighty-five percent instances.
1188
01:01:05,469 --> 01:01:08,040
I would say today a lot of times when
we're speaking,
1189
01:01:08,040 --> 01:01:11,231
we're kind of if we're giving a general
generality,
1190
01:01:11,231 --> 01:01:13,162
it's probably only sixty-five percent,
1191
01:01:13,162 --> 01:01:17,324
you know, applicable. There's just another
third of the industry that's doing
1192
01:01:17,565 --> 01:01:18,648
all sorts of different things.
1193
01:01:18,965 --> 01:01:21,676
That maybe they weren't doing 10 years
ago.
1194
01:01:21,676 --> 01:01:25,108
And so it's kind of an exciting time to be
a seller because there are
1195
01:01:25,108 --> 01:01:29,290
a little lot of different flavors in the
ice cream shop of MA,
1196
01:01:29,290 --> 01:01:31,951
so to speak. It's not just vanilla and
chocolate anymore.
1197
01:01:31,951 --> 01:01:38,584
There's you know pistachio and ~ coffee
nutmeg and all sorts of different flavors
1198
01:01:38,584 --> 01:01:40,784
of ice cream in the MA ice cream shop,
1199
01:01:40,784 --> 01:01:41,784
so to speak.
1200
01:01:41,599 --> 01:01:44,621
That's a great analogy and that's exactly
what we found.
1201
01:01:44,621 --> 01:01:49,736
We negotiated offers with I think five
different individuals or firms
1202
01:01:49,736 --> 01:01:53,899
and every one of them was extremely unique
in the the structure of the deal,
1203
01:01:53,899 --> 01:01:56,201
the payout, the time commitment,
1204
01:01:56,201 --> 01:01:59,384
rolled equity. ~ you know,
1205
01:01:59,384 --> 01:02:00,965
they were they were all very unique.
1206
01:02:00,965 --> 01:02:05,199
It was eye opening to me that it wasn't
just a a cut and clear process
1207
01:02:05,199 --> 01:02:09,322
or cut and clear formula, but ~ it it was
like everybody just making it
1208
01:02:09,322 --> 01:02:10,322
up as they went.
1209
01:02:10,489 --> 01:02:15,233
So I've heard the statistic that ~
seventy-five percent of people that
1210
01:02:15,233 --> 01:02:19,306
try to sell their business are
unsuccessful in that endeavor.
1211
01:02:19,306 --> 01:02:22,748
~ could you speak to that statistic a
little bit?
1212
01:02:22,748 --> 01:02:25,950
That that sounds like an alarming
statistic.
1213
01:02:25,950 --> 01:02:30,213
is it something that's maybe misunderstood
or w what are the pieces that really make
1214
01:02:30,213 --> 01:02:31,213
the difference there?
1215
01:02:33,203 --> 01:02:35,234
Yeah, so I think that's probably right.
1216
01:02:35,234 --> 01:02:40,257
And I think a couple things that I would
recommend to increase those probabilities.
1217
01:02:40,257 --> 01:02:45,400
Number one is having a strong intermediary
on your side can be hugely helpful.
1218
01:02:45,400 --> 01:02:49,443
And so I do think that's something that
you know we generally advocate
1219
01:02:49,443 --> 01:02:51,974
for is having an intermediary with you,
1220
01:02:51,974 --> 01:02:53,965
but making sure that they're qualified.
1221
01:02:53,965 --> 01:02:56,647
There's a lot of difference between
1222
01:02:56,781 --> 01:03:01,373
You know, the the upper and lower range of
the the investment banking,
1223
01:03:01,373 --> 01:03:04,174
and then you go below that and you've got
business brokers.
1224
01:03:04,174 --> 01:03:07,626
But there's a lot of difference between
you know firm to firm
1225
01:03:07,626 --> 01:03:11,418
and individual to individual. And so I
would do a lot of betting before
1226
01:03:11,658 --> 01:03:15,965
I selected someone, but I would probably
encourage you to have somebody because
what
1227
01:03:15,965 --> 01:03:20,752
it will allow you to do is to have
somebody who you know does transactions
1228
01:03:20,752 --> 01:03:24,164
for a living on your side. It's gonna
allow you to spend your time working
1229
01:03:24,164 --> 01:03:26,715
on your business as opposed to working on
your
1230
01:03:26,717 --> 01:03:28,198
business and your transaction,
1231
01:03:28,198 --> 01:03:31,671
even though at some point you'll also be
working on your transaction,
1232
01:03:31,671 --> 01:03:34,040
but it can be a helpful kind of time
saver,
1233
01:03:34,040 --> 01:03:37,705
~ time leverage, if you will. Those that
that right there in and
1234
01:03:37,705 --> 01:03:41,488
of itself will increase your odds of
getting a transaction done.
1235
01:03:41,488 --> 01:03:43,710
Going from there though, what I would say
is,
1236
01:03:43,710 --> 01:03:46,652
you know, being kind of thoughtful in
terms of preparation.
1237
01:03:46,652 --> 01:03:48,374
Again, if you've selected an advisor,
1238
01:03:48,374 --> 01:03:50,295
it's giving you a prescriptive path to,
1239
01:03:50,295 --> 01:03:54,278
you know, being able to make it through a
diligence process,
1240
01:03:54,278 --> 01:03:55,278
follow it.
1241
01:03:55,039 --> 01:03:58,842
So one of the things that ~ we like to
encourage our clients to do is
1242
01:03:58,842 --> 01:04:02,484
to get some financial diligence done and
out of the way early on.
1243
01:04:02,484 --> 01:04:07,928
Financial diligence is the number one bust
contributor of all deals,
1244
01:04:07,928 --> 01:04:11,730
meaning a person goes to market or a
company goes to market,
1245
01:04:11,730 --> 01:04:15,152
their financials are not in line to go
through a diligence process,
1246
01:04:15,152 --> 01:04:16,874
and the buyer is just left with,
1247
01:04:16,874 --> 01:04:18,495
you know, what do I do with this?
1248
01:04:18,495 --> 01:04:23,868
We can't get there. And so the buyer will
either walk away or they'll retrade
1249
01:04:23,868 --> 01:04:24,868
the seller.
1250
01:04:24,509 --> 01:04:26,600
Which oftentimes also leads to a bust.
1251
01:04:26,600 --> 01:04:30,693
And so I think two things if you get
nothing out of this podcast that you
1252
01:04:30,693 --> 01:04:34,396
can do to increase your odds is selecting
a high-quality intermediary.
1253
01:04:34,396 --> 01:04:38,188
Okay. Preferably if your business is doing
over a million of profit,
1254
01:04:38,188 --> 01:04:41,090
you want somebody that has a securities
license,
1255
01:04:41,090 --> 01:04:42,961
and there's all sorts of reasons for that.
1256
01:04:42,961 --> 01:04:46,723
but then number two would be to make sure
your your organization,
1257
01:04:46,723 --> 01:04:50,426
your your company is is diligence ready
from a financial perspective.
1258
01:04:50,426 --> 01:04:52,037
That's really, really important.
1259
01:04:52,037 --> 01:04:53,678
Again, that's gonna that's gonna increase.
1260
01:04:56,767 --> 01:04:58,378
I that's some good advice there.
1261
01:04:58,378 --> 01:05:03,833
And I know w we did have a an awesome
broker kind of helping us walk through
1262
01:05:03,833 --> 01:05:08,456
it and we had a great and A attorney on
our side and that diligence process
1263
01:05:08,456 --> 01:05:15,384
was still I I had no idea that ~ you could
go that deep into some of our records.
1264
01:05:15,384 --> 01:05:19,576
It it was a eye opening experience for me
and ~ I think I would
1265
01:05:19,984 --> 01:05:24,070
willingly sign up for a number of prostate
exams before I went through that again.
1266
01:05:24,070 --> 01:05:26,014
It was not a fun experience.
1267
01:05:26,185 --> 01:05:27,580
Yeah. Yeah,
1268
01:05:27,580 --> 01:05:31,583
it's like a it's like having a procedure
with no anesthesia at times.
1269
01:05:31,288 --> 01:05:32,830
Yeah, yeah. And
1270
01:05:31,583 --> 01:05:32,687
~
1271
01:05:32,910 --> 01:05:38,145
~ i at the time we were growing and the
reason we ~ had caught the
1272
01:05:38,145 --> 01:05:40,227
eye of some buyers was because we were
growing.
1273
01:05:40,227 --> 01:05:43,600
So trying to keep running a growing
organization,
1274
01:05:43,600 --> 01:05:46,923
trying to maintain growth and then also go
through that process.
1275
01:05:46,923 --> 01:05:49,885
~ it was like working three full time jobs
at once.
1276
01:05:49,885 --> 01:05:51,607
That was it was not a fun experience,
1277
01:05:51,607 --> 01:05:52,607
but
1278
01:05:52,682 --> 01:05:56,074
Well, you were in such a you know hot
space roofing.
1279
01:05:56,074 --> 01:05:58,305
There's just so much going on there right
now.
1280
01:05:58,305 --> 01:06:00,746
it's and there has been for some time.
1281
01:06:00,746 --> 01:06:03,197
So it makes a ton of sense. And you know,
1282
01:06:03,197 --> 01:06:05,918
the the other thing I would just say is
like making sure
1283
01:06:05,918 --> 01:06:10,681
the business performance and the industry
interest is timed well.
1284
01:06:10,681 --> 01:06:12,672
So again, kind of the internal,
1285
01:06:12,672 --> 01:06:15,863
external. So for instance, if your
business is growing well,
1286
01:06:15,863 --> 01:06:20,205
that's gonna be highly contributed to
getting a successful transaction done.
1287
01:06:20,205 --> 01:06:21,966
If your industry is very active.
1288
01:06:22,176 --> 01:06:24,608
in terms of MA, that's going to help.
1289
01:06:24,608 --> 01:06:28,801
so conversely, if your business is you
know underperforming or kind
1290
01:06:28,801 --> 01:06:31,702
of sliding off and you can kind of see it
in the monthly numbers,
1291
01:06:31,702 --> 01:06:35,245
just know that it's gonna be fairly
difficult to transact or to transact
1292
01:06:35,245 --> 01:06:37,946
at sort of market multiple, so to speak.
1293
01:06:37,946 --> 01:06:41,322
And or if your industry is starting to see
some declines in interest,
1294
01:06:41,322 --> 01:06:45,271
kind of same thing. So you do there are
some things that you can look
1295
01:06:45,271 --> 01:06:48,233
at and just say, you know, is this going
to be a good time or not?
1296
01:06:48,233 --> 01:06:50,134
So if the business and industry are going
up,
1297
01:06:50,134 --> 01:06:51,335
it's going to be a much better
1298
01:06:51,395 --> 01:06:53,858
Time than if the business and industry are
going down.
1299
01:06:53,858 --> 01:06:55,610
I mean, I I know it sounds simple,
1300
01:06:55,610 --> 01:06:58,363
but sometimes people like overlook that or
they think,
1301
01:06:58,363 --> 01:07:00,465
you know, the business and industry are
going down,
1302
01:07:00,465 --> 01:07:04,010
and now's the time I'm going to sell and
get a premium multiple for their company.
1303
01:07:04,010 --> 01:07:07,083
And that that just you know really doesn't
happen.
1304
01:07:07,083 --> 01:07:10,717
It's not probably realistic in a lot of
instances.
1305
01:07:11,009 --> 01:07:12,009
Yeah.
1306
01:07:11,609 --> 01:07:14,980
I think there's just a a lot of luck
involved there of kind of timing
1307
01:07:14,980 --> 01:07:17,852
the the market right, especially on the
industry side of things.
1308
01:07:17,852 --> 01:07:21,234
You might be more in control of the
success of your business,
1309
01:07:21,234 --> 01:07:25,586
but ~ the the market activity and your
particular industries,
1310
01:07:25,586 --> 01:07:28,627
there's just a lot of timing and a little
bit of luck involved on that side
1311
01:07:28,627 --> 01:07:32,880
of things. I know you you and I were
discussing previously that you know,
1312
01:07:32,880 --> 01:07:35,932
you mentioned roofing and kind of the the
trades
1313
01:07:36,194 --> 01:07:39,526
service industry as a whole is extremely
hot right now.
1314
01:07:39,526 --> 01:07:45,129
~ you mentioned maybe somewhat
unprecedented the way that industry is
moving.
1315
01:07:45,129 --> 01:07:49,821
~ what are you seeing kind of in the
market and how does that affect the
1316
01:07:49,821 --> 01:07:51,172
the and A world right now?
1317
01:07:53,299 --> 01:07:57,316
So great question and I'll go back to you
know the luck commentary.
1318
01:07:57,316 --> 01:07:58,316
I think, you know, that's
1319
01:07:59,229 --> 01:08:03,201
Probably true in the s bigger picture
sense of like you're lucky,
1320
01:08:03,201 --> 01:08:05,332
~ we'll use your instance if that's okay,
1321
01:08:05,332 --> 01:08:08,443
your example. So lucky to pick have picked
roofing.
1322
01:08:08,443 --> 01:08:12,065
But when it comes to like specific
industry activity,
1323
01:08:12,065 --> 01:08:14,186
there's actually a lot of data out there.
1324
01:08:14,186 --> 01:08:17,628
And so one of the things I would kind of
encourage people to do is to,
1325
01:08:17,628 --> 01:08:20,689
you know, find some good data and just be
aware of what's generally going
1326
01:08:20,689 --> 01:08:24,021
on in their industry. And you don't have
to kind of keep up with it monthly,
1327
01:08:24,021 --> 01:08:28,563
but I do think like a check in every
quarter or six months to see what's going
1328
01:08:28,563 --> 01:08:29,563
on with
1329
01:08:29,193 --> 01:08:33,296
With activity in your space is pretty
important as a you know founder and owner.
1330
01:08:33,296 --> 01:08:37,217
Look, for a lot of us, we're doing this
entrepreneurial entrepreneurial journey
1331
01:08:37,217 --> 01:08:40,040
for a number of reasons, but you know,
1332
01:08:40,040 --> 01:08:42,122
financial outcome is probably part of
that,
1333
01:08:42,122 --> 01:08:45,284
right? And so having a little bit of pulse
on what's going on in your industry
1334
01:08:45,284 --> 01:08:49,797
is important. And there's several
industries that are experiencing all-time
20-year
1335
01:08:49,797 --> 01:08:52,659
highs in terms of both activity and
valuation.
1336
01:08:52,659 --> 01:08:57,032
So roofing, ~ HVAC, anything with utility
services,
1337
01:08:57,032 --> 01:08:59,083
food manufacturing, there's a number
1338
01:08:59,103 --> 01:09:02,735
number of industries and they're all
industries that are doing real things,
1339
01:09:02,735 --> 01:09:07,407
but they're industries that are seeing a
real kind of renaissance
1340
01:09:07,407 --> 01:09:09,838
in terms of valuation and views of
valuation.
1341
01:09:09,838 --> 01:09:12,579
The other one is, you know, asset
management or wealth management.
1342
01:09:12,579 --> 01:09:15,381
That's another one that's seeing kind of
all time highs in terms
1343
01:09:15,381 --> 01:09:19,147
of where valuations are. And so for folks
that own those sorts of companies,
1344
01:09:19,147 --> 01:09:21,383
any of the ones I mentioned, and there's
probably several others,
1345
01:09:21,383 --> 01:09:25,835
I mean it really is kind of an interesting
time to at least understand what your
1346
01:09:25,835 --> 01:09:28,236
company is worth and or potentially
consider you know
1347
01:09:28,596 --> 01:09:32,597
how you might want to view the asset and
potential kind of turning that asset into
1348
01:09:32,597 --> 01:09:36,833
~ liquid liquid capital because there are
some cycles to all this stuff.
1349
01:09:36,833 --> 01:09:41,536
I mean they in a lot of instances the
valuations don't just kind of keep going
up.
1350
01:09:41,536 --> 01:09:44,848
They kind of cycle and then they kind of
return to some sort of mean
1351
01:09:44,848 --> 01:09:46,811
and then cycle again and cycle again.
1352
01:09:46,811 --> 01:09:51,034
But those are some industries that are
experiencing kind of 20-year all-time
highs
1353
01:09:51,135 --> 01:09:52,135
Yeah, I know that
1354
01:09:51,575 --> 01:09:52,575
from the data.
1355
01:09:52,305 --> 01:09:54,789
the the roofing industry is very hot right
now,
1356
01:09:54,789 --> 01:09:58,612
but maybe in HVAC is ~ even far exceeding
that.
1357
01:09:58,612 --> 01:10:01,425
I'm talking to people and and hearing
stories of,
1358
01:10:01,425 --> 01:10:06,330
you know, twelve X, thirteen X EBITDA
exits.
1359
01:10:06,330 --> 01:10:10,374
as a someone that's maybe more on the
investor side of thing
1360
01:10:10,374 --> 01:10:11,925
and looking at investments right now,
1361
01:10:11,925 --> 01:10:12,925
that just
1362
01:10:13,052 --> 01:10:18,629
It it seems almost mind boggling to me ~
to invest in something with that much risk
1363
01:10:18,629 --> 01:10:23,286
at that multiple. Could you help us
understand why that is?
1364
01:10:23,286 --> 01:10:27,291
Why is that industry so hot right now and
what justifies those multiples?
1365
01:10:29,362 --> 01:10:30,362
So
1366
01:10:30,322 --> 01:10:32,873
There is some level of justification,
1367
01:10:32,873 --> 01:10:34,982
although at certain points in time I,
1368
01:10:34,982 --> 01:10:38,266
you know, tend to question a little bit of
the sanity of it,
1369
01:10:38,266 --> 01:10:40,607
right? So it's it's hard not to to some
degree.
1370
01:10:40,607 --> 01:10:43,798
When in particular there's another
industry I'm thinking of right now
1371
01:10:43,798 --> 01:10:48,831
is talking to a company they got an
unsolicited offer for seventeen times
EBITDA.
1372
01:10:48,831 --> 01:10:51,217
Now, if you think about seventeen times
EBITDA,
1373
01:10:51,217 --> 01:10:53,703
and this is a different industry than than
HVAC,
1374
01:10:53,703 --> 01:10:55,214
but it's another one that's kind of
peaking.
1375
01:10:55,214 --> 01:11:00,002
You think about the number of years after
tax it would take to earn
1376
01:11:00,296 --> 01:11:03,478
that purchase price back. The individual
would ask,
1377
01:11:03,478 --> 01:11:04,668
you know, what should we do? And I said,
1378
01:11:04,668 --> 01:11:07,610
Hey, you know, we always come from a
position of advising the way we'd want
1379
01:11:07,610 --> 01:11:10,852
to be advised. And so I'd love to run a
process for you,
1380
01:11:10,852 --> 01:11:11,852
but
1381
01:11:11,524 --> 01:11:15,605
Maybe we can just help you get this this
exact unsolicited offer done.
1382
01:11:15,605 --> 01:11:19,519
I mean, at 17 times, you're really kind of
taking enough chips off
1383
01:11:19,519 --> 01:11:22,132
the table to ensure family security,
1384
01:11:22,132 --> 01:11:25,845
individual security. You're probably kind
of getting pretty darn close
1385
01:11:25,845 --> 01:11:29,681
to a peak multiple. It's hard to kind of
sit there and say you shouldn't just kind
1386
01:11:29,681 --> 01:11:32,570
of run at that. ~ and so for HVAC,
1387
01:11:32,570 --> 01:11:36,753
what's gone on there is you've seen a
number of kind of platforms that
1388
01:11:36,753 --> 01:11:37,994
are private equity owned.
1389
01:11:38,454 --> 01:11:40,695
And as they've continued to scale,
1390
01:11:40,695 --> 01:11:45,297
their platforms are going up what we call
the EBITDA ladder in the sense
1391
01:11:45,297 --> 01:11:48,919
of the platforms multiple kind of
continues to tick up.
1392
01:11:48,919 --> 01:11:52,380
And so as the platforms multiple continues
to tick up,
1393
01:11:52,380 --> 01:11:56,842
it allows them to pay more for companies
that they're acquiring into that platform.
1394
01:11:56,842 --> 01:12:02,005
And so what that means is if you've got a
platform that you think is worth
1395
01:12:02,065 --> 01:12:03,585
20 times EBITDA.
1396
01:12:04,986 --> 01:12:08,007
If you're buying a company for 10 times
EBITDA,
1397
01:12:08,007 --> 01:12:11,869
it's kind of a no-brainer, even if 10
times seems expensive.
1398
01:12:11,869 --> 01:12:16,088
And why is that? So if my company is worth
20 times EBITDA,
1399
01:12:16,088 --> 01:12:18,392
let's say my platform HVAC company over
here,
1400
01:12:18,392 --> 01:12:19,933
I think it's worth 20 times EBITDA.
1401
01:12:19,933 --> 01:12:24,315
And I'm gonna pay, I'm gonna buy
somebody's company doing ~ a million
1402
01:12:24,315 --> 01:12:26,716
of EBITDA and I'm gonna pay them 10 times
for it.
1403
01:12:26,716 --> 01:12:31,428
The moment I bring that million of EBITDA
into my platform company and
1404
01:12:31,428 --> 01:12:34,620
it seasons a little bit, that million of
EBITDA is now worth
1405
01:12:34,880 --> 01:12:41,212
$20 million. And so by doing a transaction
for $1 million
1406
01:12:35,831 --> 01:12:36,831
Yeah.
1407
01:12:41,212 --> 01:12:45,530
of EBITDA at 10X and bringing that million
of EBITDA into my platform company that's
1408
01:12:45,530 --> 01:12:46,762
worth 20 times EBITDA.
1409
01:12:47,122 --> 01:12:51,887
I've actually made about $10 million as
the owner of this larger organization
1410
01:12:51,887 --> 01:12:56,472
at close. And so that's kind of what we're
seeing going on in the HVAC space:
1411
01:12:56,472 --> 01:13:00,696
you've got these large-scale platforms
that have very large even multiples,
1412
01:13:00,696 --> 01:13:06,613
and they're able to afford to pay more to
bring in additional companies into their
1413
01:13:06,613 --> 01:13:08,324
platform through acquisition.
1414
01:13:08,975 --> 01:13:12,306
Gotcha. Yeah, I think that's what I was
seeing in roofing as well.
1415
01:13:12,306 --> 01:13:16,117
Just ~ you know, I'm I'm just a lowly
roofer here looking at what I
1416
01:13:16,117 --> 01:13:18,978
see on the market, but there's five or
six,
1417
01:13:18,978 --> 01:13:24,679
well, really probably three, three massive
national companies with two more kind
1418
01:13:24,679 --> 01:13:27,795
of biting at their heels that are
competing over you know,
1419
01:13:27,795 --> 01:13:30,116
the the largest spot in the industry.
1420
01:13:30,116 --> 01:13:32,757
And they're buying up, you know,
1421
01:13:32,757 --> 01:13:37,210
hundred million dollar a year companies at
~ twelve or thirteen X.
1422
01:13:37,800 --> 01:13:41,853
And so then you have these smaller
companies or the private equity that looks
1423
01:13:41,853 --> 01:13:47,316
at that and goes, okay, well, if we go buy
five twenty million dollar companies
1424
01:13:47,476 --> 01:13:52,359
at an eight X, now we've got a hundred
million dollar company we can sell
1425
01:13:52,359 --> 01:13:56,782
at a twelve X. And and the next level of
investors down the next level
1426
01:13:56,782 --> 01:13:58,603
of private equity looks at that and goes,
1427
01:13:58,603 --> 01:14:03,286
Okay, well, I can go buy four five million
dollar companies at a six X.
1428
01:14:03,786 --> 01:14:07,829
and have a twenty million dollar company
to sell at an eight X and it
1429
01:14:07,829 --> 01:14:10,531
it just keeps laddering up like you were
describing.
1430
01:14:10,531 --> 01:14:13,293
It have you seen cycles like that?
1431
01:14:13,293 --> 01:14:16,475
Have you seen that anomaly occur
previously in your career?
1432
01:14:16,475 --> 01:14:19,777
How at at some point in time that has to
come to an end.
1433
01:14:19,777 --> 01:14:20,848
What does that look like?
1434
01:14:23,283 --> 01:14:25,044
So I definitely have seen this before.
1435
01:14:25,044 --> 01:14:28,706
And what I really refer to this back to is
the Ebida Ladder.
1436
01:14:28,706 --> 01:14:31,447
So let me kind of walk through that really
quick and we'll talk about
1437
01:14:31,447 --> 01:14:34,488
how potentially this journey goes for
these different industries.
1438
01:14:34,488 --> 01:14:38,020
So the Ebita Ladder basically starts off
at the bottom rung.
1439
01:14:38,020 --> 01:14:40,611
And the bottom rung is going to be what we
kind of call for,
1440
01:14:40,611 --> 01:14:43,928
let's just say, industries and businesses
that do real stuff.
1441
01:14:43,928 --> 01:14:45,363
It's going to be two guys in a truck,
1442
01:14:45,363 --> 01:14:46,534
right? Or two people in a truck.
1443
01:14:46,534 --> 01:14:49,705
And essentially that's going to be kind of
an individual practitioner
1444
01:14:49,705 --> 01:14:53,217
or a very small business. And those tend
to trade for maybe two to three times.
1445
01:14:53,217 --> 01:14:57,140
Times profitability. And it's really
EBITDA at that point's not a total
measure.
1446
01:14:57,140 --> 01:15:00,902
It's really more of like seller
discretionary earnings or kind of
profitability.
1447
01:15:00,902 --> 01:15:04,124
As you scale all the way up to the top of
the ladder,
1448
01:15:04,124 --> 01:15:08,887
you may hit a publicly traded company with
full share of liquidity for investors.
1449
01:15:08,887 --> 01:15:10,979
And that EBITDA multiple, maybe,
1450
01:15:10,979 --> 01:15:15,022
you know, 20 times. Okay. And so you go
from the bottom rung of let's
1451
01:15:15,022 --> 01:15:16,933
say two times to the top rung of 20,
1452
01:15:16,933 --> 01:15:20,775
and everybody else is slotting in the
different rung along the way.
1453
01:15:20,775 --> 01:15:23,137
And so you might start to see in this
example.
1454
01:15:23,137 --> 01:15:28,010
A business at 5 million of EBITDA is going
to start to trade at seven times,
1455
01:15:28,010 --> 01:15:32,033
and a business at 25 million of EBITDA may
start to trade at 12 to 13 times,
1456
01:15:32,033 --> 01:15:34,925
and then you may see something even more
scaled at 15 times,
1457
01:15:34,925 --> 01:15:37,527
and ultimately you get to that very large,
1458
01:15:37,527 --> 01:15:41,069
maybe a brand that we even recognize kind
of trading at 20 times EBITDA,
1459
01:15:41,069 --> 01:15:43,110
full liquidity on the New York Stock
Exchange.
1460
01:15:43,110 --> 01:15:48,494
And so these organizations are going along
that journey of the EBITDA ladder.
1461
01:15:48,494 --> 01:15:50,375
And so where this kind of ends,
1462
01:15:50,375 --> 01:15:53,057
if you will, ~ will likely be with.
1463
01:15:53,117 --> 01:15:57,400
Several of these companies IPOing into the
public markets so that they ultimately
1464
01:15:57,400 --> 01:15:59,141
achieve that top rung of the ladder.
1465
01:15:59,141 --> 01:16:02,643
And so what you've seen is kind of these
platforms being pieced together
1466
01:16:02,643 --> 01:16:05,846
at four and five times EVITA, and then you
know eight to ten times,
1467
01:16:05,846 --> 01:16:09,247
and then probably low teens, and then
ultimately those organizations
1468
01:16:09,247 --> 01:16:12,770
are gonna be scaled to a point where
they've got hundreds of millions of EVITA,
1469
01:16:12,770 --> 01:16:16,613
if not a billion of EVITAB, and then
ultimately they'll IPO and probably trade
1470
01:16:16,613 --> 01:16:19,465
it around 20 times and they'll continue
acquiring.
1471
01:16:19,465 --> 01:16:22,156
And why is that? Because they're gonna be
trading at 20 times,
1472
01:16:22,156 --> 01:16:23,156
they're gonna have
1473
01:16:22,959 --> 01:16:25,902
Full liquidity of their shares and they're
gonna be able to pay maybe eight
1474
01:16:25,902 --> 01:16:27,713
to twelve times for companies that they
buy.
1475
01:16:27,713 --> 01:16:31,456
And again, they're using that even a
multiple arbitrage as a
1476
01:16:31,456 --> 01:16:33,398
way of increasing shareholder value.
1477
01:16:33,899 --> 01:16:39,397
Okay. So this is not necessarily a cycle
with a a dead end at the end of the road.
1478
01:16:39,397 --> 01:16:40,749
It it may continue.
1479
01:16:42,355 --> 01:16:45,641
Well, so that's the good picture,
1480
01:16:45,641 --> 01:16:47,625
and there will be companies that get to
that,
1481
01:16:47,625 --> 01:16:48,647
no doubt in my mind.
1482
01:16:49,149 --> 01:16:51,920
The tougher picture will be not everybody
will get there.
1483
01:16:51,920 --> 01:16:56,602
And unfortunately, somebody will
over-leverage and underoperate,
1484
01:16:56,602 --> 01:16:59,834
and you'll see a flame out. And we've seen
this in industry,
1485
01:16:59,834 --> 01:17:01,685
industry after industry, time and time
again,
1486
01:17:01,685 --> 01:17:05,017
where is where somebody I call it
over-leverage and underoperate,
1487
01:17:05,017 --> 01:17:09,169
meaning they borrowed too much money to
build their scale.
1488
01:17:09,169 --> 01:17:11,480
And as they were building scale,
1489
01:17:11,480 --> 01:17:14,521
they were not putting in place the right
people systems and process
1490
01:17:14,721 --> 01:17:17,983
to keep everything growing in a uniform
and healthy way.
1491
01:17:18,463 --> 01:17:21,345
And ultimately ~ performance will go down,
1492
01:17:21,345 --> 01:17:23,277
leverage is too high, and you know,
1493
01:17:23,277 --> 01:17:24,618
we'll see a flame out for sure.
1494
01:17:24,618 --> 01:17:29,471
And so I've I feel fully convinced we'll
see ~ a really wonderful scenario,
1495
01:17:29,471 --> 01:17:31,583
or maybe multiple wonderful scenarios
where
1496
01:17:31,858 --> 01:17:35,010
You've got these companies at IPO and
create unique opportunities
1497
01:17:35,230 --> 01:17:37,368
for stakeholders along the way.
1498
01:17:37,368 --> 01:17:40,111
And I feel pretty confident we're we'll
see,
1499
01:17:40,111 --> 01:17:44,174
you know, an organization or two kind of
flame out and and you know
1500
01:17:44,174 --> 01:17:49,097
be some tougher stuff and have to
reorganize itself and it'll be some
tougher times.
1501
01:17:49,097 --> 01:17:52,498
But those things are natural. It's part of
the scaling journey.
1502
01:17:52,498 --> 01:17:54,389
And I will say though, overall,
1503
01:17:54,389 --> 01:17:58,181
it does create some really unique
opportunities for stakeholders across the
board.
1504
01:17:58,181 --> 01:18:01,543
It really does. If you think about where
valuations were for you know,
1505
01:18:01,543 --> 01:18:02,543
roof.
1506
01:18:02,083 --> 01:18:04,355
electrical companies, you think about
fence,
1507
01:18:04,355 --> 01:18:07,886
rental, you think about a lot of these
industries that have seen some renaissance
1508
01:18:07,886 --> 01:18:11,428
periods of of ~ valuation. You think about
where they were 10 years
1509
01:18:11,428 --> 01:18:14,566
ago compared to today, it's still it's
still pretty good times.
1510
01:18:14,566 --> 01:18:17,081
You know, it's still still there's still
been some benefits
1511
01:18:17,081 --> 01:18:18,862
to this valuation renaissance,
1512
01:18:18,862 --> 01:18:19,862
if you will.
1513
01:18:19,804 --> 01:18:23,527
Well you just ~ mentioned one of my key
questions I wanted to ask.
1514
01:18:23,527 --> 01:18:29,783
is there kind of a a rough generic
valuation model that people could apply
1515
01:18:29,783 --> 01:18:33,456
to their businesses that transcends most
industries?
1516
01:18:33,456 --> 01:18:36,619
I know ~ you know, as a business owner,
1517
01:18:36,619 --> 01:18:40,362
i that's a huge question. Is what what is
my business worth?
1518
01:18:40,362 --> 01:18:44,926
What does exit look like? And what what
does the future look like as we plan for
1519
01:18:45,564 --> 01:18:48,337
the next generation or retirement or that
kind of thing.
1520
01:18:48,337 --> 01:18:54,134
Is there a a rough generic model that we
could apply to get a a rough idea
1521
01:18:54,134 --> 01:18:55,476
of valuation?
1522
01:18:57,293 --> 01:19:00,424
So I'm gonna give a very general answer to
that,
1523
01:19:00,424 --> 01:19:02,405
and I'm gonna give a very specific answer
to it.
1524
01:19:02,405 --> 01:19:05,457
So the general answer is think about that
evida ladder.
1525
01:19:05,457 --> 01:19:07,858
We spent some time kind of talking through
that.
1526
01:19:07,858 --> 01:19:10,199
So a business that's maybe early or small,
1527
01:19:10,199 --> 01:19:12,800
so again, very you know owner-centric,
1528
01:19:12,800 --> 01:19:16,652
if you will, maybe two employees not
making a ton of money,
1529
01:19:16,652 --> 01:19:18,063
let's call it low six figures.
1530
01:19:18,063 --> 01:19:21,845
that business is gonna you know generally
be two to three times profitability.
1531
01:19:21,845 --> 01:19:26,247
And again, that's assuming that the
business is diverse and it's actually got
some.
1532
01:19:26,307 --> 01:19:27,828
Underpinnings of a real business.
1533
01:19:27,828 --> 01:19:31,851
As you start to scale, let's say you get
to low seven figures of profitability,
1534
01:19:31,851 --> 01:19:34,632
you're gonna start to see that four to
five X range.
1535
01:19:34,632 --> 01:19:37,294
You get to more of an institutional level.
1536
01:19:37,294 --> 01:19:40,957
So we kind of call that around three
million of profitability or EBITDA.
1537
01:19:40,957 --> 01:19:45,360
You're starting to become more
institutional in terms of ~ private equity
funds
1538
01:19:45,360 --> 01:19:47,511
themselves will buy you as a platform
company,
1539
01:19:47,511 --> 01:19:50,863
and that's a probably a whole hour in of
in and of itself defining what
1540
01:19:50,863 --> 01:19:53,605
a platform company is. But you start to be
more institutional,
1541
01:19:53,605 --> 01:19:56,127
that can be anywhere from five to six
times.
1542
01:19:56,189 --> 01:19:59,561
Even seven. And then when you get to 10
million of EBITDA,
1543
01:19:59,561 --> 01:20:02,292
that's really when you start to see the
high single digits.
1544
01:20:02,292 --> 01:20:03,582
And depending on your industry,
1545
01:20:03,582 --> 01:20:06,024
as we talked about, maybe even low double
digits.
1546
01:20:06,024 --> 01:20:09,275
And so for most of us, that's going to be
kind of the path that's most
1547
01:20:09,275 --> 01:20:10,846
of you know of most importance.
1548
01:20:10,846 --> 01:20:13,267
And then again, at the top end of the
ladder,
1549
01:20:13,267 --> 01:20:16,208
you've got publicly traded companies that
are you know in the mid-teens,
1550
01:20:16,208 --> 01:20:17,259
high teens, if you will.
1551
01:20:17,535 --> 01:20:20,827
But that's maybe a good way to think about
it from a broad perspective.
1552
01:20:20,827 --> 01:20:24,718
From a narrow perspective, you can dial
that in in two ways.
1553
01:20:24,718 --> 01:20:26,849
Number one is the size and scale of the
business,
1554
01:20:26,849 --> 01:20:29,180
and secondly, is your industry multiple.
1555
01:20:29,180 --> 01:20:33,448
And so there is quite a bit of a
difference between ~ maybe being a roofer
1556
01:20:33,448 --> 01:20:35,092
and maybe being a general contractor,
1557
01:20:35,092 --> 01:20:40,795
for instance. And so we can kind of narrow
those ranges down within a pretty good,
1558
01:20:40,795 --> 01:20:43,086
you know, kind of zip code, if you will,
1559
01:20:43,086 --> 01:20:46,198
of valuation by having both industry and
range.
1560
01:20:46,198 --> 01:20:47,198
And we publish.
1561
01:20:47,028 --> 01:20:52,638
A lot of data. We just actually sent out
an email today for Q1 statistics are in.
1562
01:20:52,638 --> 01:20:56,604
~ And so we actually publish a lot of data
of where multiples are based
1563
01:20:56,604 --> 01:20:59,316
on size and industry. And if you have
those two variables,
1564
01:20:59,316 --> 01:21:01,348
you can get a pretty good sense for what
your business is worth.
1565
01:21:01,348 --> 01:21:04,930
Things that will make it worth more or
less will vary from company to company.
1566
01:21:04,930 --> 01:21:09,153
So they're fairly obvious. So if you have
a million-dollar profit,
1567
01:21:09,153 --> 01:21:11,425
three million, five million dollar EVIT of
business,
1568
01:21:11,425 --> 01:21:14,917
and you've got you know half of the
business is tied up with one customer,
1569
01:21:14,917 --> 01:21:16,298
your business is gonna be worth.
1570
01:21:16,578 --> 01:21:20,710
Less than somebody who's got a lot of
diversification of their customer base.
1571
01:21:20,710 --> 01:21:24,802
And so, and there's just some kind of
intuitive things that you know they're
gonna
1572
01:21:24,802 --> 01:21:28,484
strike you as you know being fairly
self-explanatory as to what would make
1573
01:21:28,484 --> 01:21:30,255
a business be worth more or less.
1574
01:21:30,255 --> 01:21:33,967
But those sorts of things can impact kind
of one layer deeper.
1575
01:21:33,967 --> 01:21:37,389
So size, number one, industry,
1576
01:21:37,389 --> 01:21:41,431
number two, the actual business being kind
of a the third kind
1577
01:21:41,431 --> 01:21:43,031
of dial-in factor along the way.
1578
01:21:43,447 --> 01:21:46,920
Okay. Well thank you. That's very helpful
and answers a lot of questions
1579
01:21:46,920 --> 01:21:50,744
for a lot of business owners 'cause that's
kind of a a key part of that,
1580
01:21:50,744 --> 01:21:55,759
you know, s eight year preparation and
sales cycle and that three
1581
01:21:55,759 --> 01:22:00,274
to seven year planning cycle is looking
forward to that exit and knowing what
1582
01:22:00,274 --> 01:22:01,385
to expect. So
1583
01:22:03,393 --> 01:22:04,393
Awesome.
1584
01:22:03,522 --> 01:22:04,522
Yeah,
1585
01:22:03,782 --> 01:22:06,653
no, it's ~ it it's it's you know all
important stuff.
1586
01:22:06,653 --> 01:22:09,405
And I think and again if you think about
the reverse engineering,
1587
01:22:09,405 --> 01:22:12,716
one of the things that we do is actually
take the current valuation
1588
01:22:12,716 --> 01:22:17,038
and the forward valuation so that we can
have a sense for what it
1589
01:22:17,038 --> 01:22:20,480
is that we're really going after and how
important that is to the individual.
1590
01:22:20,480 --> 01:22:24,192
And a lot of times it's really that what
motivates somebody is kind
1591
01:22:24,192 --> 01:22:26,583
of understanding what that forward value
is too.
1592
01:22:26,583 --> 01:22:29,404
So not just today, but also thinking about
you know,
1593
01:22:29,404 --> 01:22:30,705
if you were to grow and succeed,
1594
01:22:30,705 --> 01:22:33,446
what that forward value could be too and
what that would mean for
1595
01:22:33,446 --> 01:22:35,308
Or you know yourself, your employees,
1596
01:22:35,308 --> 01:22:37,300
your investors, potentially, family,
1597
01:22:37,300 --> 01:22:38,300
etc.
1598
01:22:38,293 --> 01:22:39,293
Yeah.
1599
01:22:39,293 --> 01:22:44,595
Well, I know you mentioned you guys handle
kind of two types of liquidity events.
1600
01:22:44,595 --> 01:22:48,836
One ~ a hundred percent liquidity or
moving towards a hundred percent
liquidity,
1601
01:22:48,836 --> 01:22:53,558
a major stake. And the second being just
kind of taking some chips off the table,
1602
01:22:53,558 --> 01:22:59,479
you you threw out, you know, selling
thirty percent to get ~ some capital
liquid
1603
01:22:59,479 --> 01:23:02,040
personally as well as reinvestment in the
business.
1604
01:23:02,040 --> 01:23:03,040
what
1605
01:23:03,042 --> 01:23:06,526
What would motivate someone to do that
second option?
1606
01:23:06,526 --> 01:23:12,001
Why why would someone want to sell off a
minority stake and and how would that help
1607
01:23:12,001 --> 01:23:14,324
them eventually reach their major goals?
1608
01:23:15,793 --> 01:23:19,125
Yeah, so there's really three core reasons
why they would want to do it.
1609
01:23:19,125 --> 01:23:24,547
Number one, they are desiring some level
of personal financial flexibility,
1610
01:23:24,547 --> 01:23:26,548
but not wanting to sell the company.
1611
01:23:26,548 --> 01:23:30,880
And so a lot of times in those ~ what we
call them like minority recapitalizations
1612
01:23:30,880 --> 01:23:34,252
or basically just selling something less
than fifty percent of your business,
1613
01:23:34,252 --> 01:23:37,113
number one, they're gonna want to see a
little bit of personal liquidity.
1614
01:23:37,113 --> 01:23:38,444
And and this is kind of common.
1615
01:23:38,444 --> 01:23:42,146
I mean, a lot of times people put 20 years
into their business and they put
1616
01:23:42,306 --> 01:23:45,047
a lot of financial resources back in.
1617
01:23:45,107 --> 01:23:48,888
To it and so getting something back out
but without selling can be
1618
01:23:49,088 --> 01:23:51,051
a number one driving motive motivation.
1619
01:23:51,051 --> 01:23:55,614
Number two, they want to have the
opportunity to grow the business,
1620
01:23:55,614 --> 01:23:58,496
but again, not wanting to use their own
capital.
1621
01:23:58,496 --> 01:24:01,958
And so if you think about taking some
money out and putting some money
1622
01:24:01,958 --> 01:24:03,279
on balance sheet the business,
1623
01:24:03,279 --> 01:24:04,950
you're getting a bit of a double whammy.
1624
01:24:04,950 --> 01:24:09,183
Okay, so you're you're not only getting
some capital back out of the business,
1625
01:24:09,183 --> 01:24:12,605
you're also not putting money back in in
order to grow it.
1626
01:24:12,605 --> 01:24:14,967
And so a transaction that provides both
1627
01:24:15,019 --> 01:24:18,060
Opportunities can be you know of interest
to a lot of people.
1628
01:24:18,060 --> 01:24:21,210
And then lastly, is you're typically gonna
get a partner who's been there
1629
01:24:21,210 --> 01:24:24,101
and done that, who can kind of show you
the ropes a little bit,
1630
01:24:24,101 --> 01:24:27,582
and then the theater system of the capital
markets will actually be
1631
01:24:27,582 --> 01:24:31,852
a credential to ~ maybe when it comes time
to sell the business ultimately will
1632
01:24:31,852 --> 01:24:34,163
be a credential on that part of the
journey.
1633
01:24:34,163 --> 01:24:38,054
And so personal liquidity, personal
imbalance sheet benefits,
1634
01:24:38,054 --> 01:24:40,694
and then lastly is having a partner who's
maybe been there,
1635
01:24:40,694 --> 01:24:43,785
done that, and again, not without not
without giving up control.
1636
01:24:44,164 --> 01:24:47,145
that makes a lot of sense. Well,
1637
01:24:47,145 --> 01:24:51,157
I know you mentioned just a moment ago you
guys put out a a quarterly report with
1638
01:24:51,157 --> 01:24:56,369
some great resources in it. ~ I know
you're a a multi-time best selling author.
1639
01:24:56,369 --> 01:25:00,391
You have a book coming out, either just
came out or is coming out very soon.
1640
01:25:00,391 --> 01:25:04,903
~ if someone wants to take advantage of
the resources that you have available
1641
01:25:04,903 --> 01:25:09,155
or if someone is interested is ~ coming on
board with you as a client.
1642
01:25:09,669 --> 01:25:12,765
What's gonna be the best way to get a hold
of those resources or get
1643
01:25:12,765 --> 01:25:13,765
in touch with you?
1644
01:25:14,814 --> 01:25:16,295
Well, we welcome all the above,
1645
01:25:16,295 --> 01:25:21,717
and we are really happy to provide a lot
of data and industry information that's
1646
01:25:21,918 --> 01:25:23,428
available through our website,
1647
01:25:23,428 --> 01:25:27,140
so Westlake Securities.com. Our LinkedIn
profile,
1648
01:25:27,140 --> 01:25:28,371
which we're pretty easy to find,
1649
01:25:28,371 --> 01:25:30,772
both Westlake Securities and Matt
Andersen.
1650
01:25:30,772 --> 01:25:32,483
Andersen spelled with me at the end.
1651
01:25:32,483 --> 01:25:36,705
the two books that I have Completing the
Deal and Intentional Growth
1652
01:25:36,705 --> 01:25:40,846
are available on Amazon. completing the
deal is a great resource for those
1653
01:25:40,846 --> 01:25:42,617
who want to learn more about
1654
01:25:42,709 --> 01:25:46,262
transaction activities and what
transactions look like,
1655
01:25:46,262 --> 01:25:48,824
preparing for preparing for a transaction,
1656
01:25:48,824 --> 01:25:52,317
what may be involved after a transaction
is a great resource for that.
1657
01:25:52,317 --> 01:25:57,101
Intentional growth, which is available for
pre-order and will come out October 20th.
1658
01:25:57,101 --> 01:26:00,754
Another great resource for those that want
to grow and scale businesses
1659
01:26:00,754 --> 01:26:03,826
of all different sizes. I think this is a
great resource for anyone who's
1660
01:26:03,826 --> 01:26:07,760
got a business from a million in revenue
to ~ you know a billion in revenue.
1661
01:26:07,760 --> 01:26:11,292
I think it's a if you want to grow
intentionally this can be a great resource
1662
01:26:11,292 --> 01:26:12,292
for a much
1663
01:26:12,053 --> 01:26:15,235
Wider audience of potential business
owners out there.
1664
01:26:15,235 --> 01:26:19,898
And we give back a lot. This is the books
have been a major give back for me.
1665
01:26:19,898 --> 01:26:22,080
If you've studied anything about author
royalties,
1666
01:26:22,080 --> 01:26:26,287
you'll quickly realize that there's not a
lot of ways to get wealthy writing
1667
01:26:26,287 --> 01:26:27,743
a business book in particular.
1668
01:26:27,743 --> 01:26:31,506
So for us, this is a bit of a way to kind
of get more information in
1669
01:26:31,506 --> 01:26:34,468
the hands of business owners and really to
provide a give back.
1670
01:26:34,468 --> 01:26:36,319
I also give a number of talks,
1671
01:26:36,319 --> 01:26:38,901
masterclasses. We have a workshop.
1672
01:26:38,901 --> 01:26:41,433
Our next workshop is coming up towards the
end of June.
1673
01:26:41,483 --> 01:26:44,525
You're actually going to be able to hear
from it's a very low-cost way
1674
01:26:44,525 --> 01:26:47,447
to hear from people who are actually in
the trenches doing this every
1675
01:26:47,447 --> 01:26:52,801
day and can take your business and apply
real life strategies and tactics
1676
01:26:52,801 --> 01:26:54,742
to help you get from where you are to
where you want to be.
1677
01:26:54,742 --> 01:26:59,215
And so those are all great ways to reach
out and to get involved with what we're
1678
01:26:59,215 --> 01:27:01,306
doing. But we give back a lot,
1679
01:27:01,306 --> 01:27:06,440
whether it's free data, whether it's
low-cost books and low-cost content
1680
01:27:06,440 --> 01:27:08,841
or free content or low-cost workshops.
1681
01:27:08,841 --> 01:27:11,353
We're doing like we're doing an event at
the university.
1682
01:27:11,413 --> 01:27:16,426
At Georgia next week. We've got an
afternoon plan with some great speakers.
1683
01:27:16,426 --> 01:27:20,136
The admission for that event is very low
because it's in partner with partnership
1684
01:27:20,136 --> 01:27:21,230
with the University of Georgia.
1685
01:27:21,230 --> 01:27:23,831
It's going to be a $50 admission.
1686
01:27:23,831 --> 01:27:28,094
So we've got kind of elements that can
range from free content all the
1687
01:27:28,094 --> 01:27:30,086
way to our full-on consulting services,
1688
01:27:30,086 --> 01:27:34,128
advisory services, and everywhere in
between for kind of almost any budget.
1689
01:27:34,128 --> 01:27:38,631
But we really feel like after 27 years
personally and 23 years
1690
01:27:38,651 --> 01:27:40,783
of personal and business success,
1691
01:27:40,783 --> 01:27:41,783
we want
1692
01:27:41,273 --> 01:27:43,044
We want to give back to the business
community,
1693
01:27:43,044 --> 01:27:47,433
and so we've got something, some piece of
content or some piece of advice that
1694
01:27:47,433 --> 01:27:49,018
can be given across any budget.
1695
01:27:49,156 --> 01:27:52,447
Awesome. Well, I really appreciate that as
a a business owner.
1696
01:27:52,447 --> 01:27:56,229
And yeah, I know those that content that
can be very beneficial.
1697
01:27:56,229 --> 01:27:59,350
so from all of us small business owners,
1698
01:27:59,350 --> 01:28:03,152
thank you. And I'll make sure we get all
those links in the show notes here.
1699
01:28:03,152 --> 01:28:06,712
Your LinkedIn profile, Westlake Securities
dot com,
1700
01:28:06,712 --> 01:28:11,553
and a link to those ~ books on Amazon so
our listeners can ~ just hit
1701
01:28:11,553 --> 01:28:14,094
the show notes and click on those links to
get right to you.
1702
01:28:14,094 --> 01:28:15,094
So
1703
01:28:15,961 --> 01:28:18,162
Awesome, and I'm really excited about
intentional growth.
1704
01:28:18,162 --> 01:28:22,644
We've gotten quotes and feedback from
Salvatore Ferragamo Jr.,
1705
01:28:22,644 --> 01:28:24,765
who's the CEO of El Boro winery,
1706
01:28:24,765 --> 01:28:27,076
which is the Ferragamo family winery,
1707
01:28:27,076 --> 01:28:30,888
Charlie Amado, who's one of the owners of
the San Antonio Spurs
1708
01:28:30,888 --> 01:28:33,889
and chairman of SWBC, ~ Abby Millot,
1709
01:28:33,889 --> 01:28:36,871
who's president and publisher for the
Austin Business Journal.
1710
01:28:36,871 --> 01:28:40,222
I mean, I could keep going, but we've had
a number of just really,
1711
01:28:40,222 --> 01:28:43,654
I'm almost like honored as to the quotes
we've gotten back from these industry
1712
01:28:43,654 --> 01:28:45,755
leaders that are in support of the book.
1713
01:28:45,885 --> 01:28:50,366
It's really kind of meant to provide an
unlock and a proven guided framework
1714
01:28:50,366 --> 01:28:54,877
for those that are on this business
journey with us to have a better path to
growth.
1715
01:28:54,877 --> 01:28:59,299
And so it's ~ again just been an honor to
see some of the comments that we've gotten
1716
01:28:59,299 --> 01:29:02,630
back and quotes I've gotten back from
business leaders that have kind
1717
01:29:02,630 --> 01:29:05,240
of been there and done that, that have
viewed the book and said,
1718
01:29:05,240 --> 01:29:06,401
hey, there's something here.
1719
01:29:07,480 --> 01:29:10,133
That's fantastic. Congratulations.
1720
01:29:10,133 --> 01:29:14,679
Well, this next question is a question I
ask of every guest.
1721
01:29:11,623 --> 01:29:12,623
Yeah.
1722
01:29:14,679 --> 01:29:18,344
~ are you a person of a particular faith
tradition?
1723
01:29:18,344 --> 01:29:22,870
And if so, how has that affected your
business journey and your leadership?
1724
01:29:24,305 --> 01:29:30,148
Yeah, so happy to share. ~ so I am
definitely a a believer in in Christ.
1725
01:29:30,148 --> 01:29:32,049
I believe he is my Lord and Savior.
1726
01:29:32,049 --> 01:29:34,870
And so along the way, you know,
1727
01:29:34,870 --> 01:29:37,551
that I think part of that is kind of
keeping him an open mind.
1728
01:29:37,551 --> 01:29:40,522
So we've had folks of all different kinds
of religious beliefs
1729
01:29:40,522 --> 01:29:41,933
and big believer that, you know,
1730
01:29:41,933 --> 01:29:45,975
people can and should see you coming
before long before you get there
1731
01:29:45,975 --> 01:29:47,276
in terms of your works, deeds,
1732
01:29:47,276 --> 01:29:49,947
and activities. And that's kind of where
we really focus from a day
1733
01:29:49,947 --> 01:29:52,658
to day business perspective is leading
through example.
1734
01:29:52,658 --> 01:29:54,219
But when you think about our
1735
01:29:54,271 --> 01:29:57,193
company in terms of advising the way we
want to be advised,
1736
01:29:57,193 --> 01:29:59,535
being a relationship first firm,
1737
01:29:59,535 --> 01:30:02,717
being focused on outcomes and delivering
results,
1738
01:30:02,717 --> 01:30:04,678
toughing it out when it needs to be
toughed out.
1739
01:30:04,678 --> 01:30:08,331
All those things I think are kind of
deeply rooted in some of what I think
1740
01:30:08,331 --> 01:30:11,102
are core tenants of my belief system.
1741
01:30:11,102 --> 01:30:13,764
But it's something that's you know been
very important to me.
1742
01:30:13,764 --> 01:30:14,765
~ I've been
1743
01:30:15,457 --> 01:30:19,140
None of us is perfect and but a better
practitioner over some days
1744
01:30:19,140 --> 01:30:22,232
and years versus others. But if at the end
of the core,
1745
01:30:22,232 --> 01:30:25,154
at the end of the day, those are things
that really matter to me.
1746
01:30:25,154 --> 01:30:28,777
And I think they shine through in the
sense of we don't really go out there,
1747
01:30:28,777 --> 01:30:30,017
we're not very public. In fact,
1748
01:30:30,017 --> 01:30:33,330
this is one of the few public pieces where
you'll hear me actually say that,
1749
01:30:33,330 --> 01:30:35,091
but you asked the question, so I'm gonna
answer it.
1750
01:30:35,091 --> 01:30:41,256
so we hope that what we do is able to be
seen through our work product
1751
01:30:41,256 --> 01:30:42,837
and how we interact with people and
1752
01:30:43,143 --> 01:30:45,184
That they would understand that long
before.
1753
01:30:45,569 --> 01:30:49,201
~ we we we answered the question in terms
of seeing kind of our our good deeds
1754
01:30:49,201 --> 01:30:51,702
so to speak. we're big believers in giving
back.
1755
01:30:51,702 --> 01:30:55,013
We raised several hundred thousand dollars
this year to help
1756
01:30:55,013 --> 01:30:58,962
a homelessness organization. We've helped
all sorts of organizations over
1757
01:30:58,962 --> 01:31:02,517
the last kind of decade and it's a really
important part to what we do
1758
01:31:02,517 --> 01:31:07,309
in terms of our purpose statement being
delivering value that changes lives.
1759
01:31:07,309 --> 01:31:09,820
And so when you think about the companies
we work with,
1760
01:31:09,820 --> 01:31:12,201
we've had some fantastic outcomes.
1761
01:31:12,201 --> 01:31:14,502
Our folks at work in our organization have
had some wonderful
1762
01:31:14,502 --> 01:31:18,263
nerfful personal outcomes with their time
with us at Westlake,
1763
01:31:18,263 --> 01:31:20,734
all the way through our community in terms
of give back.
1764
01:31:20,734 --> 01:31:24,986
And that whole cycle I think is kind of
reflective of a core belief system that's
1765
01:31:24,986 --> 01:31:28,447
important to, you know, myself and
probably a lot of folks in our
organization.
1766
01:31:28,693 --> 01:31:33,228
Fantastic. Well, thank you for your ~
openness and vulnerability there.
1767
01:31:33,228 --> 01:31:38,093
I appreciate that. I know early on ~ we
talked about podcasts,
1768
01:31:38,093 --> 01:31:41,487
we talked about going to the the discount
bookstore and getting books.
1769
01:31:41,487 --> 01:31:45,221
you've talked about mentors and and we had
a discussion about coaching.
1770
01:31:45,221 --> 01:31:49,526
What have been the best resources to grow
you as a leader?
1771
01:31:51,689 --> 01:31:56,815
So another great question. I think a
couple things I would really point to.
1772
01:31:56,815 --> 01:32:01,381
I've been a ferocious reader. I've
consumed thousands of books throughout
1773
01:32:01,381 --> 01:32:04,445
my adult life. I've been a ferocious
journaler,
1774
01:32:04,445 --> 01:32:07,379
which means accountability to outcomes in
my mind.
1775
01:32:07,829 --> 01:32:10,230
~ and then all like and not just business
wise,
1776
01:32:10,230 --> 01:32:12,531
personal. I've got things that I've kind
of written down,
1777
01:32:12,531 --> 01:32:16,143
I track over time, and I really try to
hold myself accountable.
1778
01:32:16,143 --> 01:32:17,804
And that's in all aspects of life.
1779
01:32:17,804 --> 01:32:19,625
And again, not every day is perfect,
1780
01:32:19,625 --> 01:32:21,205
not every month's perfect, every year's
perfect,
1781
01:32:21,205 --> 01:32:25,867
but I do think that those are two core
areas that are hugely helpful.
1782
01:32:25,867 --> 01:32:28,808
I also really do prioritize. Look,
1783
01:32:28,808 --> 01:32:30,723
there's times I unplug and unwind this,
1784
01:32:30,723 --> 01:32:32,940
that, and the other. But if you're on this
business journey,
1785
01:32:32,940 --> 01:32:36,282
I think the sacrifices that we go through
1786
01:32:36,880 --> 01:32:39,841
You know, it's important to continue to
personally develop along the
1787
01:32:39,841 --> 01:32:42,943
way because in the end, that's what what
makes them all worthwhile.
1788
01:32:42,943 --> 01:32:45,074
Because as we create more value in
ourselves,
1789
01:32:45,074 --> 01:32:46,772
that's going to translate to our business.
1790
01:32:46,772 --> 01:32:48,866
We're going to bring more value to our
stakeholders,
1791
01:32:48,866 --> 01:32:50,266
like our employees, et cetera,
1792
01:32:50,266 --> 01:32:52,227
even our customers, vendors, suppliers.
1793
01:32:52,227 --> 01:32:54,738
And so that self-education is really
important.
1794
01:32:54,738 --> 01:32:56,299
I've gotten more into, you know,
1795
01:32:56,299 --> 01:33:01,031
podcasts. ~ Audible, I've kind of gone
back and forth with over time,
1796
01:33:01,031 --> 01:33:04,543
but I really like podcasts. I'll listen to
~ great,
1797
01:33:04,543 --> 01:33:05,924
like I think this is a great podcast,
1798
01:33:05,924 --> 01:33:06,924
man. You've been there and done
1799
01:33:06,714 --> 01:33:08,725
Done it, right? You're bringing people
that have been there and done
1800
01:33:08,725 --> 01:33:13,219
it to your audience. And so this is a type
of podcast that I would listen
1801
01:33:13,219 --> 01:33:16,171
to is I want to hear from somebody who's
actually been in the trenches
1802
01:33:16,171 --> 01:33:18,192
on a particular topic that I have interest
in.
1803
01:33:18,192 --> 01:33:20,604
And I want to get that knowledge as best
as I can.
1804
01:33:20,604 --> 01:33:22,395
But I would say first and foremost,
1805
01:33:22,395 --> 01:33:25,357
books, secondly, journal and
accountability to outcomes personally
1806
01:33:25,357 --> 01:33:30,220
and professionally. And then ~ lastly is
probably consuming podcast content from
1807
01:33:30,220 --> 01:33:31,631
people that have been there and done that.
1808
01:33:32,360 --> 01:33:34,782
man, well that's a a great way to wrap it
up.
1809
01:33:34,782 --> 01:33:36,874
I think ~ just speaking with you,
1810
01:33:36,874 --> 01:33:39,666
the time that we have, I think we share a
lot of similar values.
1811
01:33:39,666 --> 01:33:42,128
And I I could ask questions all afternoon,
1812
01:33:42,128 --> 01:33:45,600
but I know we're kind of up against the
time limit because again,
1813
01:33:45,600 --> 01:33:49,514
you outlined the three types of mentorship
or the three types of coaches,
1814
01:33:49,514 --> 01:33:51,886
and you fit into that third category.
1815
01:33:51,886 --> 01:33:53,397
You're somebody that's getting it done,
1816
01:33:53,397 --> 01:33:57,270
doing it, and and you've got a meeting to
close a big deal this afternoon.
1817
01:33:57,270 --> 01:33:59,862
So we want to honor your time and make
sure we get
1818
01:34:00,002 --> 01:34:03,925
you to that on time. So Matt, thank you so
much for joining us.
1819
01:34:03,925 --> 01:34:06,687
~ I really appreciate your wisdom and your
knowledge.
1820
01:34:06,687 --> 01:34:09,629
like I said, we'll get those links in the
show notes so our listeners
1821
01:34:09,629 --> 01:34:13,452
can get in touch with you ~ or at least
get a hold of your resources.
1822
01:34:13,452 --> 01:34:15,094
I really do appreciate the time.
1823
01:34:15,094 --> 01:34:16,094
Thank you.
1824
01:34:16,699 --> 01:34:18,472
Well, thank you. And as a quick reminder,
1825
01:34:18,472 --> 01:34:21,067
intentional growth is available on Amazon
for pre-order.
1826
01:34:21,067 --> 01:34:22,600
Check out Westlake Securities.
1827
01:34:22,600 --> 01:34:25,665
I really appreciate the time we got to
spend together this afternoon.
1828
01:34:25,665 --> 01:34:26,665
Thank you.
1829
01:34:26,306 --> 01:34:30,219
This has been fantastic. And thank you
guys for joining us here on From
1830
01:34:30,219 --> 01:34:32,841
the Ground Up Show. Again, help me out.
1831
01:34:32,841 --> 01:34:35,264
Like, share, follow, subscribe on your
1832
01:34:35,282 --> 01:34:39,135
favorite podcast platform on YouTube or on
social media.
1833
01:34:39,135 --> 01:34:41,647
Take a moment, send this episode to a
friend,
1834
01:34:41,647 --> 01:34:43,458
recommend it to somebody that you know.
1835
01:34:43,458 --> 01:34:46,850
~ we really need your guys' help to get
the content out there.
1836
01:34:46,850 --> 01:34:51,864
Make sure you check out our merch store
that is shop.fromthe groundup show.com.
1837
01:34:51,864 --> 01:34:54,485
And until next time, keep grinding.