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alrighty well hello everyone my name is Gabrielle I work in marketing for majona financial and CPAs we are so excited to have you all here for the second webinar of the business owners Playbook series welcome back to those that joined us on Tuesday when we discussed the maximizing business value and hello to the newcomers so today we'll be discussing the steps in the business sales process and the best practices um if you have any questions please submit them in the Q&A tab below and the speakers will go over them at the very end um so Brian can you do the next slide please yeah all right there's a the mugs of the two speakers today look exactly the same maybe yeah yeah exactly so won't spend too much time on that slide go to the next slide here so I'll introduce myself just uh briefly here a lot of people know um who listen to the first one of course or hear my radio show but I've been a CPA for about 40 years I've started when I was eight that's a joke and uh got a lot of experience on that side of things also financial planner I own madona financial services and uh write books and National coach and and uh write articles and go on TV and all that good stuff do a lot of speaking at conferences and I'm a host to Growing your wealth radio heard on um ktth kbi Cairo uh also in the Salt Lake City Market in our Utah offices and we have about 35 employees but we're combination uh CPA firm and financial planning firm so these are things that are are sometimes a significant part of the business sales process and go to the next slide and John introduce let you introduce your your team yeah good uh good afternoon I'm John odor so I'm co-founder of shinook cap advisors together with Ed Kirk uh we co-found founded the firm seven years ago we're based in Kirkland uh Washington Caroline point and uh all of our clients are business owners in the Pacific Northwest and we help them through the business sale process uh we have a full team in the office uh seven professionals we cover uh really core industries that drive the economies here in the Pacific Northwest um listed there um you when you hire an investment banking firm you want to make sure you have access to buyers and uh we do a ton of research finding the right buyers for our clients and um again been doing this for a long time and have a track record uh to support it so let's just kind of launch in here um today we're going to be discussing steps in the cell side process as Gabrielle mentioned our our first one was on how to prepare a business for sale and how to maximize value uh the next two are going to be on how to value your business and evaluate buyer qualifications and then finally my favorite topic tax planning and reinvestments but in this one we're going to be talking about steps in the cell side process how long does it take uh these are all real pertinent questions I'm looking forward to this and why uh milestones we want to measure our progress along the way uh what happens from the letter of intent to close mistakes to avoid that's always probably one of the most important sections in in any analysis what are the fees we'll be talking about fees and next steps so with that I'll just kind of launch in um John uh so so tell me about uh the relationship the business and the owner and that's we we did cover this briefly in the first one I just want to do that again how to know when each are ready yeah sure so uh again if you're business owner you have a business you really you know you have two two options one is you could plan for a sale right so you could say hey I would like to sell in a year or two years and then we would do evaluation today create an action plan and work towards a sale in the future or uh you know some business owners are uh they're just at a point where they've decided and now is a great time uh to sell the business so I'm ready personally I think the business is ready uh you know asking me is is the market ready and then if that was the case shinook would be hired to just go to market and this uh this presentation is what is that go to market strategy and uh you know some people would ask well isn't this shouldn't it be kind of easy maybe it's like selling a house or something a piece of real estate there's a lot more to the the sales process here uh we can see you've identified some of those things here I want to jump to that next slide and really get into some some of the new material we have in this webinar uh purpose of the process there is a purpose to something being hard I mean as I always say just because the hard it's hard doesn't mean it's a bad thing that can be a very good thing there's a purpose to the process I'd like to hear your thoughts John on on these different steps yeah so uh you know when you work with uh with shinook or any Investment Banking firm you know you really have a um a team you know uh working with you on the transaction and so the first one here you know why would you hire banking firm to work with you on a transaction number one is um reduce the burden on you and uh let me ask you a question Brian you know if if if uh uh you took a company to Market and then uh one month into the sale process or two months into the sale process revenue is falling uh down five or 10% you know what what message do you think that's giving the buyers I think that's that's a really good question because I was thinking about this before we started chatting today about uh you know we always think that our business is super awesome and everybody's going to want it and but I like to put myself on the side of the buyer and so that's exactly the case if if business is down and I'm a buyer you've added some uncertainty to the process to me and I'm now I'm worried and and so anything that's that's going negative and and isn't addressed right away as a buyer I'm going to be very concerned a seller you're going oh that's just a blip don't worry about it and I'm like well okay maybe you're not worried about it as a seller but as a buyer I'm pretty worried about it is this a trend I should know about oh my gosh you know Red Alert Red Alert we got problems here so that that's a a great question I'm I'm putting myself in the seat of the buyer as I'm trying to sell my own business what would they be concerned about and you know in the next talk we'll talk about valuation and ID multiples but you know for any business any industry there's going to be range so you know let's say a manufacturing business would be uh you know 6 to 8X or uh you know a distribution business might be 5 to seven well you know every business owner would say well I want to be at the top end of the range right like I'm and the I'm my business is a top core tile business well if it's a if it is then you're growing right I mean and and so what we want um you know we strategize on this you know we want the business owners focused on growth initiatives during the sale process so when we have the face- tof face meeting with the buyers we're saying hey and we just signed up another client hey and we're entering a new product uh you know a new market or we're launching a new product there's energy in the business that things have momentum and uh you know the the flip side of this and and I've seen it is um you know the owners get get so wrapped up in the sale process that they forget to run their business and uh and it's the outcome is is not good so I'll move move to the second one maintain confidentiality and um you know when we we do our buyer research and uh you know we it's it's collaboratives we work with the owners and we would say okay hey here's the top you know 10 10 20 30 40 buyers that we think should be approached um you know if if the business owner thought well you know I think I could probably sell this business myself I will approach them well if he goes and talks to the market I mean if he makes 20 phone calls to his competitors and says hey you know Bob or Charlie um you know I'm thinking about retiring someday would you be interested in buying my business immediately you know you've you've shown your hand and uh that can be a competitive disadvantage for you in the market um having an intermediary you know like shinook or any Investment Banking firm we can make those phone calls but we're not going to say who our client is right we're going to say hey I'd like to talk to you about a potential business that's for sale this is kind of what it looks like and feels like like and not give enough information when they can guess it if they say hey we don't do Acquisitions we're not interested um you know we're too busy that's just too much risk at least we've we've managed confidentiality and um and another thing in with confidentiality sometimes the relationships aren't with the owners right maybe you're relationship with the salesperson at a company you don't want to call A salesperson and say hey do you think your company would be interested in buying us because you know it's just going to you know words going to spread like wild fire so really you know maintaining confidentiality um signing a confidential agreement with on the other side you know only the CEO the president the CFO I mean very senior people in the company um to manage that confidentiality boy that's a big one right there uh uh you know as we talked about in the first part of this series uh making sure that You' addressed your senior leaders your management team your succession plan all that stuff if if you haven't talked to them and it and you start making some phone calls pretty much guarantee by about the end of that day they're going to know what's going on you got some serious issues there's there's so many reasons to involve the right team and and and go through the process uh you know the next one on the list maintaining momentum and and leverages multiple offers clearly if you're just calling one or two people and and that's all that's the population I made the analogy in our last one about listing your house for sale you know a house for sale you can put a sign in your yard and people on your street might know it's for sale uh but uh you want to have multiple people looking at that so that you can find the right buyer so that you continue with uh your discussion there yeah so I think you know our goal is to get multiple offers so we get to the um we say the letter of intent phase where you have Bonafide vetted offers you know they know your business they've seen your numbers they can put a valuation on a piece of paper um we want to have multiple so ideally we're going to have you know three four five six seven Lois and that'll give the owner you know so much confidence right they took their company to Market they got multiple offers they know exactly the valuation that the market is giving them for their business and um you know he's able to he you know he has choices for um you know how we get and it's hurting cats and it's h it's really the secret sauce but um you know how we get owners to the Finish Line at the same time is with deadlines right we have to M maintain momentum so you know we give information and say we need your first round offers in three weeks we give more information hey we need your letter of intent in four weeks so everybody's working on the same calendar so they get to the same uh place at the same time and and that's you know for a business owner to have multiple offers for their business it is such a peace of mind um you know so they know that that they had choices and they could pick uh pick the right buyer and that's you know just the Ming maintaining momentum and and um having multiple offers is is key yeah and so I I think we'll we'll move on from this slide certainly the the other things is finding the right buyer and maximizing value I think if you'd put minimize value on that then we would have something to talk about why did you put that but you didn't maximize value of course is a seller we want to do that I I love your comment about everybody thinks their businesses should be at the top end of the range that is an actual fact and uh and I think of that about my business too someday I don't necessarily think I'm ever going to go through this process but uh uh and then ensure a smooth closing so as we we move on to uh the next topic uh let's see here kind of the timeline so maybe uh let's talk about this timeline this isn't something that you you know I'm going to sell my business let's let's plan it next month it's not something like that if you want to maximize your sales you know experience all the different aspects of that so maybe John you could comment on some of these yeah sure so this is you know set up here as a as a 9month timeline um you know certainly things have moved more quickly I mean we've done some in in six or seven months and sometimes it you know there's problems and things get delayed and it it can be longer but I'd say on average you know it's right in that 8 to n month time frame um so you know breaking this down in in in what happens right so if you've you know you engage an investment banking firm right out of the gates we're going to do preparation right so we're going to create the marketing materials are going to use to speak to investors so it's a a Sim cim a confidential information memorandum it's really going to explain the business the investment highlights the growth opportunities you know why we have an exceptional business uh it'll go through the financials the operations uh it'll talk about um uh some projections uh or at least you know a budget for the rest of the year what do we think we're going to do and um and answer really and again this is just our experience you know we we already know the first 100 questions that any private Equity Firm or investor is going to ask so we anticipate those questions and and our experience is that um you know if these Sims are say 40 to 60 pages but if a qualified investor reads a Sim they're going to be able to Value the business after reading that Sim with with minimal followup questions so so really you know getting that Sim done is uh six to eight weeks at the front end and then parallel to that is this quality of earnings report you know hiring an outside CPA firm to do uh the sside QV report so that the numbers we show investors are vetted and um and again uh the adjusted bah calculated we covered that a little bit in the next talk we're go into more detail uh in the next talk so once the preparate the SIM is done and the QV reports done then we start the marketing so for any you know any industry there's going to be industry leaders right for any industry there's going to be investors that are looking to grow through acquisition for any industry there's going to be private Equity firms that have decided to focus on that industry and create uh platforms and and have rollup strategies so you know we have access to all that information um there's probably 5,000 uh private Equity Funds in in the US right now and um you know finding the right private Equity Fund that's focused on your industry takes a little bit of effort but we do that so the marketing phase is creating the um the targeted buyer list and then going after those buyers uh initially on a blind basis without disclosing the name signing an NDA and then offering the marketing materials so once um we get through the marketing phase we do Q&A uh then we would ask those groups hey are you interested to move forward with a first round offer and so we would set a date and we would say Hey by Thursday at 5:00 p.m. you know please submit your first round offer and then we would share those with our client so ideally we have you know 5 10 15 first round offers and we sit in a in a boardroom and we we put them on the table and we say hey who's exciting here who understands us who is who do we think we could work with who from from a cultural perspective do we think is a good fit and uh we really want to make a decision is who do we want to invite out for face-to-face management meetings um so we would say okay we're going to draw the line right here so we think there's four groups that can um you know that can get to the Finish Line they have strong valuation they understand our business we think we could work with them and then we would arrange those management meetings so the management meetings would um typically be a a half day maybe four five hours in a conference room plus a dinner uh often there's a tour of the facility so that could be at night sometimes after dinner uh but um but and and everyone to the management meeting knows that uh maybe two or three weeks after the management meeting is is Loi deadline so we want fi best and final offers and then um and then the The Next Step there is to select the buyer right so selecting the buyer means signing the one Loi that you think uh gets the deal done and John let me inter interject here selecting a buyer I know with my clients that have built a business up and are selling it there's a lot more to the sale than just getting the top dollar it's selecting the buyers is going to you mentioned an alignment of culture and so forth and and I I think that may be as important as anything to most people that I'm talking to uh what's your experience with that yeah yeah absolutely and uh you know we really want to do background checks too so um you know typically if um you know ABC private Equity Fund um you know comes in with strong valuation we think they're good you we're going to call we're going to ask that PE group for phone numbers of other business owners that have sold to them and without the P fund on the phone we want confidential candid calls with those previous owners that have sold and ask them how did it go you know are you happy you know treated well were your employees treated well did they did they do what they said they're going to do um and and and doing those background calls really again builds confidence that hey yeah this you know this makes sense right uh this buyer makes sense the the other thing with the LOI you touched on this um you know valuation is important but structure is important right so um you know hey I you know if if you have a cash offer of 15 million or an another buyer is 20 million but you only get 12 million cash and 8 million is in an earnout you know if you grow 10 or 20% then it's like well hey you know I'm selling this business so I'm not on the hook for that growth you are right but now like my Enterprise Value is tied to me keeping to work in the business so you know we're really uh down on on earn outs but yeah Frankly Speaking earn outs are back uh in in this market because of um you know higher interest rates lower valuations and and the economy is a little wishy-washy right now so uh so sometimes we're using earnout to close that Gap but you know in general we don't like her anout um but again you know being having multiple buyers and being able to play them off each other to negotiate the best terms is is the kind of the art of the deal yeah let's let's jump forward here we got due diligence obviously closing activities uh as part of this uh tell me uh John about uh you know we talked about having multiple buyers and so forth we'll just kind of briefly touch on this but uh looks like you do a pretty extensive uh uh marketing uh activity here that you could talk about yeah yeah so again we you know the the big the big buyer databases are are cap cap IQ and and pitchbook um but you know there's other resources so we're going to you know take your industry and we're going to you know at a high l and this was uh project build this was a building materials business um that that we sold but you know we identified you know probably 3,500 private Equity firms and another thousand strategics at a high level that you know are in the same industry and and and might be interested to have a conversation and and then we decided you know hey you know 90 of these are really like there's a rationale right they they need to be in the Northwest they need our product range um they they have a successful track record of of acquiring and growing businesses um you know there's just something about that buyer that you know there's an investment thesis that makes sense so so we started the process with 90 buyers we went and talked to all of them and 25 of them said hey this is you know this sounds really interesting we'd love to sign NDA confidential agreement and uh and learn more so of those 25 then seven of them after they read it they said hey we you know we're serious we want to submit an offer um so we got seven initial offers uh two of them were lowball or they weren't very well funded or maybe from a personality perspective they rubbed us the wrong way just something you know uh maybe just maybe they have a a lousy reputation in the market of of destroying culture or or uh you know just just whatever but we we uh we kept it toi so we had five management meetings uh we got five Lois and eventually signed one um so again from that uh you know say the you know the marketing process to signing that Loi uh about a four-month process and then um and then from Loi to close which we'll talk about next is like another 90 days just a quick segue I have a question from uh participant here that uh what's the average market cap that that your your company works with John yeah sure so um so you know broadly I'd say businesses valued five to 100 million um but um you most of them are I would say in the 10 to $75 million value range that's great um here's a a slide that you put together I'll let you take it from here John yeah so um you know we go to market with with a hundred buyers I mean it's you know we're having you know emails conversations every day with a hundred buyers it's it's hard to you know say okay well who's in it who's out what's the next step so we use we have a CRM system called dooho it's custom made uh for us and and this this slide reads from the bottom up so in the bottom here it's just you know we haven't contacted them yet um maybe we we reached out we're trying to have an intro call the teaser the blind teaser is sent um or you know we have that conversation and then they said well you know we're not moving ahead that's fine that's declined before NDA or we're negotiating the NDA we sign the NDA we send the Sim or they have the Sim uh after they read the Sim maybe they pass or U they said hey we want to move forward so you know in this graph we have 12 we're in the process where we're expecting 12 initial offers and you can see the status of all 100 buyers so we my take away John here is is if I'm selling my business I'm work working on my business I'm working especially hard to make it you know grow you mentioned that and I want to add value on make sure that the buyer I'm I'm trying to track down all these documents these reports I probably don't have time to do this and I probably don't have the ability to do it as selling so that that would just be a comment to those folks that say well why can't I just do this on my own and and not get anybody's help well you can I suppose I don't know that you'd be necessarily coming up with this is that a fair assessment that's that's pretty fair pretty fair all right we'll go to the next slide here um yeah so um you know you know when we when we close the deal money's in the bank we do the high five but when we sign the LOI we we we do the one finger you know high five right so it's a it's a big milestone right the LOI has all the commercial terms in the deal it has the structure it has the framework asset or stock Sal often we will'll negotiate the compensation uh of of the owner if he sticks around um um you know there's there's lease terms sometimes that get negotiated in the LOI so we really I mean before we sign the LOI we have maximum negotiating power so we're going to get the best deal uh possible once the LOI is signed okay then this closing process starts and and this is where you really need to focus um you closing is is is uh I mean it could be 75 days it can be 120 days and Beyond 120 days the probability of close it it falls dramatically because people just get tired uh they get deal fatigue sets in and and uh they start losing interest so um so it's just really important that it's a um a collaborative process so the buyer is going to introduce their deal team uh the seller is going to introduce uh our deal team um you know which would include our CP PA firm it'll include our lawyers right I was just going to interject there John you know I've been involved in in these as when I was just doing CPA work in fact that's how I started maonan Financial I was helping one of my clients sell their business and we were going through the process a lot of that had to do with the taxation are we doing a a Goodwill sale are we you know are we selling equipment or non-compete and all that kind of thing they all have tax implications we have another question from uh one of our attendees here uh asking about real estate uh 1031 exchange possibilities that will be our fourth installment of this series where I'm going to talk extensively about bifurcating the sale between the business and the real estate how we can defer and potentially eliminate the income tax on the gains capital gains and depreciation recapture of the real estate using 1031 exchanges and Delaware sary trust I'll I'll touch on the business capital gains part that could be eligible for opportunity zone or differeny installment sales and cash outs and all that kind of stuff so there are tax implications this would be a good part in the step uh where you would involve some of those discussions because you don't want to have a letter of intent and and and then try and uh redo it later and say oh we didn't think about the tax implications we didn't think about the real estate implications can we redo this and I I I'm imagining John that that buyers aren't really interested in redoing something 90 days down the road because you just thought of it and you just uh involved somebody would that be accurate yeah uh there there's a there's a rule that the the value in the LOI it never goes up that's say that's accurate yeah yeah so uh uh if if if during due diligence um you know something's discovered that that that's a surprise or the a material deterioration in financial performance then uh then it's reasonable you know for the buyer to say hey we base the LOI on you know our assumption we were not going to find something that bothered us or um that the financials were going to continue to perform um uh you know we the the preparation that we do uh beforehand ensures that that doesn't happen and and I would say you know I mean just looking back over the last seven years um I I I can't think of of of even one Loi that got ret traded uh uh you know as a as a tactic by the buyer right I mean you you know really trying to build trust and get a deal done on the terms of the LOI and um you know ret trading in Loi is is not a recipe for Success um so this this is um um you know this this time from you know signing the LOI to close what happens right so we sign the LOI we kick off due diligence and then we have these meetings so theem are the are the subject matter experts so the buyer you know they may have a an employee and benefits expert they may have an insurance expert you know they may have a a commercial Chief commercial officer that that's going to look at uh at the market um they're going to have their lawyers their accountants right so the so you know the big due diligence I guess ball you know gets gets uh broken into into pieces and uh there's work streams on every on every uh piece the next step is the uh purchase agreement which is the document that that uh whether it's a asset or stock stock purchase agreement um generally the buyer is going to provide that to council and then um and then uh sellers Council will work with the owner to negotiate that document it's it can be a 50 to 100 plus page document and uh it's a heavy lift uh so getting the purchase agreement in place is is a big part of this and then the other documents so uh there might be an employee agreement there might be shareholder agreement if you role Equity right um there are disclosure schedules so there's just a a ton of negotiating and and documents that have to be uh gone through and and you need time and patience um to get through all this and uh uh you want to be on top of things and and and not let things slip yeah one of the ancillary documents might be related to that real estate uh maybe it is part of the sale maybe it's not and maybe you're going to maybe you own the real estate and it's a manufacturing warehouse or something more specific to that business and you're going to hang on to it so kind of the the leases because maybe you're not at fair market value right now it's part of the adjusted earnings that we would do quality of earnings report adjustments but um that might be part of this uh also so there there is that yes often uh just on the on the real estate um uh you know sometimes we're putting in a long-term lease um uh prior to the sale prior to going to Market we'll put a seven five or seven-year lease in place at Market so that the lease just gets a assumed and um you know that's not something something that we want to take care of before we go to market rather than leave the lease terms open for negotiation during the deal yeah one of the issues with uh hang on that real estate too though as you mentioned before uh having an installment an earnout or installment contract you're still kind of part of that business you need the business to succeed if you're going to get all those payments uh same thing with real estate if you have a particular real estate that is only good for particular use and and maybe they're not as good at running the business as you you might get the building back without a tenant and have a tough time to so these are all kind of the discussion points uh just on the real estate aspect that need to be had beforehand yeah so here's a here's a a Gant chart of say a deal that's going to close in 75 days so um so we sign the LOI the the the buyer kicks off his Q and the buyer kicks off the legal Insurance the otherme due diligence streams um you know say a month in we finally get the purchase agreement we start negotiating that we start negotiating the other documents and then um you know when everyone feels like hey this is really going to happen then we talk about transition planning okay well you know when do we do employee announcements what happens to employee benefits um so we create action plans for that and then eventually on the close date um you know there's a call it's very exciting that's usually uh very early in the morning and the lawyers and the the buyer and the seller get on and say Hey you know the Agreements are fully negotiated I have signatures and then the other party says uh you know we agree to the documents we're prepared to release signatures and then the seller released signatures the buyer released the signatures and then the wire transfers happened and uh probably about 3 hours later the U all the wire transfers land in in the appropriate bank accounts and uh that's that's when we do the high five yeah I was going to say uh signer knives nice but I like to see the money hit the account before I I would do any high fives on that uh but that is an exciting process there must be a lot of uh adrenaline sometimes uh positive and negative uh going through this process sometimes that you would share with your client just as a side note I don't know if you have any stories about that yeah yeah I mean it's uh it's incredible um you know often you know at the front end of this process hey why why are you selling your business right like what what's really driving this well because you know I there's things I want to do in retirement right or um you know I've I've I've worked hard and um you know I I you know that was the right time right they they just decided Well you you get into this deal and yeah sometimes you know things don't go perfectly and and um you know killing the deal or stepping away uh without compromising you know could it could put you back you know two three or four years in your plan so you kind of have to weigh well you know hey why were we doing this in the first place and uh and hopefully I mean our experien is you know we're generally you know getting you know very strong valuations you know and creating wealth you know more money than most humans can spend in their lifetime so if uh if if a uh you know business owner gets a a little emotional in it you we got to come back to hey why why are we doing this in the first place and and um and uh but uh yeah but it is on that uh that day there's been many tears tears of joy uh that I've shared with with the clients uh uh they're very very very emotional U you know one story is one of my favorite clients is a um a business up in um up near Bellingham and she um you know she started the business uh on her living room floor uh cutting uh Fabric and she eventually created the largest Luxury Spa linen company in the country and we sold it to a private Equity Firm and uh and uh she when when she started the company she funded it on credit cards you can imagine that and uh from there to uh uh you know uh a multi-million dollar transaction it was uh yeah one one of one of the most joyous moments in in in my life as a professional and and obviously for her as well yeah imagine it would be um here's some of the the work stream uh we did have a question from participant uh in a business that's sold what are the tax implications and again we'll be we'll be covering that in the fourth installment of this series more directly but there's not only just the income tax implications uh the opportunities as I mentioned previously on the real real estate uh piece uh using a 1031 exchange or or or dsts that kind of thing or opportunity zones installment sales versus cash out you know different uh uh different treatments on how you uh bate the Assets in the sale Goodwill versus non-compete all that kind of thing there's also an estate tax planning aspect to this depending on your state also uh different states have different rules and Washington's a community property State uh Oregon's common law state uh you know it's depending on where your business is you have different rules related to that we will cover that in that but uh uh definitely uh there's there's a lot to that for the finance and tax aspect obviously on this Slide the legal there's a lot of legal that goes into this I can see that uh insurance policies making their they sure they're okay maybe you can also mention uh some points on these other three I think you know a challenge that I I have with with our clients is is you most business owners they you know they don't want to tell their leadership team that they're thinking about a sale and in reality is they need their leadership team to get a sale done and any buyer you know if if your goal is to sell the business and to move on you're not going to be there so the buyer says well who's going to run like who am I working with who's the leadership team right who's your head of operations sales Finance you know who's the new who's the new leader of this business so um you know so you know getting those retention agreements in place and saying hey you know we are talking to investors we may get a deal done if that happens you know there's going to be something here financially for you and then when we get to the due diligence phase you know I say team members who you know you really need your team on board to get through all these due diligence items because if it just lands on the shoulders of one person I can tell you it's it's overwhelming it's going to take a long time people are going to get very frustrated and it's going to be harder to get the deal done yeah I de with the IRS and the SEC and this is overwhelming to me so I imagine it's overwhelming to somebody in the normal business that that isn't something they do every day um I think uh let's let's hit on some of the mistakes uh during the process it's it's uh really beneficial I think to know what you know I just recorded my radio show this morning and we're I was talking about estate tax planning and our topic was estate tax planning mistakes so we talked about some celebrity mistakes on that uh and and but uh maybe you could talk about this here uh what are some of the mistakes uh preparing to go to market uh yeah yeah so you know we talked about you know telling the story of of your company well there's you know we need to say well what are um you know what's our customer profitability or or our you know what are our our our margin Trends um you know do we have all the data that we need in the business to tell the story and and it's just a a broad spectrum right I mean there's there's as as an owner of a business you may say hey I don't you know I don't need to calculate Customer profitability because because I don't care you know I mean it's just you know as a buyer I do and I want to bifurcate that into uh because you know 80% of your your your good stuff you know your best 20% of your clients are 80% of your profit and I want to I want to know where the problems are and all that stuff so yeah uh as I mentioned earlier in this put yourself in the shoes of a buyer pretending you're buying the business what would you want to know about because that's what I'm I'm going to guess you're going to get asked is that correct yeah yeah so so just that data collection exercise on the front end um you know if it takes too long it's overwhelming it it's it's a message that uh um you know you know that's why you need to prepare for a sale because because all this data has to be collected and analyzed the second one is is um you know when we're in Market um you know we do lots of calls with Buyers there's critical meetings um you really need to be present and and we've had examples where you know business owners well hey I you know you know yeah chanook I've hired you to to sell my business but I'm going to be in Hawaii for two weeks then I'm in Mexico for two weeks then I'm in Arizona for two weeks and it's like well you know are you going to make yourself available you know for these critical calls or not because we're in the process and we really need to be you know all hands on the pump getting it done and and if you're not available things are just going to drag on and on and and it's not going to be a successful process um and and again talked about this can't emphasize this enough but you know your leadership team they can smell it right yeah they need to know what's going on yeah you gota you got to figure that one out for sure because you're you're selling your team you're selling everything you know the processes everything in your business so that's such an important step yeah and then you know from so this is you know that kind of the you know getting ready to go to market we're in Market we sign the LOI then you know the a close we really need you know the vdr virtual data room has to be uh populated and you know sometimes oh I I bought my brother out of the business you know 14 years ago uh was there any documents no you know you know I just you know I I I I paid them out well you know you know you we have to kind of you know you have to have some some corporate records and Company records um you know customer contracts um you know we have to go through them and often you know they're lost they're not signed um you know they have to be recreated um the again the buy side qve to toh calculate our eida um you know we have to get through that um you know the I9 audits right hey for every employee we have uh identification documents they've been reviewed photocopied signed uh all my employees have have signed the appropriate uh employee handbooks and what not and just for some businesses that's just not a priority but in order to sell a business you know we need a A+ grade on on all that stuff and it and it just has to be done it's kind of like selling a house you gota you gotta get it painted and cleaned up stuff you probably should have done while you owned it but if you're going to sell it you got you got to raise your bar and you got to make it something attractive it's it's probably not that much different um and and you mentioned deal fatigue you know uh and and taking your eye off the ball on on the on the earnings SC uh uh super important I was curious just real quickly John have you ever had a situation where somebody said they're gonna want to sell their business they got it all fixed up they're growing it was really attractive for a buyer and they go well now that I've I've done all this work I want to keep it yeah all all the time did you know we do this we write the Sim and we send it to the owner to to read the info memo and after he reads it he says this is a great business you know I want to buy this business I already own sell it yeah ex that usually lasts for about five minutes and then they come to their sentences and oh yeah I'm 72 years old that's why yeah I'm sure that that happens well that's uh let's kind of wrap things up today certainly we've got our our our next two coming up June 18th and June 20th uh how to ma you know how to value your business I think a lot of people would be interested in that I had a question on that too and so we'll be uh covering those those elements excuse me and then we're going to do valuation and eita on the fourth one so here's a QR code for anybody that wants to get some more of the information from uh shinik Capital Advisors uh here's a QR code for uh my education Library I've recorded 98 topical videos uh so you you really want some some deep dive on a lot of different topics in little six minute increments that's the place to go uh here's the a group of folks that uh are running the ship of the the firms here the shin Capital advisor folks and myself and then finally there's a QR code for our upcoming uh webinars there but uh anyway yeah so on on June 18th um we're GNA talk about business valuation um and we're also going to talk about um different types of buyers whether it's um you know private Equity unfunded sponsors search funders owner operators so how do you uh you know how do you differentiate buyers uh in the market um so that that'll be another great presentation yeah and I'm looking for the one on the 20th tax planning reinvestment opportunities uh that's that's always a fun topic for me so looking forward to that well thank you John that went fast I look forward to seeing you and everybody that watched this really appreciate it uh we'll see you hopefully next Tuesday June 18th great yeah and if anybody has any follow-up questions feel free to reach out to me on on my email uh and I'd be happy to get back to you all right thanks a lot John okay bye bye