Why Most Business Owners Lose Millions When They Sell

If you’re not building your business to sell, you’re building yourself a job.

In this episode, Jack sits down with Steve and Austin from McCall Wealth Advisors to break down what actually drives business value—and why most owners leave millions on the table when they exit.

From EBITDA games to private equity traps, this is a masterclass on how to turn your home service business into a sellable, high-multiple asset.

Because the reality is simple:
 No buyer wants to step in and buy a job—they want a business that prints profit.

💡 What you’ll learn in this episode:

•  Why 80% of your net worth is probably tied to your business
•  The biggest mistake owners make when preparing for an exit 
•  Why you should start planning your exit 5–7 years in advance

📩 Connect with McCall Wealth Advisors:

👉 https://mccallwealth.com/

🐦 Connect with Jack:

👉 https://x.com/thehvacjack

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John Wilson, CEO of Wilson Companies
Jack Carr, CEO of Rapid HVAC

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Transcript

 No buyer wants to step in and buy a job. They're looking to buy a business that spits off profits. All it baby, let's do it. The point is like you've gotta be prepared well before, even if you're not thinking about an exit. 'cause you never know when that time may come or that big offer may come around the table. If you're thinking about selling the business, you want to. That you're making money and the more profit that you can show, the better position you're gonna put yourself in. You know, a lot of people think, oh, if I try to get my business ready to sell, that's gonna sacrifice like the success in the business between now and then. It actually does the opposite. You're cleaning up so many things, what the average owner should probably take a look at doing, maybe first month post. Yeah, I've got three welcome back to Owned and Operated today. It's John is not here. It's me running the show. This is the Jack Show today. Uh, today I have some friends on and neighbors and all around awesome people. I have Steve and Austin from McCall Wealth Advisors. How are you doing today, guys? Yeah, great. Happy to be here. Thanks for having us. Yeah, good to be here, Jack. Uh, so offline, um, Steve and I have been having a few conversations about what's going on in John and my life with all of John's acquisitions and the industry in general, and. Steve is right in this on the daily, Steve, like what, talk about what you guys do and, and where your position is with this market. Yeah, so I think what, what we're wealth advisors first and foremost, um, uh, but we've got a ben to business strategy and so we realized that for business owners. Most of their wealth is tied up into their business, 80 per, in fact, 80% of all business owners' wealth is tied up in, in their business. Um, and then there's 20% outside. And so we try to build all of our, uh, I guess, advice, strategy and all of our, um, the resources that we can provide and build our team around helping. That that 80% grow scale, and when they're ready to take chips off the table, we help 'em assess that. So, which it's, it's always so funny when I hear those conversations because as, as an entrepreneur, we, I, I call us all squirrely. Uh, we always want to do and touch a lot of different things, and I think deep down we all know the correct move is just to reinvest back into that 80. Mm-hmm. How many, how many people do you work with that actually kind of go out of that bubble and they start to dabble in things they probably shouldn't touch. Uh, so a lot of business owners, uh, especially those that have had some, uh, some success, are pretty confident that they can have success in other areas too. Uh, and a lot of times I think the most value that we preve, we bring is to, uh, keep your eye on the prize, keep protect that golden goose. There's, you will have plenty of egg golden eggs. Uh, but don't, don't let those eggs turn into a goose among themselves. 'cause that compromises the golden goose. So yeah, talk, talking to somebody who's running like three or four different businesses. Yeah, I am definitely guilty of this exact thing. Yeah. Um, it, it's definitely difficult to manage. I can, I can say that. Uh, but that being said, um, so where, when you guys start working with operators who are potentially looking to exit or are thinking about an exit, uh, what, what, when do you guys normally get involved with them? At what time in the process or where should you get involved with them? Austin, you wanna step in? Yeah. Yeah. So, um, Jack, that's, there's two different answers there. Um, you know, a lot of times we would like to be involved sooner rather than later, right? Because that just builds in a lot of optionality with how someone thinks about an exit. You know, as the timeline gets closer. Um, a lot of doors just end up being shut off, you know, rather than if, if you were to start at an earlier time. So we would love to be brought in five, seven years before an exit. 'cause there's a lot of cool things that we could advise on and help build for the business owner to help 'em maximize for the most value and, and the way that they want to. We end up getting brought in about eight months before an exit. Yeah. A lot of the time, right? It's like they're running, running, running. Oh, I got an offer, or, oh, something's happened life. I need some help and I need to sell now. And yeah, there's just, there's fear levels, levers to pull and we try to pull as many of those as we can, obviously, and we can and offer insight there, but. The sooner the better, Jack. Yeah. I mean, and that rings true because it wasn't for me personally, in my personal journey, it, um, I, I only heard about the conversion of your business to a C corp. So that, uh, you can after five years Oh, too, right, right off, yeah. Right off the, the capital gains up to $5 million and da, da da, da. I'm like, oh my gosh. I wish somebody would've told me that. Uh. Earlier than today because I don't know if I'm gonna have a business in five years. So why would I start that road now? Unless that's the future. But for anyone listening who is on a five to seven year trajectory, like that's an amazing tool to save you up to what? 5 million in, in capital gains. Something along the taxes on 5 million in capital gains. It's a lot more than that now. Um, uh, I think a year or two ago they came out with some new legislation that you can get like up to $75 million worth of capital gains kind of written off if you're qualified for qualified small business. And C there are a lot of, like, a lot of caveats. A lot of caveats to that. Yes, yes, yes. But we're no tax advisors. We'll say that. No, but yes, they did. There's a lot of friendly options, but the only way that you can even think about those is if you start early. Yeah. You have to plan. Yeah. Starting having those conversations with, with people in kind of all different industries, including I think this one, which is why I think you guys are awesome to have on here today. So just an update for you guys and for anyone who's listening who hasn't heard. So John is, in the past three months, has recently acquired three small businesses, uh, ranging from about 2 million in top line to five to 6 million in top line. And so where, where this, these conversations are coming from is. I think that once those become really public and those episodes drop, um, I think there's gonna be a lot of questions for other people who are potentially interested. Um, we all get those thousands of emails, uh, a week about, Hey, sell your business now. Or, you know, we're, we're at the private equity company and we're looking to buy. And so, um, I just, I think that this is a great time to do this. Uh, and, and from your guys' perspective, um. How long have you guys been helping out operators to exit and do you guys have like some great examples or some, some kind of walkthroughs that you could do with with us and the listeners today? If you're running a home service business with five or more trucks, you already know that payments are a mess, checks are slow, and credit card fees are high. And nothing talks to each other, and that's where Eye Wallet comes in. Eye Wallet is a modern financial operating system built specifically for the trades. It combines cards, a, c, h, and even digital check processing into one simple platform, and it plugs right into your existing CRM in my own business. We are currently slashing our credit card processing fees in half using eyewall. If you're serious about scaling your business and cleaning up your cashflow, check out eyewall. Head to eyewall.com/demo to learn more. Yeah, so, uh, it's funny, we've been a part of our, our practice started in 1988, and so, um, you know, obviously we were children. I don't, Austin, were you even born then? I was a baby. Um, and so, you know, we have a lot of examples of, okay, this business owner did this, this did this, they planned in this. So we've got a lot of, thankfully through our, our senior partners, they've told us what, what works best and what. What doesn't work, like what to steer away from. So we've got, um, and then, and then since, uh, you know, since we have kind of taken on initiative and, and been firm leaders in the, in the firm, we, we've got a lot of examples of what we're walking through now. And so, um, Austin's got one that he's working through, um, currently where a, a business, they, they approached us. What, at the end of last year mm-hmm. Um, he was looking to sell and, uh, eight months. Yep. Yep. He had a, he had a, it was one of those, I had an offer. PE came in. Yeah. Um, Austin, you wanna dive in? Yeah. Yeah. Into that one. And I, I think that's such a, such a good point, Steve. Like, you know. The, the, the stats we hear is that 50% of all exits are involuntary. Right? And that, that's not even counting those emails that, you know, a lot of home services companies get that. You're right. Sell your business now. Um, but the point is like, you've gotta be prepared well before, even if you're not thinking about an exit. 'cause you never know when that time may come or that big offer may come around the table. So this, this business owner, um, he's, his business was doing ride around. Uh, 1.1, um, million dollars, um, in revenue. Um, he, uh, he, he, he got an offer for right at $2 million, um, ebitda, 300,000. Um, and he was thinking, all right, let me capitalize on this. And taking on the surface, that sounds good, right? $2 million for a, for a business, um, that was a fair value at that point in time. He came to us and said like, okay, how, how can I do this? Um, but once we backed up and, and really looked under the hood of this business, um, one, he was really the only senior leader, right? He had had a couple of managers with him, um, but they had recently left like with them in the last six months. So that meant that he was gonna have to continue to stay on for three to five years to make sure the business succeeds. In addition to that, the company wanted him to, um. Part of his, his compensation was an earnout, right? So if the company didn't continue to produce, um, he wasn't gonna be making his money, which is important. The third thing is a significant portion, about 30%. They wanted to include not as cash at close, but as stock at close in this private equity company. So that means, and and they, they always pitch it like, you know, this is valued at x now, but we're thinking about selling in two to three years, and that value could grow by 2, 3, 4 times. So it's actually advantageous for us to do this, in my opinion. Like, you actually gotta discount that stuff if it turns out that it's, you know, the value that, that they're saying it is great if it's more than that. Awesome. Um, but a lot of times it ends up being less, there's no guarantee with that guarantee, with that stock portion. Um, and so those, those were big three things. And even more so than that, um, about 25% of the $2 million he had saddled in debt and this, um, was debt that. Upon the, the actual close he was gonna have to pay off immediately, right? And so the $2 million number that you would see headlined once you back out taxes, because again, short time to close, not a lot of leverage to pull. So you back out taxes, you back out fees to the attorneys, you back out commissions to the broker. He back out all the debt that he was gonna have to pay off that $2 million number looked a lot more like five or $600,000. Right. It's, it's for him. For him, he'd have to stay on. So honestly, it was almost just like a bonus, a very nice bonus. Mm-hmm. To become an employee. Yeah. But it stripped him of, um, perhaps, perhaps his golden goose, which is the asset of the business itself, right? And so what we told him is, yes, you could sell right now, but it was significantly compromised what you want to do post-sale. And so let's do some work. Let's clean up that debt. Let's bring in some general managers to really help take the load off of you so that when you go to sell in four or five years, even if you still get that $2 million offer. Because the debt's paid off because we can pull some lever levers between now and then. The help with the taxes. Your plan actually will work even with the same exit price. Right. Just because, but typically and and then in And in that case though, because he did the planning and he builds a team, most likely that value price is gonna go up. Right. 'cause he's invested back in the business. Mm-hmm. And so, yeah, uh, definitely. I, I definitely get that. And, and so where, where are the big levers that you see? Not necessarily the tax levers, but mm-hmm. The levers that, um, you see that, that most business owners can pull or focus on to really try and drive that value as they kind of round that corner a year, two years out? Yeah. Steve, I think, yeah, I think the biggest thing is really a mindset. It's, it's a mindset shift for the owner because I know it, you know, it, we all hate paying taxes, and so mm-hmm. We run our business to earn as much as possible. That's, I mean, we're trying to make a good, good living, but we also wanna make sure that, you know, that tax expense is, is as minimal as possible. Um, well, if you're thinking about selling the business, you don't, you wanna make it, you want to show that you're. Making money because a buyer wants to, I mean, that what's attractive is the asset is making money. They wanna see, okay, this is actually a really efficient business. It spits off a lot of profit. And the more profit that you can show, the better, the better position you're gonna put yourself in. Because, um, it it, because that's what, that's what the market wants. And, and those multiples, if you do the math Yeah. That's where the real multiples come in. Yeah. So, right. Yeah. When you're looking at the ebitda, multiples of ebitda, that's where the, they're taking their valuation from. And when you focus on taxes and, and optimizing for taxes and tax purposes, you're trying to get that net number, which is part of EBITDA as low as possible so that you're paying as minimal amount of tax business taxes as possible. But as you start to optimize for, um. As you start to optimize for a sale, you're looking at, Hey, how can I get the EBITDA number as accurate and as high as possible? Because that's where my multiple comes from. And I mean, you, do you, you guys have CPAs at your firm? I would, I would assume you guys are not the personal CPAs there. No, we were not CPAs. We weren't, I was gonna say no. There's so many different ways I, yeah. I, I talked to, um, uh, A CFO the other day and he was just rattling em off, and I'm going, I never thought of that one time expense here. One time expense here, r and d dude. Duh. And he's able to really climb these EBITDA numbers by just actually focusing on an EBITDA four business versus a. Tax reduced business. Yeah. Yeah. Well, and Jack, to, to your point, like, you know, a lot of people think, oh, if I try to get my business ready to sell, that's gonna sacrifice like year to year revenue. It's gonna sacrifice like the success in the business between now and then. Um, it actually does the opposite. It's counterintuitive, but you're cleaning up so many things as you're getting ready to sell, like the, the best. The best analogy I make is because most people have done this is selling a home. Before you sell a home, what do you do? Like, you make sure that all the nicks are cleaned up. You make sure that like all, all of the plants are in a good spot, you know, walls are painted well. Um, you make it as livable as possible and as pretty as possible. So a buyer will come in and say, you know, yes, I, I am, am, could see myself living here. And by doing that. 3, 4, 5 years before an exit. Not only when that time comes, is it gonna be more attractive to the buyer, but you're gonna enjoy working in the place so much more too between now and then. Yeah. Yeah. So, so the other co-host of the show and I, um, we, we talk a lot about, you know, the theory behind the business and, and et cetera. And one of the big ones that we've been deep diving recently is we've always done, um. Like, there's benchmarks in this business set by nexstar, set by, uh, business, uh, practices, like best business practice groups, uh, and always all those, those percentages like you, you can only use 3% of your revenue on, um, uh. Uh, on x or 7% of your revenue on marketing, and ironically enough, what we found is like the, the better option is to do what you said and like clean up those nicks and focus on, well, actually let's look at how much of the percent of each of our expenses is off of. Revenue or off of, excuse me, not revenue off of gross margin. And so that we're able to really deep dive and find those nicks and see like, Hey, where are we losing money? And it drives all of the focus to say, Hey. What is your ebitda, what is this worth? The EBITDA that you're spending, is this worth the EBITDA that you're spending here? Mm-hmm. And so you can actually hyperfocus on that. And, uh, I think you're right. I do think by cleaning up that business and all those individual line items, um, you do build a better business, ironically. Well, and we think about like what ends up driving the multiple, what ends up driving the, you know, enterprise value? Um, buyers don't like, yes. Past, you know, past cash flow, past revenue, past EBITDA is a good predictor of what's to come in the future. They don't care what you made, to be frank. Like they, they want to know what they can make in the next 2, 3, 4, 5, 10 years, right? And they want to do, we want to know, can they do that with the least amount of risk as possible, right? Mm-hmm. And so. If you can show a buyer that we've got this recurring revenue, I've got this great management team in place, I've got these expenses down as far as I can, margins are great. They're gonna say, I'm gonna pay a higher multiple for this because my risk is really, really low. Right? Yeah. And that's what you want for a buyer. That's how you really get those accelerated multiple numbers. And, and I would say too, to add to that, it's like we're going through a couple of different transactions at, at, at the moment, and all the buyers, um, are looking, they wanna look at the last three years. And so you can't just say, okay, I'm gonna clean up this year, or, Hey, I'll, I'll do, I'll do tax mitigation strategies in 2026. 2027 is my, my year. No. A, a buyer wants to see, hey. Is there proven profit growth that is sustainable? Because that's a red flag. You, you show that you weren't running much of a profit one year, and then you've got a 400% profit increase. They're like, what are you hiding? You know? Yeah. I mean, yes. That's exciting. Oh no, our sales increase, no, your sales increased by 10%, but your profit increased by 400. Mm-hmm. Like, come on. And so that, that's just that, that those are yellow flags, potentially red flags. Those are red flags that lower your, it's gonna lower your ebitda. So say your, if your industry's getting eight, that might get you down to a six multiple because they're, they're taking a risk. Yeah. And, and ironically, the, the funny part, it's funny you say that, Steve. I have that argument with brokers probably once a quarter. As I said, Hey, his, his expenses dropped in the last year, but his revenue went up like unless, or his gross profit expenses. So like his material expenses went down, but his profit went up. What happened? Explain this, please, like this is. 10 point reduction. Well, did this just come outta nowhere? Well, it's funny that she did. Did you suddenly get good at it? Absolutely. Yeah. And it's funny that you say that. So a business like that, that has those types of data, the, the, the discrepancies in their data, that's 80% of businesses that actually go to market don't even end up selling. Now, they might sell later, but the first time they won't because they're books. Like that guy probably didn't sell his business. He probably didn't. Why would you? You can't trust those numbers. Steven, only 10% of those businesses that do sell get the valuation that the owner thought they were gonna get. When they go to market, that's like two to 3% of of all sellers. Right? Which just crazy. That's the other part too, is like, you know, brokers are, I think that they're great for this industry, but they also are really rough for this industry. At the same time, there's good ones or bad ones, like real estate agents. You can have a house that's worth half a million dollars, but if you tell the owner it's worth 1.82 million, it's just gonna sit on the market. Or you might even get an offer. And then they step inside that house and it's absolutely trashed. And then they're like, ah, you're gonna get 200, 300,000. Yeah. Yeah. And I just hate that re-trading process. Expectations. There's, like I said, we've worked with a lot of brokers who are absolutely amazing, but there's definitely some out there that. They set the, the client up for failure. But enough of that, uh, me on my soapbox about brokers, uh, what, like, okay, those are some great, great heads up. So start early, start a couple years ahead of time. The more time the better. We always say, Hey, you should be building your business now like you are going to sell. Just because again, if you do get this offer that's ridiculous, you should probably at least think about it and be ready for it. Are there any other big, uh, either red flags or. Here's a big lever. Um, yeah. John and I like to talk about levers versus knobs. Right. Levers are harder to pull, where a knob, you start it and you can just kind of crank it up. Mm-hmm. Um, a great example of that's like, uh, what we see is redu reduce multiples for not having a marketing, uh, team. Or not having a marketing plan or process or SOP, just because again, turning on marketing as a lever is a very difficult thing to do. 'cause you spend a lot of money trying to figure out which channels work. But if it's on, it's easier to crank up and like really put money into it in overdrive. Your Google business profiles are either printing money or they're losing it, and that's where big reputation comes in. Big reputation turns your GBP into a true lead machine. Without adding more work to your plate, it runs in the background with automated posting review generation and fast responses so that your reputation compounds over time, and this is huge. If you're multi-location, they make it dead simple to manage and scale your reputation across every branch. So every location shows up in wins in the map pack. I'm actually using big reputation right now as I grow and scale my newest acquisitions. Plus you get real insight into what's actually happening. You get to spot gaps with location health monitoring. Track reviews and sentiment. And see which zip codes you're winning and which ones you're losing. Better insights, stronger trust, more calls from an asset you already own. Go check it out at big reputation.ai/oho. Well, I was just, I was gonna tee you up 'cause you're, you're doing some good work with the business owner right now who came to us. He, he had an offer that honestly would have. Would have, um, you know, been enough for him to do what he wants to do post. And so, but there was a lot more opportunity inside of the business that he could crank up those knobs and, and turn those levers to get a higher multiple, but also raise his ebitda. So Steve, share a little bit about the work that he's doing to, to try to make that happen. Very, very successful business. He does a lot of commercial work, uh, but he is, uh, we, in our world, we call this, oh, he's got owner's. Owner centricity problem. Mm-hmm. Uh, he's working 60 to 70 hours a week. Um, he is the per, he is the primary salesperson. He is the backend quality control. And so, I mean, all of those things are necessary and valuable. Um, but he, and he has learned over time that he can do it so efficient, and he's had frustration with actually taking that hat off. Going back to your. Your, your E-Myth book, probably the first book that most people read when they get into business. He had, he, he just never, never, uh, uh, took that hat off and let it go. Let it. Appropriately trained for, it's hard for business owners because it's their baby, right? It's the keys. Somebody else. It's also hard because they're, I mean, that's why they're in that position that they're in. It's like I, not to pat myself on the back, I'm really good at being a tech. It's not the best use of my time, but I'm very, very good and so it like, it's very hard to try and train and trust in. Allow someone else to do something and take off that hat because I know how well I can do it. Mm-hmm. And when they don't produce or don't meet those expectations, it's like, uh, oh man, come on. I know. I can just jump back in. Well, and in this, this owner's case, and probably in your case, it's like, I mean, there are representation of you. Yeah. So you gotta, you, you, there's, so for him, he had to step back. Train people. Mm-hmm. To be representatives of him. Take some hats off from quality control, take some sales hats off so that he can focus on the business, which, if an owner is able to invest in its proper team, that's when they can add a zero. You know, if they're, they're focused, they can add a zero to the business. Now there's a lot of work involved and a lot of investment. I get it in trust. Yeah. 100%. And so, um, owner centricity, they, no buyer wants to step in and buy a job. They're looking to buy a business that's structured, that spits off profits. And so if you've created an environment where. Where everything kind of bottlenecks through you, key decisions, uh, sales, payroll, all that kind of, it's like the more stuff you take off your hat, the more attractive that cash flow is. Yeah. 'cause you open up the market. Right? So if, if. Like that, that business you're referring to in terms of just generalities is probably still, still sellable, but it's still sellable as a tuck into another business or emerging ex emerging potential for another business. It's not, uh, adequate for a first time buyer or a separate industry buyer or non-institutional. Even an institutional buyer might have issues with that. 'cause they have to bring in their own guy to run it. Yeah. Private equity, they'll, they'll discount that. If you have a team that's in place, uh, we, we like to say. You do not have an owner centricity problem. If you can step away for four straight weeks, take your family on a long vacation, and that business, ugh, doesn't, doesn't skip. Yeah. A beat. Now you'll have to, I understand, emails, all that kind of stuff, but you not physically being in the business for a month. That's your litmus test. Yeah. That's your, that's when you know you have a good team. It, it's the control freak in me that's losing all that. Uh, no, that's awesome though. And, um, no, I, I completely agree. Like that's definitely when you're looking at a business for me, like when I buy businesses, it's less of an issue just because when we absorb, I don't actually want the owner to stay on. Uh, I'm the perfect buyer for like that kind of owner. Just 'cause like, I want the contracts, I want the business, but like, I'm ready. You should, you should definitely leave. I don't need the help. Um, that being said, like for most other cases it, you will get more value out of having more buyers bidding the price up higher. Yeah. Like bar none. And, um. Because it's true profit. They're buying a system that operates. Mm-hmm. Well, that now that's, so that's what I always say about that's, that's the point with marketing too. It's like you're buying a system that operates, you don't want to buy the lack of a system for potential operation like. Yes, this, you don't wanna buy a job potential operation there, but you just don't want that. Um, sweet guys. Uh, and if I, I, on a much more of a personal note, like just outta curiosity, um, you know, as somebody who potentially wants to move into, I guess the, uh. Capital allocation realm rather than the owner realm. Right? Because I think that there's a difference once you, once the dream is once you sell the business, you move into a kind of a different role as a, as a capital allocator, you make enough that you move into a place where, um, you're putting stuff in maybe another business, maybe ETFs, bonds. Like I know this, the show isn't specifically about, um. All of that, but like what, what is your guys' recommendations on what, what the average owner should probably take a look at doing within the first six months post exit or even. Yeah, I mean, maybe first month post exit. Is this, Jack, is this the point where you want us to give you your, our hot stock tip? Is that, is that Yeah, yeah, that's exactly like gimme the goods so that I can go and do it myself. No, no. I'm more, I'm more curious about like the framework. No, no, no. I, I, I'm, I'm good. I, I like it. Uh, I'm more curious, the framework. Yeah. You know, like what, what should they be thinking about? What should they be doing? Where should they be? Yeah. Positioning. 'cause I've heard like a bunch of different things, right? There's people that are moving stuff into commercial real estate. There's per people that are moving stuff into next ventures, there's people that are moving and, and I mean all of those might be good in certain instances, but I think that there's probably a best practice for the average owner. Yeah. I, I think the best way to talk about this is to tell a story. 'cause I, I think that's, um, probably most relatable. So we're working with business owner right now, two partners. Um. Uh, their business, um, you know, is, is gonna sell right for right for around $8.3 million. Um, they've got enough to where they can, um, they can walk away and, uh, their, their personal finances are in a good spot to be able to do what they want to do. Right. Um, we talk about pulling levers. They made their business as efficient as possible before they sold. They did a fantastic job of getting the house ready to sell. The only way they could have increased. Uh, EBITDA is to expand, right? Either add on to the facility or open a second location, which would've involved more risk, right? And so they said, you know what? We can do what we want to do post. We're tired, we're ready to take chips off the table, let's do it. Um, and so they entertained private equity offers and found one that, you know, because of the leverage, they were able to negotiate good terms. And they're gonna exit, or I guess close here in a week or two. And so the conversation for them now is now what? Right? They're gonna stay on and continue to work for about three years. That was part of the agreement. Um, but with that capital, we have to really take a hard look at how do we, how do we allocate those proceeds? And for Steve and I, I think one of the things that, that we do best in our opinion is, is understanding. Like there's no rules of thumb. When it comes to like investing, there's no rules of thumb of what to do with the proceeds of your business. It should all come down to like you, your family. What, what desires do you all have? Um, fer all, some people it's buy another business, right? Business owners, and I say this kindly are squirrel, psychos. Um, squirrel. Crazy. Yeah. And I can say that 'cause Steve and I have ownership in our business, right? And there's, yeah. There's a lot of stuff that goes on that like, you know, squirrelly, right? So, lemme tell you, can, can I, I'm gonna interrupt here because I just did, I did a big whiteboard session with a husband and wife, literally yesterday. We have this process called the Cornerstone Process and they're considering an accent and they're like, well, what are we gonna do? And so we gotta process with that. We can talk about that later. But, um, on a whiteboard, what I found is that no, they really are passionate about feeding the community and cows. And so their 10 year plan. Is once they have their exit, they're going to have an established. Head of cattle that can produce the, their cash flow that's necessary. And so what are they gonna invest their proceeds? Well, they're buying the land now. Mm-hmm. They're buying the equipment now to service all of these cattle and they're slowly starting to build up those systems. So in 10 years, their whole family and communities and is gonna live off of that operation. So for one, it might be, let's, let's buy some, let's buy some stocks, mutual funds. Let's buy some commercial real estate. But for another, let's buy a hundred head of cattle. Yeah. So it's just, that's awesome. But, but every business owner is different, you know? Mm-hmm. Their interests are different. And, um, and the go, and going back to controlling the golden goose, it's like we all know that you can invest in a stock market, get, you know, what, 10 to 20% on a good year, but if you have a little bit control, you can turn a dollar into six. Yeah. So, yeah, the rules depends on what risk you're willing to take, right? Yeah. Jack, the, the rules of thumb things I would say that most business owners need to think out. Think about one, make sure you maintain a good amount of liquidity. Post exit, meaning don't take all of your proceeds and throw it all into some sort of purchase where it's locked. Um, because all it baby, let's do it. Yeah. Um, 'cause you, you're going to get squirrelly. You know, I'm laughing, I'm laughing 'cause I've actually seen it like more than one time. So like, it, it's, it is me en enjoying this moment as somebody who has seen people sell and then be like, Hey, what are you up to? Oh, I, we just bought this bus. Actually, the old owner of Rapid Response did that. Mm-hmm. He went, sold rapid response to me. Went down, moved down to Florida. Built rapid response. Again, same ip. I didn't care. I said go for it. Sold that made decent amount, couple mill and then went and immediately bought within like six months a bar like it. And I'm like, this is wild. Not only did you buy like take your money and like flip it. For me to, to do it again and then take that and then go into some like randomly adjacent field with like the highest default rate. Yeah. Out of any type of business. Um, but you know, squirrely. Yeah, squirrely he did, of course. So yeah. Hopefully John Taffer didn't, didn't visit his business. Um, yeah. Right. But, um, but yeah, I mean, you gotta maintain liquidity because like. There's gonna be something that pops up. Um, and so we always try to take a good portion, you know, and just leave it in some sort of, you know, high yielding account where the money's guaranteed for a period of time. Because one, if we do end up going the market route and like investing it in public securities. You probably don't wanna dump all that in at once, right? So that gives us a timeframe to sort of like drip in, but also if there is something that pops up that they want to take advantage of, the opportunity, whether it's a business, whether it's some sort of dream vacation, right? Like there's a pool of cash there that they're able to do what they want to do. Um, the second thing is, you know, be as tax efficient as you can. Like you're, you most business owners. Unless they did a lot of pre-planning, you know, there's gonna be taxes, whether it's regular income or capital gains that they're paying on the sale of their business. Most businesses are treated as an asset sale, right? And so you're gonna have capital gains, you know, anything between the basis and, and the value that you sell. Um, and so, so, yeah, go ahead. Real quick on that one. 'cause I mean, I think that that's really pertinent. Mm-hmm. Is what I mean. What are the strategies, right? Because I mean, we talked about one with the capital gains mm-hmm. Uh, two, outside of moving your business to Tennessee or Florida mm-hmm. Or, you know, Nevada, you're gonna have state capital gains. But what, what, what are the, are there any big levers for somebody within a year or within three years? I think are two good timelines to really say, Hey, what can we do? Um, 'cause like. Real estate has a great, a bunch of great options. If you start within a year, you could probably do a 10 31. Mm-hmm. Um, like there's, there's options in other industries I have yet to find or hear about any Yeah. Shorter term options in. Business sales. I've got, is there just none? Yeah, I've got three. Um, and Steve interested your thoughts. Um, the first one, and, and this is area I do a lot of work with and is just charitable giving, right? If you have a heart to give, there are a lot of things that you can do pre-sale that not only are gonna gr impact, then your net proceeds post-sale. But it's gonna allow you to even give more to the causes you care about. Um, and so that, that's one thing that, that we take a lot of pride in and do a lot of good work, I feel like. Um, the second thing, uh, is, is some sort of tax loss harvesting vehicle. And so like if there's a way that we can invest money, either pre-sale, hopefully for a couple of years, but certainly post-sale, we're able to achieve market returns but also rack up a bunch of tax losses. Realize tax capital losses, then we can count those against the sale, your business. Right? Which ends up being pretty significant. Um, the third thing, Steve, um, and Jack really is, um, what's called an esop, an employee stock. Um, was it. Steve Employee Stock Option Pro. I, I don't remember what it stands for, but yeah, most, most of us know what ESOP is. I think that a listening, I shouldn't have gone there with the words. So, um, basically it's a way where you can sell your business, right, and move the business into like a. Um, uh, into retirement plan. And you can not only negate taxes upon doing that, now it takes the right business owner, it takes the right business to do. It is not a lever. Takes a staff, everybody. You've gotta have a management team that's incredibly strong because a lot of your end profits or end, um, uh, the money that you receive after the sale is gonna be up from future earnings, you know, in the business. But. For the right business and business owner, that can be a significant way to eliminate taxes on the sale. Definitely, definitely. Yeah. One of my buddies just was as, as the employee, was a part of a giant ESOP from a construction company that sold out in California. Mm-hmm. So, really neat stuff. I, I love ESOPs. There's some great stories here, um, in, in the home service industry of, of owners going the ESOP route and then selling mostly to their employees. It's rare. It's rare. It has to be perfectly line up. Yeah. You have to be a big company too. You win, you'll win. Awesome guys. Well, thank you all for, for coming on today and talking about a little bit about pre-sale post-sale, uh, and what you guys do. Again, it's, it's called McCall Advisors or McCall Wealth Management. Yeah, so we're McCall McCall Wealth Advisors. Um, you can find us, uh, yeah, McCall wealth.com. That's our website. So, and we're, if people wanna reach out to you guys directly, uh. LinkedIn, Twitter, Facebook. Yeah. Where should they go find you? Yeah, you could challenge us link LinkedIn, but, uh, LinkedIn for sure. But then also, uh, we've, we've got a page dedicated, uh, it's called McCall wealth.com/oho. Awesome. Just for the show. That's, we'll link that below in the bottom, so McCall. Wealth Advi. No, I'm gonna mess that up. Go for it. Link www.mccallwealth.com/oho. Perfect. Awesome guys. Well thank you for coming on today. Really, really, really appreciate it. This has been fun. Um, they know where to find you. If you like what you heard, leave us five stars. Wherever you're listening, it really drives this show. And, uh, we'll see you next time. Thanks, Jack.