M&A Murders & Accusations: The Good the Bad and The Ugly of Selling Your Business

Exit Is Now podcast guest appearance with Scott Snider, President of the Exit Planning Institute

• Rick J. Krebs, M&A Advisor, CPA and CEPA

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SPEAKER_01:

Hello and welcome to MA Murders and Accusations, the good, the bad, and the ugly of selling your business. We dig into what you need to know and how not to kill the sell of your business. Now here's our host, Rick J. Krebs, Mergers and Acquisitions Advisor.

SPEAKER_02:

Hello, everyone, and welcome to the show. I was recently asked to be a guest on my friend's podcast. My friend's name is Scott Snyder. He's the president of the Exit Planning Institute and leading the nationwide charge for exit planning. So enjoy, and we're going to talk about collaboration. We're going to talk about what we do, and of course, exit planning. Thanks for tuning in. But when they brought it up, the walls were down, and that it was no longer a must run away from him. They truly wanted to know what I wanted to know. Once they knew that I cared about them, then they cared about me and they're willing to accept it.

SPEAKER_00:

Hey everybody, and welcome to the Exit is Now podcast with me, your host, Scott Snyder. We're on a special series here over the next two or three episodes as we are broadcasting from EPI's headquarters during our EPI Partner Summit. What our EPI Partner Summit is, is a place where uh VIPs like our chapter presidents, our faculty, our sponsors, and our partners that all help build and contribute to the EPI community come together once a year here in Cleveland, Ohio at EPIHQ to really uh drive, I think, clarity, alignment, and vision. And one of our guests, who I think you all know certainly in the EPI community very well, is none other than my buddy Rick, uh, who is a the owner of a company, My Biz Value, I think a very recognizable name, walking through our partner and exhibit hall each year. But also uh two other, I think, claims to fame for him inside of the EPI community. Number one, he is the chapter president of our Utah chapter, and then beyond that, he uh this year at our exit planning summit won a member of the year. And so I asked him on the obviously he's here, he's in here in town as a community partner for us, but I really want to dive into uh the best in class SEPA element that is around connection and collaboration, and that's really what makes up the the member of the year each year. So with that, Rick, welcome uh to the show. And and and maybe I would say too, if you follow us on LinkedIn, this is the guy that took me snowmobiling in January or la laughing off air. I see Rick had asked me while we're sitting on top of this massive mountain in Utah, have you ever been snowmobiling before? And I said, Yeah, through cornfields in Ohio, but nothing like this. So nonetheless, welcome to Cleveland and and and welcome to the show. Thank you, Scott. I appreciate it. So as a partner, uh for those that are perhaps unfamiliar, can you just talk to us first about the the business that you've started and owned and and perhaps how it's how in collaboration you're working with with CEPAs from around the community?

SPEAKER_02:

So I started the business. I I sell businesses, that's my main business. And and um about ten years ago, I had a client approach me about getting a business valuation. And uh I would send them out to someone that had a certified value and uh C VA, and they kept coming back or like ping pong balls got they were like and I'd send them out and they're like Rick, it's it's you know, it's ten grand, and I just need a number. And so finally one client he had an insurance business and he twisted my arm and said, Hey, please just pull some comparables, give me a number, and I said, Okay. I quoted him a number, I did it, and uh he loved it. And then he uh came back and and I was doing some work for his buddies, you know, and it just kind of blossomed from there. And I saw this niche or this need in the market, and we created this um based on on what the clients wanted, and they wanted an affordable valuation that they could make an informed decision that didn't break the piggy bank, that just gave them a solid number. And as you know, with the triggering event, that's what it's all about. You know, when we're calculating the wealth gap, we gotta know what the business is worth, and we gotta have something we can rely on. That's usually the biggest hole in the financial plan. They're like, what's your business worth? Oh, I don't know, four million bucks, whatever. And so now I work with advisors and collaborate with them, advisors all over the country at that triggering event in the in the initial stage when they're just getting started, because they don't they don't want to spend 10 grand or 15 or more. They want to spend a small dollar amount and make a small investment to get a number.

SPEAKER_00:

Well, and I would say to get started, right? I think that the the triggering event inside of the discover gate of the methodology is is called such because it triggers the action of the owner. It's a starting point, it is the identification of what we have and what we could have. And so, yeah, I think that we need a number so we could start moving, right? And so we might investigate that number in a deeper way as we build, but nevertheless, yeah, just starting out is for you have to have a starting point.

SPEAKER_02:

Yep. And what we do is we are about, and you've said this many times, it's uh it's about a number. But I try and do some brain surgery as well, and that is to change their thinking from income generation to value creation. Absolutely. And that's why we do a phone call with them. Once it's done, we set up a meeting with the advisor, myself, and the client will go through. We do a phone call with the client, and they leave with a number, and they also leave with a with a path and a design on what they need to do next. And I think that's the biggest value that we bring. That's how we collaborate with the advisors because you know then they're like, okay, is it an internal sale? Okay, what do I need to do? Yeah, exactly. Right. What are the next steps for that? If it's is it an ESOP?

SPEAKER_03:

Right.

SPEAKER_02:

What does that look like? Uh an exit, you know, an intra external, whatever it is, we collaborate with them and bring that advisor in. Sometimes the advisors want to be the quarterback, sometimes they need me to be the quarterback. And so that clearly defines roles and that path forward.

SPEAKER_00:

So let's uh focus uh focus in on that that collaboration. We've kind of talked about it here in the opening moments of the show. And when we look at uh not only just the certified exit planning advisor, Rick, but if we looked at what truly makes the most trusted and valued advisor, it becomes about a relationship with an owner, not necessarily just a transaction. And when you study the advisors like you that are really good at it, there are three elements that make up these most valuable and trusted advisors that are have deep relationships with business owners. The first is they have this ability to change their language and approach with owners, to embrace what you just said, not an income generation mindset, but they deliver a value creation mindset to the owner. Uh the next thing that they have is they are typically lifelong learners, right? They believe in professional growth, they believe in purposeful growth, a core value that frankly hangs behind us on the on the EPI core value, uh core value wall, but they are lifelong learners as the methodology evolves. We all kind of evolve along with it as more and more owners come into uh come into the community. And the one that really is focused on member of the year is really around connection and collaboration. And uh and and I think it's one of the three that you do really, really well. I was always impressed that snowmobiling trip actually stemmed from you inviting me out to to Salt Lake City to speak at your chapter to kind of kick off the year. And uh I was I had multiple shock moments, if I'm if I'm being honest, that were really impactful. You sat me down uh with breakfast with your leadership team, and I can remember on the way to the meeting, I took on my phone and I texted my team and I said that was probably one of the most collaborative and and and and maybe brought together leadership teams I think I've I've might have had breakfast with. And then I got to your meeting, and the meeting had a sense of energy and and fire to it, where you could just tell people weren't just coming to learn, people were coming to also see each other, meet, greet, and frankly try to do some more business together. And so that community that you have built in Utah has been, I think, quite significant. So I'd like to focus the show a little bit around for our audiences. How did you do that? What makes you this connector and collaborator of people? And maybe let's start with the leadership team. So when you look at a leadership team, which I think Rick is a is a nice example of what a uh core exit planning advisory team could even be like for an owner, how do you choose those type of advisors and how do you lead a team like that along the way?

SPEAKER_02:

So, Scott, one of the first things that that happened is I was thinking about starting the chapter. My initial inclination was let's lock all the other business brokers out. I don't want to be the other one. I want a monopoly here, just break. I got it. I'm here, right? Let's let's shut the door. And and I'm like, Rick, I kind of beat myself up, like, Rick, this is stupid, right? Don't have this mentality of scarcity. Exactly. Have an abundance mentality. And so not only was I not locking them out, I was reaching out and inviting other business brokers to be part of this. And I and what happens, and I I said this many times, it's like when you raise the level of the sea, all boats rise. Exactly right. And so, as a collaborator and an educator, I'm like, we're gonna make each of us better. We're gonna make all of the people that are here better, more educated, they can speak the language, the value acceleration methodology, the seep is in the room, they know what to say. And we're not competitors because this this silver tsunami, this this$14 trillion that's coming our way, it's not a matter of how do we slice the pie. It's like how do we build funnels large enough to handle this business that's gonna come our way because it's gonna just it's gonna mull us over. And we need good people, not just two or three. We need dozens and dozens of people, right, that are gonna handle it. Or the business owners are gonna suffer. And it and it's all about the business owners, truly. As we get better, they get better, and they have better exits, and it's just good for the community.

SPEAKER_00:

I think going along those lines too, right? Going beyond the silver tsunami and and maybe into the next generations as well, one thing that we opened up this year with at our partner summit was a conversation around what does the EPI and the EPI community and the exit planning profession look like in in three to five years. And I think that beyond the baby boomer business owners exiting, you have this unique millennial crowd that might exit multiple times throughout their uh throughout their career or out their business owner journey. So to your point, a scarcity mindset does not make for collaboration because if you if you have the scarcity mindset, you're shutting the door. Instead of shutting the door, you're actually welcoming your competitors in because frankly, I also think we all grow together, even with the competitors in the room. We do. If you could take, you know, if you could take two back, you know if you could take two Super Bowl-winning teams, you're not two different teams, but you put them collectively together, I'm sure they're bringing different elements to the table, and you're like, ooh, I like that. Maybe I can maybe I can use some of that. And then the other guy in the room that's doing what you uh you that you have done, you're saying, man, I really like the way uh Rick approaches that. Maybe I'll take a little bit of that in. And so to your point, all advisors are better. And I think that's what we're after, right? That's truly the impact of helping companies become more significant. It's not just about one, it's about many. So community. Yeah, it's about community, yeah.

SPEAKER_02:

It's about the whole community. And uh and like my leadership team, yeah. I developed uh what I did, and I ought to weigh, I I'm a skinny guy, I ought to weigh 400 pounds with as many people as I can.

SPEAKER_00:

How many breakfast meetings you go out to?

SPEAKER_02:

Oh, uh hundreds of meetings and lunches. And and I was like, I felt like I was the Pied Piper of exit planning in Utah because nobody else was talking about it. And I'm like, I got to get some people excited. So I went around and I got on LinkedIn and I just found strangers. People that I'm like, I need an MA attorney. Well, let me find one. You know, I need so-and-so. And and I just started taking them to lunch and saying, hey, I'm doing this, and I'm wondering if you want to be a part of it. And and what I found was people got excited. And they were like, Yeah, I'll be a part of it. So we assembled a leadership team who had the same core values of collaboration, about education, and about raising the level of the sea so all boats could rise. And and when I surrounded myself with that team, that became the core and I think the foundation from which the rest of the chapter just flourished.

SPEAKER_00:

And there's a couple of key things to pull out there for the o uh for the audience. One, uh literally just being able to go on a platform like LinkedIn, look for folks that are local, and simply reach out and have a meeting, right? A collaborative session. Two, once he had the right people in the room, we said collectively, what are the core values of this leadership team and let that let that kind of lead us down the path of inviting more uh into our meeting. And I think those two key things are possible are are are important for others that are looking to connect and collaborate, or frankly, start and and run a great chapter. I think it it truly starts with a great leadership team. And for me, again, when I was sitting at that breakfast the morning before the morning of our meeting, uh it was like a hundred percent participation too. So you clearly have people bought into the overall purpose, mission, and vision of what you collectively uh are trying to build. So that's gotta be doing something right, right? It's when you could lead people that way, I think it's it's super impressive. Let's talk a little bit about the chapter though as a whole, right? So there's another one of the reasons I wanted to come out and see you is there's this like break down the wall moment, if you will, right?

SPEAKER_02:

And there's a typical meeting spaces.

SPEAKER_00:

I'm sure people certainly have been in them. They have airwalls, right, that split the room into you know two halves or you know, thirds or whatever, quarters, whatever it might be. And Rick, talk about LinkedIn too. Rick goes online and videotapes him taking down the wall. And it was a proud moment for somebody that you know has poured a lot of resources into building a successful chapter when you have to take down the wall to expand it because so many people are wanting to come out and collaborate. So, how did you get to that break down the wall moment, though? Uh, because you started from like, you know, you start from the ground up, right? You might get a 120 people at your first meeting as you launch, you drop down to like 20 or 30, and you start to build back up from a core group to 50, 60, 70, and one, and whatever that might be. Can you talk how do you get to bring together so many different types of people from the greater Salt Lake community?

SPEAKER_02:

So, first of all, it didn't start that way. Right. When I started the chapter, I in the back of my mind, and here I'm just revealing all of my all of my insecurities and everything, but in the back of my mind, I'm like, well, worst case, I got a couple of buddies, so there'll be three people there. Right. So more of a round table. Yeah, more of a round table, all these chairs. But um, what I found was exit planning has been on the mind of a lot of people, and they're looking to hitch their wagon to the right ship or to the right the organization. And so when I started to bring it up, it made sense. And exit planning makes good business sense regardless of whether you're gonna exit or not. And so these advisors, what I said resonated, and I just I just repeated what they taught me in the SEPA training. It's nothing new, right? Right. But it it resonated, and people, I I just repeated it, and people started to they were attracted to it because I followed that um value acceleration methodology model, and I followed what I'd learned in my SEPA training and repeated it, and they're like, yes, it resonates with me. I want to be part of it. And we have a couple of things in our chapter. We're not commercial, we don't allow people to come in and and to peddle their wares or whatever. We are strictly educational and collaborative, and we have a no-poaching role. So when a when an advisor brings a client in, you know, that client doesn't feel like fresh meat in front of everyone else. So I think I think we created a forum that was safe and a forum that that provided valuable education that people are already searching for, and it just naturally flourished.

SPEAKER_00:

Talk to me about the unique education that you're doing. If you go on Rick's LinkedIn, they had like a almost they conduct I I would describe it as they they conducted a uh a formal education session, but as you are going to like a play, the playhouse, right? Like here in Cleveland, you have Playhouse Square, you're like watching it unfold by seeing a story unfold. Talk to us about some of the unique things that you've put in there to attract and and and retain uh great people come to meetings. So these are funny.

SPEAKER_02:

So there's two things that I've done. I um I business owners are like Cinderella at their first ball. And I tell this story over and over, and I'm like, you're Cinderella, you're your first ball, and what do you do? You fall in love with the first handsome prince that comes your way. You know, you get an unsolicited LOI, and ah, I'm in love. Oh, somebody thinks I'm pretty. You know, oh, like we joked about it, and I wrote a script. I wrote a mini play. I actually put on a dress, a blue dress, and a wig. Cinderella. Yeah, Cinderella, right? I was Cinderella, and I was ugly, but I thought I was pretty. And I had a there's more to that story. You had a wig on and everything. I had a wig on, and I I had another chapter member. He he was handsome prince and he had the jacket. But you know, we threw in things like I don't need to sign an NDA. We have a new thing, a new form. It's called a friend DA. You don't even have to sign it. You just trust me. You just give me all your taxes, you know. And we just we made fun of the process. Yes. But in making fun of it and ourselves, we're able to educate business owners in a meaningful way. And they're like, ah, Cinderella, I get it. You know, oh yeah.

SPEAKER_00:

And keep them engaged, I would assume too, right? As somebody that has to produce a bunch of education classes and typically in kind of form or lecture form, uh storytelling, I think, becomes a big part of that, right? To kind of bring it back, uh make it real, uh, see it applied, and keep it fun. And you did that in your most recent chapter meeting as well, and I thought it was I thought it was super unique. I don't think every chapter is gonna be able to have the courage to go out there and and and do that, but nonetheless, Rick's certainly doing in Salt Lake City. That is for sure.

SPEAKER_02:

It's funny. And one other thing I want to share with you is is I I was really excited about this. We had I call it a reverse shark tank. It's exit planning live. And what we do there is uh we've done one and we're gonna do a second. We'll have more of these meetings next year. I struggled because I wanted to bring business owners to the event and I wanted them to be incognito so we could plan their exit. We're in the Discovery Gate. We have them fill out a questionnaire. What are you, you know, where are you at? What are your questions? And I thought, well, I can put them up in the front with a bag over their head and we won't know who they are. That didn't sound good. Or like the old dating game where there's behind a wall, right, contestant number one.

SPEAKER_03:

Yeah.

SPEAKER_02:

But what we did is we we did a zoom call, so they called in over Zoom and they'd filled out a questionnaire ahead of time about their business, their age, you know, what their goals are, and gas in their tank, their energy, and their biggest questions in their mind. And then we took the CEPAs in the room and the attendees, and we devised an exit plan for them. We took two paths: one is build and one is sell. If you're gonna go down the sell path, this is what you do. If you're gonna build, these are the next steps that you take. Do you have you done a business valuation? Have you calculated your wealth gap? Have you done a personal financial plan? What is your profit and value gaps? And at the end of that, they had a plan. And we wrote it on a board. Those business owners went away with such value from that meeting. In fact, I should share with the comments, they just loved that meeting. They're like, Rick, you guys solidified what I knew. And some of the comments weren't so nice because we weren't in person. A couple of the guys are like, Your baby's ugly, that thing, yeah, it wouldn't sell. Oh man. You know, and and it's like, ooh, that was a little hard to hear, but it's what they needed to hear.

SPEAKER_00:

Yeah, absolutely.

SPEAKER_02:

And I had so much fun with that event. We're gonna do more of those. And and I thought that it would be hard to get business owners that wanted to do it, but they were like signing up before I even was halfway through my pitch. They're like, I'm in. Yeah, Rick, sign me up. You know, I gotta do this. So they live with these questions every day in their head. They're wondering, do I build, do I sell, what do I do? And they're thirsty for that help. And so the SIPAs and the SIPA community provided it to them real time at that event, and it was it was a huge success.

SPEAKER_00:

So, kind of rounding this this all out, as our kind of resident collaborator here, right? And what what does it take? So, if I'm a brand new SIPA kind of entering this community, regardless of what professional discipline I represent, a core part of being a certified exit planning advisor, and I think an effective advisor with an owner, is the ability to collaborate and connect. So, in your mind, if you had to give that advice out to your peers inside of the SIPA community, what to you makes a best in class collaborator and connector of people? Read the book, The Go Giver. The go-giver. I think you've given me this book.

SPEAKER_02:

The go-giver is amazing. And uh relationships aren't like flipping a switch. We all want to just go flip a switch and hey, we got this relationship, yeah, we'll send business back and forth, right?

SPEAKER_03:

Yeah.

SPEAKER_02:

That's not how it works. And and I would say the third thing is lead with your ears, not with your mouth. And what I mean by that is we want to meet someone and we want to give them the elevator pitch, right? And no, let's not give them the elevator pitch. Let's ask them about their business. Let me give you an example of that. So we were uh at a convention and I had a booth at a convention, I was soliciting business owners for business, right? And I was giving away free valuations. I printed up all these cards, I had a big stack of these cards, I'm all excited. Um and people would walk by and I'd go out and go, hey, you want a free business valuation? You know, it's worth like 800 bucks. And I struggled to give them away. The owners would actually, I watched them, they would walk around and they would avoid me like I had the plague. I thought I had COVID, right? I'm giving these things away. I'm like, hey, I'm giving you 800 bucks worth of value here. Right. And um, I'm like, I need to change my approach. And so I went to the back of the booth instead of the front, and I, you know, somebody walked by and I go, Oh, nice cowboy boots. Where did you get those? Or I'd be like, How are you enjoying the show? You know, are you getting value? And and so I led with questions, led with my ears, and they would come over to me, and then they would start talking, and I would just, you know, start talking to them about their business. You know, how's how's your business doing? What's the market like? And they would talk to me and we'd we'd start a conversation for 10 or 15 minutes, and I would never bring up what I did. They would bring it up. Yeah, it would be like, okay, but when they brought it up, the walls were down and that it was no longer a let's run away from it. They truly wanted to know what I wanted to know. Once they knew that I cared about them, then they cared about me, right? And they're willing to accept it. Was a total turnaround and total game changer for us at the event.

SPEAKER_00:

I love that. I think that's a great piece of advice. We uh talked to this a bit too in inside of the SEPA community, and again in our venture to become best in class and the most valued and trusted advisor is I think the advisor of the future, let's call it, right? The advisor that I think business owners are looking for now and in the future uh is somebody that can instead of just giving the right answers, ask the right questions and listen. So I think it's actually a great uh piece of advice. Rick, well that is already uh that's already we're already at time. And so I might have to have you back so we could dive dive deeper around your Cinderella story and snowmobiling and your other impacts inside of the the EPI community. I appreciate you coming all the way in from Utah to Ohio to join our our our partner summit over the last couple of weeks. You will see Rick again inside of the Utah chapter. So if you're in town, uh Utah chapters open, please uh feel free to check them out. You'll also see them next year at our exit planning summit in Nashville, uh Nashville, Tennessee. So uh Rick, really appreciate you coming and hanging out on the Exit Is Now podcast, and uh you have a safe trip home. And for our audience, our next episode is October 15th. So please subscribe, listen, and leave a review on all of your podcast platforms. Thanks, Rick. Thank you, Scott. Thanks for having me.

SPEAKER_01:

Thank you for attending our podcast. We invite you to join us for future episodes of MA Murders and Accusations, the good, the bad, and the ugly of selling your business. You can also visit us at www.bsalesgroup.com or email Rick directly at rick at bsalesgroup.com.

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Rick J. Krebs

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