17: M&A 101 for Female Founders: Debunking the Myths that Buying and Selling Business is Hard

Today, we are talking about something that almost feels a little taboo in the business world because it's something we all know happens, today we are talking about the scary words of merger and acquisitions. For a lot of us female small business founders it feels like this giant stretchy thing that we're never going to even have to think about and it’s only for large corporations like Snapchat.

So I'm bringing on Lacey Madison who is the M&A gal, because she is a four times business owner, a multimillion-dollar investor, and a business consultant and startup advisor who specializes in helping female founders. Lacey is industry agnostic and she helps businesses rapidly build, grow, scale, and sell their own conglomerate multimillion-dollar businesses. As the founder of Sir Ventures and the SIR Business Academy, Lacey leverages her expertise in M&A fundraising, growing, and scaling businesses to inspire the next generation of women to break barriers and lead in the world of business and investing.

I can’t wait to share this conversation of how acquiring or selling your business is not something that's just available to you but it could be a really great strategy for you to scale this business, your next business, and increase your wealth.

M&A Resources:
Flippa
Baton
Acquire. com

Connect with Lacey Madison:
@laceymadison_
ICYMI Newsletter

Chapters:

00:00 Introduction to Business Acquisition

00:49 Meet Lacey Madison: Business Acquisition Expert

03:05 Debunking Myths About Buying and Selling Businesses

04:36 The Financial Realities of Business Acquisition for Female Founders 

09:33 Operational Readiness for Acquisitions for Female Founders

14:05 Exploring Asset Acquisitions

20:08 Finding Acquisition Opportunities

23:20 Networking and Due Diligence

24:35 Strategies for Selling a Business

26:37 Preparing Your Business for Sale

28:03 Documentation and Data Rooms

30:22 Evaluating Potential Buyers

32:05 Building a Sellable Business from the Start

32:22 Lifestyle vs. Sellable Businesses

35:02 The Importance of Clean Operations

37:02 Tough Love for Aspiring Entrepreneurs

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Transcript

Lacey: [00:00:00] truly, if you want to x4 your growth in the next 12 months, go out there and buy a business. 

Lucy: Hi there, Lucy here. You are listening to The Bold Founder, where we inspire you to go bigger in your messaging, marketing, mindset, and moves while finding a joyful middle ground between intense hustle and easy flow. Today, we are talking about something that almost feels a little taboo in the business world because it's something we all know happens.

But for a lot of us, it feels like this giant stretchy thing that we're never going to even have to think about. Or if we are going to think about it, it's going to be when we're super successful like Snapchat. And that is acquiring a business. or selling a business. It's something that we know happens, but sometimes it's hard to know what actually happens when there's an acquisition.

So I'm bringing on Lacey Madison who is so smart when it comes to these things. I mean if you guys saw me when I was Recording this episode with her. I was just deer in [00:01:00] headlight eyes being like, please tell me all the things, you know, because she is a four times business owner, a multimillion dollar investor and a business consultant and startup advisor who specializes in helping female founders, she's industry agnostic and she helps them rapidly build, grow, scale, and sell their own conglomerate multimillion dollar businesses. As the founder of Sir Ventures and the SIR Business Academy, Lacey leverages her expertise in m and a fundraising and growing and scaling businesses to inspire the next generation of women to break barriers, lead in the world of business and investing.

And finally, take a seat at the table with the elite 1% by building a business that is simple. profitable and widely scalable. So let's dive right in because you're about to, maybe for the first time, see that acquiring or selling your business is not something that's just available to you. It could be a really great strategy for you to scale this business, your next business, or just in your [00:02:00] career and increase your portfolio and increase your wealth.

Let's dive in. Hello Laci, thank you so much for coming on today's episode. How are you? I 

Lacey: am so excited. I'm so excited to be here. You guys obviously never get to see like the first intro of us. Getting to know each other, but this is going to be a vibe. We are going to be a vibe. We're going to be dropping so much goodness, and I'm so excited.

Lucy: I love that. That is the energy. That is the energy. 

But that is also a really good segue because I have So much to cover. This is going to be one of those snappy interviews that is going to actually blow your mind. Because for a lot of us buying and selling a business or mergers and acquisitions is something, at least for me, I used to think that's something you do.

If you're Snapchat, as an entrepreneur, I don't have to do that. I don't have to think about that, but Lacey is going to break it down. So at the end of this, you're going to think selling your business [00:03:00] or buying a business. might be for you and it's not going to feel as big leagues. So let's just dive right into it with what are some myths that you want to bust right off the bat when it comes to either buying or selling a business?

Lacey: I think the first one you touched on is that you have to be at a certain level or stage of business to be able to buy or sell a business. And you know, I was very much so the same until I got into the industry. I always thought like, think of like the Paramount Skydance merger. I don't know how involved you guys are in like big enterprise M& A, but that's what I always assumed it was about.

And I had no idea that on the back end, small to medium businesses were buying and selling each other like hotcakes. and it was just something I never really understood until I got into angel investing. And angel investing really showed me into private equity, but that would be the first one is you are never too early on in your business to buy or sell a business.

That's the first thing. There are people who enter entrepreneurship for the very first time through buying a business. [00:04:00] Okay. And one of the biggest things that I see is that women, a statistic, let me share a statistic, 5 percent of women in general, total 5 percent of female business owners acquire or get acquired.

That is it. 5 percent of business owners. That's such a small amount. We're talking about 12. 6 million businesses across the U. S. owned by women. That's just in the U. S. Women own a third of businesses globally, and yet 5 percent are buying and selling businesses. And this just goes to show the complete lack of education around how possible it is for you.

I think the second most important myth that I always bust is that it's expensive to buy and sell a business. Buying and selling a business can be as expensive or inexpensive as you need or want it to be. Right. and I think a lot of the time it's a lot of the hard costs, like I'm sure you would understand when you are selling your business is obviously you need to get M& A advisors and legal counsel and [00:05:00] CPAs and things like that.

I mean, first and foremost, if you are running a business, you should have some sort of CPA or accountant on retainer, you should have some sort of legal counsel on retainer. So these are costs that you should already be factoring into the business. Just gearing them towards M& A is just a different thing, right?

And then obviously, you can get an MNA advisor in, integration specialist, whatever that looks like. Again, it can get as expensive or non expensive if you want. But! The myth that I bust is that buying a business is more expensive than starting a business. Sorry, like I said, I'm queen of yap. I love a good yap.

So just cut in, like, literally talk over me whenever you need to. No, I'm like, if she could see me, 

Lucy: like, I can't eat popcorn because that would be like weird ASMR and no one wants that. But I'm out here being like, bust everything. Yeah, I'm like, even though I have sold a business, I see myself buying and selling more in the future.

And I'm like, especially buying a business. I'm just like, it's going to be expensive. And then I see that [00:06:00] you're like busting these myths and I can't wait to really dig into each one. 

Lacey: Okay. So another thing starting a business is actually more expensive than Buying a business. 

 So, when it comes to starting a business, there are lots of hard costs that come with starting a business. I'm you an example. So, we Pivoted the company and to pivot that company costed us 100, 000 to start up that business that's across creative branding that's across, you know, preliminary team systems, everything, right?

So 100, 000 to launch that company. To buy a business that's already churning a hundred to a million dollars a year. I could have started for 10, 000 and pay the rest on an earn out. So there are a lot of nuances to how you can get into business. And I truly think like if you are someone that's typically more risk averse, you don't really tolerate risk yet.

I say yet. Because you need to be risk tolerant in [00:07:00] business. If you want to grow a multimillion dollar business, like it's non negotiable, but if you are not yet risk tolerant by business, that's the best way to get started. I know that most of you already have businesses like I get it, but if you want to go bigger, that's a different conversation.

So buying a business is often cheaper than starting a business. Then I would say the third myth that I bust a lot is the simplicity versus complexity. I will say that these three, cause I could go on to a million myths that I like to bust, but those three are really the hard ones that I solve because we're taught that M& A needs to be complex.

Why? Because the models for M& A that we have are. Enterprise corporations, they're large businesses. And so of course, when we're looking at MNA for a model in that type of business, we're looking at a level of complexity that most businesses have never even touched culture, teams, compliances, legal issues, like the magnitude of the departments that we're dealing with, [00:08:00] like.

We don't have anywhere near the level of complexity involved, not to mention the fact that most of you startups are bootstrapped. So you don't have the complexity, the added complexity of trying to deal with investors. And so I really try, this is why I focus on small to medium business owners, because selling and buying businesses really is so simple.

There are six steps. Okay, I've seen people sell businesses On their fucking Instagram story, , I have to say it like that, like on a fucking Instagram story. They went on their story and they said, Hey, I'm thinking of selling this business, and they start some dms. The people in the dms are like, can you just show me finances?

Send through the finances. That's it. They sold a business like, come on. It cannot be that hard. And this is what I'm saying is like, It's just the level of risk that you're dealing with is not that risky. And so if as long as you have that cash aside or whatever model that you were deciding to do to pay for this business that you were buying, [00:09:00] it can be incredibly simple.

So those are my three roundup. It's not as expensive as you think. It's a lot simpler than you think. And you don't have to be, you know, a large corporation to get started. 

Lucy: You're so right. honestly, we always talk about like making sales in the DMS. And a lot of my clients are coaches that are making 30 to a hundred K sales in the DMS without a sales call.

But you mentioned like selling a business and like suddenly everyone gets all clammy around this conversation. I'm like, it's the same thing, like sales is sales and people want to buy things with a strong ROI. So that is such a good reframe. That you just brought up. So I'm actually gonna, I sent over some questions beforehand, but I'm gonna do a little bit of a switch up because I actually want to start with buying a business, especially because that is something that I think no one thinks about as an idea to get new clients, to tap into new markets, to even not have to start from zero.

And then we do things like spend tons of money on creative, spend tons of money on ads, but this is a really. Interesting strategy [00:10:00] that I think if more people embrace, maybe it's not right for everybody, but let's talk about who this would be right for us. So talk me through who in your mind is in the best spot to buy or acquire a business.

Lacey: Okay. I would say typically Again, best spot. I'm dealing with your target audience. So obviously you can come in at any point, but let's say for the target audience we're speaking to, typically I would like to see finances sitting at over 250, 000 a year. That way, you know, that all of your minimum needs are being met.

You have maybe a few contractors on retainer, helping you out here and there. You can really put your focus into this acquisition. So I would say, 25 per month, 25, 000, just to clarify per month is a really good baseline to have. because you can start buying businesses for 15, 000 or not even businesses.

You can start acquiring assets, acquiring an asset for 10, And you pay minimum upfront, but [00:11:00] the rest on an earn out, or you can pay by equity. Like there are lots of options that you have. So when I think of the actual. Financial goal. That is where I'd start really getting some skin in the game when it comes to acquisition, or at least thinking about acquisition when it comes to the logistics of what the company needs to look like.

Different story. And this is why I say there are six steps when it comes to buying a business. And one of those very first steps is preparing the business to buy a business. And I think that, you know, if a lot of you are coaches, well, you understand the importance of having consultants in your business.

You understand the importance of having a really operationally sound business, a really healthy, financially healthy business, and you are not in the day to day. If we can have those things, we're doing really well. and so really I just want you to look at the health. If there are still a lot of gaps and inefficiencies within a company, no.

If there is a profit problem within a company. [00:12:00] We need to fix these things up. If you don't know how much money is coming in, where it's going, how it's working for you. No, it's not for you. Right. That doesn't mean it's not for you ever. It means that step one is cleaning the business up and this should be your priority, whether or not you are looking to buy or sell a business, you should be aiming for an operationally sound business every single time, because.

You're trying to build a business for longevity, right? And one of the things we're going to talk about is selling a business very soon. And both things require the exact same thing. So if you can have those things, fantastic. If we get into that extra layer of like, ah, You are ready to buy a business. I would say you have some sort of management or leadership team.

So a really strong foundation in each department, more specifically operationally, so as long as you have some sort of COO, tech person, system, person, automation, client experience, whatever that thing is for you and your business, That's a really good place to start because you are [00:13:00] going to lean on them in this process.

They are going to be your best friend. They're going to be leading integration when it comes to M& A or buying that business and integrating it or buying the asset and integrating it. So as long as you have a really good management team, you've got really good systems, you're really in a good place financially, then you're in a good place to start.

Oh, I'm sorry. This is all just really happening right now. Um, this is the most, I think this is the most chaotic podcast episode I've ever done. I mean, it honestly makes sense that like the chaos 

Lucy: comes when you start talking to me because I think I'm like transferring my chaos, to your side of screen, the screen, honestly, that is. So helpful. I think even if you're not thinking about buying or selling a business, like knowing your numbers and being operationally sound are just two things that are so not sexy, but it's that's what it takes to run a business. And I'm, I want to dig into something you said that sometimes it's not buying a business.

Sometimes it's buying an asset. So that's a fun thing that I feel like people are also not talking [00:14:00] about. Can you kind of just list out some assets that people buy and why they would buy them for their current business? 

Lacey: The most typical reason we see someone engage in M& A is growth, time over time.

You want to make more money, you want to diversify, you know, customer segments, you want to diversify into a global market, whatever that may be. Maybe you want to diversify, Your service suite. So for coaches, maybe you want to offer a product or maybe there is a certain methodology that you teach, but you don't own and you want to own it so you can charge more money on it, which is a really important discussion in the coaching landscape.

Those are all assets you can buy. Another really important asset to remember. Is that people in your industry and industry adjacent. So when we're looking at markets, you've got two different markets. You've got vertical markets and horizontal markets. When we're looking at vertical markets, these are your direct competitors.

They are people directly in your industry, directly in your field, usually directly in your niche. When we're looking at horizontal markets, these are people playing in adjacent fields that you can [00:15:00] still sort of tap into. So let's say if there is a marketing firm and operations agency, a legal firm, real estate, they have.

Client subsets that integrate with yours so you can leverage them and their business to be able to boost yours. So in saying that one of the most prominent asset acquisitions, we see the small to medium business owners. I'm going to say male, not women, because women need to get buying. Anyway, I'm listening 

Lucy: to this.

Bye 

Lacey: bye. Come on, let's go. Literally listen to this woman. We have the power to boost the global economy by something like 3. 2 trillion dollars by I think it was like 2027 something ridiculously close 2027 2020 30. I can't remember I spoke about the statistic like two months ago now But we have the power to do these things If we get buying, if we start spending our money in the right places, 40 percent of angel investors are women [00:16:00] investing in women.

Now let's not just invest in the startup, but invest in helping them grow the business. It's the only way we're ever going to be able to compete with men in these industries. So We were talking about asset acquisition. So buying customer bases is one thing that's very, very popular.

There are businesses shutting down or looking to shut down every single day, especially considering the COVID bubble. How many coaches or service providers and online service providers do you know that started in COVID realized, Oh my God, this is actually so much harder than I ever expected and want to leave.

Come on. Like literally boom was insane. Insane. And I guarantee that you've got 25 percent of your audience right now that are probably feeling the same. And that is the problem is that you guys have an opportunity right now on either end to either sell your business. If you're in that place, if you're like, I want out, you don't have to just close it down, make money off the shit that you've done for the last five years.

Right. The second thing is if you want to buy a [00:17:00] business, there are a plethora of businesses out there that are shutting down. You just need to get in at the right time. Right. And the thing is, you don't have to buy the whole business. Coming back to your asset conversation. These people have probably spent money on ads.

They probably have, you know, A really great Instagram audience or, you know, a customer database that you can tap into by that customer database. The one thing is, is that with MNA acquiring customer bases, you have to get permission essentially from the audience. So if that audience agrees to transfer over, You have immediate cashflow and you can also acquire this is getting a little bit technical.

So I'm trying to make it as simple as possible, but you can also acquire receivables. So any cash owing to the business by those customers now goes to you. So you get the customers and the cashflow, which is an amazing place to be. Whereas when you acquire a whole business, you have to acquire the liabilities too.

So if you're in debt and all the things you got to pay for [00:18:00] it. that's why I love asset acquisitions and a series of asset acquisitions. 

Lucy: I think the asset acquisition conversation is, I'm really glad we like kind of zeroed into that one because I think obviously buying and selling a business is not as hard as it needs to be.

That's the whole point of this conversation. But I think like sometimes when you look at the whole, you're thinking to yourself, Oh my gosh, That's so stressful. I could never do that, but buying a customer base or buying a methodology that's something you could honestly do next quarter if it's on your radar because it's one specific piece specifically solving a problem that you have.

So I think that's such a good distinction that it's it's not all or nothing. It's not, you have to buy everything or you, you know, you just got to sit in your chair. 

Lacey: Yeah, actually. And you know what on that note to buying a team. Do you know how hard hiring is? Hiring is one of the hardest jobs that I've ever had.

I fucking hate it. I actually hate it. And hiring onshore, I am a whiz at hiring overseas, okay? I can pull someone out of the U. S., like, gotcha, okay? I've got a [00:19:00] great team member. Trying to hire onshore is literally my nightmare, if you don't know, I live in Australia. And so, yeah. being able to acquire someone else's team that I know is a high performing team because they either don't need that department anymore.

They're selling the department or they're selling the business is such a great opportunity. I mean, like when you know that you are growing at such a rapid pace, which most OSPs are. The one problem we always see is I can't hire fast enough and I can't find good enough teams fast enough to being able to hire in that way.

It's just. Phenomenal. I wanted to tap into that because I just want to look at all of the opportunities that you truly do have when it comes to acquisition. 

Lucy: And if there's one takeover people should get from this conversation is look how many things she just mentioned in like a couple of minutes, look how many options you have for financing for what you can acquire.

there's no linear process of this is how to do an acquisition. so let's say someone. wants to [00:20:00] make an acquisition. They're like, okay, I really want to acquire a customer base. or I want to acquire a methodology. Where do these opportunities live? where can they go to see if anyone in their vertical is selling a customer base or how can they approach someone who has a methodology?

Do you have any tips around that? Cause I know it can feel weird just like going up to someone and being like, Hey, love your business. Can I buy your customers? 

Lacey: Okay, listen, I cannot give you advice until I make this one disclaimer. I'm going to come back to that first statistic. 5 percent of business owners that are women buy and sell businesses.

If you are looking to acquire another female business owner's assets, it's going to be harder to find these businesses. That is the, and like, It's just the fundamental truth of the world that we're living in, which is why education is a massive part of the movement that we are doing. Because if we don't start talking about it, well, we're not going to be doing it and then we can't buy.

And so [00:21:00] that is the first very real truth. And that's not to be disheartening. That's just to say, if you want it bad enough and you're willing to put in the work, you can find the opportunities, but understand that it's going to be work. Now, when it comes to more logistical things that you can do. There are lots of platforms that sell assets, especially digital assets.

So companies like Flippa is a marketplace, Baton, which is Sophia Amoruso's new portfolio company is also doing the same thing. there's another one, which is acquire. com is also selling digital assets. So many like literally little exits, like look them up and you'll be able to find these companies that list on marketplaces.

And you can literally filter by category on exactly what you're looking for, your budget, the types of assets you're looking to acquire. If it's female owned, male owned, whatever that is for you, the industry. So. There are lots of platforms like this where you can buy. I think that these are the easiest to get started, especially if you're a little bit shyer, you're not as confident with target acquisition, because target acquisition is the same thing as [00:22:00] selling.

You have to sell that you are the most appropriate buyer for the business, especially if they don't want to sell. That's the other thing. So I think getting to a marketplace. It's level two. So if you want to start level one, just like dip your foot in the game and just see what's out there, get on these marketplaces and start looking, you'll never like, you'll never know what you can find.

The second thing I would look into MNA advisors and brokers, MNA advisors, specifically not brokers have. Really robust networks of buyers, sellers, brokers, accountants, CPAs. They are absolutely brilliant. I wouldn't call myself an M& A advisor. We definitely help founders through the M& A process, but I wouldn't say that I'm the best person to go to if you're looking for a buyer or looking for a seller.

If you really want to get to the nitty gritty and you're like, let's go. And you don't care about carry fees and you don't care about the take that brokers are going to get. Brokers head to a broker straight away. Brokers that specialize in the type of business [00:23:00] that you want to buy within the range that you want to buy.

That's super important. A lot of brokers don't touch small to medium businesses. So you have to get ones that specialize in deals under a million. Um, they exist. They're harder to find, but they exist. So those are the three that I would start with. If you're looking to figure that out, I'm going to give you one more option.

If you're balls to the walls, like me. And you are a networker like me, I would just reach out one-on-one. Like that is the best. That's how I have started. Shoot your shot my, yeah. Yeah. I shoot my shot like and you never know, like, my thing is, is the quality of the lead and the quality of the due diligence is gonna be a lot better if I'm sitting in there doing it again.

Remember the disclaimer, I'm a consultant. It's my job to do due diligence. I make investments for a living, so. That's not gonna be the same for everyone. That's just the reality of the situation. but I know at least for me, due diligence is gonna be a lot easier. It's gonna be a lot more cost effective and it's gonna be quicker if I'm in there doing it.

So I [00:24:00] get out there and I shoot my shot. I send a message. I'm like, especially if I see someone's closing down, if they're like, Hey, we've decided to close our doors immediately. I know they've got assets that I need or someone. I'm in there. Like I DM them straight away. I'll get in a poll. Like I literally will.

I've never messaged this person before and I will call them and be like, I just saw you were closing down your business. Stop. Like stop literally right now. I need to talk to you. And then I just like educate them on the process. And I'm like, I would love to buy this asset that you have to be really helpful for a client that I have.

They're willing to pay this much upfront, rest on earn out. Are you open to a discussion? Go from there. There are lots of different ways that you can come in to, uh, an M and a pitch just depends on your buyer. and so long as you know, sales psychology, this process is exactly the same. You have to know the buyer that you're speaking to, what they value, what they desire, uh, what they want for the company.

If those values align with you, what they struggle with, right. If you can understand those things, the sale is easy. 

Lucy: Oh, so good. And I also think like that's [00:25:00] such a good segue into kind of flipping it into selling. So let's say you are someone who's in that space. You are like, Oh my gosh, I can't do this anymore.

I want to close down. What would you tell them to look at in their business before they approach trying to sell an asset or sell the whole thing?

Lacey: This is a really always a funny discussion for me and I'm going to tell a story where you have had so many clients come to us being like, I think I want to shut down and I think I want to sell my business and I'm like, okay, let's get started. Let's start cleaning the business up. Let's stop pushing for growth.

And they're like, what? And I'm like, yeah, you want to sell a business, you treat this company like it's still growing and it's still going otherwise, good luck trying to find a buyer unless, unless like the only other thing is, is if it's an absolute distress sale and with a distress sale, you're selling for bits and you are not selling for the price you think you're going to sell for most of the distress [00:26:00] sales we sell a hundred thousand that's on a good company with amazing profit margins.

Okay. For most distressed sales that aren't making money, that's why they're distressed. It's why they're selling. You're selling for like 000 for the IP that you bothered to pay for if you paid for it. And if you didn't pay for it, maybe customers, this is the very real reality of the situation. And so sometimes to sell and to sell for the price that you want, you have to gear up and you have to strap in.

You have to be willing to see this company through. And so that's on the side of like, um, I can't do this anymore. That's on the side of like, I need to get out. We need to keep going. And so my thing is, is just get the books looking as clean as possible. Get, if you're in debt, be open about debt. Okay. Let it be show that you have a plan and a way out of debt.

Really zoom in on those growth opportunities. If you're looking at your business with failed hope, Why would a business want to come in and buy it? Like you have to see the opportunity and where it can go when there [00:27:00] is a founder better than you, more skilled than you, and with more funds than you to take it to where it's going to go.

Believe in your business, believe in its potential, believe in your IP, believe in your methodologies and shine the best light on them. And this is what I was saying at the start, right? You have to clean up the business and create a healthy business, whether you are buying or selling. And so looking at.

Every single function, looking at your operations, are they lean, are they agile, are they clean, are they smooth, are they efficient, are they profitable? Looking at your finances, same thing. Is it healthy? Are you financially stable? Is there profit in the companies that are understanding those things?

Looking at growth, where is the opportunity for growth? Is there historical growth? Have you proven growth in the past? If it's declined, why? These are really important answers. You can have a really high growth and high potential for business, but again, You felt sick, you, you know, lost someone, or you want to change career path.

There are lots of reasons as to why the business declines. So prove those reasons. As long as you [00:28:00] have all of this data, you're going to be fine. Once you've gathered the business and you've prepared the business, if you are thinking of selling as soon as possible, gather all of this documentation. So when you go through the M& A process, and we're going to talk about Lucy's whole story with her M& A process on my podcast, which I'm so excited about.

Because like I'm obviously speaking things that you already know, but the investor or whoever is buying the business is going to ask you to upload documents into a data room inside of that data room. Well, it depends how it's done. I've seen some pretty dodgy deals done. Like I've said, like I've seen deals done with no contracts and no data rooms.

So I mean, it depends on who's buying you, but for the most part, you're going to get asked to upload to a data room. And in that data room, it's going to ask for everything. Depending on if you're selling an asset or a stock. So if you're selling a stock, typically they're going to want to see like your company registration, your cap table, all of the company registration documents.

They're going to want to see all of your legal documents if you've been in any litigation. [00:29:00] Most SMBs within our industries, especially OSPs, Don't go through any litigation, but on the off chance you have put it in there. Don't hide it. what else are they going to ask? They're going to ask the strategies.

They're going to ask the meeting minutes. If you've got investors, they're going to ask for those meeting minutes. They're going to want to know who's on that cap table. If they're putting more money in, what is that like safe assurance that you have? Like there are going to be. Everything, everything needs to go into that folder.

If you're buying assets, it's a little bit less, but you need to have a ledger of all of the assets that you're looking to buy or sell. So to avoid overwhelm and to make this as simple as possible, I have like resources, I can link you a resource that literally just has the most. Perfect. A running list of like most of the things you're going to be asked for.

The thing is you have most of these things. You're sitting there being like, Oh my God, this is so much stuff. But you have it, like literally, like you have it there. It's just a matter of going through it and pulling it or like pulling the right people. Cause you're gonna need it if you want to [00:30:00] sell, otherwise you're not going to be able to sell because you need to prove legitimacy to a buyer.

However, I'm going to say one thing cause I'm a yapper again. I'm so sorry guys. I'm going to say one thing. If you are looking to sell besides all the other stuff, you know, that you need to have a healthy business. You know, that you need to provide all of the proof that what you're saying matches what the business is doing.

The third thing is. As long as you're not a distressed sale, do your due diligence on the buyer. If you are someone that cares about the legacy that you are leaving, if you have built something that you're really passionate about and that you love and you care about what the business owner is going to do with it, more importantly, if you are on a creative deal and they are not paying you cash up front and they're paying you on an earn out or a seller's note or Equity, for example, you're going to want to make sure that they can grow the business.

Otherwise they've effectively bought a business for 10, 000 or 100, 000 or whatever that business is for you. I highly doubt a hundred. I probably say 10 to 50 upfront, and then they're [00:31:00] never going to pay you back out. Because they didn't have the skills, the assets, the finances, the teams to build the business to where it's trying to go.

So that would be my biggest piece of advice amongst everything else is yes, of course, be a sellable business, but like in a sellable business, again, just a healthy business. But On the other side of that, make sure the person you are selling to can take the business into its future vision so that you can ultimately get paid out.

But yes, the business can continue to go where you want it to go. 

Lucy: Such a good point. And I think a lot of people who are selling, you know, even if they're like, I need to get out, you said it yourself, like if you've been working on something for five years, it probably matters to you who's buying it.

and I think that's such a good point to bring up. And I'm also curious. Let's say someone is listening to this episode. Maybe they're an aspiring founder and they're like, Oh, it's on. Like, I want to build a business that has potential to be sold. Like I don't want a lifestyle business that I have to do for the rest of my life.

So what [00:32:00] would you tell them to have in place if they had this mindset starting their business from the beginning? 

Lacey: Okay, pause. I want to pause for a second. You can build a lifestyle business and a sellable business. And that is something that I talk about all of the time. Oh my gosh. I love it. I love that.

I like said that 

Lucy: specifically to trigger that because like I need, I need this information. 

Lacey: Yes. Okay. When it comes to a lifestyle business, a lifestyle business can revolve around you when it comes to Okay, this is going to be the worst fucking example of it because Skims is not a lifestyle business.

But I want you to think about it. When you think, yeah, when you think of Skims, you think of Kim Kardashian. She is the face and she is the brand. But if you were to buy Skims, you're buying IP and you're buying the product, the manufacturing, the name right outside of Kim Kardashian now. And so I want you to think about the same with your business.

The lifestyle business has nothing to do with you. Lifestyle businesses are based on simplicity, profitability, and scalability [00:33:00] without swapping time for money. That is at least what I teach. And so I always help people build a lifestyle based business. I have built multiple multi million dollar businesses.

That had the capacity to sell to be honest. I didn't even realize you could sell at the time Which makes me sad because we're looking at my first company Hit its first million just after its first year. Like it grew very quickly. I ended up abdicating Yeah, it was like I'm very lucky. Wait, did I say my first business?

My second business. Sorry, not my first one, my second business. but I ended up abdicating a CEO from that company. I ended up giving it to my husband. He sold it later on, but I am like, yes, it's my husband. So yeah, I appreciate the finances. Yeah, yeah, yeah, whatever. But like, still like if I kept my shares in the company.

I myself, and that's something that I care about just for me. Like I could have had a much better turnout personally. And so it's just not something that I was aware of. And it wasn't a conversation my husband and I had at the [00:34:00] time. Like it wasn't something we were really thinking about. It was just like, well, this person wants it and I'm going to sell it.

I'm like, okay, I guess that's how it goes. but yeah, lifestyle brands, as long as it's simple, it's scalable and it's profitable. You are building a lifestyle based brand.

Okay. It is, you know, something that suits your lifestyle. It is around you and what you've done, whatever it is, whatever impact you want to have. The basis of it is underneath all of that, as long as you have IP. As long as you have something valuable to someone else. You can sell something, whether it is the business itself or whether it is an asset.

Okay. So if you spent a lot of money in ads or you spent a lot of money building organic content that curated the most targeted audience, and you want to shift careers and you don't need this audience anymore, you Sell the audience. If you spent, you know, a decade with this lifestyle brand, building the most phenomenal team, sell the team.

If you have methodologies and principles and frameworks that are custom and unique to you, sell those things, right? So you can have a lifestyle [00:35:00] business and still sell those things. Now, When we're looking at a sellable business in general, like I said, it just needs to be a very clean company. So when we come back to your question of what do you need to do from the start, whether or not you're requiring to start or just building a business from the start, is everything I said.

a business how you know it should be built. We build businesses based on what feels good to us. We build businesses based on our mood, based on our motivation, based on what's easy, based on what we know. But if we build businesses, how we know they should be built, lean and agile, consumer focused, financially healthy, growth potential, scalable, simple.

We build businesses in that way, you can sell a business no problem, but we don't. And that's the thing. And that's why people like you, that's why [00:36:00] coaches, that's why consultants, that's why advisors are so important because there's a lot of message, like you can grow, just something that no coach is honest about.

You can grow a multi million dollar business. Messy. I have seen it multiple times, like so many times they've come in and I'm like, literally, how did you get to this point? I have no idea because you're falling apart. And the business owner is working 24 seven. They're putting out new fires every fucking day.

They haven't trademarked half of their things. And I'm like, Oh my God, you literally have a lawsuit coming your way in two seconds. I actually don't understand how we've gotten to this point. So it's possible. But that company is not going to sell. Buy is going to come in, look at their profit margins, look at their cashflow, look at their outgoings, look at their operations and think.

Let me buy that business. No, because it's not a clean, healthy business. People want what easy when someone's coming in to buy a business, they want to see everything looks good. Okay. As long as [00:37:00] everything looks good, we're going to go. So that is my biggest piece of advice. And the reason that I make it that simple, the reason I say build a business how you know it should be built is because it's going to take you two seconds.

Like I know every single person listening to this podcast today is ingrained in business consulting or coach culture. They are consuming business education content. Every single day, like I am aware of what our consumers are doing, and so I don't need to sit here and give you a six part framework for what you need to be focusing on because you know what you should be focusing on, you know, that if you lack the mindset, the knowledge, the skill, the strategy, all the execution to get to where you're trying to go, then you need to get help in those areas so that you can build what you're trying to build, you know, that there are gaps, you know, that there are bottlenecks, you know, that there are operational efficiencies within the business, but you're not doing what needs to be done to fix them.

And so if you want to sell, you want to make money on your effort, put in the effort, put in the risk and do what needs to be done to get the business where it's trying to go. And that's like a bit of tough love, but I am such a tough love. I love tough love. I'll tell you how it is. 

Lucy: [00:38:00] Yes. 

Lacey: It just, sometimes people need it.

Like sometimes people just need that kick in the butt. I will be there to cheer you on. I will be there to, like I said, be your biggest cheerleader and support you through everything. But at the end of the day, I will always pull you to a higher standard. And like, you haven't, honestly, you haven't been in my world for that long, Lucy, but like, I always say I raised the cumulative standard.

I raised the standard of my community, of my clients, my friends. I've lost so many friends because I hold everyone around me to a higher standard. And even in this podcast, if this one podcast episode can hold you to a higher standard to say, uh, If I want to sell a business and actually like reap the rewards of all of the sweat that I put into this company, then I need to act like a CEO.

Like, and this is going to sound wrong, but I hope it comes across to the right people. You want to build a big business. You want to build a profitable business. You want to build a sustainable business, build a business like a fucking man. And the reason that I say that is because men have been building businesses for [00:39:00] centuries.

We've been building businesses for. Three decades. Like we don't have anywhere near the level of knowledge or experience necessary to build the types of businesses that we need to build. So if you can start thinking like a man, obviously embracing both your feminine and your masculine side, because I think that we can actually build businesses better than men.

When we think about the skills and the strategies and all the things that you need to get to where you're trying to go, stop thinking like that show up as the biggest version of yourself, the most daring, the most outrageous, the most bold version of yourself. And start there. If you want to buy a fucking business, if you want to go big, truly, if you want to forex your growth in the next 12 months, go out there and buy a business.

If you want to diversify your product and service suite, and you are testing risk, go out there and buy a business or go out there and buy an asset. Like truly just get out there and start that process. And if it's not for you, quit it, stop it. At least you tried. You know what I mean? Like most people don't even try.

Lucy: It's so true. And honestly, like, [00:40:00] even if anyone listening to this, maybe your challenge is just like get on one of those marketplaces, just see what's out there. Like maybe reach out to someone. If you see an asset you want to buy, like you can set your own goalposts based on where you are in your business and your risk tolerance and also just your personality.

But like, make this a part of your, this could maybe one day be my strategy, but I've really like. If you guys saw my, this is an audio only podcast, but if you guys saw my face, just my eyes have been so open, like, whoa, like the whole time. And I could like, honestly talk to you for maybe like eight hours.

Like it'd be the world's longest podcast episode, 

Lacey: but you're such a good interviewer. I love it. 

Lucy: but I want to know where people can go have more of you, especially if they want, just honestly, I feel like I could talk to you about literally anything business related. I feel like I just got like an MBA in this 40 minute chunk. so where can people go to like, digest more of you, [00:41:00] enter your world if they want to, or if they want more information on, acquiring a business or selling a business link, drop us, and we're going to put everything in the show notes.

Lacey: I literally the best, and I'm sure you get this all of the time, but the best place truly is Instagram. I mean, like my Instagram is my hub spot. Any company that you need to find I will link it out. Um, we actually, I will say there is one place I think you should start, and it is our Icy Why Am I newsletter, because in that newsletter I talk a lot about M& A.

I don't talk a lot about M& A really on my Instagram these days. Right now we have a separate account for it. Um, And so the podcast, just look up, excuse me, so I see why am I, and we'll come up and we do like a lot of news edits and M& A and covering that sort of thing just to get immersed in your world, like, like Lucy said, start small and then go from there.

And maybe it's just about learning more about it. And so looking things up, listening to stories, like just getting used to the lingo. And then when you get a little bit more comfortable with the lingo, go from there. So I'd start with those two places. Go to my Instagram. If you have any specific questions, [00:42:00] message me, but otherwise check out the ICYMI podcast.

Lucy: Amazing. And thank you so much for being on the Bold Founder. I mean, this is the ultimate episode in boldness. So, um, you, you definitely take the cake. 

Lacey: You guys gear up because yes, we don't like spoke about a lot of like high level, just like. Things today, we're going to be diving into Lucy's story, selling her company over on my podcast.

And I think that one thing, yes. One thing to talk about strategy and just different options in general. I think it's another thing to truly listen to someone's story and what they went through emotionally. So I'm sure that was a rollercoaster for you during that time. It's for most founders. And I think that hearing that the founders is going to be so powerful.

So I'm excited for that episode. 

Lucy: I'm so excited. Yes. Uh, this is going to be basically a two part episode. So you'll have to head over to her podcast and you will hear my story of selling my agency. 

 I remember when I sold my content writing agency, Volcanic Content, before I did it, I barely [00:43:00] knew that that was a thing I could do. I thought to myself, oh, there's no way I could sell a business that's not, super far along or hitting this, arbitrary number that I felt a business had to hit to be considered sellable.

It was such a cool process selling something that I built and once I kind of discovered Selling and buying businesses is something that's not only a thing that people do but something that's viable It really expanded me as an entrepreneur and and made it that I felt my impact could rapidly expand, but it's one of those things that, yeah, I didn't really know a lot about it until I did it.

And if I could give advice to other founders, it would be know about it and know that it's available to you because it really is just such a cool tool. And I'm excited to talk more about that sale and I'm going to be doing so on Laci's podcast, but also through the Bolt founder through multiple episodes.

[00:44:00] But I really appreciate you tuning in today and I hope this opened your mind to seeing. People sell and acquire businesses all the time and it can be you and if it is you, if you already sold or acquired a business, you can do it again and again and that's the fun part about being a founder. So keep putting your ideas out there and know that there's a million ways to exit your business, acquire a new aspect of a business that you want, or merge and and create these businesses in really awesome creative ways because there's no one way to do anything.