#24: 5 Expert Tips for Selling Your Business with Dan Altom

Selling your business is one of the biggest financial decisions you'll ever make, so how do you get it right?

From pricing it correctly to finding the right buyer, selling a business is a complex process that many owners don’t prepare for until it’s too late. Whether you’re looking to exit soon or just planning for the future, knowing the right steps can help you avoid costly mistakes.

In this episode of Brewing Business with Brady, Dan Altom, Managing Director of Sunbelt Business Brokers, shares expert insights on selling a business the right way. He breaks down what buyers are really looking for, how to avoid common pitfalls, and why the right preparation can add significant value to your final deal.

Main Topics:

✅ The biggest mistakes business owners make when selling—and how to avoid them
✅ How to properly value your business before going to market
✅ Why SBA loans are an underutilized but powerful tool for business buyers

Connect with Dan:

💼 Website: https://www.sunbelttexas.com/
🔗 LinkedIn: https://www.linkedin.com/in/danaltom/

Connect with Mason: https://www.linkedin.com/in/masonbrady/

Visit BradyCFO: https://www.bradycfo.com/

If you enjoyed the episode, please be sure to rate, review, and of course, SUBSCRIBE!

LEAVE SOME FEEDBACK: If you enjoyed the series, please rate and review!

Have a business growth question you'd like Mason to cover in an upcoming episode? Email: info@bradycfo.com

Transcript

Mason Brady (00:00.994)
Hi everybody. Welcome back to another episode of Brewing Business with Brady. Today's guest is Dan Altam. He is the managing director of Sunbelt Business Brokers. And we are so excited to have you on the guest today, on the show today, Dan. Thanks for ha, thanks for being here.

Dan Altom (00:15.404)
Thanks so much, looking forward to it.

Mason Brady (00:16.974)
Awesome. But yeah, so excited to kind of dig in here that, you know, it's a personal, like, you know, it's a personal thing for me. I love the art. I call it art. And there's a science of business valuations and, know, in buying and selling businesses and, you know, those types of transactions, it's just something that I personally geek out on that. if, if I, you know, I had done something different in my career, I think that I would have wanted to get more into the and A space overall that.

It's just a fascinating scene for me. So yeah, I'm really excited to be able to talk with you today and for our audience to get, you know, a lot of these questions out that, you know, really I think will provide a significant value for our audience of, you know, that are potentially looking at buying a business, selling their business and how to go about that and do things well. And so really, really excited to have you on Dan. Awesome. So yeah, obviously this is Brewing Business with Brady. So we ask every guest, you know, what's in the mug today? How do you start your day?

Dan Altom (01:06.348)
Great.

Dan Altom (01:12.856)
Yeah, what two or three of these guys, right? Well, disappoint you a little bit. It's just whatever's in the curing machine, right? I'm not a coffee kind of sewer in the slightest.

Mason Brady (01:16.808)
yeah, wow, two or three, good deal, good deal. You're my kind guy.

Mason Brady (01:25.568)
Okay. Fair enough. Fair enough. As long as it's coffee that we've had a lot of variety on this show of what people start their day with, but as long as it's coffee, then we're safe. Yeah. Yep. So, yeah, to kind of dive in that, you know, I'd love to understand, you know, what are the pitfalls that business brokers and &A advisors can help owners avoid when selling their business that

Dan Altom (01:31.36)
Yeah, right.

I'm sure that's funny.

Mason Brady (01:51.394)
You know, and a lot of our audience, Dan, they are in the lower middle market, which really represents in my mind, you know, in between five, 50 million in revenue, sometimes up to 75 million. And so in that space, what do you find are some of the major pitfalls that, you know, they should really be considering when potentially selling their business.

Dan Altom (02:11.864)
Sure, no, that's perfect too, because Sunbelt Business Brokers, we're a franchise, international, guess, big US presence. That's kind of who we cater to is the Main Street Business Brokers. We do larger deals as well, but just in that kind of range, our Houston office, our average transaction is between one and $2 million. So we get to help a lot of...

Main Street, kind of mom and pop businesses is just, we're really good at it. But it surprises me how many times that, well I guess it doesn't surprise me anymore, but so many business owners don't realize that they have something that can be transacted. They just think they're gonna wrap up their last client with their lease and just shut it down or sell their stuff or whatever. So it's really exciting.

We're going to talk about that valuation thing. know just because that's what it all centers on so much. But it's really exciting to sit down with some owners and talk to them about just their legacy and what that financial impact is going to be for them and maybe their family going for a long time. But that's one of the things is to get involved in the marketplace for a business owner and to meet with some folks and find out what the expectations, what that looks like. We have a lot of

We're the bearers of bad news a lot of times just because the expectation is so far off and we want to bring something to the table that is reasonable and doable and achievable and all those things. I think just sitting down with some folks and figuring out what that really looks like and how it works into your plans as a business owner and if you need to make a change then you have some runway to do that.

Mason Brady (03:52.686)
I'm really interested because you mentioned, you know, a lot of people think that there isn't value to transact in their business. I, in my experience, or a lot of, you know, what I've seen and heard is there's an overvaluation. You know, it's their baby and they put too much value on it for what it's really worth. And they almost have to be talked down to, hey, this is the real number that your business can transact for. if you want to get that valuation, this is what you'd have to do.

Dan Altom (04:15.808)
Yeah.

Right.

Mason Brady (04:20.384)
On the other side of it, I haven't heard as often in today's marketplace that, yeah, there's people that don't believe that there's anything that they have built and that, yeah, they're just going to shut their doors one day. So I'm interested to understand like what types of examples, like what do usually see in the types of businesses, et cetera, that are in that mindset? Like, is there a theme of those that believe that there isn't something to transact or are you seeing something there?

Dan Altom (04:31.896)
You

Dan Altom (04:48.908)
You know, that's a great question. I don't know if I can track a type of person or type of owner. seems to be folks that have had their business for a long, time. And they've just kind of been doing things. They plateaued at some point years ago, just because they were comfortable. mean, great business, great things. Their website maybe is 15 years old and just some things. And they're comfortable and they're happy. And they just kind of never.

just somehow never realized that that was a thing, you know, that they could do that, that they had us, they just thought they could sell their stuff. Maybe their customer list to a competitor, you know, who we always feel like is one of the worst buyers, as far as value goes, you know. So, you know, so when they learn that there's a way to capture that goodwill and then how that works is always fun to talk to folks about and why.

Mason Brady (05:25.474)
Yep. Yep.

Dan Altom (05:38.302)
something you know so just the the education part with a seller on what they you may have you know whether it's over under whatever just that something there you know is fun.

Mason Brady (05:48.654)
Yeah, absolutely. I'm sure that it's pretty exciting for some of those people that didn't think that there was much there, right? That, yeah, they're just going to sell their assets, that they have a bunch of equipment in the shed or a bunch of vehicles and stuff, and they're just going to get, you know, it's going to be an asset sale, but wait, like you actually built something, you built a system or something pretty unique here that somebody would value. And so I have to imagine that it probably lights them up quite a bit when they see, wow, that

Dan Altom (05:58.53)
Mm-hmm.

Dan Altom (06:06.338)
Yeah.

Dan Altom (06:12.15)
Yeah.

Mason Brady (06:14.189)
I could probably add a zero to the back end of that number of what I would get for my business, right? So that's awesome. So I'm interested, you know, we're kind of diving into the theme of, especially for owners looking to sell their business. You know, I think a lot in, you know, discussions in &A space, obviously talk about buying businesses and things to consider. But, you know, today we're, we'll dive into that a little bit, but today we're especially focusing on the theme of, you know, people that need to sell their business. And there's,

Dan Altom (06:16.952)
Right.

Mason Brady (06:44.202)
a lot of businesses out there that they talk about it, that there's a silver tsunami out there, right? That a bunch of baby boomers that are business owners that are going to be looking over the next 10 years or so and they have to create an exit plan. And so, you know, but then there's this theme around, you know, exit planning and all this. But, you know, I'm really interested to understand your viewpoints on what are some of the first steps a business owner should take when considering to sell their business like.

Dan Altom (06:49.954)
Yeah.

Mason Brady (07:11.362)
What are some of key things that they should start preparing to do and start thinking about when they're considering a sale?

Dan Altom (07:17.08)
Right, because we do, I agree with all that, but what ends up happening is folks roll into our office and they need to sell their business. Something's happened or there's been a change and so they've been, know, well we should have started this year and a half ago is kind of the most common phrase we hear in our initial meetings, you know, and it's kind like, yeah, I can tell, you or you should have, or something, you know, dramatic that they certainly weren't anticipating has happened and now they need to make a move.

And it's a long process, even if you've got everything ready to go. We kind of walk through it with our...

prospects and clients with, know, we're not going to sell your business by the end of the year. You know, we might get it sold next summer kind of thing. You know, that kind of thing. It's like, you know, and so the timing of it is, you know, it's not a transactional on the shelf kind of thing, you know. So, you know, our firm doesn't really get into the exit planning so much in a lot because of that. And also we want to focus on what we do.

folks that come in and go through that valuation process and get an expectation of what it looks like, how it works. And just to understand, we walk through our presentation as here's what a transaction might look like and kind of maybe dispel some myths or educate them on some of the things that happened during the closing process. And so that kind of gives them some thoughts. And we've had more more business owners in the last few years that have come in and gone through all that. And then they go away. then 18 months later, they show up and say, hey, we did some things. We figured out how that

and now we understand and we pull these levers and you know the business looks better and we get a better multiple and they have better cash flow and those kinds of things. So I think just you know just learning about it and figuring out how it works will just change your mindset of as a business owner what you're going to do to move forward for the next you know year or 18 months or whatever that plan is.

Mason Brady (08:53.101)
Awesome.

Mason Brady (09:03.768)
So for our audience, I'm interested, you know, when somebody comes in, they say, I need to sell my business. you brought up that example that more often than not, it's that they're in a need to sell their business pretty immediately. I think they talk about the four D's like death, disability, divorce. I forget the fourth one, but you know, it's, some type of personal life event that forces that. Yeah. You have to exit. And it's a serious, it's a serious thing, but I, I'm interested to understand somebody.

Dan Altom (09:20.632)
you

Mason Brady (09:32.386)
you know, somebody walks into Sunbelt and begins talking with your business brokers, you know, hey, what I need to sell my business, you need to value that business. What are the steps or the methodologies you use? And for so for our audience, like, how can they begin to get their mind wrapped around what their business is worth? Like, how would you go about valuing a business?

Dan Altom (09:53.88)
Sure, sure, sure. Well, the first thing is go see your attorney and get your LLC to reflect those four D's. So you know what's going on, you know, your buy sell agreement. Yeah, and that's how we start every engagement to be honest with you is if somebody is interested in, you know, they like the process, they like us, they think we can do a good job for them. The very next thing we do is look at the books, you know, and learn more about their business and kind of review and analysis. And we're not providing a certified product or any of those kinds of things.

Mason Brady (09:59.008)
Yep, yep, yep.

Mason Brady (10:18.094)
Thank

Dan Altom (10:23.786)
that you're going to use for tax or legal work, but it is a, here's what we think your business is worth and why. And those whys are the, you we use a risk analysis. We use comps that we have access to. use, we stress test it against what a bank might do because in these main street transactions, you know, the buyer is likely to use a financing. And so we know how that's going to look. So it's all got to work. And so we come back with, hey, here's your cash flow. And what we think it is is available to the new buyer. And here's what we think all these market conditions and

risk analysis and lending things look like and we come up with the conclusion of here's what we think when you sell it for and here's what that transaction might net to you because you know maximizing your value is great but we really want to maximize what's in your pocket you know so but we work through the whole cash flow model on

discretionary, you a lot of business owners, there's a blurry line there between your business expenses and personal expenses and so, and that's okay. For the most part, banks and buyers are okay with all that, you know, and we work through that because we really want to show a buyer in a bank what your maximum cash flow that's available to use for the new buyer to use.

Mason Brady (11:29.389)
Yep. I'm interested to understand too, cause we've seen this where sometimes we've worked with clients that are considering buying businesses and we help them evaluate, you know, Hey, what are some different financing options in Brady CFO? As well as we also kind of do a high level valuation based upon historical earnings. Really to say, Hey, you know, that price that they're asking.

That's a tough price, right? I don't know if you should really be looking at that opportunity further. you know, more often than not, feels like there's businesses for sale where the price just feels way overstated. It is way out of range of even what's possible for any bank financing to come in and to actually serve the debt, you know? So I'm interested, you know, why do you see that business brokers are doing that to where, you know, it's just

You see these astronomical asks that just don't make sense. Why do you think that is?

Dan Altom (12:31.32)
You know, I don't think we do that here. So don't know No, the way if you know, we have a weird price on ours Some you know look behind the curtains for our business when you look at some of our listings that they don't have an asking price That's kind of the same thing There's a pro and a con to that because people are gonna look at that go they must have some nutty price, right? Which is a you know, fair assumption what we're really trying to do is the broker though is that we think maybe there might be a buyer out there that's not an individual using regular financing

Mason Brady (12:33.998)
Fair enough.

Dan Altom (13:01.236)
So we want to be able to approach a strategic buyer or private equity or those kinds of things who have been dipping down into this smaller main street space the last few years and make sure we can maximize the price with those guys. Cause once you establish a price out there in the market, then that's kind of going to be your max. So that's how we work it is where we may put a no price or call for more information kind of thing. There's a downside cause we lose some of the buyers I know cause they just swipe right or whatever it is.

Mason Brady (13:16.738)
Yep. Yep.

Dan Altom (13:28.962)
just trying to maximize that price for a particular buyer.

Mason Brady (13:31.672)
Got it. Makes sense. So I am interested in, because you and I went to a lunch, you know, I want to say about two months back and you specifically brought up that, you know, you feel like SBA loan products are excellent products, you know, in order to buy and acquire a business. And I think that's one of things too, that at Brady CFO, we work with clients and, you know, for our audience too, that one of the big questions that always comes up is how do I finance it? Right. That I do want to buy a business, but

What are all my different financing options? And there's a lot of different things that get tossed out there. Sellers notes, can you just do a cash deal that, do you have the cash on hand, et cetera, et cetera. But I am favorable to using some debt financing because it does provide, that purchase should provide a sufficient ROI and you're using somebody else's money, obviously with a stated interest rate, but.

The intent is that you would get a better ROI than what you'd be paying on the debt capital, right? The cost of the debt itself. I've heard a lot of negative perceptions of SBA financing, right? But you were one of the first ones that had a very positive perception about it. So I'm interested to understand why you feel that way and if you can expand upon that for our audience. Yeah.

Dan Altom (14:45.24)
Yeah. Well, I think one of our SBA lenders was part of the group paying for that lunch. no, no, and that is running lots of folks that are just think the SBA they're terrified for. They think it's because it's some kind of.

Mason Brady (14:50.092)
Yeah, fair enough. Fair enough. You were hungry.

Dan Altom (15:04.116)
You know, can't, you know, high risk, you can't get a loan anywhere else, you know, lender of last resort kind of thing, which is not the case at all. You know, they've got guidelines and everything. The biggest differentiator is your typical conventional lender is most likely going to look for those hard assets as collateral for their loan.

When you have this business like we talked about a minute ago that you have this goodwill piece in the brand and the longevity and just all the things, there's a value to that. And the SBA will absolutely lend on that because they're looking at that cashflow, which does tails back into that whole, hey, we really want to figure out what the real cashflow is out of your business. And in SBA, it's a...

You it's not just the hand like, know, if you have your community bank that you've been with forever, you can walk down there and say, hey, I need to do XYZ. And they may say, hey, let's, you know, high five and let's go do it. The SBA has a much more stringent underwriting process and those kinds of things. But what I tell our buyers is, you're going to get checklist after checklist and it's going to look like the same checklist, but just keep checking off the things, you know, and we'll get there, you know, and it's going to take, you know, three or four months. And it's just a process that you have to go through. But that's why I love it is it's a known quantity. You get to the end, you can, we can get ourselves

sellers much more their value at close. And so it just works out for everybody. know, interest rates are, you know, they're okay. But when we analyze the deal, we're looking for that, you know, that kind of same thing that ROI that covers the debt service allows the buyer to have room for growth and room for their personal expenses.

Mason Brady (16:29.55)
Yeah, think because even at Bracee, feel like we work with a lot of low margin businesses in general, A lot of blue collar, boots and jeans to work everyday types of businesses, agribusiness, construction, logistics, transportation, and you know, they don't have the cash on hand to do a deal. And there's so much, feel like, you know, it's just thrown out there. There's this big trend around buying businesses, Or entrepreneurship through acquisition.

And there's this trend around the idea, sellers financing, sellers financing. And it's like, yeah, very few sellers actually wanna do that. At the end of the day, they're still carrying all the risk. They need their cash upfront. This whole theme of you're gonna get, you can go buy a business and you can put a note on the business and you can pay the seller over time. You and I both know if we owned a business and somebody presented that option, we'd say, how do we know that you're not just gonna run this into the ground, right? We want our money upfront, yeah.

Dan Altom (17:21.698)
Yeah, I'm trying to get away from the business, not worry about you running the business.

Mason Brady (17:24.81)
Exactly. And so I want my money upfront. But the reality to your point, you know, it's, you know, since these are low margin businesses, sometimes they already have difficulty finding a quality banking relationship as it is. And then that bank's capacity may not be able to help them finance it. I could see if it was an asset deal, right? Where the bank could get around, you know, financing assets, but especially when it is a cashflow based deal that you value the business on cashflow.

Sometimes a bank just doesn't know how to wrap themselves around that solely, right? They don't know how to do that. But, you know, and what's nice about the SBA financing, I find is you do go through a stringent underwriting process and that's actually what you want to make sure that, yeah, you bought a good business, right? That, you know, if the federal government isn't willing to help you buy that business, you know, should you? You know, so.

Dan Altom (18:15.82)
Right. Right. Yeah. Myers asked about who should I hire for my due diligence team? I'm like, well, the bank's going to be on your side. So they'll run you through the grinder for sure.

Mason Brady (18:22.69)
Yeah, yeah, that's the best advice I've heard is that, you know, even if you were to use a different form of financing, if you're looking at a deal, just run it by a couple bankers that you trust. And, you know, if they would tell you no way, you know, absolutely no way, granted, banks are probably gonna be a bit more conservative, right? They're a bit more risk averse by nature. But if a bank says, like, it's not even middle ground, it's just no way would we do this deal.

Dan Altom (18:44.46)
Yeah.

Dan Altom (18:50.125)
No.

Mason Brady (18:51.374)
You should probably be taking a second guess on it, right?

Dan Altom (18:54.038)
Yep. And we run a lot of our sellers before we go to market through a preferred lender and get that, you know, just to make sure we didn't miss something or just to make sure they're on board or maybe something, you know, loosey goosey with the SBA with that particular industry or style of business or something, just because we want to know, you know, we'd like to know the answer before the question gets asked.

Mason Brady (19:13.676)
Yep, yep. I'm interested because, I mean, we're kind of shifting from selling that business and we're talking about how do you finance it. But what's some of the process that you go through to make sure that a buyer is a right fit for a business? How do you align that and make sure that that is in place, that that is the right buyer for the business? Yeah, what's that look like for you all?

Dan Altom (19:39.65)
Sure, yeah, that's always kind of a delicate deal, Because all the things we do with our sellers is real confidential, know? So we're out there trying to engage buyers with very minimal information, you know? Certainly not talking about the name of the business or location or some things like that, you know? So we're under a little bit of that art versus science thing on how to figure out where we have some good buyers and to...

to maintain that confidentiality with our sellers. So we do try to cast a big wide net at the same time though. So it's a balancing act of how you engage these buyers. And something I would encourage buyers to do is fill out that buyer profile. If you're going through in the broker space, you'll get a non-disclosure agreement and a buyer profile. Just put some information in there. It's not a credit check. It's not any of those kinds of things, but what the broker's doing to try to make sure that they're fulfilling their obligation to the seller is, hey, does this buyer have the capability to pull

let's deal off you know so if you don't list any financial information a lot of times that's why you're not getting a response from a broker because they're like well you know if you're not willing to share information with me why the war

sharing information about my client with you. You know, and I just have to know that you can pull this deal off, you know, so, you know, give us a call or put something on there, but the whole, you know, to be disclosed later or whatever. it's like, well, okay, then we'll disclose our client's information later. So we just really want to have that call. And I do feel, feel a little bad for buyers because of the bro, at least in the broker space, it's so fragmented and inefficient that, if you're calling brokers, you got to call brokers, you know, because you talk to me.

Mason Brady (20:58.744)
Yep. Yep.

Dan Altom (21:14.154)
I'm going to show you the Sunbelt businesses we have, which we work really good internally. So that's nice, but you know, I can't go out and help you. Or I guess I could, but it's just not effective for me to try to go help you find the business over at CBB or Transworld or wherever. So it's just, you know, I hate it for buyers because you got to, you you spend a bunch of time and they usually have a job or whatever. And so something else about along those lines is it's

Usually surprising to sellers when I tell them, the likely buyer for your business is not currently in your industry. You know, they're, they're doing something else or working in corporate or something. And that's just shocking for some folks. How are they ever going to do this? And back to your point of like, because you've developed this great business with processes and you have a team and all the things, know, so, just trying to find those buyers. And like you said, it's become quite the, I want to say trend. think people just more aware that they can go do this other thing and they can buy an existing operation and they, and they'll, they'll be successful or have a high degree of success.

Mason Brady (21:54.21)
Yep. Yep.

Dan Altom (22:08.602)
So you find those buyers is exciting and we get to talk to lots of people who are looking to make lots of changes and we've got lots of buyers. So we just kind of got a system down for it to just try to figure out that match.

Mason Brady (22:20.13)
Awesome. You know, lot of what you're saying, because I find that there's a lot of business owners that, you know, the &A space feels very elusive, right? That it's just, yeah, it's this, you know, it's that space where it's so difficult and so, there's just so many concepts of it that are so difficult to understand. you know, most business owners have bought a house, right? And just, I mean, to what you were saying that...

even to put an offer on a home, you have to get pre-qualified, right? And so in the same way as a buyer that you have to have the financial backing, otherwise they're not going to treat you serious because yeah, I mean, there is a lot of confidential information that that client is sharing that they don't need, you know, put out into the world. And so in that same way, just like with the homeowner that they're not going to take your offer seriously unless they know financing is in place and that it's secure, right? And so there's elements here that are so similar at the same time, there's many elements that are different, right?

Dan Altom (23:14.732)
Mm-hmm. Mm-hmm.

Mason Brady (23:15.854)
the way a home can be valued and especially as an asset versus a cash flowing business and how do you value the intangibles, et cetera. There are many, many differences here, but conceptually, I just wanna remind our audience, it's not as elusive as you think that at the end of the day, you have to appear like a good buyer and in the same way as a seller, just like you would prep and sell your home and make it really attractive for a buyer.

It works both ways in a business transaction too, right? So, yeah.

Dan Altom (23:46.2)
Absolutely. Yeah, and even though our clients are the sellers, when we engage a buyer that we think is a viable candidate and is his interest, we also want make sure that the buyer's not just, you we don't want to waste their time either, right? So we want to make sure they have enough information to make an informed choice on if this looks like a business that's good for them, you know. Like if I know you don't want to drive more than 15 miles from your home to a new business and this is on the other side of town, well then...

Let's not even go down that path because it's not going to be good fit, right? So I don't want to inundate people with spreadsheets and all this stuff. I know what you need to know to make a reasonable...

you know, estimation if you should move forward on this business, you know. So when we get to that point, you know, that's when you kind of keep rolling it forward and it's a process and you just got to work through it. And like you said, you, you, put your best foot forward and I'll help you do that with the seller. Cause at some point, you know, I'm invested as well or incentivized to get a deal together, you know, so I want to make your offer look as good as we possibly can and realistic and meet some needs. And I can tell you, Hey, this is great. This is where the resistance is going to be. You know, here's what they're looking at, you know, just trying to help you manage the pain points

as a buyer for that seller to put your best foot forward.

Mason Brady (24:51.384)
Yep. I'm interested, what's your response to buyers, whether, you know, it's somebody coming in wanting to be an entrepreneur for the first time, or it's another business coming in and buying that business. What's your response to those that think, yeah, as long as there's a management team in place of that business I'm buying that, yeah, I can kind of kick my feet up on this one. You know, what's your response to that?

Dan Altom (25:14.072)
You

Well, I try to get off the phone as soon as I can. So we do get that a lot. And it's part of the education process, I think, for the most part, you know, to your real estate point, people try to draw some parallels. And there are, there's quite a few. But what it's not, at least in our opinion on these main street businesses, is that it is not mailbox money. It is not a rental home. It is not something where you can just say, hey, I'll come check in or provide the leadership or at least at the cash roll that we're representing.

Mason Brady (25:21.511)
Yeah.

Dan Altom (25:48.214)
reflects some owner-operator-ness, if that's a word. You get your sleeves rolled up and you're doing something.

So if you don't have the time or capacity to do that, then that would make it difficult to get that ROI you were mentioning just because you're going to end up having to hire somebody or somebodies. And then also it just eats up your cash flow in these smaller businesses. So I've talked to lots of people and it's like, hey, want to have 500 grand. I want to buy this business for cash because I'm debt averse and all these things, you know, but I don't want to work there. It's like, well, then the business is going to probably going to fall apart on you. know, so what I do talk about is like, Hey, if you take a bigger bite and look at these businesses, it starts to get to that $2 million or so in transactions.

value is what we found. They're more likely to have like this general manager person or a right-hand man or something to where you wouldn't necessarily have to go put hands on but you'd still need to you know be there to a degree in our opinion but there is that person that's kind of running the business already in a lot of cases but that's still difficult to get behind in our opinion on these smaller businesses. You're not gonna stay at your full-time you know career and be able to run. It's not a car wash.

Mason Brady (26:51.394)
Yeah, yeah, yep. I tell people the same thing. I just said, you know, the first year in buying this business, you really need to be prepared to be genuinely hands on. then, and then you could look at it after that and determine whether you can begin to pull back, but do not go in with the intent that yeah, just you're going to come in five hours a week and kind of check on things and do some leadership meetings and stuff. Yeah, yeah, it won't.

Dan Altom (27:01.036)
Yeah.

Dan Altom (27:11.616)
Yeah.

And we've run into some buyer groups that they had something like that set up or they were prepared for that or they had already analyzed that and they were good with that. But when you start crunching the numbers and suddenly you're like, wait, I'm to have this loan payment of what? And I'm only going to make this after I hire a manager. it's like, hey, let's get to end of that movie real quick. Make sure this makes sense for you. And if it does, then cool, let's take a look at it. But if it ruins your numbers a little bit from what your expectations were, then let's look at something else.

Mason Brady (27:43.342)
I'm interested, because as you were talking through some of this, it's a question that came to mind, like, you know, a lot of buyers out there are trying to look for off-market deals. What would you say, why would you encourage people to really consider, know, especially on the buy side, why would you say to encourage people that they should consider, you know, working with a broker deal or, you know, a marketed business?

Dan Altom (27:53.194)
Mm-hmm.

Mason Brady (28:11.286)
Yeah, I'm interested. understand your take on that.

Dan Altom (28:13.846)
Yeah, it's almost kind of back to that diligence piece, right? You know, in theory, you know, as a broker, we've kind of put that business through the ringer already, you know, and we've kind of vetted it to a degree. You know, we don't make any kind of, you know, hey, this is what our client's telling us. You know, we're not auditors, all that kind of fun stuff, but we're not going to take on a client that we don't think we can sell. So we've seen the tax returns and we've seen all these things and we kind of know the story. And in lot of cases, we know what maybe the issue might be that you might not find.

you get pretty deep in the process. Like if we have a customer concentration issue, we're going to disclose that early on in the process just because that'll knock a lot of buyers out. They don't want that risk. And so if that's their case, then we want to go ahead and get that on the table early. Whereas if you're just working with the seller, they don't see that as a lot of risk because they've had one major client for 20 years and it's been fine. So they may just, not purposefully, but just kind of not realize that that's a big deal to you. And so if it's your first time going through the acquisition process, you just may

may not see that. So the flip side is, know, brokers looking to maximize the price for their sellers. So, you know, you're paying a little bit more. But my opinion on that is if you, if you, you know, back up and look at it long-term, you're going to buy this business for seven to 10 or more years, you know, who cares if it's another 50 grand on a million dollar transaction, right? It doesn't change your world hardly at all. But that's, that's real money to the seller. So I just, sometimes it's like, well, do you, you know, do you don't need to wiggle on the price too terribly much just because

You know changes your payment by a couple hundred bucks and you know the longer you take to dilly-dally around buying a business That's every month that you're not making that money

Mason Brady (29:47.502)
Yep, I'm interested, yeah, too, to understand, because especially a lot of our audience, they are, you know, they're existing business owners, right? And there's many, there's a big trend right now of this entrepreneurship through acquisition of, you know, people coming from corporate and deciding, yeah, I don't want to do that corporate thing anymore. I'm going to go buy a business and I'm going to run it. And that's how I'm going to live my life going forward is I'm not going to go build something. I'm going to buy something existing cashflow. But, you know, especially for, you know,

people are already operating businesses but are looking, and it could be for a variety of reasons, right? They're looking for a strategic play. They're looking, that hey, they do have existing businesses that they're operating well and they will continue to operate well. Maybe they do have a management team, but you have these visionary kind of entrepreneurial founders that are like, yeah, but I'd love to do something else too, right? I'd love to have something else to the portfolio that, I mean, even, that's a personal dream of mine someday is to have Brady Enterprises, right?

We just have variety of businesses and we're serving the community and it'd be great and to have that variety to it as long as it made financial sense too, right? But for those that are existing business owners, what are some of the key things that you would suggest that they'd be considering when starting to look at, I should consider an acquisition here in order for growth or

You know, I do have some spare funds and I need to figure out, you know, how I invest those spare funds and I have this cashflow available and I would like to buy a business. What are some of the, what are some of the first things that you would tell them that they should really have at top of mind as they're starting to consider this?

Dan Altom (31:28.258)
Sure, and we've actually done a few of those transactions here this past couple years, oddly enough, where you got, just like you said, they own a small business and then they buy something that's, I'm trying to think of the examples I'm thinking of, wildly different from the business they're in. So it's not even like they're looking at a synergy, it's from a sheer, almost an investment where their plans usually are folding in, maybe the management or the marketing, or there's something that they're doing in their current business from a...

role that they can fulfill in the acquisition. at least with us, it's been rare that it's something that dovetails together for some reason. Like one was a paint manufacturer and then they bought an automotive lift distributor. You know what It didn't make no sense whatsoever, right? But it just was a business they were interested in. The numbers made sense. was something they could do. You know, just something they had a person who could manage it. You know, just all kind of the little things that didn't have anything to do with the widget, if that makes any sense.

Mason Brady (32:09.144)
Huh. Yeah. Yeah.

Mason Brady (32:23.02)
Yeah, totally. No, yeah, that makes no strategic sense at all, but okay.

Dan Altom (32:27.2)
Yeah, and I, me personally, actually own several other businesses that same kind of thing. They just so unrelated. make no sense, but from a management standpoint and the marketing team and some things like that, we all shift gears and, and cruise along and it just kind of seems to work. You know, now we leaving some dollars on the table and some efficiencies maybe, but as a whole, you know, it's working out pretty well.

Mason Brady (32:48.054)
Yeah. And I mean, there's just an aspect of it too, that is, you know, within our CFO services, as we've worked with so many business owners, we've just met this profile of these owners that often they are this visionary founder, right? And that that's not to say there's, there's others that are a bit more operator mindset. Like we, we reference a lot a methodology through what's a book called predictable success. And it talks about different types of profiles within a business.

there's certainly, I mean, there are people that are those visionaries, right? That it's like, Hey, every month there's a new flavor of ice cream that they're thinking about. And that is their favorite flavor of ice cream, right. And that, they're onto a new passion project, but at the same point in time, for some people that can be incredibly frustrating. Cause it's like, Hey, we need to stay focused, but these are the people that are bringing new ideas in the economy to life. Right. and so we need that. and, yeah, the idea that people have ventures in different places that if.

Dan Altom (33:24.12)
you

Mason Brady (33:45.954)
that's what excites them and keeps things going and keeps the economy growing. if there, if, you know, at the end of the day, that if we can make an economic transaction happen between a seller that needs to sell that business and this person's interested, but it's way out of left field, so be it, right? I mean, it's good. Yeah, it's still good for the community, right? That that business is still in place and it's still growing there. So, you know, I am interested, Dan, that a little bit of fun here as we kind of begin to wrap up, you know, what's the worst

personal business sales story you could share with us. Like where just something just completely eroded or like, man, the skeleton's in the closet. You know, I realize some of this has to stay confidential, but I'm just really interested to understand like, what's the worst you've come across?

Dan Altom (34:18.616)
you

Dan Altom (34:27.254)
Yeah. I hope this counts. So I've been in the business valuation space or acquiring and investing small businesses my whole career. So I've been around a lot of small businesses. But for this one in particular here, I first got into the...

brokerage firm. I made a trip to a suburb of Houston to deliver some valuation news and we kind of went through our whole thing of here's what it looks like and here's what you're gonna net and I could tell it wasn't really, we weren't quite at the expectation level of the owner so you know okay we did our thing and you know I left and then the next morning I saw a headline and looked into it and the business burned to the ground that night.

So, I don't know, but I never, yeah, I never fell in love with that one.

Mason Brady (35:13.963)
man. That would be very serendipitous. Yeah, that would be very, very serendipitous. man. I wonder if their insurance broker caught on to that too.

Dan Altom (35:26.966)
Yeah, I have a funny feeling that there was a different number from the insurance carriers, my guess.

Mason Brady (35:31.18)
Yeah. man. Wow. Yeah. That's great. That's so, that's crazy that you caught that too, that it just, yeah, I just, you were able to watch that and catch that. wow. Awesome. Well, Dan, is there any final things that you'd love to share with our audience that in regards to either selling or buying a business that you feel like from your many years in it and even in your background, right? I mean, you were doing valuations.

Dan Altom (35:43.542)
Yeah.

Mason Brady (35:58.734)
before becoming a business broker. So you just have a breadth of experience here and wisdom. Is there anything else you'd love to share with our audience?

Dan Altom (36:07.928)
Yes, something I take to sometimes when I speak is this little cartoon that I'll describe to you, but generally speaking, entrepreneurs in general just have a different risk tolerance or view on risk than...

regular people, you know. So, but to that end doesn't mean you can't do it, know, and this entrepreneurship through acquisition thing is a great path into that, right? So we sell a number of franchises that make it the best of both worlds, you know, you get this existing operation that's also layered with, you know, the support and, you know, policies and processes and all the things, which is fantastic.

But my biggest thing is when I go into some classes sometimes with MBA deals where they're talking about buying a business and nobody's requested information or nobody's taking a step to just talk about it and spreadsheet it and all these things, which is great. But at some point you just got to take the jump. So my cartoon is this guy that has a box of things sticking out of it and it says plane parts, right? And then he just steps off the cliff. In the next window he's got the plane going and he flies off. So it's like you just got to take the plunge sometimes and get into the process and work through it and you're not wasting any broker's time.

you know our job is to go find buyers so you know inquire about the business sign the NDA get used to the cadence of Things that are going on and just get in there and check it out. You know you may find hey, that's terrifying and I don't want to do that But the more you learn the more you like okay, and then when you do find the business that's right You won't be like well. I don't know you you

Mason Brady (37:24.578)
Yeah. Yep.

Dan Altom (37:31.704)
this history now looking at things and you'll have something to compare it to. And for sellers, give us a call. Come share a cup of coffee and we'll talk about what a transaction might look like and valuation and those things and just get you educated on if that's good for you or maybe now, maybe later. We're not going anywhere.

Mason Brady (37:50.018)
Yeah, no, Sun's great. I really appreciate having you on the show, Dan. Please tell our audience where they can find more information about you, about Sunbelt. Where can they discover more?

Dan Altom (38:00.536)
know, really, just sunbelttexas.com is the place to go, right? The place to go to buy or sell business.

Mason Brady (38:05.6)
Awesome. Great. But yeah, Dan, I really appreciate this. Like I said, I kind of geek out on these subjects that I think we may be working together at some point in the future once we built Brady Business or Brady CFO a little bit further and Brady Enterprises needs to take off. Exactly. Brady Enterprises needs to take off. So no, this is a real pleasure. And just thank you so much for your insight and your wisdom here. It was a pleasure.

Dan Altom (38:16.14)
There you go. There you go. I'll be your head of your &A firm.

Dan Altom (38:27.416)
Yeah, thank you so much. I appreciate it. Have a great one. See ya.

Mason Brady (38:29.452)
Awesome, thanks Dan. So from here Dan, yeah that was great. You did great and so I don't foresee a whole lot of edits there, that was awesome. yeah, so from here, like I said, we're technically still recording which is all good but I'm gonna ask you to step out and then from here I would expect the release date of this. Cindy will follow up but it's probably gonna be in January.

Dan Altom (38:39.896)
Okay.

Dan Altom (38:56.418)
Okay.

Mason Brady (38:56.606)
probably towards the later part of January. We always try to have a backlog of episodes, so we do have a decent backlog right now, because I'm also taking some time off in January and that was kind of the intent is to book some of these and that way when I'm out, you know, traveling that I can't record, right? So, but yeah, it'll come out in late January. if you've seen anything that we've done so far, will actually share with you some of the video shorts that...

Dan Altom (39:00.748)
Yeah. That's awesome.

Good.

Dan Altom (39:11.712)
Yeah.

Dan Altom (39:18.432)
Yet to happen.

Mason Brady (39:22.062)
you can post and so your marketing team or social media team can post some of those and then we'll let you know once the episode's released on YouTube and all the major podcast distribution platforms and that way if your social media team wants to do anything with that, great, but otherwise we do our own thing with that, so, yeah.

Dan Altom (39:22.105)
great. OK.

Dan Altom (39:39.381)
And is it it means okay? guess tell me you know we like linking back to pages rather than just sticking on ours, too So we can just find where it is and go with your stuff. Okay. Yeah, I mean great

Mason Brady (39:43.362)
Absolutely.

Mason Brady (39:47.36)
Absolutely. Yep. Yep. Yeah. So she'll be ahead of it to share all that that can go to your social media team. And we encourage that that we actually I mean, that helps it get more traction and take off faster. And so we encourage that that yeah, we'd appreciate if you all share and by all means, do whatever you all want to do with it that the intent is, is we like doing this just to kind of build relationships to right. And so we want this to be valuable for you and

Dan Altom (39:56.589)
Yeah.

Dan Altom (40:04.098)
Okay.

Dan Altom (40:08.406)
Yeah, I love it.

Mason Brady (40:11.586)
Yeah, we're gonna send you a little thank you gift with the mug and stuff too. So you'll be getting that soon. I'm gonna try to get those out before Christmas. might be a little Christmas gift for you. So appreciate you. Sounds good. Thanks, Dan. Yep. See ya.

Dan Altom (40:14.092)
Perfect.

Dan Altom (40:20.288)
Awesome, I appreciate that. All right. We'll talk to you real soon. Thank you.

Mason Brady (40:27.598)
All right, I'm going to do the intro now. and you could probably see my stand of desk for some reason is not working. Like it's had a block. so I'm sitting, so you usually don't see the chair behind me. So this is kind of unique, but it's all good. so, I'm going go ahead and do the intro.

Hi everyone, welcome back to another episode of Brewing Business with Brady. So today's guest is Dan Altam. Oops, actually.

One sec.

Hi everyone. Welcome back to another episode of brewing business with Brady. Do you know, are you wondering and struggling with the idea of buying a business? You don't know how to do it. You don't know how to look for the right business to make sure that you'll get the right return on investment and even how to finance that business. Well, today's guest is Dan Altam.

He is the managing director of Sunbelt business brokers. And Dan has many years of experience of exchanging businesses, transacting businesses. He's been on both the sell side and the buy side within the lower middle market, meaning businesses that usually sell for between one to $20 million. He is an expert in being able to see how a, how marketable businesses, how do you go to market and sell a business? How should buyers perceive and should finance a business purchase?

Mason Brady (41:56.962)
He has been on both sides of the transaction and manages a team that does these transactions all the time in the Houston market. And so today, Dan is gonna share his wisdom advice for what sellers should be considering when trying to sell their business. We're gonna dive into SBA financing because it is actually a really good form of financing to acquire a business. for our audience as business owners, you're gonna get to understand one form of financing a business through SBA financing. And we're gonna...

dive into understanding a bit more about buying a business and some of the top things our audience should consider in regards to buying a business. And so we are really excited to have Dan on the show today and hope you enjoy. Thanks.

Mason Brady (42:41.902)
All right, so that was it. Yeah, let me know if you need anything else. Appreciate it.