Episode 9: The Buyer’s Lens: Seeing Your Business for What It Is with David Barnett Artwork

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Episode 9: The Buyer’s Lens: Seeing Your Business for What It Is with David Barnett

May 16, 2025 • Levi Lawrence and Colby Jardine • Season 1 • Episode 9

In this episode, Levi and Colby are joined by David Barnett — business broker turned consultant, author, and content creator — for a masterclass in buying, selling, and valuing small businesses. David shares his journey from Yellow Pages rep to business owner, debt broker, and ultimately trusted advisor helping entrepreneurs navigate the complex world of business transactions. The conversation dives deep into lessons learned from brokerage, the realities of small business exits, how real-world transactions often differ from theory, and why systems, not just passion, build enduring organizations.

The episode also explores how content marketing, authorship, and thought leadership have fueled David’s consulting business, offering valuable insights for entrepreneurs thinking about how to build reputation and revenue streams beyond direct operations. Packed with candid advice, practical frameworks, and a dose of tough love, this episode is a must-listen for anyone considering buying, selling, or scaling a business.

Links and Resources Mentioned
David on Linkedin: https://www.linkedin.com/in/davidbarnettmoncton/
David Barnett’s Website: DavidCBarnett.com
Books by David Barnett https://www.investlocalbook.com/p/buy-book.html
Courses by David - https://www.businessbuyeradvantage.com/
YouTube Channel: David Barnett’s channel with over 700 videos - https://www.youtube.com/@DavidCBarnett

Quotes Worth Sharing
"The business is the cash flow — that's what someone is acquiring, not just the stuff inside."
"Businesses are always worth far more to their owners than they are to the buyers."
"Luck often explains success in business more than genius — sometimes the right person was simply hired at the right time."
"If you want to sell your business for more, make it more profitable — you get to enjoy the profits while you still own it."
"Don't buy yourself a job unless that's exactly what you want."

Segment Breakdown with Timestamps

00:00 – 07:00 | Introducing David Barnett: A Life in Business
David shares his early passion for business and journey through Yellow Pages sales, entrepreneurship, and business finance.
Lessons learned during the 2008–09 financial crisis.
The evolution from business broker to consultant.

07:00 – 14:30 | From Broker to Consultant: Building a Better Model
The flaws in the traditional brokerage commission model.
How David transitioned to a consulting business structure.
Early use of YouTube to automate sales conversations.
Going from local clients to an international consulting practice.

14:30 – 27:00 | Lessons in Systems, Franchises, and Business Building
How systemization helped David successfully build and sell his first business.
The myth vs. reality of franchise support systems.
Importance of documented processes to create transferable business value.
Why small operational details often separate great businesses from average ones.

27:00 – 42:00 | Buying and Selling Businesses: Tough Love Edition
Why most small businesses don’t sell (80% failure rate).
How owners often drastically overvalue their businesses.
The real market dynamics for Main Street businesses (under $500k cashflow).
Five main reasons people are forced to sell: burnout, poor health, divorce, relocation, retirement.

42:00 – 59:00 | The Reality of Small Business Acquisitions
Insights on "buying a business without money" claims.
Understanding buyer competition and market realities.
How to create your own deal flow outside of traditional brokers.
Why passion can sometimes blind buyers to real business risks.

59:00 – 1:15:00 | Deal Structuring, Due Diligence, and Red Flags
How to evaluate small businesses realistically (cash flow, working capital, client concentration).
Hidden pitfalls: improper broker valuations, missing

1:00:00

Welcome to Built to Last, the podcastwhere entrepreneursshare real stories about thetriumphs and challenges ofbuilding enduring success.Hosted by ColbyJardine and Levi Lawrence.Welcome everyone.Welcome to this newest episode.I'm super, super excited.I don't know if anybody's noticed thetrend for those whohave listened to a lot, butwe typically are picking topics that areselfishly curiosity of the moment.For Colby and I, the first customer wasus and we're justhoping other people followsuit.There's a number of topics here thatyou'll see common themesand I'm looking forwardto the conversation and Iwon't spoil them at all.I was thinking about this, David.One of the things you said and speaking Iheard is the reasonwhy part of this businessexists and it was over 10 years ago.I can't wait to tie into that.I didn't realize that I wastying all the connection points.With that foreshadowing and noexplanation, I'd like to pass it off.David, if you would just introduceyourself and what yourbusiness is, just the way youwould to a stranger, let's start therebecause as we always say,nobody likes to read thebio.Sometimes I learn stuffright in the first 30 seconds.I am very comforted to hear that you havesome master plan forthis podcast that tiesit all together because I feel today thatactual plans are inshort supply right nowin the world.It seems like a lot of people are justplaying things by ear.It's good that you've sketched this out.Who am I?I'm David Barnett.I'm a lifelong business interested personwho even from my teenageyears would get frustratedgoing into businesses when I saw thatthey weren't doingthings the way I thought theycould do it better.Looking for ways to improve things, tomake it better,cheaper, faster, et cetera.I ended up in business school and thoughtI would learn how to be a business personthere.I didn't really realize that's not whatthey actually do there.Eventually, I got intothe world of real business.The way that I got into the world ofbusiness was with the Yellow Pages.I became an account rep in the late 90swhere I got to go and sitdown with the owners andmanagers of all the businesses that yousee when you're drivingaround and talking withthose people and finding out what kind ofcustomers they werelooking for and figureout how they made money.Eventually, I went offand started my own business.Then I started another business, whichwas a debt brokeragecompany for small businesses.I was helping people get operating andcapital leases on equipment.Factoring facilities is when you sellyour accounts receivable.I was helping people arrange loans fromthe big banks that weall would recognize.Then the financial crisis came in 08-09,kind of put a damper onthat in that a lot of thesenew B-tier lenders that had grown overthe early 2000s allwent bust all at once.I was helping a lot of peopleget loans from those people.Then I ended up in business brokeragebecause I had met peopleduring that finance brokeragetime who were looking for money to buyexisting businesses.I realized just that themarket was pretty underserved.I signed up with a big internationalfranchise brand in thebusiness brokerage community.I got a certification from a biginternationalassociation and went to work.I sold 36 companies in three and a halfyears for people basedout of my office in Moncton.Business brokerage is an absolutelyterrible business that Idon't ever recommend anyoneget into because it's based upon thisreal estate model whereyou meet someone who hasa business and they want to sell it.You sign them up and then you do all thiswork and you find a buyer.At the end of the day, if the business issold, you get a commission.What I didn't fully appreciate when I gotinto it is that it cansometimes take a yearor two of conversations to get someone toactually sign up with you.Then they say, "Great,let's sell the business."I'm like, "Good, Ineed all of this stuff."It can sometimes take people six or eightmonths to get me the documents.Then you have to put it together and makea marketing package.You have to advertise.It can take a year tofind the right buyer.Then you work out a deal between thebuyer and seller, which can take weeks.Then you have to work with the buyer tohelp them build abusiness plan to help them applyfor financing.All that debt brokerage stuff I used todo before came in again.Then finally you have adeal that goes to closing.If you looked at the financial statementsfrom my businessbrokerage over those threeand a half years, what you would havefound is that sales andearnings went up 30% or40% a year.You would say, "Wow, thisis a really awesome business.I was growing like crazy."What it would not have told you if youlooked at those year-endfinancials is that eachof those years had a period of seven tonine months long with no closings at all.Every month I was paying for office rent.I had a receptionist that I was paying.I had a billboardcampaign in Moncton at the time.I was doing Roger's radio.Back when Talk Radio was around.It was costing me between my life and myoffice and everything like 10,000, 12,000a month just to keep the lights on.You go seven, eightmonths with no closings.You know what ends uphappening is you end up in debt.I had lines of credit and credit cardsand I would sell abusiness for like a millionbucks and get asix-figure commission check.All it would do is fill in holes.I'd be back to even.It was incredibly stressful.I jokingly point to the gray on the sideof my head and theysay, "All of this gray haircame in during those three years."Since I left business brokerage, Ihaven't had any new gray hair.I left and I became a banker.It was totally different.I still remember the guilt that I feltthe first time I got paid.Money ended up in my bank account and Ithought, "Oh my God, Ididn't actually have to slayany dragons or argue with a lawyer or getthis jump over anamazing hurdle to help thisdeal come together at thelast minute to get this money."Literally they just sent it to me becauseit's been two weeks.It was very disturbing at first.To step back over to the other side ofthe fence, as it were,to be an employee for awhile.But over those three years, when I waswith the bank, I was doingrevolving credit programsfor mid-sized companies.It was a completely different crew ofpeople I was meeting.I was meeting bigger companies like adairy or something likethat, like these biggeroutfits.But my phone kept ringing because peoplehad met me in mybrokerage career or they've beengiven my name by someone.I started to talk to people who wantedhelp doing these dealsand I would just tell them,"I don't do this anymore.I'm not a broker."Eventually, a guy named Bob, who wantedto buy a business thatI had met earlier in mybrokerage days, he said, "Dave, I'vefound this deal on my own.I want some help with it.I've been talking to my lawyer.I've been talking to my accountant.Both of them are telling me what I needto get out of thedeal, but neither seems tobe able or willing to help me negotiatethrough this deal, likehow to talk to this otherparty and all this kind of stuff."I said, "Bob, I can help you, but I'vegot a full-time job atthe bank, so I don't know.I have to charge youlike a consultant might."He said, "Great.Where do you live?I'll come to your house on Saturday."That was like thebeginning of a little side hustle.Then the bank chose to reorganize andthey were offering a package.I took the package and I used that moneyto be my runway to geta consulting businessgoing, which I run still today.This was back in 2016.I built a couple of websites.I had already written one book at thatpoint, but I wrote twomore books really quicklyin that period.Pre-chat GPT.Pre-chat, yes. I actually wrote them.I started a YouTube channel.My idea was that I was going to helppeople buy and sellbusinesses, but I was not goingto be a broker.I was going to follow a consulting modelwhere I was just going towork with people who weredoing this stuff and they would pay mefor the work I was doing,which was a revolutionaryconcept in my mind because the whole wayI had been helpingpeople before was based onthis real estate model.I describe it as pivoting from the realestate model to thelawyer and accountant businessmodel where go to the lawyer, they makesome contract for you orwhatever and they expectto be paid.That's what I do.Over the last 10 years, what started offas a business where Iworked primarily in theregion here, it's funny, when I wouldhave a conversation withsomeone about how I couldhelp them, everyone wanted to meet forcoffee or have a phone callto talk about my background,I would share the samethings over and over again.I got this idea, "Hey, I could makevideos that answer common questions.I can make one video for each questionand this could be a wayof automating my salesprocess."I started making these YouTube videos andpeople would say, "I want to meet you forcoffee next weekbecause I want to do this."I would say, "Oh, that's great.Let's make this coffee date."Then I would send them an email saying,"Before we meet, youshould watch these six videosI recorded.They're only five or six minutes each,but it'll help set thestage for our conversation."Three quarters of the time, people wouldemail me back after theweekend and say, "You knowwhat?We don't really need to meet for coffee.I'd like to move forward.What does it look like?What are your rates?"I began to realize, "Hey, I'm saving alot of time by having these videos."I thought it was really great.What I did not really understand when Istarted is that anybody inthe world could see them.Then I would start to get emails fromTexas and California and Alberta.At first I was like, "Well, how am Igoing to work withsomebody who's in Texas?"Then I realized, "I'm not even going tovisit people now anymore here in Moncton.I'm just doing it allover the internet anyway."I started to work with Americans andpeople in othercountries, in Western Canada andToronto and stuff.Today the business has five people on theteam and 75% of ourrevenue comes from Americanclients.The balance of that is spread across whatwe call the Anglosphere, so basically theEnglish speaking countries of the world.We work with people all over.Doing the same kind of stuff I did as abusiness broker butunder this consulting model.I just had my ninthbook come out in the fall.We consider Amazon to be a top of funnelactivity because there arepeople who, when they wantto know something or understandsomething, they go looking for a book.It's a great way for publicity.When a book comes out, it gives you anexcuse to reach out topodcasters like, "Hey, Iwant to come on yourpodcast, talk about my new book.Do you want a copy?"It helps with PR andmarketing and things like that.The YouTube channelnow has 700 videos on it.I try to make one solo cast video a week,which is just meanswering someone's question.The same stuff I did when I startedanswering one question per video.I'm trying to have aninterview every week.Some months we've had some slip upsbecause we're trying to dothem as live streams becausethe algorithms like live streams best.We are doing some pre-recorded ones fordays where maybe I'mtraveling or something andI can't quite do it on that time slot.We can do them as premieres, whichYouTube still likes.That's where I'm at.I go to conferences and stuff and speakto small business ownersand groups of entrepreneurs.That's where you and I first met.That's a very comprehensive answer.I love it.Sometimes we get like eight to ten wordsand then I'm just pulling the next thing.So that goes great.Yeah, there was a lot.We went out for supperthere a few months ago now.That just opened up a whole slew of newquestions that I have for you.I love that in the show notes we're goingto have to explain thehistory of Yellow Pages.It's just not even the same thing now.There's no pages that are yellow anymore,but it's still a thing.Funny enough, that's actually where I dowant to go back to thatcomment about the YellowPages and where you got your start.I had a specific question around that.You mentioned that you'd get to go intobusinesses and all thesethings that were popping upthat were driving you nutsabout the way you were operating.What were some of those things that wereblatantly obvious toyou at a young age thatwasn't working for businesses?You know there's adrive-in in Shadyac, right?At one point there was this old guy thatowned it who was soconcerned about waste that ifyou walked over the counter and orderedan order of fries, hewould measure out an orderof frozen French fries and put it in thefryer and prepare itwhile 20 other people werestanding behind youalso wanting French fries.He would prepare themone scoop at a time.I was just like, "Why doesn't this guythrow the whole bag into the thing?He'll sell all the French fries."But it's just this penny-wise poundfoolish kind of stuff, right?It's funny because that drive-in inShadyac, they at one pointin the past had the littlespeakers on the poles and the poles arestill there even thoughthey use FM radio now.During the same time, and this was backin the 90s when I hadthese thoughts about thedrive-in, I was like, "Why doesn't he putnumbers on these poles so that people canjust run in quickly, place an order withthe pole number, andthen they could deliver tothe pole?"Right?So you don't have to waitin there and wait in line.Today, I would be like, "Why don't theyhave an app with numbers?"Actually today, theywouldn't even need an app.All they would have to do is put a uniqueQR on every one of those poles and peoplewould call up the menu on their cellphone, place an order,and the kitchen would knowwhere they are.I saw that for the firsttime a couple of years ago.I was in New Orleans and I was at thisrestaurant and it was thisbeautiful place that was inthis old industrial building and itbasically sprawled for thousands ofsquare feet in differentdirections.There were little nooks and cubbies wherethere were tables and chairs and each onejust had a QR code and you would scan it,place your order, paywith your credit card,and someone would show up with the food.I thought, "That's really cool."Then, of course, these are allinnovations that came fromthe COVID time when they weretrying to manage contact between peopleand all that sort of thing.This actually gets to the ... I can'tremember when we first met.It's been through different spheres.I'm sure it was when I had my firstbusiness before I wasdoing the switched professionalservices.But you told a story ofone of your first businesses.I don't know if it's the first one or thesecond one, where youwere the first personwho introduced to me, I believe, aroundthe built to sell, thelike, "I need to systemizeit so that I can pass it off."That was you, Ibelieve, who told that story.Yeah, it was my first business on my ownout of Yellow Pages.I had a partner andit was called Junkaway.The way that it started is we came acrossthe 1-800-GUT-JUNK franchise.We reached out to those people and theysent a package and we got awhole bunch of informationand we went on sort of a conference callthing where we had to learn about stuff.It was going to be like $100,000 to startup and you had to buy a new truck and youhad to do all this stuff.They actually rejected us because theytold us that Monctonwas too small a market fortheir concept.I read the book, E-Myth Revisited, and itbasically describedhow you create a businessby making it like a franchise.I sat down and I said, "Well, what wouldthe 1-800-GUT-JUNKoperating manual look like?"I started writing and I createdflowcharts with how tomake decisions and I created ajob sheet where we would be able to enterthe information forthe customer, the detailsof the job, all this kind of stuff.I just wrote it all out and it waslargely wrong, but once weactually got a truck, whichwe bought for $8,000 and we had a machineshop in Riverview, dosome work to it, makethe swinging gates on the back, rig it upso that we could put atarp over it and stuff,and then we painted it with Tremclad andgot a sign shop inDieppe to put lettering onit.We were all in forlike 10 grand, not 100.Then we went out and we started torespond to calls and wewent to people's homes andwe realized, "Hey, ourpricing's all out of whack.People won't pay this.Here's what they will pay."Then we made those changes to ouroperating manual and our worksheet.Then we figured out that some of the waysI had thought thingswould go down are notreally true, that we had to modify it.Having it all written out, even though itwasn't correct, was areally great exercisebecause once you've got it done, you canjust go fix it really easily.It was really great.We were able to then figure out whatnumbers we had to keeptrack of, the famous KPIs andall that sort of thing.When we decided that we didn't want to doit anymore, weimpressed a lot of people whenwe showed them everything we had builtfor this small business.We ended up selling that business and theperson who bought ittold me after the dealwas done that the reason they bought itwas because they wereso impressed with how wehad systematized it and they envisionedexpanding our systems totheir existing business sothey could copy it.To me, I just thought, "Well, I just didwhat was in the book."To me, it was no big deal, but then Irealized later, it'sfunny, at that point in my life,I believed that people all existed alonga spectrum of IQ, thatthere were smarter peopleand less smart people.I didn't understand things like theMyers-Briggs personalitymethodology and stuff where there'sactually differentspectrums of different qualities.People have all sorts ofdifferent things going on.I honestly couldn't understand why otherpeople who I knew weresmart couldn't figure outhow to do this, but at the end of theday, it's just the function of myparticular personalitythat I find that kindof stuff really easy.I heard that and it resonated.I went back and I had a food company, Ihad manufacturing, I wasgrowing, but I also dealtwith 150 small scale businesses that Idepended on them growingwith me for me to grow whatI was doing.We had an incubation kitchen and westarted doing like, "Allright, I started bringingthat message notformally to a lot of people."Then that business closed.2017, 2018, 2019, 2020, a consultingagency to help peoplebecome more turnkey and addressthe systems and processes of theirbusiness was all of ourstaff read eMyth and builtto sell to start just to get them kind ofempathy with theowner more than even justthe principles.Then we merged companies with IronhousePro and we brought thatside of the business over.Now I'm like 99% of my time is under ...I didn't realize quitethe direct connection,but I'm pretty sure that's one of thedrivers, which I thoughtwas interesting coming inbecause even when we had a pre-callearlier, I hadn'tquite made that connection.That would have been a long time ago.I can't remember when, but itwould have been before 2015.Yeah, it would have.I'd love to take credit for shaping yourworld as it exists today.You go ahead.The reality is that none of these ideasthat I'm sharing are anything new.All this stuff is out there and it'seither in the publicdomain or you can buy a copyfor 15 bucks.It's the timing though.The timing of hearing atthe right moment is a big ...Yes.Yeah.I think that there's a lot of businesspeople out there orpeople that are interested inbusiness who maybe aren'tready to hear a certain message.Every time they're confronted with it, itjust passes through them.You had lived enough experiences torealize, "Hey, this istough or this isn't working.This is frustrating."Then I said that thing in front of youand you're like, "Oh, this is the thing."Well, yeah, and you probably had heard itbefore, but it's allabout the right time.Yeah.You get that all the time.It's funny that I waspretty like, well, I guess late.I don't know.I was later to the game of the correctfunctions of a business andhow you should be thinkingabout it and this built to sell model andall that stuffbecause I started a businessyoung and just essentially worked offwhatever natural talent Ihad and then that quicklybecame not enough.I didn't understand.It's funny, it's same as anything.If your compass is just slightly off, youfeel like you're goingin the right direction,but then you end up super far away.It's like that stuff just can zoom by youand right in front of your face and untilsomething like your experience.You probably went further than mostbecause one of yourstrengths is communicating andtalking to people andbuilding relationships.That covers a lot of other gaps.I'll add that, and I think I may havesaid this maybe not on thepodcast, but what happenedwas that I was able to get in the rightrooms and get thingsfarther than maybe most, butthen the execution to follow it and thesystems to follow it and tokeep multiple things goingat the same time just crumbled.Just crumbled in.Then you just think thatyou're really bad at...You just accept that.You think of the old school owners thathave just trudgedthrough and figured out a waythat they do things.Now we're having to have conversationswith that owner as thebig transition is happeningwith all the businesses having to makesome sort of transition,whether it's sell or whatever.There's a lot of that emotionalattachment to the waythat they built things.Sometimes I don't think there's enoughcredit given for luckbecause I know a bunch of businessowners right now that are in their 70swho've never had these epiphanies at all.They've just been lucky enough to hirethe right assistant orperson that they are ableto delegate slash abdicate things to.That person is incredibly talented andmanages to pull it off orimplement systems of theirown.This business owner nowbelieves that business is easy.You just need theright or the right people.Then if they lose that person, then theyhire the next person.They can't understand why the next personmaybe can't do what the other person did.They really have no idea of what theother person hadorchestrated behind the curtainkind of thing.I see that a lot.I would say, and I'd love to hear both ofyour opinions on this, that I don't thinkthat people realize that that's whatthey're buying with thefranchise a lot of the time.Some franchises.Yes, some franchises.It's like to buy "a business in a box,"like a McDonald's orsomething along those linesthat is fantastic training, all the tech,all that kind of stuff.I'm curious how many people reallyunderstand the differencebetween starting somethingfrom scratch, making all those processesup, and then when youpurchase a McDonald's, youget that stuff.I wonder how many peoplerealize that from the beginning.It's funny that you mention franchisesbecause one of my books thatcame out in 2014 was calledFranchise Warnings.One of the things that I put in there,because when I was abroker, I resold a couple offranchises.One of the lessons that I learned is whatyou just said about franchises having allthe systems and processes and everythingput together, is that's what they like totell you, but there are franchises outthere that are really poor at it.They actually don'thave it all put together.I've known franchisees who boughtfranchises, did not getanything that they expected inthe way of operating aids, materials,systems, etc., and havehad to pull other franchiseesto try to figure out howthey were doing things.The other franchisees turned out to be abetter resource thanthe actual franchisor.One of the things that I warn peopleabout is don't claim tohave these systems, go seethem.I tell the story of one guy I know out ofHalifax who went toToronto to a head officeand he was like, "Where'syour operations manual?"They showed him a book and they said, "Wecan't let you see ituntil you sign on andeverything."It turned out that the book was aworkplace health and safetything that was put togetherby a consultant that was all abouthandling chemicals and stuff, but itwasn't an operationsmanual at all.It didn't have what you would expect tofind in that McDonald'soperating manual, whichI've never seen, but apparently coverseverything, from how to makethe burgers to how to sponsorthe local baseball team.Once you've seen the goodand the bad, it's fascinating.I asked some really great questions forpeople who are buyinginto or have a franchise.What kind of franchise is it?In my first trade, I was a chef and Iworked overseas inBelgium for an Irish hotel chainthat was in a bunch of places, becauseIrish hotels and bars arepretty much all over theworld.I walked in and there was a three-inchbinder and tests I hadto take for the pouring ofGuinness and a second one for Stella.Then I come back and I work himself hereand I was like, "I'mlucky if I got shown wherethe bar was."If you're going to scale the way an Irishpub does to take overthe world, you need tobe kind of happy, because it looks supercasual, but there's a lot under the hood.Over in Ireland and the UK, a lot ofthose local quaintneighborhood pubs are actuallyowned by big companies.They are now, yeah, for sure.They've got to have it systematizedinstead of just havingthe owner and their familykind of watching over everything.Have you ever heard ofthe book I've been reading?It's the third or fourth time I've readit, but The Unreasonable Hospitality?No.It takes this a little bit further and itcomes from TheHospitality Customer ServiceSite.It's written by somebody who's a verysuccessful New Yorkrestaurateur, but the entire bookis extending the principles ofunreasonable hospitality to any sector.The idea is that when you truly invest inthose small moments in delight to be ableto take advantage of luck and have thebuy-in of your team, butyou can be so over-the-topprocess-driven so that these little micromoments happen thateverybody thinks are bychance.It's just really great.I read a book along a similar conceptfrom a guy who used to work at Disney.They're in this category too where theykind ofinstitutionalize the unexpected littlemoment that creates memories.It's one of the big hotel chains too thatin one of these big international brandsthat has a policy about people having acertain spending authority.The Ritz Carlton always did because Iworked for them for a while.Even as a reservations agency, I was ableto make those calls.There's a famous story about a littlegirl who lost herstuffed animal or something ata New York City hotel.No, I don't know.The staff found it, butthey didn't just send it back.Everyone went out and bought at the timea disposable camera.They went around the hotel to the kitchenand the dining roomand they went and touredall the different places in the hotel andtook photos and had them developed.Then sent the animal back to the childwith these photossaying, "The reason you missedyour teddy or whatever was because he wasout touring the hotelwhen you guys left."How incredible is that?Are those people ever going to goanywhere else when they visit the city?Never.That's the place they're going forever.No.I love that stuff.I love that you can build it that doesn'trest on a couple heroicor well-built charismaticpeople.Levi, you know this.I'm not sure if I mentioned this to youbefore, David, when wefirst got together, but myparents ran a Burger Kingfor 22 years here in Miramish.They turned thatrestaurant into a family restaurant.They hung my grandmother's paintings andwent against thegrain on a lot of things.The owners were thereseven days a week for 22 years.They ended up making the top5% of Burger Kings in the world.People went there for supper.People went there for breakfast.Families would go after church.It was a thing.It was just fascinating.Looking back now, it wasnormal when I was a kid.Then now I'm looking at itlike, "Wow, this is very odd."I would buy a Burger King so that Ididn't need to be there.That was the way my grandfather andparents wanted to be.They just wanted the excellence.Everything they did,they wanted to do well.I think we've said it afew times on different chats.I know I've told you, David, but we'reactively looking for acquisitions.We're trying to-Well, I've been listening to your showand I've been hearingyou talk about it and someof the other things that some of theother guests have said too.It's interesting for me to listen to.I'm happy to see if I canhelp you here during the call.It's been exciting.We've made the decision.We're not rushing into it.We're busy.Then we have criteria.We know what we'relooking for and not looking for.We have gone down a due diligence paththat isn't going tohappen and we've learned fromthat and that was exciting.I actually wrote, I don't know, again, Ithink I got this fromyou and there's probably astory behind it, but be careful we don'tbuy ourselves a job, which made me think,Colby, when you said it.Some businesses, you buy them but youhave to operate them.That is one of the criteria.We're not looking to buy jobs.It was you, I think.It depends who the buyer is and itdepends what the buyer wants.It's funny, I was actually writingsomething today about themarket for jobs and how it'sdifferent than the market for businessesbecause there is a market for jobs.There are people, that guy, that tradesperson who's from theMaritimes and went out to Albertaand now he wants to come back but wantsto buy something that he'sgoing to operate himself.He's going to buy one of those businessesthat you describe as ajob and that's exactlywhat he wants.Now, is he going to paya lot of money for that?No because it's not worth a lot.It's going to be alower ticket transaction.The seller is, if their expectations arenot set correctly, maymiss the opportunity tosell that thing.I'm sure we'll get into this today but alot of small businessesdon't sell because thesellers have completely unrealisticexpectations of whattheir business might be worth.There's a definite shortage of goodadvice out there for peoplethat have small businessesthat might want to sell them.That's part of what I do inmy business is help people out.You just mentioned something earlierabout how the brokerageworld for businesses feelslike the real estate world.I know that in the real estate worldspecifically right now is like afterCOVID, they're saying,"Well, your house is, you put it up for$750,000 and it's inreality worth $350,000."That must be, I'm assuming that similarkind of conversationhappens because the brokeris trying to get the most out of the dealas well if I'm not mistaken.Here are the problems.You've got this idea that you want tohave the broker and theseller's interests alignedand the seller's interest is presumed tobe to sell the businessfor the highest price.This is where the notion that acommission-basedsystem is what is effective.What that then does is it creates anincentive for brokers to tryto put the highest possibleprice on a business.And this might be like,"Yeah, that makes sense."But businesses are always transacted at aprice that makes senseas a function of theircash flow.There are a lot of reallyeducated buyers out there.There's people that watch my YouTubechannel or there's peoplethat learn how to do themath.Here's the problem if you put a businessup for sale that's atan unrealistically highasking price is that the people who areknowledgeable buyers thathave down payment money, goodcredit scores, industry experience andare familiar with theprocess and have been educatingthemselves on how to buy a business,they'll see thatoverpriced business and they'll say,"That person's crazy."And they won't engage.The problem for that seller because theythink it's like sellinga house where I can putit up for a high price and then if peopleoffer me less, I'lljust pull my price downover time.They won't meet the qualified buyer, butwho they will meet isother people who also don'tknow what they're doing.They'll meet that buyer whodoesn't know what they're doing.The buyer will meet with them, look atthe business, getexcited, ask for a bunch ofinformation, then they'll make an offerand it might even be a full price offer.Now the seller thinks that they're areally smart businessperson because they got someonewho agreed to the price they wanted.Then the buyer goes to the banker and thebanker shows them howit doesn't cash flowand they won't do the loan.But by this point,four months have gone by.The seller now thinks that it's realisticto sell the businessbecause they convincedone person to offer that.Now they think there's a problem with thebank or the borrowerdidn't have a good enoughcredit or something.Then they keep going, trying to findsomeone to pay thisoutsized price and they just wastetime.One of the ultimate truths about sellinga small business isthat the perception of therisks involved in the deal from thebuyer's point of view isalways going to be very differentfrom the seller who knows the risks andhas lived with themfor a long time and knowshow to manage them.The seller also usually has a muchstronger balance sheetbecause if it's a good profitablecash flowing business, they've paid downtheir debts over time,they accumulated other assets.If there's some kind of hiccup in themarket, they can evenmaybe put money back in if theyhave to to help the business.The buyer though isgoing to buy the business.They're going to applymaximum leverage to it.So they're going to end up with a veryweak balance sheet themoment they do the deal.And now everything has towork out just perfectly.And sellers often don't get this.The biggest threat to sellers trying tosell a business is thatthey have a lack of empathy.And when I talk with business owners, Iwill ask them questionsabout their customers.I will say, how many of you spend timethinking about yourcustomers, what your customerswant, what your customers can afford, howyour customers aregoing to buy your product?And everyone's hand goes up.To be successful in business, you have toconsider your customer.But for some reason, when people thinkabout selling theirbusiness, they become entirelyself-centered.They say, oh, I want a million dollarsbecause I want a condo inFlorida and I want an RVat Grand Lake and I want this and I wantthis and I want this.And they never once actually sit down andthink, if I was abuyer, how would I buy mybusiness?What kind of moneywould I have to put down?How much would I have to borrow?What would the payment be?And then look at your own business andsay, would I be able to afford that?Like it's incredible thatthey don't do this, right?And so this is an exercise that I oftentake sellers through.And I actually had lunch with a guy theother day who I'veknown for years and he said,I'm thinking about selling my businessand I want to get anidea of what it's worth.And I said, why don't we go have lunchand bring your financial statement?So I looked at his income statement.We did some quick math to determine whatwe call seller'sdiscretionary earnings, whichis kind of a level of cash flow we usewhen we look at businesses that are sold.And then I said, Dale, whatdo you want for your business?And he told me and I said, okay.I said, if someone paid you that amountand they had to borrowthree quarters of it, whatdo you think the payment would be?So I whipped out my phone and we lookedup an online loancalculator and we put it overseven years, which is like pretty muchwhat you can get for abusiness acquisition loanfor amortization.And I said, if you went out today andborrowed that amount ofmoney, this is what the paymentwould be.Could you make thispayment today in your business?And he was like, no, that strangled me.Like yeah, I know.So why would somebody volunteer for this?Do you think someone'sgoing to volunteer to do that?And so people are buying the businessbecause they want to avoidthe risk of starting somethingfrom scratch because they know that it'shard to start a business.You got to find enoughcustomers, all that kind of stuff.So if you buy a business, you're going toget those customers.But if you overpay for a business, youget another different kindof risk, which is financingrisk, where all of a sudden now thebusiness has to functionperfectly or even worse, it'sgot to grow in order foryou to afford the payments.So not having enoughcustomers is the risk of a startup.If you over leverage and you pay too muchfor a business, younow have the risk of ifyou lose a customer, youcan't make the payment.It's exactly the same risk.It's just the inverse side of it.But what's worse is when you start abusiness, you're usuallyputting in some capital, maybeborrow against your credit cards orsomething, and that's what you risk.If your business fails, you lose that.But if you buy a business and you borrowhundreds of thousands ofdollars from the bank, well,your personal liability and risk in thedeal is just magnifiedseveral fold for most people.So it's actually a riskier position.And so for somebody to actually do thedeal, not only do theyhave to be comfortable thatthe business will cash flow, they'll beable to service theirdebt, but there has to besomething in for themfor taking the risk.So that buyer who's going to buy thebusiness and a lot of thetimes a buyer will be someonewho will take over the day-to-dayoperations that the seller is doing.And so that person who's going to dothat, they have to beable to take home a salaryfor their time, commensurate with whatthe market wage is for that job.So if you're going to take over thecorner sandwich shop,the buyer is going to havea lower expectation of salary than ifyou're taking over an engineering firm.Take over an engineering firm, youprobably deserve$150,000 or $200,000 salary.You take over the sandwich shop, you'reprobably in line for a$35,000 or $40,000 salary.But then beyond the salary, they have toservice the debt, theyhave to pay the taxes, theyhave to take care of capex because we addback depreciation andamortization when wecalculate this.So we have to have an allowance formachinery to be replaced.And then there's got to be some kind ofreturn on the cash you put into the deal.So when you start to look at all thosemouths that have to befed out of the cash flow ofthe business, you realize, hey, it's notgoing to make sensefor someone to do this.And so one of the things that I try to dowhen I'm working with sellers is I try toshow them the deal fromthe buyer's point of view.If they are willing to accept that, thenthey either say one of two things.They either say, well, if I just kept thebusiness, I'd havethe same money over thenext couple of years, which is true.Or they'll say, if that's all I can get,I don't want to sellit, which is also true.And it brings me back to the reality thatbusinesses are alwaysworth far more to theirsellers and owners thanthey are to the buyers.And then people will then say, but hey,wait a minute, how do I then cash out?Where's the big opportunity?I've always been told my whole life thatif I build this greatbusiness, I'm going tobe able to sell it in anexit and get all this money.And the problem is that people have beenlistening to contentthat is not for them.And when you get into the world of theinternet and you'relistening to conversations aboutbuying and selling businesses, there areconversations about main streetbusinesses, which is whereI live.And main street means cash flows under ahalf a million a year,which is like 99% of businessesare in the main street category.And then there's the middle market, andthen there's the big ones.And then there's the weird conversationsthat come out ofSilicon Valley about internetstuff.And none of those other conversationsapply to main street businesses.And so people will listen to this contentabout so and so whosold their business forseven times cashflow or whatever.And I say to these people, that clearlydoes not in any way apply to you.The only people who can afford to do thatdeal are people thatare private equity backedwith a super low cost of capital becausethey've collected investment funds from abunch of wealthy people and they'relooking for this dealthat they're going to roll upwith other companies.Like that's not your business.And so a lot of people when they learnthe truth will say,well, I can't afford to sellmy business for that because I need moremoney to retire, or Ineed this or I need that.So who then ends up being the sellers?There has to be a pressing personalconcern on the part of the seller.And there's basically five categories.There's what I call the mental basket,which is burnout, boredom, and fatigue.So these are peoplewho are just tired of it.They don't want anything to do with it.And when their cell phone rings, I alwaysjoke with these people when they say, I'mjust getting tired of it.I'll say, when your cell phone rings, whoare you most afraid that it might be?Employees or customers?And when they chuckle uncomfortably, Iknow that they really dosuffer from this set ofcircumstances.I'm putting myself into2016 at the end of a business.It's like I had that moment.Yeah.Right?Your stomach tightens up and you're like,oh, who do I have to talk to?So burnout, boredom, and fatigue.And then there's the other ones that areprobably ones you could guess.Divorce, poor health, the need torelocate, and retirement.So divorce and poorhealth, you get it, right?You have the terrible personalcircumstance, you've gotto get out of your business.The need to relocate is becoming a biggerand bigger item,especially when we have moreand more women who are owning businesses.Because what will happen is you get thismarried couple and one ofthem will own a business,the other will be a very successfulemployed person with acareer that may be more lucrativethan the business.And that career person part of the couplewill get transferredto Calgary or Vancouveror something.The other spouse owns a business.Well, it's going up for sale, right?Because they want to stay together.And so I've unfortunately worked withsome people where they'vehad to split their familyfor a year as they work through trying todispose of the businesswhile the other personhas to go report towork in the other city.And then retirement's the last one.And so of those list of five items, onlyone of them is aplanned thing, retirement.The other four things happened to us.It should be a planned thing.Well, it should be a planned thing.The other danger though, I'll tell youLevi, is that, and I'mincreasingly having theseconversations with people in thefinancial planningcommunity, because there's a huge,huge blind spotamongst financial planners.And I'm having more and moreconversations about this with peoplewhere they'll sit downwith someone who's 30 and they'll make aretirement plan and theperson will be a business ownerand they'll say, "Oh, what are you goingto sell your business for?"That's 65 in 35 years' time.And the person willsay, "Oh, I don't know.It's going to be worthlike a million dollars."And they'll put it in the plan.And then at 55, they're not even checkingto validate whetherit's a sellable businessor it could be sold or what have you.And so that's a conversation of havingmore and more with people.And so people will get caught off guard.They won't be able to afford to retire orthey'll need a certainamount from the sale.And when they realize theycan't get it, they can't retire.So they end up working longer.So I feel like we just got tough love,lots of clear facts, which is great.And I'd love to doubledown and give you the knife.Let's cut down ourassumptions even further.So all that I think we knew is true.I love the categories.I hadn't quitethought it through that way.We have an assumption that I'd love youto tell us if we'reabsolutely foolish or not.And we talk to a lot of people.So somebody's in this category, but youhave a broader perspective on this.Our assumption is everything else yousaid holds true, butthere is going to be, anda lot of people call it the gray tsunami,but it's not limited to gray hair or age.But I think it's somewhere between themental basket andretirement or aging out, lookingfor succession, that there's going to bea large pool ofbusinesses that want to sell,that we could purchase that we're doingmore than solving a financial problem.I think that's our sweet spot is thatwe're really well set upto buy a business that'snot really ready for sale.And price is one thing.And I think we want to make sure it'sfair because a win-winwould really help everythingin the transition.But more so, it would have to be veryflexible terms for fair price.And so we're looking for the peoplelooking to sell forlegacy or the people that were,we're going to cause that business andthe employees and thevendors and the customersto still have anindependent business to go to.That should be in our value for us to bea winning purchaserbecause it won't be strictlyon dollars.We're just not approaching it that way.And I'll get cold, but I'm looking forlike, are we out to lunch?Because we talk topeople and they say it.But then I go to the brokers and I thinkthe stuff on themarketplace, none of that exists.And a lot of people say itis, but we're not seeing it.So now we're finding otherways to go to that gray market.And just to make sure that this is saidout loud, we don't want to buy adistressed business.Right.Yeah.You want to buy one that makes money.Yeah.Yes.And that like everythingthat they're quote unquote.But we can build the operations manual.That's what we're set up to do.Yeah.Everything that, because we are havingthese conversationsmore and even if it's not abusiness for sale, but we're looking,we're always workingwith different businesses,we kind of have this in the back of ourhead of like, we might approach this.It's like the things that we'respecifically good at isvery helpful in the majority ofconversations that we're having.The systems and the HR and all that kindof change and culture and all that stuff.Yeah.Okay.So do you guys have money available tomake a down payment ifyou find the right business?So we have some capital available anddepending on the type ofbusiness we've started discussingwhat financial partnership looked like.Because we have a lot of our network who,they don't want to beoperational, but they'dlove to participatein this type of thing.So we're not without ability, but we'renot sitting on a large chest.It wouldn't come, itwouldn't be a cash deal for sure.So let me give you sort of the landscapeof what is happening in this market.And then I can better answer yourquestion about what youwant to do and if it's feasibleor not.So right now there are almost 20different online gurus whoare currently offering $10,000courses on how to buy abusiness with no money.And this is right out of the playbook ofthe learn how to buyreal estate with no moneyin 1988 at the Toronto Airport HiltonHotel conference room.And so there are every weekend moregraduates of these programswho've been taught tacticsand tricks on how to convince someone tosell a business on100% seller financing orwith some other kind of trick.I'm going to take over your business andsomehow refinance all thestuff to give you a downpayment even though I don't own it yet.Like all kinds of crazy stuff.And so when a broker puts a business upfor sale that has adecent cash flow, they willget inundated with these people who areall saying the same things.Like I'm looking for a creative deal.It's got to be a motivated seller who hasan interest in legacy,blah, blah, blah, blah.And so the words you said, I mean, wesound like one of those dicks, right?There's a lot of people saying that samekind of stuff, right?And so are those things possible?Is it possible to buy a good cash flowingbusiness with verylittle money using thingslike getting the seller to finance a bigchunk of it or gettingthe seller to agree to letyou work on the business beforehand?It is possible.But here are the challenges and I'll giveyou some case studiesfrom some of my clients.So I've got a client in California who'sin a service industry.They do translating services and theyhave a lot of governmentwork that they do in hospitalsand things like that.And he has bought nowfour different businesses.The first one that hebought was his parents business.And so it was sold on good terms, right?As you might expect.He bought it with a sibling and then theywent out and tried tobuy another businessand they did it using a bank loan, an SBAloan, because they'rein the United States.So they were able to get a good amount offinancing for that second acquisition.A couple of years later, they went anddid their third acquisition.But by this point, they've got now atrack record of operatingthese two companies together.And so when they went to the thirdoperator who wanted tosell, they said, you know what,we can borrow money for this, or youcould lend us the moneyand we'll give you a higherrate of interest than you'd be able toget if you took themoney and invested it.And here are the financial statementsfrom our first twocompanies that are very muchlike yours.And you can see thatwe're capable operators.And that third person waswilling to do that deal.So they put like 20% down, the sellercarried a note for the balance, right?And then they wentand did the fourth deal.And it was similar to this.They had to put more down, but the sellerwas willing to financethe difference becausethey now they've gotthis track record, right?They're not newbies,they're not strangers.They actually have ademonstrable track record.It's very difficult.It would be extremely difficult for mewho's never run anybusiness related to translationto go and make that same kind ofconvincing argument to oneof those business owners,right?Because I don't have the track record.So you guys as operators in the businessservices, businessguidance, organizing kind of space,if you found a similar business to yours,you'd probably have areally strong opportunityto make that kind of deal because youcould show them that youare capable of doing thiskind of business alreadybecause you're executing, right?And so that's one aspect of this.The other thing is that you mentioned agood profitable business.There are always lots of buyers for goodprofitable businesses.So even though your offer, even thoughyou might see anasking price of 500,000, youmight think, "Hey, we want to do all thisstuff, like to get theseller to help us buythis business.We're going to offer 525.We're going to offer more than asking toget that person's attention."But there are probably other people withgreater resources that aremaking much less demandingoffers on that business because it'sattracting all kinds of buyers.So you're competing against other buyersand that's the job of a business broker.The job of a business broker is to createa competitiveenvironment so that the sellergets the best possibleopportunity that they can get.And that's literally the conversation Iused to have when I wasa business broker is Iwould say, "Yes, my commission's a lot ofmoney, but I'm goingto bring multiple buyersthat will compete against each other andyou'll get more for yourbusiness and that's goingto be how I earned my commission."And so when you're going down the road ofusing the brokerchannel to try to find oneof these businesses, you just have to beaware that thebusinesses are likely to bebetter prepared because if it's a goodqualified broker, they'vedone some work with theirclient to get everything ready.So you should have better informationavailable and all that kind of stuff.The broker has probably given them anidea of what theirbusiness can sell for and thenthis is really where it's important.So if it's a qualified broker that hadone of those tough loveconversations with them,then they're going to be ready andprepared to accept areasonable offer because theyknow what it's really worth.If it's a less than qualified broker,then the person'sexpectations are going to beall out of whack.And I'll give you an example.So one of the ways that we commonly valuesmall businesses is thatwe look at this seller'sdiscretionary earnings cashflow that Italked about earlier and wefind out what other peoplehave paid for that kind of business as amultiple of that cashflow.So you could find that other people havepaid 2.3 times cashflow.So what a broker will do is they'll justsay, "Oh, well, here's the cashflow.Here's the multiplier.I'll multiply it out.Here's what you get."And then you talk with that broker andyou look at thebusiness and you realize thatthis business has accounts receivable andaccounts payable and sort of some work inprogress and you say, "Hmm, there's acertain working capitalrequired in this business."And you ask the broker, "What exactly isincluded in that price that you gave us?Like how much inventory comes with it?Are we taking over current accounts likereceivables and payables?"And then you sometimes get a blank stareback because you'redealing with someone who hasgot no concept of these things, butthey've somehow managed to convincesomeone that they'rea qualified business brokerand they can represent them.And so then they start to realize, "Oh mygoodness, what's included?"And then they say, "Well, the sellersays, "Well, I'm notgoing to include my accountsreceivable.That's my money for work I already did."And then all of a sudden you end up inthis position where thebroker and the seller arenow expecting to sell the business for acertain price and then they want to takeout the receivables.They want to take out the cash.And you as a buyer aresaying, "Wait a minute.That means I got to put money in togrease the wheels of thisoperation because there'sa certain operating capital requirement."And the thing that's missing is that thebroker doesn't understanda concept called net normalposition and working capital.So this is another area where deals justgo straight in the ditchand the seller now thinksthat their business is worth a certainmultiple of cash flowplus they get to keep all ofthe grease out of ... They're going totake the gas out of thecar before they sell itto you kind of thing.And it's just a lot more complex thanwhat some people are ledto believe when they reada couple of books on the topic or watchsome YouTube videos on the topic.And without that proper setting ofexpectations, like I've had theseconversations with sellerswhere we'll look at their business, we'lllook at the cashflow, we'll look at theiroperating position and I'llshow them all these things.And they'll look at me andsay, "Well, wait a minute.If my business can only be sold for thisamount of money, but Ihave to leave the operatingcapital in it and my equipment is worththis and thereceivables in cash are literallyworth receivables in cash, it means thatI'm selling thebusiness for what's in it."And I'll say, "Yeah."I'll say, "What you've done here isyou've collected a seriesof assets that are workingtogether to produce the cash flow, whichactually doesn't warrant any value beyondthe value of the assets.Your business has no goodwill."And then their minds explode.They're like, "Wait a minute.I've been working for 15 years and you'retelling me thebusiness has no value beyondwhat's in it?"I'm like, "Yeah, but it's probably betterto sell than to liquidate.I mean, don't you want to help youremployees keep their jobs?"We're having those conversations now justbecause a lot of thepeople coming to us arelooking on the journey towardsbeing able to sell something.Yeah, I totally get it.So here are some stats.BizBuySell.com is a big website in the USfor this kind of thing.They put out a quarterly report onstatistics about theactivity on their marketplace.80% of the businesseslisted for sale don't sell.80%?80% don't sell.There's another stat which has no bearingin any real measurable way.This is just put together from my ownexperience and from what is visible.I'll talk about visibility if you want.But only about one in five businessesthat change handsactually go through any kindof intermediary or end upon one of those websites.So a lot of businesses are sold.Think of a Ford dealer.If a Ford dealer wants to retire and selltheir business, who's the likely buyer?It's another Ford dealer.And they already know those guys.So why are they calling a broker?So a lot of businesses, whether it's afamily transaction orit's someone you know throughyour industry association like that Fordexample, people aremeeting each other and they'redoing deals and they're going and gettinga lawyer and stuff tohelp put the paperworktogether and they're just doing thesedeals without an intermediary.And so I say to people a lot that if youare strictly looking atthese websites and brokers,you're only looking at asmall part of the market.And when somebody does put a business upfor sale on thosewebsites that is properlypriced for the cash flow, it's gone inlike a week becausethere's so many people on therewaiting for that.And when it appears, they jump on itbecause when we helpsellers, we help people realizewhat their business is worth and peopleonly decide to sell it ifthey're really motivated.And so when we put it upthere, it's priced right.It makes sense.We'll get 120 inquiries in five days.We'll turn it off and work through thoseinquiries and sort out those people.And usually there's someone in therewho's going to do thedeal and then it's done.So as far as a buyer's point of view,like if you want to haveany degree of leverage,there's only one point of leverage indeal making for buyersand that's a willingnessto not do a deal, right?Where you have to say, you know, oh,that's what you want.That doesn't work for me.I'm going to do that.I'm going to step back.That's the only thing you can do as abuyer to try to assertyour position in negotiation.And so if there's five other buyers, manyof others, many of whommay not be as informedas you and were willing to do a dumbdeal, then that's theproblem that they'll comein and do the dumb deal and not realizeuntil two years later,they overpaid for the businessor something else, right?So you really have to find theopportunities and create deal flow.I've interviewed on my podcast beforepeople from the private equity world,these are professionalbusiness buyers and they'll say how theyexamine 500 businessesin a year to buy one.And so you've got to create a deal flowpipeline for yourself.And that usually means identifying anindustry and then it'sjust a sales process, right?So I always use the example of like themachine shop with fiveor 10 employees, right?So if you say, I want to buy a machineshop somewhere in themaritimes with five to 10employees, great.All you need now is yellowpages.ca andyou can find all the machine shops.They're all listed together.And then you have to figure out who'syellow pages mentioned as five.It's great.I know.You need to spot them back.You've got all the machine shops they'relisted and then youactually have to do the workof sorting them out, which what, youknow, oh, oh, that's thelocal branch of like Apexmachine shop.Well, that's not a little business.That's a bigger business, right?I'm not going to call on them, but youknow, then this one islike Joe's machining.You're like, oh, that'sprobably one of my targets.So you have to sort through the list,create your suspect listand then create relationshipswith those people.And most of them are not going to beinterested in selling their business.But the problem in the world of buyingand selling businessesis a visibility issue.You know, it's easy for us to identifybusinesses becausebusinesses want to be seen.They actually advertise.But it's hard for a business owner tolook out at a crowd ofpeople and identify whomight want to buy a business.That's why the businessbrokerage industry exists.My buddy Rick bought a seafood restaurantand he met the ownerbecause he was a restaurantexpert.He's been consulting inthat field for a long time.He met the business owner as aconsultant, took stock ofthe situation, said, you know,those are your options, which are limitedbecause things have gotten really bad.And he ended up becoming the owner.As soon as he became the owner within afew months, two otherseafood restaurant ownersapproached him about buying their placesbecause he unwittingly orunknowingly, he solved thevisibility problem.He became known in that industry as theguy who just bought therestaurant and other peoplewho were thinking of selling were like,oh, actually, I'll talk to him.So if you've identified the target, likethe machine shopexample, and you go out andyou make the relationships, then all youhave to do is waitfor something to happen.And I think that's kind of a directionfor us is using our networks currently.Not as explicitly as we're talking aboutin this particularmedium, but a lot of our outsidenetwork engagements werejust laying the ground.It was like, this is something we'relooking at because we'rein a position where we'reexcited but not urgent.We've made the decision and it's alearning journey for us as well.But there's no pressure and there'sactually protectionbecause the three of us have toall make the decision.And so no one person'spassion, we'll get it across the line.Yeah.But it does kind of make us, well, I knowfor me, and I'm surethis for all of us, islike I'm looking at everythingdifferently now that we're considering,which is interesting.I'm noticing businesses Iwouldn't have noticed otherwise.It's been really kind of amazing.I think it was one of your things aboutthe boring business.And I just like that.And also the businesses Ijust don't even think about.Smallest widgets and services.It's like, oh yeah,that's probably a thing.I think earlier, even like two years agoand before that, Iwould always look at thingsthat were strictly my passion.It's like how do you get involved withcoffee, cycling, whatever it might be?But now I'm thinking, well, why don't Ijust enjoy those thingsfor what they are and gofind a functioning business rather thanstarting this new thing, right?Do you know who John Taffer is?He's the bar rescue.Oh yes, yes, yes, yes.So I watched an article, no, it was avideo interview with himand he was saying the biggestproblem that people get into is when theythink they want to own a restaurant.He said, because theylike to go to restaurants.And he said, it's far cheaper to own arestaurant than it isto actually be the owner.He says, here's what you do.He says, you start goingthere four or five nights a week.You start tipping everyone 20bucks every time you show up.You tip the owner when you see the owner.Everyone looksforward to seeing you there.Everyone will do whatever you say.You can show up there on Valentine's Daywith no reservation.They will kick someone outof the restaurant for you.You will own the restaurant.You will own the bar.You will be able to enjoy everythingthere is about thatplace and you will not haveto ever make the payroll.Yeah.Right?And he's like, if that's the lifestyleyou're going for, do that.Don't buy the thing becausethat'll cost you like your life.It'll suck you dry.Yeah.And the perfect thing.I did my business degree to open arestaurant and that idealasted three and a half months.Yeah.I think the idea that the romantic ideaof sitting outside yourown cafe and taking phonecalls, that's literallywhere that dream stops.There is a bookstore.I think it's in Virginia that is anAirbnb that you can stay in.So downstairs is abookstore, upstairs is the apartment.And part of renting the apartment is youget to be the bookstore owner.And there's like $20 in change in thetill and they justtell you to do your best.And they let you sell books or buy booksor whatever you want to do.And every weekend there's a new owner.It's all these people working throughtheir fantasies andbeing bookstore owners.Their fantasies.Because the bookstore itself, I don'tthink made any money.So someone had this bright idea of justturning it into an experience.Yeah.It's like an escape room for work.Your comment earlier about all the thingsthat when we walkinto any sort of businessand think about what we would fix or whatwe should fix and thatbecoming such a distractionfor what you should actually be focusingon, I think is like amaturity step in the directionof being a bit more ready to look atpurchasing a business.But it's funny how that'schanged so drastically for me.I definitely think there's value inknowing an industry because the idealbusiness acquisitionis one in which there's a positive cashflow and the business hasproblems that you recognizebut you have an idea how to fix.Because it's in fixing those problems andimproving the cash flowthat you get an appreciationin the value of the asset.And it becomes worth more to you,produces more of a cash flow.One of the questions that I will oftenask people who find abusiness and they get excitedabout it, someone here mentioned passion.I use a term that a guy named Ted Leberetshared with me called buyer fever.It's kind of like a conditioned people.It's a conditioned people fall under.And so you find the plumbing business andyou think it's such a great deal.One of the questions I will always ask iswhy has no otherplumbing outfit bought this?What is it that another plumber might seehere that we are not seeing?In an industry like plumbing, forexample, you've got labor shortages.Everyone's talking aboutthe lack of trades people.And so a plumber might look at thatbusiness and see like eightpeople and they might knowthat there's so much work that everyonewho's in the industry is being maxed out.So why would you pay anything for thatbusiness if all you had todo was find some plumbersand put a phone number out there, you'dend up doing business.That's the kind of the perception we wantto pull out of peopleis what does someonein the industry see that you're not andwhat might be different here.And that brings up another question.I'd love to hear your opinion on takingthis a little further.The option of purchasing a business orstarting something brandnew, I'd love to hear yourthoughts around that.Builder by?I published a book onthat at the end of 2024.I have it in my bag.Okay.Yeah.So, I mean, I'm a big fan of buyingbecause you avoid thestartup risk, as I said before.And I think it makes a lot of sense.At the same time, though, when we'relooking at buying, one ofthe other questions I askpeople is what wouldit cost to replicate?Yeah.Like if we look at this business and allwe're getting is a truckand four employees, I thinkand you could put that together.Like here's a ridiculousexample, I said to a guy.He was looking at a plumbing and HVACbusiness in the Statesand there were like five orsix employees and a couple of vehiclesand there was a certaincash flow there and theseller wanted like six or seven hundredthousand for the businessand felt that the cash flowjustified that.And I asked this ridiculous question.I said, what if you hired fourtradespeople and youadvertise that you do plumbing forfree?You just people have to pay for the partsand we added up thesalaries and we multipliedby two years.We did plumbing for free for two years.We could probably become the best knownplumbing outfit in themarket and we would lose likefour hundred thousand dollars payingthese guys over the nexttwo years and then maybewe could start charging for plumbing andeveryone would know usand we will have spent halfdoing this crazy plan than we wouldbuying it from that guy.Love a good story.I'm not ever recommending somebody dothat idea, but I'm justsaying it's a crazy ideathat just shows an extreme example ofwhat you could do andthen it really draws thequestion of can thatbusiness really be worth that much?Now when we got into the weeds on thatbusiness, what wediscovered was that there were twoowners and the broker added back both oftheir salaries tocalculate his cash flow, whichis an error.It's one of the most common errors thatbrokers make when there'smore than one owner in abusiness because they're trying to getback to this seller'sdiscretionary earnings numberand one of the things you do is add backthe salary of an owner,but it's only supposedto be one owner.A lot of brokers who are inexperiencedwill add back all theowners and then this is whythey thought the $700,000 price wasjustified because thecash flow was inflated by oneperson's earnings.When we teased this out and realized it,we're like, "Oh, okay."Really the cash flow ishalf of what they claim.The business is really only worth 300 andthen it immediatelyfits into that exampleI gave.Of course, when those owners found outtheir business is worthhalf as much as they weretold, do you think theywanted to continue selling?What happens is business owners will meetsomeone and businessowners are not expertson selling businesses, right?They're experts at what they do.When they say, "Let's sell the business,"or they get a piece of marketing materialfrom a broker that says, "I can help yousell your business fortop dollar," and they say,"Let's check this out."They meet a broker who either throughinexperience or ignorancemakes a mistake like I describedand tells somebody their business isworth a million dollarswhen it's really only worth400 grand, for example.That person could decide to go to marketbased on the fact they'vebeen told it's a milliondollar business.If you sit down with them and show themthe numbers and explainto them how the businessis only worth 400 grand, it can only eversell for 400 grand,they might logically beable to follow you and theymight accept what you're saying.In their mind, they are a millionaire.In their mind, theyalready have this money.What I've come to learn is that peopleactually have to go throughwhat is akin to a grievingprocess.Yeah, totally.It could take that seller a year or twoto really process thefact that they just lost$600,000, which neverexisted to begin with.They were led to believe they were goingto get a million dollars.This is, I think, a part of this reasonwhy we have thesestatistics about how many businessesdon't sell.There are good businesses that could havesold really quickly.There's an example, I won't identify itspecifically, even thoughit's been long closed, but itwas a dry cleaning place.The business owner engaged a real estateagent to sell it, which isone of the biggest mistakesthat a business owner can do.Real estate agents sell buildings.Businesses are not buildings, but in NewBrunswick and NovaScotia, to be a businessbroker, you need tohave a real estate license.A lot of realtors out there think thatthey are thereforequalified to sell businessesand they're not generally.This business owner called a realtor whoput a sign in front oftheir business and thesign being put in front of their businesskilled the businessright away within a monthbecause people assumed it wasclosed when they saw that sign.I mentioned thevisibility problem earlier.Businesses have to be sold in secretbecause if people thinkthat a business is for sale,they immediately thinkthere's something wrong.Employees think they're going to losetheir job, they might quit.People worry that they're not going toget a warranty or that ifthey sign on for anythingthat requires future delivery.I always use a flower shop example.If I want to buy a bouquet of flowers formy girlfriend, I go in there, I hand them20 bucks and they give me the flowers.I don't care if the business is for sale.I get what I paid for in the moment.If I ask her to marry me and we have toplan a wedding for nextyear, I'm not going tohire that florist because I'm worriedthat they might beclosing or the new owner isn'tgoing to be as good as the current owner.There's just too much risk there.We've got this situation, we've got thissecret that has to bekept of this businessbeing sold.There's so much that goes into it.If that seller isn't properly prepped,their expectations will be out of whack.In the case of the dry cleaner, I knewthat I could have sold that business.The problem with dry cleaning is that ifthey've been there longenough, there's going to beenvironmental concerns and people aregoing to want to drillholes in the ground and allthis kind of thing.I would have advised that guy, you aregoing to have to sellour finance through realestate because if you sell our financethrough real estate, nobank will become involvedand no one will start asking questionsabout phase twoenvironmentals, et cetera, et cetera.If people do start asking questions,they're going to havehuge costs to get all theseengineers out here to do the drilling andall this kind of stuff.If they do find something, the provincewill get involved andyou'll have all of this headache.What ended up happening was no one endedup wanting to do thedeal and the seller, ofcourse, was holding out for a big checkand no one was willingto write the check andnobody was willing to go through theprocess of getting the bank loan.That was an example of a business thatprobably could have beensold in two or three monthsif the person had gone to someone whoknew what they were doing.It's still empty today.You said a lot of things that we couldprobably pull out, but ifyou were to have advice forpeople that are planning or looking orthinking about sellingtheir business, what would yousay to them?You need to have a realistic idea of whatthe business is worthso that you can makea plan for your future, which does notmean waiting until youthink you want to sell andthen initiating the process.You need to know 10 years before you wantto sell if yourbusiness is worth anythingbecause that's going to inform yourretirement strategy.If your business isn't worth anything,how are you going to retire?You're going to have to create adifferent plan, get a financial plan orbuy some investmentsof some kind.You're going to have to have a plan.Other people, the parts of their businessmight be worth something.The business might not be worth anything,but maybe they owntheir building and thatcould hold value that is enduring.They might have trouble selling itdepending on where it is,but you really need to knowwhat are these things worth?What are my options?That means thinking about it in advance.Very few people do that.Very, very few.I would say like one in 10 businessowners are really peoplewho look at their businessas some kind of asset that they'remanaging and taking care of.A lot of people that own a roofingcompany, they consider themselvesroofers, not businesspeople.Yeah, totally.Totally.Yeah, sorry.Go ahead.Well, so they need to havean idea of what it's worth.They also need to have an idea of whatthese deals look like.I mentioned earlier about sellerfinancing and how hard itis to find someone willingto finance the whole deal.The flip side is that almost no deals aredone without somedegree of seller financing,which means that for a lot of sellers whodon't know this, I'lltell you about a restaurantin Kent County.This was back in my broker days.I get a call from a real estate agentwho's trying to sell this restaurant.He says, "I've got someone who wants tobuy this restaurant I'm trying to sell.We want to know where to go for financingbecause my buyers arehaving a hard time."I'm just imagining what's happening withthese people withthis real estate guy whodoesn't have any ideahow to sell a business.I said, "Look, why don't you refer theparties to me and I'llhelp them get the deal doneand whatever commission I charge, I'llsplit with you for referring it to me."Of course, he freaked out.He's like, "I don't know.No, it's my deal.I'm going to do it."Blah, blah, blah, blah.Eventually, the restaurant closed and thebuilding stood thereempty and someone elsebought the buildingand opened a restaurant.All of the value of the existingrestaurant evaporated.I found out later that several people hadtried to make an offer on that restaurantand offered various sorts of paymentarrangements or lease toown deals and all this kind ofstuff and the sellerrejected all of those things.The reason that the seller rejected themall is because the sellerwas under the understandingthat they were going to get an offer forthe business for anamount of money and someonewas going to pay themlike you sell a house.What the real estate agent didn't know isthat it's almostimpossible for anybody toget financing for a restaurant.There are three banks in Canada thatmight finance 50% of the equipment.That's it.If the fridge, the stove, the furnitureare worth 50 grand, youmight be able to get yourselfa $20,000 or $30,000 loan.That's the extent offinancing that's available.$0.10 on the dollars that they gave mewhen I had a commercial kitchen.For financing.If you buy stuff new, you can sometimesget a leasing companyto finance it for you.In that deal, part of preparing theseller would have been toexplain to them what thedeal was going to look like.I would have told that restaurateur,"We're going to sell thisrestaurant, but the likelybuyer is going to be a person who's fromhospitality," which meansthey haven't been earning a lotof money.There's not a lot ofhigh wages in hospitality.They are going to havesome kind of down payment.Maybe it's their tips.Maybe it's going to be aduffel bag full of cash.They're not going to qualify for any debtunless their mom ordad is willing to co-signwith them.You're going to end up having to financemost of this deal andthey probably can't get amortgage on the building.You're going to end up just selling therestaurant and becoming their landlord.After they've got two years of financialstatements under their beltshowing that they're capableoperators, they might then be able to goto get a mortgage tobuy the building from you.They might be able to get a line ofcredit to pay down partof the seller note that youhold or something like that.This process is going to be a multi-yearprocess that is going torequire your participation.Yes, there's risk in that, which meansyou're going to need to bearound keeping an eye on.I sold a bar in Moncton.Bars are notoriouslydifficult to finance.The seller held ahuge note in doing that.It was like 65% of the deal.I coached the seller.I said, "Look, you needto think like a banker.What are you going to need tokeep an eye on this business?"He thought, "Okay."He said, "I want the tax returns.I want weekly and monthly reports.I want a copy of thebank statement every month."They had this computerized bar.This was in the 90s.They had this computerized bar thatmeasured the dispensingof the shots of alcohol.He said, "I want theweekly report from that too."The buyer agreed andstarted to operate the bar.All of this material had to be deliveredevery week, every month.After about three months, the sellercalls the buyer andsays, "Yeah, you got someonestealing from you.Here's how I know."He walked them through the variousreports and said, "Here'show I know that someone'sstealing from you withrespect to the bar reports."That seller, even though they wereselling and collectingmoney, they had to keep aneye on that business almost like theywere territory manager,district manager, somethinglike that.It worked for the buyer because they wereable to get thatoversight and support thatallowed them to catch this problem beforeit grew into something really bad.It all comes out to people.I know a few friends of mine who havebought businesses, andit's been that situation.It was an age, retirement reason.There's nothing better than being able togo back to work andhang out and keep going.It's not the norm, butit is definitely there.Taking this a stepfurther because if someone ...After that, I want to pull us into acompletely different direction.Yeah, that's fine.Taking this a step further, let's assumethat what you just saidis being heard on thispodcast by a business owner.They just got very overwhelmed by themountain that now sits infront of them to figure out.What are some of those first steps, likea list of questions,first steps of like, "Howdo I get more prepared for this?Let's bite size it down for some folks."Sure.I think the very first thing is anexercise in empathy.You have to actually think about it fromthe buyer's point of view.When the buyer ... Thebuyer has to do two things.They have to figure out what is thebusiness worth, how am Igoing to pay for it, and doI really want it?I guess that's three.The amount of cash flow that yourbusiness generates isgoing to determine the value.The industry and what is in your businessis going to determine the terms.If you are a foundation company with abunch of heavy equipmentand trucks and backhoesand stuff, you're going to have moretangible assets in yourbusiness, which is going tomake it easier for someoneto finance with a bank loan.If you're a service business with notmuch in the way ofassets, like your business,like you guys, you got some computers andsome furniture, right?Not even.In a business like that, it's going to beharder for the buyerto get financing froma bank.It means that the terms are more likelygoing to mean that you'regoing to have to financemore of it.The cash flow is number one.The best thing about this is if you wantto sell your businessfor more money, createmore cash flow, which you get to enjoybefore you sell the business, right?This is totally worth your time.Make your business more profitable.That's number one.The second question, will this cash flowcontinue under my stewardship?This is what the buyer's asking becausethey're worried that thegoodwill or the relationshipsor whatever is with the seller themselvesand not with the business.If I'm looking at buying a corner storeand everyone in theneighborhood goes there, butevery time they go there, there's justsome teenage kid workingbehind the counter, right?The owner can change.Nobody's even going to know.That's an example of a business that isextreme where theownership doesn't really matterfor the customers.The flip side of that is a business wherethe owner is the only salesperson and haslong established relationships with thebiggest customers andhas a concentration problemof customers.They've got four customers that represent50% of sales andthey're all good, long-timecustomers with arelationship with the seller.Now buyers might agree that that businessis worth 500 grand,but they're saying, "IfI step into your shoes, how do I knowthose people are going to stick around?"Then that creates abarrier for the buyer.What they want to see is they want to seethings like systems and SOPs and all thatkind of stuff that you guys work on.One of the ways that sellers need to beprepared is that they couldface a deal structure thatmakes them bear the risk of the clientcustomer concentration.I'll give you a quick example of that.I've done deals before, helped buyers dodeals before, where abusiness like that would actuallysell if there's five big clients, theremight be five sellernotes, each for a differentamount of money.All of them amortized over five or sixyears, but each one ofthose notes is tied to aspecific client.If that client disappears, then the noteevaporates so thateffectively the buyer gets a discountafter the fact if one of these importantcustomers goes away.Because what, again, putyourself in the buyer's shoes.In a scenario like that where you've gota business with verylittle in the way of assets,five important clients that make up halfthe revenue and one ofthem disappears, what didthe buyer buy?They're only buying the relationships.The business is a cashflow.That is what someone is acquiring.When you go through that exercise,looking at your ownbusiness, trying to see how abuyer is going to look at it, it can showyou where the problems are.That business owner might say, "Okay,I've got a customer concentration issue."I either need to grow the overall pie sothat those top fivepeople only represent a quarterof my revenue, perhaps,might be a way to solve that.Or I need more big clients.Or I need to change the way Ido business with these people.Maybe I need to have them sign contracts.Or maybe I need to change the way I buildthem or something sothat you can create morecomfort for the buyer.Yeah.Yeah. I love that because we're always talkingabout no, it's alltechnology, it's process,it's business, but at the end, at theroot, it's all people.I like how validating it was here.It all came back to people and emotionsand empathy and communications.That's what we feel and find in ours.I do, and we can come back to thisbecause I love thistopic, but I want to be selfishand shift us just a little bit.The other area that you have a lot ofhistory in, and I'd lovefor you to poke some realityholes, is, well, Colby and Iare loving doing this podcast.We're loving the conversations.We're loving the fact that every week wehave these one to twohour conversations on topicswe care about with people who know stuff.But we're also geeky about the businessside of it, not that we'replanning on this becominga revenue stream or abusiness onto its own.But I'm wondering, like my understandingis you've been doing thiscontent marketing YouTubechannel for a long time, 10plus years or thereabouts.When you've written books, which issomething that has been apersonal passion of mine aswell, but I've neverpublished, is that just marketing?Is there a business to that?Any thoughts on that as a ... Because youput a lot of time into these things.Is that pure marketing for your world?It's a great thing I love to talk about.I actually made a video on my YouTubechannel called, "Why doM&A coaches make videos?"Actually, that video explains mymarketing funnel and theway that I run my business.But there's two kindsof content creators.There's content creators that are usingthe generosity of aplatform like YouTube to marketthemselves and that would be me.And then there are creatorswhose product is the content.When my children watch people playingvideo games on YouTube orTwitch, they're watchingpeople who have to create an audience inthe millions becauseevery time an ad plays,they're earning a fractionof a penny off of that view.It's only in the last three years that Imonetized my YouTube channel.I thought it would be annoying for peoplethat I want to do business with that haveto see advertisementsif they watch my videos.But what I came to realize is that if Iwasn't monetizing mychannel, then Google wasn'tmaking any money off of me either.Google owns YouTube.If they can't make any money on you, thealgorithm has no reasonto share your content.So I monetized my channel and my growthrate in subscribers doubled.So just like that because now YouTube canmake money off my content.So you monetize using the monetizationfeatures within YouTube,not by you personally gettingsponsors for your content.I have one sponsor for my content andreally I get bombarded bypeople who want to do somekind of sponsorship or joint venture withmy channel, but it'sall super scammy stuffthat I've built, crypto coins and allthis sort of thing thatI would never want to putin front of my viewers.So I do have a sponsor who's from theworld of insurance andfinancial planning and stuff.I know him and I know whathe's doing and I know it's good.I have clients of mine who used hisservices that reportedback that he's a solid guy.So I do that.But really the value for me in creatingall this content isthat it brings us clientsthat we do consulting work for.So it is anadvertising marketing channel.And would there be an opportunity for youguys to make money from your podcast?I think that the surest way to make moneywould just be tocreate something that yourlisteners could buy from you.So for me, over the years, I kept gettingthe same questionsfrom people all the time.That eventually led to mecreating some online courses.And then I've got a group coachingprogram for people thatwant to buy a business.So there's 20 to 30 people inthat group at any given time.We meet three times a month.People pay a quarterly membership fee.It's been going since 2018.And so people who join get access to allof the recordings going back to 2018.And so you can literally listen to peopletalk about theirconversations with bankers,with brokers, with business owners.You guys should totally join that ifyou're serious about this buying journey.And so that's another example of...And because I do it as a group, it meansthat people can make avery modest individualinvestment and it's a way for me toleverage my time becauseI'm serving everyone all atonce.But the biggest ticket items that we doat my firm are the consulting items.And so that's like one-on-one and I'vegot a couple ofanalysts on the team that helpme with that work.And so that's the bottom of the funnel ifyou want to envision amarketing funnel kindof thing.Yeah.So that's...Yeah.Really good.Selfishly, again, I would love tounderstand because you writebooks on your subject matterand it's another driver for audiencetrust building,consulting at the bottom of thefunnel.But is there any industry left to be anauthor just on its own legs?Do people make money off writing anymore?I don't know if anyoneoutside of Stephen King ever did.I always wanted to be an author and thenthe more I've learnedabout it, it's easierto be a restaurateur.Well, you mentioned,what is it, eMyth Revisited.And if you read the book, it tells youwhy you need to do allthis stuff but it's veryshort on the how.Have you noticed that?It's because they have eMyth Consultingand eMyth Coaching andeMyth this and that andall these other things thatthey're ready to sell you.And so that book is an entry into theirwhole world of marketingservices and everything.Oh, go ahead.Finish your thought.But so I can tell you that my books areall evergreen content,which means that the booksI wrote 10 years ago are just as validthen as they are now.I do update them from time to time.I go in, I change some of the stuff, butI don't make a splashout of it being a secondedition.I go to Amazon and replace the file.And so people get the newer content.I sell books every week, but I've neverearned more than $300 ina month off of royalties.But the whole thing is like, what reallydoes it for me is whenI get these emails frompeople who say, I read franchise warningsand then I went andlooked at the franchiseagreement I was about to sign.And I realized all the different thingsthat I was exposingmyself to that I didn't realizebefore.And I decided itwasn't for me and thank you.Or someone else who says, I read thisother book and Irealized I was about to make amistake.My most popular book is called 21 StupidThings People Do WhenTrying to Buy a Business.And it's literally just the top thingsthat I've seen peopledo over and over again.And I've gotten so much feedback fromthat book of people whohad actually made offerson businesses.And then they got the book and they werelike, oh my God, I made this mistake.I'm number 17.Well, one of the analysts on my team allhave small business ownership experience.And my latest hire, his name is Alberto.He only read the book after I hired himbecause reading the booksis part of the onboardingwork that we do.And he was like, oh my God, he was like,I checked like nine of the boxes.I did nine dumb stupid things.But I was like, I'm so sorry that youdidn't find it before.But this is what happens.There also has to be a streetcredibility of being an author.It obviously feeds into the whole thing.It does.But you could say, for example, you couldsay, hey, we helppeople better organize theirbusiness and a bunch of other people havealready written books about that.Right?You can treat this as one of two ways.You can either say, but Levi and Colbyhave not written a bookabout this and Levi andColby's book will be different becausewe're writing it andwe're going to inject somelittle twist into it that'sgoing to make it different.So in my space, there's plenty of otherpeople that have written other content.There's plenty of other content creators,but there's only one David C. Barnett.So part of it is thatpeople consume my content.They like how I sound.They find that I can articulate thingswell, that I'm easy to learn from.So then it's not about justinformation as a commodity.I want David's help when I do this.You create that kind of relationshipthrough things likecreating this podcast where peopletoday will start listening to you andthey'll listen to you fortwo years and then all ofa sudden they'll be in a position wherethey could use your helpand then there won't bea question of who they want to go to.They're going to go to you guys becausethey already know youfrom all these conversationsthat you're creating.It makes a lot of sense.Like some of my interest in this topic isless about thebusiness and the nonfiction.It's the like Colby, we talk oftenbecause you come backfrom music and the idea thatmusicians are not properly paid for art.I think it's even worse in written art.Like the fact that right now it's harderto make money writingnovels than it is to bea musician professionallyis just that's dangerous.Anyway, it's a whole otherside, it's never the business.Sorry, I didn't get to the other thing.I said if there's a book written aboutit, you could eithermake your own book whichis specific to you.The other option is you can throw yourhat in with that other book.So have you heard of Profit First?Like McCalowitz?Basically, it's a money management systemfor small businesses that is based on thewhole pay yourself first concept.Mike McCalowitz.We talk about that often.Well, Mike wrote this great book and it'sreally clear and easy to understand.Then what he did is hecreated a licensing program.So there are ProfitFirst certified coaches.So my friend Rocky isone of these people.So he's like, "Why would I write my ownbook when I can just use this book?I can piggyback off of this author who'sdone all this work already."And he'll go toconferences and things like that.Because he's licensed, he can buy thesebooks by the box fullat a discounted price.So he just leverages all the work thatMike McCalowitz hasdone for the brand and thetitle of the book tobuild his own business with.An author doesn't necessarily have tohave a licensingprogram for you to find a bookand say, "Hey, I want to usethis as my key teaching tool."You just go to them and say, "Hey, wewant to promote ourservice using your book.Can I get a rate on buying500 copies or something?"We've actually looked at that.It's just come down to time and dollarsbecause we're pretty busy.But Pat Lencioni's Table Group, all hisbooks have certifications.You could take it to coaching.Bill to sell does.Emith does.There's just all these things that wealready talk about inall of our projects anyway.It would just be an easier entry point.But they're all three tofive grand and takes time.I'm doing it now, so Ishouldn't say that much.But you're right.It's the same kind of decision thatanyone faces when they'rethinking about this kindof stuff.Anyone can open a hamburger joint or youcan buy a franchise.When you look at a franchise, of course,everyone knowsMcDonald's and Burger King.There's other burger jointsaround that are less known.Is there value in having one of those?These are the kind of decisions peoplehave to go through whenthey're thinking abouttheir business.I would say that if you guys are alreadysuccessfully executing withclients and you're able tosell yourselves and demonstrate a trackrecord and maybe, I don'tknow, what do you do withpast clients?You have some kind of white papers orcase studies that youput together to connect.Case studies.Yeah, case studies.You are building the accoutrement ofbuilding this successfulthing on your own withoutnecessarily leaning onsomeone else's stuff.We're leaning on allkinds of people's stuff.We're just not attributing.Okay, fair.Kind of.Yeah.Well, I could never remember who I got itfrom, but I feel likeeverything we say everytime is from someone.Yeah.I'm sure there's anoriginal thought somewhere.Maybe.I feel like I've scratched all, well, notall my itches, but the itches I wanted tomake sure to get done.Was there anything you want to talkabout, David, that we didn't cover today?Well, I was brainstorming about how youguys can make some moneywith your podcast becauseI was thinking, because you had askedthat question the otherday and we had a pre-cuthaul.I was thinking about a lot of your firstconversations thatyou had on this podcast.I know it's not that old.We're all about the peer group thing.I was thinking there are specificcategories or types ofbusinesses that fall outside ofall these peer group programs that thepeople have a thirstfor this kind of thing.I think that there could be anopportunity for you guysto do something like that.I was at a conference in March.I was at one in Cancun andI was at one in Cincinnati.In both cases, it really brought home tome the value of thesereal life experiences,how much value comes between sessionswhen you're cheatingwith someone you just metand talking aboutsimilar experiences and stuff.It is extremely frustrating for me toknow that there are twomillion people in the maritimeprovinces and we really have noconsistent regular seriesof business events that areinteresting for people to go to.In the fall, Startup Canada Tour came toMoncton and I knowthat the Regional ServiceCommission was involved inhaving them come and stuff.I thought that was really cool.What's happening next year?Nothing.They're not coming back next year.It was just a one time thing.Even then, so many people are soanti-startup, it's a wordstartup, so they wouldn't haveidentified and gone or participated.That thing drew people from, there werepeople here from theisland, from Nova Scotia, fromDenver, New Brunswick.I think that there's a real need and ahunger for face to face stuff.I think there's some kind of thing thatcan be put togetherand it doesn't need to besomething that isincredibly difficult to start.There's a conference I attend every fall,which is all aboutfinancial and small businesscontent marketing.It's like a global conference.It's usually heldsomewhere in the States.When they started like 13 or 14 yearsago, it was literally 30people gathering in Chicago.These things can start small and you canbuild it up over time.I think there's an appetite for that,especially in this regionbecause there's just nothinglike that going on wherepeople can get together.When we say we want to monetize or createrevenue, it's just so that we can do moreof it because we'reenjoying it and people find value.We can't just grow itwithout being responsible.We've talked about it.If the year-long mission of the podcastis to sell tickets to anevent or to create groupsof peers or whatever, then you canactually tie some kind ofperformance metric to thecontent.You bring people to an e-news letter.Did you always do that or was that kindof an eventual ...because that's something wedon't do that any long format text we'renot doing and I don'tknow why we don't do it.We just haven't thought about it.It's unwise to build your business onrented land or something like that.I don't know what the quote is.We call it a first-degree data strategyis kind of the way weformally talk about it.I've got my YouTube audience, my LinkedInaudience, Facebook,Instagram, Twitter, allthese places, but Idon't own those algos.I don't own those platforms.You have to have a strategy to get peopleinto your own world.I cringe every time I drive by a businessthat has like us on Facebook.Why?You can get 500 or 1,000 or 2,000followers that youcan then pay to talk to.That's how Facebook makes their money.You get them on the email.Yes, my email service provider charges meto send out emails,but once I have someone'semail address and they've opted inbecause they want to hearfrom me, well then I cancommunicate with thosepeople and send something out.I email every day.It blows me away when I look at thestatistics because I'llget an email from someone whosays I want help to buy this business andI'll put their emailaddress into my emailplatform and I'll find out they've beensubscribed for three years.They've opened 300 emails in that timeand finally they neededme and they reached outduring time.I don't know if it was the four hour workweek by Tim Ferriss orif it was just a podcastwith him, but he was saying doubling downon email because itdoesn't change as muchas the other ways of communicating.That's still proving to be true.Yes, some rules can change, but at theend of the day it'ssomething that you can havemore control over.Yes, you have to have theright strategy though with email.People will get on the Canadian Tireemail list and they'llthink that this is an exampleof how they should run their business.Canadian Tire sends an emailthat looks like their flyer.Here are our specials and stuff.That's what you expect from them becausethey're a merchant ofgeneral merchandise.If you send that kind of email, ifIronhouse Pro sends thatkind of email every day topeople just pitch, pitch, pitching yourservice, people would unsubscribe.We would unsubscribe ourselves.You have to create value.You got to send something that peoplewant to read that isgoing to show them that you'reworth subscribing to andthey want to look forward to it.I get people all the time that reply tomy emails and say,"Yours is the only spam Ilook forward to reading."I'm like, "Oh, I feelso good about that."I tell stories and stuff and I'll say,"Here's something thathappened to a client," or,"Here's an example ofthis or an example."People learn from it.Some people don'twant to read it that day.They just delete it.It doesn't matter.It's up to them howthey want to treat it.The people that aren't interestedlegitimately, they unsubscribe.Some people get twisted aboutunsubscribes, but I'm like,"Well, they didn't want tobe my customer.They should go away.They should go find whatever it isthey're looking for."It's not like we don't have the tools orthe awareness of the tools.It's probably going to be added.Even just because we don't do one, but wehelp other companiesadopt and start thesethings.It's like, "Oh, let's justhave our own living lab."That's actually how this is becoming.It's our little living lab for marketingtech that we just don'thave another excuse for.It's like, "Oh, let's play with it onthis new realm and trythese different platformsand tools.Testing AI tools for this is easier thanour largerconsulting, which has business.We depend on it.We can play with this."It's just been fun.David, did you have anyquestions for us in particular?Anything that you're curious about?I don't know if I've heard on yourpodcast specifically whoyour ideal client avatarwas.Who are you trying toreach through this podcast?Who should be callingIronhouse Pro today?I'll answer.I think those aren't the sameperson for rightly or wrongly.When I do the podcast, I'm notnecessarily speaking to thecustomer, but at some pointthey likely will be.Our target avatar, we have a few.We have some public sector and privatesector versions, but atthe end of the day, we'relooking for people.We can help make their business stronger.The most common problem we solve ishelping make theorganization more independent ofindividuals so that they can choose to dowhat they want to do,and then nothing dependson them, so a lot of structure and team.If I was to define an avatar that was themost central, it's the traditional older,been in business long time businessthat's trying to becomemore modern, probably becauseof the succession orsome upcoming transition.That's the one where we've had the mostsuccess and we go into.They're long term, they're profitable,they're stable, they'vebeen in business for a longtime, but they've missed a few steps.Now they want to skip ahead or the newgeneration of employeeswants to use tech that is justnot ready to do.It's complicated andit's not like a new CRM.It's like starting six steps before a CRMor an ERP or inventory management.It's a lot of in the kitchen sitting withtheir teams figuringout what's the roadmapto get there.That's what fires us up.Then here, I don't know, I'm just talkingto myself on this podcast right now.I hope the right people listen.I might add that I think that theself-awareness aspect of knowing that youmentioned the amountof business owners that don't know thatthey need to start this10-year journey of gettingprepared and I think there's a level ofself-awareness that is suggested orrequired to understandthat this is an investment.It's a want, not a need.We're in that category still and we'retrying to tip that scalebecause we feel like we'rein need.I have a friend online who helps peopleprepare for exits moreimmediately than what you guysare doing.He likens it to trying to sell medicineto people who don't know they're sick.Yeah, totally.It's like teaching them what halitosis isso they'll buy the air freshener.I definitely think that content or media,it's getting into theheads of those peopleand what would be their frustration andwhat would they type into Google?How do I …?We're actually going through that now.We struggle with thatand we talk to people.We're doing a big SEOaudit and new website stuff.For us, when we try … People ask us,you said the word empathyearlier and it resonatedbecause I did a first podcast before wemerged companies calledEntrepreneurial Stories andI started that not because I wanted to doa podcast but becauseI had four or five teammembers who didn't get the position ofthe business owner we were working with.The average person in my experience putsbusiness owners on a pedestal.They're all rich.They're all successful.They know what's going on.I know from my relationships andrealities that they're very rare.Do they know exactly what's going on?There's shame and there's guilt andthere's all kind ofpride and ego and it's like Ican run a $10 million company but I can'tfigure out Google Calendar.We were in these and I have these 20, 30,35 year old teammembers who like when theywere talking to the clients we wereworking with who werelike frustrated that my teamfinds super easy.It's like we need to gut check.That's when they have to read email.That's when they have to rebuild the celland then I startedbringing in these businessowners to do a podcastand it was a group session.We would record like we're doing now butthey all had to be in the room.They were able to filter questions.It was a webinar.It was like a live screening and the goalwas for you to buildempathy and care to turnon the give a shit button because for methis isn't a like let'shelp them maximize theirsale.For some of these business owners likethis is a real personal family issue.I need to get out of my own way and I seeit on the peer group side.That's why it comes up so often.I can't say this is a social enterpriseto most crowds but itreally is solving a bigchallenge.How many of those shows did you do?I did 16 episodes of that one.Are you familiar withNotebook LM, the Google AI?Familiar but never used.What you could do for instance is youcould upload all 16 ofthose episodes as sourcesinto Notebook LM and then you could evenupload some otherarticles and things that discusssome of these issuesthat business owners have.Then you could ask Notebook to generate alist of issues, topics orquestions that entrepreneurslike these ones may ask when they'retrying to findsolutions to their problems.Then Notebook will probably come up witha list of either topics or questions.Then you could create content like onething addressing onequestion and those could becomesections of a book too.You could use the actual frustrationsfrom those recordingsthat are expressed as peopleshare their story to actually create thiscontent map for you to fill out.I think about it as identifying thesymptoms because nobodyever articulates the wholething.It's the pain points to see along the waythat we then is like,"Oh, that's an underlyingcause."That's a really good idea.When we start to feel like when it comesback to the author thing,I've quietly only ... Thisis probably the first time I'm saying itout loud, but I've beeninterested in the wholeauthor thing for a long time.Never did anything with it, but mainlybecause I don't feel likeI'm saying things that otherpeople have said and it'sjust that type of thing.This, your idea there that you justexpressed, that does putour own voice and that couldbe very interesting.It could be like, I'm a big Tim Ferrissfan, but when you put outTools of Titans and shortlittle things where you could just skipto anywhere, thatmight be something fun thatwe could tackle.Stories and that's why I liked talking toyou, David, is because everything becomesa story and it's no longer instruction.It's storytelling.It's people.Yeah.We're wired for that, right?Like our ancestors and stuff.Yeah, exactly.But surprisingly, few people do it.When they giveinstruction, it's hard to do well.Yeah.I think we're probably coming to a nice... We're coming on to two hours and ...Sense the hook coming.I got probably toomuch value out of this.I took two pages of notes and I'm goingto rewatch this a couple of times.David, where can people find you?Yeah.If you're just interested in learningabout buying, selling,financing, or managing smallbusinesses, just look up David Barnett,Small Business Anywhere,and you'll find me on YouTube.DavidCBarnett.com is my blog site andthere's kind of like thecentral nervous system ofeverything and all the places I appearend up there on blogposts and stuff and you canlearn about the books and everything.But yeah, come on over to YouTube if youwant to watch videos orall the audios to the videosare on the different podcast apps.Like I said, just David Barnett, SmallBusiness, you'll find me.Hey, Maritimers, Atlantic Canadians, joinwith me on LinkedIn.I'd love to get a connection request fromyou if we're not already connected.We'll be sure to put those links in the... Oh, so many show notes.So many show notesstarting with the yellow pages.Yes.It's funny, but I gotthe book this spring.I guess it was last spring in Moncton.The book comes out in May.I always flip through it still and I lookfor the vestiges of the ads I worked on.Some of them are still there.Like big half page ads from back in theday are now shrunk downand with no color, butthey still kind of looked like the adsthat I worked on andthey're slowly shriveling away.It's definitely becoming less important,but I think thatthere's still some businessesthat are probably successful with itbased on maybe a certaindemographic they're goingafter or something.Yeah, yeah, yeah.ITs, but it's definitely there.Yeah.All right.Well, let's call this to an end.Yes, thanks so much David.I look reallyappreciate the conversation.It's not the last conversation for sure.No.Awesome.We'll see you guys later.Cool.This episode of Built to Last is broughtto you by IronhousePro, your behind the scenespartner in buildingorganizations designed to thrive.We specialize in solving the bigchallenges, the small annoyances andeverything in between.So while you're out there dreaming big,we're here making sureyour systems processes andpeople are ready for tomorrow.Ironhouse Pro, driven tocreate lasting organizations.Learn more at IronhousePro.com.