EP 20 | What Does Horsemanship Teach About Risk in Business Acquisitions?

How to buy a business smarter using M&A due diligence, negotiation strategy, and real-world deal discipline.

Chesney Reeves of Nocturnal Legal joins Paloma Goggins to connect horse trading lessons to buying companies. From vet checks to quality of earnings, “as is” sales to reps and warranties, she shows how the same rules apply in the barn and the boardroom.

You’ll learn how to set a real budget, write a clean LOI, manage risk with insurance, negotiate without deal fever, and integrate with steady 1 percent improvements. Fit matters. Stewardship matters. Walking away is a strength.

Press play to sharpen your acquisition strategy, negotiate with confidence, and buy without regrets. 

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Transcript

Cold Open: Stakes Of Big Deals

SPEAKER_01 0:01

In the world of business, not all deals are what they see. Fortunes rise, empires crumble, all with a stroke of a pen. Mergers, acquisitions, and hostile takeovers. Welcome to Mergers She Wrote, where we examine strategies and stories behind the biggest deals in business. Because in MA, the real risks are the ones you don't take. Let's get down to brass tacks. We have a special episode today of Merger She Wrote. I'm sitting here today with Chesney Reeves, Paralegal for Nocturnal Legal, and she's going to be talking about her history of rain cow horse riding and how that has a lot of similarities with mergers and acquisitions and the work that we do together at Nocturnal Legal. Chesney, thank you so much for being on today.

SPEAKER_00 1:04

Thank you for having me, Paloma. It's been so much fun to merge into this world from the legal world, and there are so many similarities with the horse world. I'm excited to talk about it.

What Reined Cow Horse Riding Is

SPEAKER_01 1:14

I am too. So let's jump right into it. Can you tell the listeners, for anyone who doesn't know what cow rain, cow horse riding is, can you describe what that is for someone and what's the competitive nature of it?

SPEAKER_00 1:29

Yeah, absolutely. So the first thing I always ask when somebody says, What do you do with horses? I ask, have you seen the TV show Yellowstone? Because it's not always a yes, but a lot of times it's a yes. And we do very similar events to what you see on Yellowstone. There are horses that are sliding in the dirt, um, sliding 30 feet, um, working cows, taking cows down the fence, maneuvering cows through. It's a set pattern and you're judged on the pattern, but there are a lot of variables that go into it. It doesn't look like the same thing all the time, especially when you have two live animals that you're trying to get into one sport.

Chesney’s Path Into The Sport

SPEAKER_01 2:04

That's neat. How did you start getting into that? There's so many different disciplines when it comes to horse riding and horse competitions. How did you choose that discipline?

SPEAKER_00 2:12

Um, yes, there are a ton of different disciplines. The rain cow horse spoke to me in college. I showed competitively at Texas Tech University on a rain cow horse team. I call it the ranch horse team, but it's um you show in rain cow horse events. And I uh learned through college that you you could start from the bottom. Prior to that, I'd shown in rodeo events, which is similar but um a little different, and started from the bottom with very little knowledge of that event in college, worked my way up through the different levels, and now here I am out of college and learning all the time still, but also just feeling like this sport was what I was meant to do for sure.

First Purchase Story And Early Lessons

SPEAKER_01 2:53

It's really neat. I've seen videos on your Instagram of all you doing this sport, and I think it's really fascinating. So there's a lot of similarities between helping people buy and sell businesses and the world of buying and selling horses. And so just jumping right in here, thinking back to your first horse purchase, what were some of the key considerations you had and how did you decide it was the right investment?

Crossing State Lines And Site Visits

SPEAKER_00 3:18

So from a young age, I was able to level up to different types of horses. Um started out as a with a pony, very small pony. She was honri. And then I started getting more and more competitive. Um, my dad's famous, famous line has always been, you can't keep them all. So that was number one and very integral in my upbringing was that in order to get a better horse to be more competitive, you had to sell the one before from a financial standpoint and just the logistics of we didn't have room for all of them. And so, with that first horse purchase, my first major purchase, I was 13 years old, and I called one of the industry leading at the time barrel racers, and she had this horse listed for sale. I cold called her, my parents weren't even home. I had a list of questions written down as far as what I wanted to know about that horse. She answered them. She was great to work with. I have no idea if she knew at the time how old I was or what my background was, but she was um very good about helping me through that process. And then I presented my notes and everything to my parents later that day, and they were like, What did you do? What are we doing? And we're this this horse was in Texas as well, and I grew up in Nebraska, and so they're like, You want us to go to Texas drive you to Texas to look at this horse? I'm like, Yeah, I think it's a great like I don't I honestly can't tell me tell you what spoke to me in that moment, but something did and it worked out, and we ended up going to Texas, um, met that lady uh individually and and rode the horse right there and we hauled him home. So it was a great experience for sure.

Budget Discipline And Avoiding Deal Fever

SPEAKER_01 4:53

I think, you know, as we go through this conversation, I'd love to weave in, you know, the similarities here, and also to educate for the listener that's thinking about their role in buying and selling a horse and how there's similarities in our business world and maybe ideas that they can borrow from the business world and vice versa, ideas we can borrow from the horse world in the business world. So for starters, I like that your first horse, you were like, it's in a different state. I don't care. Let's go drive there. Um there's so many ways that you can buy a business, right? And it doesn't always have to be in your backyard. But to your point, the horse is mobile. So I like to think about it like if you were gonna buy a business that was in another state and you were planning to relocate it to your home state or maybe work it remotely, right? You have to be sure of what you're purchasing, which means you have to physically go visit the business, like you visited the horse. And so I like this idea of there are no boundaries potentially, because I do think a lot of people limit themselves when it comes to buying a business and thinking only locally when there's so many opportunities, especially post-COVID, people being able to work remotely or do things more remotely. Um, so when you got to Texas on this first horse purchase, like what were the deciding factors? What do you do? I guess looking back at your first purchase, because some people buy and sell businesses habitually, and and there are people potentially listening that are like, how do I start buying and selling businesses like people who buy and flip houses, right? Because it's a potential way to get into a business, make it better, flip it, move on to the next one, kind of like a renovation, res rehab recycle. Um, what did you learn in your first horse purchase, the one down in Texas, that you got down there? What did you do to assess the situation? What did your parents do to assess it? Because I'm sure they knew more about the process than you did at that time. And what does that look like now, now that you're a seasoned veteran of looking at horses to purchase and whether it's a good investment?

Diligence Parallels: Vet Checks And CPAs

SPEAKER_00 6:55

I think just shooting for the stars or shooting from the hip was the first thing that I did right. Um, and and going after a reputable person, because a lot of times in the horse world and in the business world, you don't always know what you're getting yourself into. But this woman had so much reputation and had and had so much success on her own. I think that that's what allowed my parents to really hone in on this and say, it's worth a shot. We'll go down there and see. Um, and then when we were actually physically there, again, there was it was kind of an awe experience because this would be in my time and age, this would be like a comparison to Tom Brady, meeting Tom Brady in the horse world. And um everything went so well to where really there weren't any moments that we looked back and go, is this worth it? And the biggest thing starting out was I knew my budget in mind, and this horse was within the budget. So I think that's where people in the horse world, we get starry-eyed and we get um excited about something, and then the nitty-gritty comes down to it, and you're looking at a horse that might might be two or three times your budget, and you're in love with it before you even get to actually realize like, okay, this is not gonna work for me. And there's a lot of emotion and there's a lot of um work that goes into that deal on both ends between the seller and the buyer to uh ultimately end up and and go home with nothing.

When To Walk Away Or Renegotiate

SPEAKER_01 8:16

So well, and I think that too, I mean, from a similarity standpoint, people look at businesses that are listed for sale either on a listing website or that's on a broker website, and they haven't potentially done the financial due diligence to decide whether they have the means or even the credit worthiness to go and get an SBA loan. And I mean, we've seen in the work we've done together, like unfortunately, sometimes people get to the finish line and the and the bank won't make the loan happen. And so the whole deal falls apart. And so I think to your point, sticking to a budget, whether it's buying a horse or buying a business, you've got to know your financial capabilities, but also be realistic. I mean, I can't tell you how many times I've seen people buy businesses where you look at the monthly loan payment and you're like, boy, I don't know if that's possible for what your business is doing, right? And so I think other people too, they forget, sure, you might be able to get a loan, but can you make those monthly payments on it from the revenue of the business? So I like that you brought that up. On kind of a similar note, you know, having now gone and seen horses and bought and sold them historically, do you think you go into it with a different perspective? Are you are you more or less skeptical of the horse that you're assessing?

SPEAKER_00 9:36

Definitely more skeptical, um, especially as I prefer to buy the younger ones, the ones that necessarily haven't been in the arena yet, haven't gone through intensive training because I like the projects and I like to put my own stamp on them. And so as a young horse, there's not a performance record to look at, say in a young business, there's a startup business, not a whole lot of revenue there yet, but you see the potential. There's either the person behind it, there's the investors behind it. Same with the horse. There's the people behind it that have got it to that point, there's the genetics behind it. I think we could tie a lot of similarities with genetics in there as far as the parental line. If the if the sire or the father of the horse won a couple hundred thousand dollars, your odds of that the prospect or the offspring go up as far as what that horse could do. Um, so definitely I'm cut out again. I was rambling.

Paperwork Gaps And Why Contracts Matter

SPEAKER_01 10:29

Oh, you're fine. I I think so. Go back to this idea of going in and assessing a horse, right? A lot of similarities when there's diligence in a business, right? You're wanting to do some research on historicals for the business. Similarities you've told me about is a lot of times when you're buying a horse, you go, go bring it to a vet. And so what is like tell me a little bit about that process. Like, if you decide, okay, this horse is great, what does the vet do? They they come in and assess it from a health standpoint.

Reps, Warranties, And Insurance Options

SPEAKER_00 11:02

Yep, a health standpoint. They'll look at um the vitals, you know, obviously just do a glance over, palpate the horse, and then you can go as far as to also radiographing the horse as well and making sure critical joints like a horse's, they have a version of an elbow, they have a version of a knee. And so you want to make sure that there are any detrimental previous injuries to that horse, and even um younger ones, they can have injuries there before they've even had a saddle on their back. And so that's goes back into doing your due diligence and really making sure that if this is an investment, significant investment for you, the resale value as well. When you go to sell that horse, and I've had horses of mine that I've sold go through vet checks, is what we call them. And a lot of times, sometimes they'll find a problem in there. And so then that also goes into the negotiation where I have a set price for a horse that I'm asking. And if the buyer who is doing the veterinarian exam finds something that they don't like, that's some negotiation power back and forth. And I've had an experience with that where as a seller, you're obviously wanting the deal to go through and you have to compromise and find a happy medium there as well.

SPEAKER_01 12:11

Well, and I think that whole that whole situation is so similar to this idea of okay, you start diligence on a business after signing your LOI, and then you get into the nitty-gritty, and if you're doing it right, you usually bring in your accountant to look at the financials, right? So kind of the vet check. And then at some point, if the accountant says, hey, red flag here, there's some stuff that doesn't make sense in the financials, you could at that point back out of the transaction, similar to you saying, Hey, the vet didn't sign off on this horse. I'm not interested.

SPEAKER_00 12:39

Absolutely, absolutely. And I want to touch base where you said back out, because that's something where I feel like a lot of horse people or business buyers in general, we get so narrow-minded and we get the blinders on where we we want this horse. It's perfect, perfect color, perfect size, perfect name. And then we see something that pops up that's probably not going to go away. And it's a matter of assessing that and knowing, okay, I do not want to take on this problem today. Let me back out, let me think about it, let me consult with somebody else, phone a friend, and figure out if it's really worth it or not.

As Is Sales And Managing Risk

SPEAKER_01 13:12

No, and I I cannot stress that that is an amazing point to make because honestly, people do get wrapped up in the idea of, well, I love it, and so I'm gonna just ignore the red flags, or I'm going to ignore the pieces that aren't so great, and they just continue forward, even if the decision probably that wouldn't be so great would be to back out or to say, hey, I need to renegotiate with you because the price isn't right. Um, in passing, we've had a lot of conversations about how in the horse world there's really not a lot of paperwork like traditionally used. So when you're talking about coming in looking at a horse and deciding you want to purchase it, obviously, like with a letter of intent for a business, you're putting in a deposit, an earnest deposit, and then taking the time to do your due diligence. Is there something similar in the horse world?

SPEAKER_00 14:03

Sometimes a deposit um comes up. A lot of times, if it's a hot commodity type horse, where this is a hot a popular horse, it's either on a website or it's on social media. You can tell, especially on social media, you'll see the comments start popping up where you're like, okay, I better make a phone call. I'm really interested in this horse. And so people will ask for deposits, but going back to your lack of paperwork comment, getting that deposit back sometimes if the deal falls through, there's no black or white answer unless you do physically have it in writing. And I do think in our industry there is a lack of having things in writing that's not necessarily scary to either party, but mute mutual benefit of both parties to say, hey, we want this to go through as smoothly as possible. We know there's a lot of money at stake, there's a live animal at stake. We should do our due diligence and have a contract there so that everybody leaves happy.

Networks, References, And Not Going Alone

SPEAKER_01 14:56

With getting to see the MA world on the deals that we work on together, what would you suggest from that similarity? Like, should there be a letter of intent of some kind or a bill of sale? Or like, what do you think would be great for the horse world? For anyone listening who's in the horse world that is accustomed to doing these transactions without the paperwork and maybe has seen the bad side of doing it without the paperwork, what could they be doing differently, do you think?

Negotiation Case Study: The Mesa Horse

SPEAKER_00 15:23

Bill of sale, first and foremost, a thousand percent. Bill of sale stating the horse's name, stating if it's registered with a breed registry. Horses are like dogs, they can be registered within their respective associations. So having that horse identified in one way, other than just saying it's the brown one. And um then also having representations and warranties of both the buyer and the seller, I think that that's huge as far as this is what the horse has done previously, this is how old it is, this is its track record, and not guaranteeing anything past the point of transaction. So once um the money, the money is once the money is exchanged and once that horse is loaded onto the trailer, it is as is. There's a lot of different things too you can do to protect yourself after you buy a horse. One thing is insurance. I do have a little bit of a background in that as well. And I think having an insurance policy on a horse is critical. There's different options you can do. Um, the basic one is mortality, and that at least protects if something, heaven forbid, were to happen, you would be reimbursed your purchase price.

Fit Over Price And Seller Trust

SPEAKER_01 16:32

Well, I like what you said there because there's there's two really key considerations with horse purchases and business purchases that we can really touch on there. One is this idea of having insurance, um, which by the way was completely new to me before Chessie and I had talked more about the horse world. I think it's incredible that, you know, you can, especially if it's being sold as is, um, for anyone who is going through the sale process, something to consider, and it's not always financially reasonable, is to get a representations and warranties insurance policy. The underwriting process can be quite overwhelming, but for anyone who feels like there's a chance that a breach of reps and warranties will occur after closing, that insurance gives that additional coverage, like you're talking about with the horse, where maybe you're you think you've seen the full picture, but you're not entirely certain. And so having that insurance policy can really add an additional layer of protection, especially if you're not negotiating, and of course in the horse world, you're not negotiating this, but some sort of holdback in the purchase price where you're protected in case some breach does come up and then you're needing to pull down the purchase price because you have losses. Um, but I think, you know, we were talking about this the other night, about how it's crazy to me that horses are sold as is without any warranty. And I I had asked Jesse in passing, I said, well, there's, you know, dogs that are purebred that come with warranties, it blows my mind that someone wouldn't warranty, maybe a breeder of some kind would warranty it, but not like an average Joe, right? Makes sense. But same concept too in the business world. There's times when people are selling assets, as is where is. And I don't think people quite appreciate the gravity of that situation because I'm sure you've seen or heard stories where people bring home a horse and things don't go right or they're they're not in good health. And and then what is their recourse? Nothing, right? If they don't have the insurance policy?

Handling Disappointment And Pivots

SPEAKER_00 18:35

Correct. Sometimes if they did their due diligence again with the vet checks, you can go back. But veterinarians are very straightforward as well. It is an as is on that day, they'll have their own report drafted and you can go back to the veterinarian's report. But one thing you can do as well, which this um I don't want to get off on too much of a tangent here, but you can do a drug screening to make sure that there weren't any inflammatories or anti-inflammatories or anything as far as that goes. But really, as far as going back and seeing what the horse was before, you need to have documentation as what its physical condition was. Um, again, with the business, like you want to be able to look back at the previous records, profit and loss, and make sure that everything up to close is still on track to be better than it was prior to closing.

SPEAKER_01 19:24

Yeah, I think that's really fascinating. I mean, obviously in the world of horse purchasing, it's it's it's a whole nother animal, pun intended, right? That like it's a living, breathing entity that has historically a health track record, right? And I like that you brought up that you should be getting those vet records, right? No different than, like you said, finding out the financials, but also finding out if the company has contracts in place, right? Some of this historical paperwork that helps you paint a picture of the health and well being, whether it's the horse or the business. Right. Um, I I like that you brought that up. And So generally speaking, I know we've kind of touched a little bit on this here and there already, but so when the comparing the horse market to the business market when it comes to you know strategies and figuring out how to research and negotiate, you know, what can you describe as something that could be borrowed from the horse industry into the business world or vice versa?

Training Mindset: Patience And 1% Gains

SPEAKER_00 20:25

Sure. Um, I want to start with a similarity first, is that there are so many connections within the horse world of people knowing somebody, you know, like I said in Texas, I had a connection in Texas that I could reach out to, or I have connections um all over the place. And in the business world, with when you're within an industry to niche, it does not take very much work to find somebody that can help you out. So biggest thing I would say is to find somebody that's also willing to um help you do the research.

SPEAKER_01 20:55

Well, and I was gonna say too, like, because the industry is so supported similarly, similarity-wise, I do think this idea of don't go it alone, right? Like your original story is you brought mom and dad because you were a kid, and now you have people in your realm that you could bring to give a second opinion, whether that's a vet friend or another friend who rides horses who can maybe be a little more objective. I like this idea of bringing in someone when you're doing the horse sale, but I think that could be extrapolated and people don't really utilize it in the same capacity. If you have friends that have owned businesses in the past or maybe work in financials or financing, and you know, have some sort of tangential space. I mean, I was thinking about some of the people in my network that, you know, if I was going to buy a business, would I bring the information to them to get their second opinion? Absolutely. But I don't think we see that very often, generally speaking, in the industry.

Integration After Close And Process Refinement

SPEAKER_00 21:50

Yeah, and I think it can be a little bit intimidating too, is that people they they want their idea to seem great. And so it's the same thing with a horse. You want this horse that you think will be great to um attract everybody else to think the same thing. And if somebody shoots you down, it's handling that and going, Well, I guess I'll keep looking. And same thing with the business world. If you have a great startup idea, it it goes back to finding um an outsourced outside source of logic to kind of talk you through each step. And that way, again, with the horses, is I've I've had great ideas of traveling across the country to go get one, and then I'll call my mom and she'll say, You cannot do that. And so going back to that for sure.

SPEAKER_01 22:32

So I think kind of going back to your experience and looking at horses and having an outside perspective and also looking at the purchase from being arguably like if we're using the symbolism of being a previous business owner, like being a previous horse owner, right? So you've got all that background. You know, can you share a story where negotiations got tough regarding a whether it's a horse purchase that you had personally or someone else's horse purchase that you had heard of?

Genetics, Roles, And Smart Pivots

Relationship Capital And Final Thanks

SPEAKER_00 23:00

So the last horse I purchased was actually two years ago out of Mesa, Arizona. And I had seen him online, loved his pictures, called the owner before driving to Mesa, which again wasn't that far, but doing my due diligence, wanted to make sure that the horse was available. Called the owner, he said, absolutely, you can come down and look at him. Um and this was a young horse, he was only a year old, so there was no riding involved. There wasn't really a whole lot I could do besides make sure that he looked the same in person as he did on the photos, and he did. Um, and I took a friend with me. So, again, going back to having somebody with good logic, took a friend, and I had not discussed purchase price prior to going down, which was one thing that I do think is important. But again, it was it was a close enough drive. I had a good idea that he was in my budget, I thought it was worth it. Went down, and the owner ended up telling me the purchase price, which was not in my budget. And so I took a deep breath and I said, Okay, I really like this horse. We've had a great time here. I have a connection with him. And I gave him what my budget was and said that this is the this is the top of the line, and said to call me if you change your mind. Five days later, he called me and he said, I'll take your offer. And so at that point, I got to load up my pickup and trailer, go back down to Mesa and exchange the the funds and a bill of sale, and brought him home. And two years later, he's an awesome horse, three years old, and I'll start showing him next year. So just going and having the foundation to again stick with my budget, have a plan in mind, and the power to walk away was huge.

SPEAKER_01 24:37

Well, and I like the fact that you didn't give, even though you really wanted the horse, because I think part of I wanna I wanna stress for anyone listening that when you're going through the process of buying a business, there's a lot of negotiation that goes on upfront. And I think a lot of people, because it's not always apparent that they're negotiating the terms that are going to ultimately become the final terms in the purchase agreement, I feel like they think it's really casual and it's really open to further negotiation. And so a lot of times, as you and I have seen, we'll get the letter of intent, it'll already be signed, and people will ask, Well, I'm not really a fan of X, or I'm not really a fan of Y. Or like, what if I get into the diligence and the financials don't come back as good as they say they are? Can I renegotiate the purchase price? And your story about going down to Mesa and finding out that it was above your purchase price, right? Above your budget, and then kind of just saying, well, like this is my budget, take it or leave it. I love the horse, but I'm not gonna go above my budget, I think is a good lesson for anyone who's going through the process. They found a business they love, and it can be so cutthroat too, right? Good businesses get tons of offers and they're quick to go off the market. Some don't even hit the market. So there's always this frantic, like, I'm gonna miss out if I don't meet them where they want me to meet them. But to your point, going in person, I'm sure he got to meet you, right? And gets that personal aspect. Absolutely. There's that piece of that too that people don't realize people when they're selling their business, they want to hand it to someone that's going to take care of their business after the sale. Similarly, they want to give their horse to someone who's going to care for them deeply, right? Yes. So, like the personal nature of it is something that I feel like people don't really, they underestimate the power of being the right fit. Maybe not the right price, but the right fit. And I've seen people historically make a decision to take less money for their business because they found the right fit.

Closing Theme And Sign Off

SPEAKER_00 26:40

Absolutely, absolutely. And even with real estate, I've had um friends and connections buy houses and they met the homeowners in person and they just really wanted that person to have the house. Or my parents, they bought a home in Arizona and the people were from Nebraska originally. And so just having that connection right there really, really is important. And I still keep in touch with that seller to this day, and he happens to be a breeder. And so, another time where I might won't be shopping for a horse, I know I can call him and I'm gonna have a good experience with him, and his brand is physically on the side of my horse, and so he's gonna want that to be a good experience with me as well.

SPEAKER_01 27:18

So buying and selling a horse comes with a lot of emotion. How do you balance that with objective thinking, setting aside the fact that bringing a friend or bringing an outside advisor in for a business owner thinking about the similarities here? What could you suggest to a business owner, whether they're buying or selling a business, how do you take the emotion, use it for good, but also keep a very objective thought process going through the actual acquisition process?

SPEAKER_00 27:46

Absolutely. The number one thing with selling a horse is you want the person that's buying it to exceed the expectations. A lot of times where I sell horses, they've already have a proven track record, and you want that next person to continue on the track record or at least be happy with the level that they're at. And with business owners, you've done all the work to get to that point. You really want to be able to hand off the reins per se. And then again, it goes back to transition support. I've told people I'm only a phone call away. Please call me, please post on Facebook, please tag me and things because I want to see that horse doing well. And it looks back, it reflects good on my integrity and reputation as a person that enjoys selling horses, is because I don't do it just to send them on down the road as soon as possible. And business owners, they're not starting a business and and flipping it and sending it down the road and never keeping in contact again. They're they're gonna have a piece of that with them.

SPEAKER_01 28:43

Well, and I like what you said about being there after the sale, if people need you or need something and and wanting your reputation to be reflected properly when the horse is no longer under your care. I think for a lot of people, when they're buying a business, they're desperate to keep the business owner on because they want support in that transition. Obviously, there's a lot more involved when a business is being changed hands as opposed to a horse. But I think what you brought up is a really solid point in that it's incredibly important to when you're buying a business, have a business owner who is vested in what the business is going to do post-closing. Whether that means structuring in an earnout, which for listeners who don't know what an earnout is, it is where a portion of the purchase price is tied to post-closing revenue metrics, right? So making sure that it financially continues to be a success post-closing. Um, if you don't have that, finding a business owner who wants and cares about the well-being of the business post-closing is just as important as finding someone in your realm, a business or a horse owner who, you know, cares deeply about the well-being of their horses. And granted, I feel like a lot of horse people just they love horses so much that you're not going to find as many bad apples out there as maybe business owners who are like, I want to be done, let's get rid of it. I don't want to be involved in the transition. But I do think it's something to consider. You know, you're leaving behind a legacy, whether that's the horses that you've trained and raised and you're selling them to someone new or a business that you've grown from the ground up and you want that business to continue on in your absence. So I love that you brought that up. Um, relatedly, you know, for kind of generally speaking, what's the biggest surprise or lesson you've learned from buying and selling horses that you think every entrepreneur could benefit from?

SPEAKER_00 30:41

I think being prepared for a little bit of disappointment and being realistic when it comes to that. One surprise that I had was I I bought, I I know I talk about now that I like the younger horses, but I bought an older horse in high school that had that proven track record, and it did not exceed my expectations. And so as a young girl, realizing that and I had all these hopes and dreams, then pivoting and and buying another younger one that I was able to go through the steps of myself, that was a big surprise as far as okay, reality hits, and I thought I was prepared and it didn't quite work out. Um, and so which that horse to this day, he he found a different owner and they're getting along great. And so being able to be flexible and and having a second plan B and C in place is very important.

SPEAKER_01 31:28

Well, and I think that's kind of tying back in what you know, people don't really talk about what happens if you buy a business and you find out it's not the right fit. And we talk about how to get be successful in acquiring a business or selling a business, and we don't talk much about what what happens if after the sale you find out you hate the business or you don't know how to operate it, or maybe it's not doing so well financially. There's so many ways. I mean, I've worked with individuals that have come to me and said, you know, we sold our business, the new owner is so overwhelmed, so unprepared, so unfamiliar with this business, that it's really just a sinking ship. And so I've seen those people come back in, step back in, take the business back, try and bring it back to life and resell the business at a later date. Obviously, nobody wants to go through that. So, from your perspective, having gone through a situation where it just wasn't a good fit, it wasn't the right situation, you know, what could be some advice that you give to a business owner that maybe they've gotten to this place? Granted, you're struggling against all the investment and the time and the energy and all that cognitive dissonance of like, man, I really don't want to give up on something that I've spent so much time and energy on. But from an emotional standpoint, what would be the next steps for a business owner who has decided or realized that it's not the right fit for them?

SPEAKER_00 33:00

Definitely not to give up. Put your head down and um either head down or look at it from a bird's eye view and say, all right, this path didn't work. What I did on that specific horse deal was just pivoted. And I was lucky and fortunate enough to have my father help me purchase a second horse. And so that was that was a make it or break it moment and another significant financial investment to where what plan A didn't work out, I still had plan A to take care of. You still have a business that relies on you that has to be turning a profit one way or the other, but you might need another source of revenue to come in there and help support something while you're still trying to figure out plan A as well.

SPEAKER_01 33:41

We've talked a lot about buying and selling horses. I want to pivot just a little bit about maybe some lessons you've learned about training horses. And I just there's so many similarities that we can use to compare buying and selling horses and training horses. When it comes to, generally speaking, the process of buying a new horse and training it and teaching it all the things that you need. What would be the lessons that you could share with the listener and also maybe provide guidance to for a business owner who's getting into the business and needing to build it up or do better with it or take it and streamline the operations?

SPEAKER_00 34:23

Yeah, absolutely. When I first started training my own horses, I was told from an early age to not expect greatness right at the beginning. And I think with business owners, we don't, they're investing a significant amount of time and effort into this and they're wanting it to just take off. But if you're getting 1% better every day, you're by the end of 100 days, it's gonna be 100% better. With horses, it's pressure and release. So horses learn from positive reinforcement. They learn from being rewarded for doing the right thing once instead of having to do the right thing over and over and over again. And then by the end of it, they're sick and tired of being asked to do the same maneuver. So with business owners, how would you how would you um pivot from that and and compare it to the business world?

SPEAKER_01 35:07

Yeah, I mean, I think this idea of you've got to have patience, right? I'm I the things that you've told me about is that it it is repetitive, it is a lot of discipline, it's a lot of working on the same things and refining them. And I think people don't realize that refinement in business is more important than just rapid growth. And so so many people will get into a business that, you know, they've got a huge loan because they did a bunch of traditional financing and then they've they've also they've got a promissory note for seller financing. And so there's a lot of pressure financially to make the business work. But when people get in, and one of the things that, you know, people really, I think, real need to come to a realization that post-closing integration is so important, especially if you're a business owner looking to scale by absorbing a secondary business, that you could really buy a second business. And if you don't spend the time to marry the two, it's a disaster. And you've got two kind of wholly separate businesses that you're trying to make into one conglomerate, and it just doesn't work. Um, I used to work for a publicly traded company, and we would, you know, buy these tiny little startups. And of course, they're run like startups. And when you bring them into a publicly traded billion-dollar company, there's no similarities. You know, they're they're pivoting, they make quick decisions, they invest money fast, like they're all about innovation. And a billion-dollar, publicly traded company loves to talk about innovation, but at the end of the day, the stock price is what matters most, and slow growth and slow pivoting is what happens. And so you have this like, you know, butting heads. But through that process, I think kind of what you're saying when it comes to taking the time and the patience involved in spending time with your horse, training them, going through the same motions, I think can be similarity-wise going through your process, going through your team, helping people to really, I think, perfect the processes that are making the most revenue in your business is the kingpin of all things.

SPEAKER_00 37:23

Yeah, definitely. And one thing I want to add on to that is sometimes you might buy a horse, like I said, I like the younger ones, the ones where I've looked at the genetics and looked at the lineage and looked at the past performers' records. But sometimes horses aren't cut out to do what they're bred to do. Sometimes businesses they have to pivot, they have to um figure out a second way of revenue or or a second stream of income. And and horses are the same way. Sometimes they just don't want to conform to what you think in your mind is the best. And I think business owners really should be aware of that. And same with employees. You might hire on an employee that is on paper, looks great for one job, and actually turns out to be better at another.

SPEAKER_01 38:01

No, it's true. Pivoting, I think pivoting is important. I mean, flexibility at the end of the day. Um, but you know, I think what I like most about the symmetry between buying a horse with the sole intention of not only companionship, but also training and competition and and and doing these things with horses that I mean they're just so intelligent. I just every time we talk about what you do with horses, I it always is just exciting to me. But I think this idea of the symmetry between the the two worlds is just so acute in my mind, and that it seems to me that the horse world can really learn from the business world in putting more paperwork in it. Yes, more P's and Q's, and and the business world can learn from the horse world from the more maybe softer emotional side because everyone's so invested because it is an animal, it is a it is a companion. And and I think a lot of people, it's very transactional in a business world, right? And so it's just what does it look like on paper? And we skip the transition support, we skip whether it's a good fit morally, values-wise, right? Um, you know, in in the last few minutes that we have for this episode, is there anything else that you would like to add about symmetry and things that you could take from the horse world and really suggest to the business world or or vice versa?

SPEAKER_00 39:25

Yeah, absolutely. Um, the biggest thing for me would be to just continue to appreciate who has been there to help get you to that point as well. Because I'm still a young individual, still learning, still in the horse world, still learning in the legal world. So to take the time to look back and and really hone in on those relationships that you've built along the way. Same with the business world. You never know who when you call somebody who's gonna answer or who they might know and to get you into the next the next step.

SPEAKER_01 39:55

Well said. Couldn't have said it any better. Well, thank you so much for being on the podcast. Special thanks to Chesney for this beautiful hat. And uh when you're working with Nocturnal Legal, now you have a better name to the face for Chesney, who supports us on every transaction. If you enjoyed this episode, please like, share, and tune in for next week. In the world of business, not all deals are what they seem. Fortunes rise, empires crumble, all with the stroke of a pen. Mergers, acquisitions, hostile takeovers. Welcome to Mergers She Wrote, where we examine strategies and stories behind the biggest deals in business. Because in MA, the real risks are the ones you don't take.