Why 80% of Businesses Fail to Sell | Exit Planning Tips with Adam Koos

0:00All right, I want today's episode, we interviewed Adam Kus, you know, we really talked about kind of the financial planning and really kind of getting sellers ready to exit their business. So Casey, what was some of the big takeaways that you had from the episode? You know, it's all comes down because Adam's background is psychology. Yeah, which I thought was an interesting kind of take on a financial planner, right? I know, but there's a lot of duality between these two things. But when you're meeting with somebody that's making the biggest decision of the life, you have to have some type of sensitivity to the other person that you're talking to, right? Yep. Someone's just not going to go, oh, yes, I'm going to sell you my business, right? There's a process and there's a lot of psychology that goes into it. And so what Adam does to meet with them, they help them get ready. It's no different than what we do to try to help try to buy their business. Same process, same conversation, we're just going in at a different angles. But ultimately, you've got to be a consultive salesperson. You've got to be consulted. You've got to educate. You've got to bring something to the table. Is it taxes? Is it this or that?

1:01To keep that interest in drive, that's the line. So I loved everything we talked about. Yeah. And I would say to add to that, the one thing that I thought was kind of interesting, too, was, you know, him trying to get in as early as possible before, like, I think a lot of people take too long. They, it's a snap last minute decision and he's saying, hey, no, you need to be planning this out for years before you actually sell or just, and even if it does take maybe even a decade. You're at least ready because you set the foundation correctly. And I think a lot of sellers get into running their business, you know, and they don't think about the exit. And I think that's where Adam and his firm really kind of help work with business owners like, hey, get these things in place. And even if you don't use them for 10 years, you at least are ready to pull a trigger on a potential sale down the road. And I always thought that that was interesting. A lot in this episode. So looking forward to it. Welcome to the M&A Launchpad Podcast with your host, Casey and Ferris with Equity Launchpad. On this podcast, you will get insights on acquiring investing in and selling profitable businesses

2:03in the lower to middle market, whether you're a business owner, investor, or a spa entrepreneur at Equity Launchpad, we will provide you with the knowledge, guidance, and capital to navigate the world of mergers and acquisitions. Hey, there, this is Casey with the M&A Launchpad Podcast. Want to let you know about October 25th, put it on your calendar is, is a do not miss one day event. There's going to be incredible headliners that are really at the end of the day. You're going to get a chance to talk to people that have made acquisitions, learn from some of the challenges that they've made because this is definitely a challenging process. But more importantly, there's going to be people there that can help you and support you along the way from great vendors, quality of earnings, how to run the do diligence process. And how do I get financed? How do I raise capital? How do I structure all of these things? October 25th in Chicago, we're going to be gathering. It's going to be hundreds of people that are all focused, light-minded people. And man, everyone that's come has given us incredible feedback. So mark your calendar October 25th in Chicago, we look forward to seeing you.

3:06All right, Adam. Hey, welcome to the show. Yeah, thanks so much for having me. I appreciate it. Yeah. So why don't you just dive in and talk to us a little bit about your background, what you do. And we'll start asking you a bunch of questions from there. Sure. I'll give you the Clips Notes version because there's a lot. I started, my plan was to become a trauma surgeon. I was in pre-medit Ohio State, and some personal things happened to me, and I decided, you know, my senior year to drop out of the program, and my dad told me I had to become a financial advisor. I thought he was crazy, but he thought I was good at making complex things easy to understand. And I was always messing around with this virtual stock exchange account. So he told me I could do a, become a financial surgeon. That's what he said. Nice. That's how I got into the financial business, I guess. I ended up getting a double major in finance and psychology, but I always joke. I use the psychology degree more than I do. The finance degree, it seems, but, and then from there, ended up in the exit planning world. We call it BTEP or business transition and exit planning, no value acceleration. Just after COVID, I mean, we always work with business owners on the business advisory

4:10front, specifically with retirement plans, cash balance, plans, pensions, things like that. So I was until COVID that I read a book, frankly, and the statistics shocked me and we can get into that later. And so I got into that and then I started another company where I helped financial advisors grow their firms, not necessarily to sell, but, you know, but so that's kind of, that's kind of where I'm at today. That's the Clifsonist version. So all right. So it sounds like you've done a lot, you talked to a lot of business owners, right? You know, I mean, I guess from, from your perspective, what's the most exciting part of what you're doing right now? Is it the kind of helping them plan for that next phase of their career or is it the financial, you're still liking the financial planning and advisory part of the business or was that kind of looking like? No, you sure? My favorite part, personally, and then again, you said right before we started recording, you said, is anything off limits? I'm going to be honest. My favorite part of all of this stuff, it doesn't matter whether it's a non-business owner, a business owner, a financial advisor, I just like, I like the, the act of helping them learn the things they don't understand and bringing awareness first and foremost.

5:12So sitting down and doing the planning isn't, frankly, that doesn't really get me up in the morning. I always say that, you know, it wakes me up every morning and gets me pumped up about going to work these days, you know, doing this for 24 years is saving people from bad advice and bad advisors. Like, you can't save everybody, but that's what really jazzes me up. So I think that, I think what I love the most about working with business owners is that the vast majority of them don't know how important it is to start planning to sell. And they just put it off and put it off and put it off and they keep working harder and harder and harder and, and then, you know, unfortunately, the statistics say that most of them don't sell because they just don't plan in time and it's, and it's really sad and it's frustrating and shocking, really. So I think that's what really excites me the most is just bringing that awareness out to the business owner community. So there was a, this is kind of what got me into this space as well is this, this baby we were aging and then a lot of businesses not being able to transition. And there was a jewelry store that did very, very well here in Houston.

6:14I think it was a K Mark's or whatever it was at a location up in the woodlands where I'm at. And I was absolutely shocked to hear when they, when they closed down. And it was like, I mean, they had locations all over Houston and I talked to somebody that knew them and they just, none of the kids wanted it. And the parents just were like, we don't even want to go through this process and they just closed down. And you're like, so when I leave it some money on the table, right? They leave their money. Well, no, but like, my point is is even like, they're still value there, though, right? That's, that's what's crazy. That's what's crazy. It's a great brand. And you see that too, right? You know, like, well, maybe I'll just shut it down, you know, and, and you're just like, why? Why would you do that? You're leaving money on the table. Yeah. Or they get sick, right? They have a plan. And that's probably, and tell me if that's what you've seen most of is I'm, I'm getting to 65. I'm going to live forever, right? Then I have a heart attack or something occurs and I had to put in a system of process. I have no way to exit and no one's ready to take over.

7:15And it's done. Heart attack, stroke, dementia, divorce, they have a partner and the partnership falls apart. I mean, there's, there's the reasons are endless, honestly. And when we all think that it's just not going to happen to us, yeah, that's true. I mean, I think that's just human nature, right? We all think they're going to live forever until something tragic happens and then it's like a wake up call. You're like, oh, wait, I need to figure out like my fairs here, right? Yeah. What if that could happen to us or what if that could happen to me, right? But like, okay, so a lot of our listeners are either business owners potentially looking to exit or people looking to buy their first or second business, right? So like, what are some of the, I mean, obviously you're working with a ton of businesses. What are some of the like glaring mistakes that are just like so easy to fix ahead of time? You know, kind of maybe give us your top two or three, like business owners, please listen up. Like this is the golden nuggets that I'm going to drop right now, like that type of stuff. I think the overarching biggest thing is to pretend like you're a buyer. If you can do that, if you can step out of the box and you can look at your company

8:17as if you were going to buy it and make a T chart and say, here's the reasons I would buy it. I wouldn't buy it because I think that's probably the biggest mistake they make is they're not able to step out of the box. You know, we, I can't remember who said this. I think it was Chris Snyder. He talked about how, you know, a business is like our baby and nobody wants to be told your baby's ugly, but, you know, oftentimes it's, it's, you know, it's not ready. So I think the second thing I'd say is that too many times you've got this successful business, but it relies too much on the owner and buyers are going to come in and be really nervous about buying a company where if the owner's gone, what happens to the customers? And with that, you get customer concentration problems where, you know, what percentage of the revenue is the top five, top 10, top 20, you know, clients, customers, patients, whatever you want to call it. So that's another issue on de-risking from continuity standpoint, having contracts, bonuses, something in place for retention for key staff is a mistake I see a lot. We had one, we ended up not working with them, but we had one bank that was referring

9:19to us and they not only were all paper, no technology, they thought their company was worth about two and a half times what it really was, nothing was electronic, like I said, all paper and their CEO was leaving. And they wanted to sell next year and it's like, well, you've got to get another CEO first before you sell, right? And I said, no, no, no, we're just going to sell. I'm like, you can't, like, you're not going to get that molten, you know? So I mean, there's, there's a lot, you know, but it comes down to risk at the end of the day, a buyer doesn't want to buy something that has high risk and, you know, there's a lot of, no matter what, you can't get rid of the risk, right? You guys know that, but you want to minimize it, right? So a couple of things that you're saying that I think our listeners are really dive into and a lot of the process, right, that someone goes through and buying a business, you've got to first find the business, right? Then you've got to get that buyer and the seller in you an alignment to agree that you're the right person to transition about the business, right? So these guys got to go through a lot first, just to even get to the closing table.

10:22Then they've got to get financing, they've got to go through all this stuff to get through that, that hump. And then they've got to take over and run the business. So it's a very, it's very difficult. And anybody that's saying it's not is, you know, they just don't know. It's very difficult. They'll learn. But in that meeting, one of the things I enjoy doing with the sellers, right, is I really like to spend a lot of time seeing if our core values are aligned, right? It is critical for me to be able to get a business and bring it across a line. If we're not, if we're not seeing eye to eye, which we are not buying companies where the seller is going to leave the day we close, just not going to happen. And so in my first conversations and in my meeting, it's the hey, let's transition it. And so where you were talking about key man risk, right, a lot of these deals have a tremendous amount of key man risk. We just bought a business that had like, it was key man risk. Well, we are, we know what we're doing. We knew we, we brought in the team. We did all those things.

11:22And but he was never going to sell his business for the top dollar. And he knew it, right? So we ended up getting a great trade because he wanted the legacy to live on. So that's where I'm getting to is the legacy, right? I talk a lot about legacy in my conversations. What, what does the brand look like? We're not here to change your brand. We're not here to change this and change that. That's my talk track, right? So when you're talking to sellers, right, and you're helping guide them to these exits. What are the things that you're talking about with them? So as, so us as, as that are coming to talk to them at a later day that you're preparing them for, what are those key things that we should know when we're talking to these guys? Sure. Yeah, I think that this, this, since you started with the soft, you know, the soft topics, you know, things like that aren't necessarily tangible or quantifiable, um, would be, you know, asking them, you know, what, what does, what does an exit look like? You know, first and foremost, like, is there, is there, um, you know, there's different ways to exit, right? You can sell different types of people, companies, you know, private equity can be a competitive buyer. Um, so we want to know, make sure they understand the different types of sales and different

12:24types of buyers so they can find a right match. Definitely want to find out how, how much they, what their relationships are like, not only with their customers, but their staff, you know, with their team, because I think that one problem we might run into from time to time, but I'm just being totally transparent is you run into an occasional owner that doesn't seem, I don't want to say it doesn't seem to care as much about their team, but they just, it's, it's not, they're looking at the numbers and that's it. And sometimes that can be tough for the buyer, I think, I think that, that's, that creates more risk and it's intangible risk. It's not something, again, you can just put on paper in a number. So I think that making sure we understand who they want to sell to so that they can find a personality match, because any good business owner, again, it's their baby, any good business owner is going to want somebody to come and it's going to take care of their people and their people are obviously, they're, you know, the clients, the customers and, and their team, their staff. The second thing I think would be just the numbers, I mean, I think too many times, and I'm sure you two have seen it, but I'm sometimes shocked when I see the books of some of these

13:27companies that they're, it's amazing. They're so successful and some of them are making millions of dollars to it. They're just, I mean, it's been run on a spreadsheet and there's no real, there's, there's certainly no gap accounting going on anywhere. Yeah, there's accounting entries that don't make sense. And then, you know, they're ready to get evaluation done and they haven't done any recasting, no addbacks. And it's, I mean, so that's a big, I want to call it a struggle, but one of the biggest humps we have to get over is the addbacks, the recasting and making sure that, you know, look, if you're, if you're, if you own your office building, which many owners do, and you're, you're paying a lease, you're paying a lease of, you know, $500,000 a month, but, you know, the, the going rates 300, we probably want to change that. If you have three, three cars in, in your company that, you know, you drive your, your wife drives and your sister drives, you probably want to recast that. You know, so there's things like this. And then it gets, that's easier. It's the stuff like meals. I'm not going to let them add back that stuff.

14:28No way, they, they are not going to get a multiple on that addback. I'm right. I will fight that one. One car understood three, no way, right? Right. Yeah. So I mean, I'm exaggerating. Maybe not, not, no, you're not because of, I think we've seen it. I think like, like these guys want to add back all this shit that they've been trying to avoid paying taxes on. And you're like, hey, look, you got, you already got the bonus agreement. You didn't pay taxes on that, right? You're not also going to get now at three times, four times multiple on that addback. I mean, I'm going to do it. Uh-huh, yeah. Well, no, I was curious just to kind of take a step back. Either to your earlier statement about kind of like a brain drain type scenario that a lot of people don't take into consideration, especially like the, the, the older gal or guy that just wants to get a bag of money and go off of the sunset. I think that's always kind of the fallacy. You know, especially if you are kind of the, the, the sun, the stars and the, and, you know, in the moon in this, this little universe of a business, right? How, how are you consulting or, you know, I guess giving people options,

15:31you know, the business owners that is to, to try to, to vest themselves from, from that city scenario, right? Are you saying, hey, you should bring on a GM, train that person ahead of time. Like what are some of the, is if you're a business owner listening to the, to the podcast, like what are some of those suggestions to avoid those scenarios, right? When we put together a plan for an owner, it usually takes six months to do it. So there's a lot going on in there. I mean, part of that plan includes a personal financial plan for the owner in this palace. If there's multiple owners, obviously, there's multiple plans going on there. One of the big problems that I think probably one of the biggest overlooked issues we run into with sellers in, and this is the opposite. What you two mentioned earlier, when you say that, you know, they get these owners, you want to just, you know, they sell and they want to bounce like the next day. We do run into issues with owners that are like, oh man, you know, what am I going to do now? Like this is, I call it around. Yeah, it's like life after football, right? You know, I played football my whole life. I'm done, you know, average, what NFL 3.8 years, something like that. I mean, it's less than that. But now what am I going to do for the rest of my life? So even if you're selling your company at 60 or 70, I mean, you still got life left

16:33and you've been, you know, working in that company, your baby for many, many, many hours a week. So you have to know what you're going to replace that time with when you're done. That's a great point. That is a great point because I even think in the sales process, right? For a buyer, there's a point where the seller stays on too long. Yep. So there is, I'm just saying, we have like, I have example of that, but it's again, it's there is like, these are real things, you know? And so while you're guiding them on, hey, what are you going to do next, right? We going through the sales process. We are also needed to understand what is the, how long do we want this person on, right? Yeah, for sure. Yeah, but aside, aside from the personal planning for after, you know, life after football, as I called it, the other part is the business side of it. And again, trying to get them out of the business. I try to get them, I try to very early on get them to understand that, look, you're going to have more fun, you're going to have more free time. You're going to be more profitable. The company is going to have less risk. Your staff's going to be happier and your enterprise value is going to be higher. If we do all these things to remove, you not completely remove you from the business,

17:35but because I think many owners like that the business, business depends on them. It gives them a sense of purpose, but then I want to get a fractional CFO in there. If they don't already have a CFO on staff, and then take that plan and hand it to, you know, that fractional CFO or their CFO, maybe get a value advisor. And if there's already a CFO in place, I think we need a value advisor, somebody who understands the planning process. And then just kind of get them understanding that, look, this is your company, but they get kind of tying that into what's going to happen when they're done, when they exit. And right off into the sunset, there's got to be something to do. You can't just say, you know, like this one owner, you know, I'm going to, I'm going to move to Colorado, we're building this house, you know, my wife and I've been in the dream house. It's like, what are you going to do in Colorado? Well, you know, hang out at the house, you know, it's like, it's awesome. Have you seen the house thing with show pictures? Like, yeah, okay, but what are you going to do there, though? And he gets mad at me, you know, and it's like, look, you know, I'm not, I'm not trying to frustrate you, but you can't, you know, sit around the house all day. I mean, yeah, you got a nice pool, but I mean, how long can you sit around at a pool? And especially Colorado, you ain't going to be using that pool at least.

18:38You know, eight or nine months out of the year. Too shame. No, so I mean, I guess so. What you're suggesting really is like, it's a two-pronged process, right? It's, you know, how do we kind of get them comfortable with not being the sun, the moon, and the stars, right? First, and, and I guess the, the pitch to them is like, hey, the value is actually going to increase, right? Because you have set these pieces up in a way that's more scalable for the next guy, or gal, that's going to buy the company. That's where that psychology major source is going to be. I know, right? No, I guess, right? He's playing, he's playing that part. No, I know, because I love it, right? Because you really need to, you need to, you need to, and I think this is one big thing too, right? To, to, to kind of take a point here. People need to be planning this out, one, two, three years in advance, sometimes even longer, depending on what the, what the scenario is. And I think that's the problem is that people think that they could just flip a switch. Oh, I'm just going to go, now I'm ready. Well, no, you should have been planning this out for the last year or two, bringing these people in, getting the valuations done,

19:40cleaning up your books, you know, if you're the financials, yeah, because I think the other thing that I noticed too, and, and correct it for wrong, when you're reviewing these financials, is not only are they doing a lot of personal expense stuff, but they're, they're just trying to load up so they, so they don't have to pay taxes, right? And really what they're doing is they're shooting themselves in the foot. They're not running a valuation, you know, they're not running it like a business, they're working, they're running it like they're an employee of their business. Yeah, they're trying to, they're trying to minimize their tax exposure, but what they're ended up doing is they're, they're, they're, they're lowering the potential value of their company, right? Or by doing all of these things. And so like, from the perspective of a buyer, they're, the buyer's not going to want it. I mean, they're going to, they're going to be a less attractive company. I realize that you, yes, the value goes up, but that's not the point. The point really is, it doesn't matter what your company's worth if nobody wants it. Yeah, that's true. And I think one of the, if one of the things here for our listeners is if you do not understand the psychology of the person that you're buying their company, you've got to understand what they're going through on the other way, right? It's, it's, there's, there's a tremendous amount of, of care and love in their business.

20:44And now you're talking to them, you're, you're about to go through due diligence and tell them that they're baby's ugly, right? Yeah. It's a big thing. So what do you do at a, to find these companies? How are you sourcing business owners? Because it's the same, it's the same way that I'm probably trying to source of myself. But so how are you getting to them? And then what is that consultive selling process to get to the table with them? Because I think it's the same exact thing we do. Yeah, the lead, I mean, when you talk to, you know, how we meet the first, how we meet anybody to begin with, I mentioned that in, you know, COVID, I read this book and it said that 80% of businesses dissolve and blew my mind. And then it also said that 80% I'm sitting here, I'm a business owner, right? I'm sitting here reading that it says 80% of your net worth or the business owner's net worth is tied up in their company. And I'm shaking my head and well, and yeah, it sounds about right. And then you hear that 80% dissolves. So that means 80% of owners who have 80% of their net worth in their company lose 80% of net worth. And then of the 20% that sell roughly 75% self or less than market value, right?

21:48So when I'm looking at this stuff, I get pumped up about meeting new people to share this information with them so they don't make the same mistakes and they don't become a statistic. So during COVID, when I read this book, I decided I got to figure out how to find these people. And it's not easy. Like, is there a harder person to get in contact with than a business owner, right? So I am one. So what I did was I started another company that's the elevate and exit. And I started doing events. At first, it was in-person events, probably kind of them throughout the year. Then we realized we could have a bigger reach if we just did it virtually. And then they could live out there forever. So we started a podcast, we do webinars. And we do some events just a couple of events locally now. And then I built a kind of revised my network of centers of influence. So corporate attorney, M&A broker, a couple of them, business banker, and then got them all involved in these events, did things like this, like a podcast, just like you're doing here. And the goal was really, it wasn't to sell.

22:48It was to, again, educate. Bring awareness and let people know, hey, you can't just kick this candy on the road. And then when we get to the table, which happens a lot, it's, again, I'm not trying to sell. I'm just trying to educate. Because some of the owners aren't ready to sell. Literally, it's like, look, I'm not selling for 13 years. And my only goal then is to, like, again, the kind of thing we were saying earlier, explain to them, look, it doesn't matter if you're selling three years or 13 years from now. What matters is you do this planning now. And I don't mean to use CrossFit as an example. But you know, one of the models of CrossFit is, be ready for anything anytime. I mean, if you're running a great company and all of a sudden, you just get a, you have some competitive buyer that comes up and says, hey, I want this thing, you know, I want to buy this this year. And then you're embarrassed to get the books out. That's your fault, you know? And you're going to leave it money on the table. I think that's a big, that's a big part of like what's happening. It's just these people are just not prepared. Right. And I think you brought up a really, really good point that I want our listeners to understand, like, you know, if you're a business owner, run your company,

23:52like you're going to sell it at any point, you're not like, oh, I'll get around to that in three years. I'll get around that in five. Why not do it now? Because you never know if you're running a great business, especially right now is we're starting to see a lot of buyers in the space. Private equities getting bigger and bigger. They're coming down the stack in terms of buying smaller companies. So like if you're a business owner, listen to this podcast, the takeaway here is get your get your affairs in order now. Because even if you say you're going to do it in five years, what if like I'm said, what if somebody comes along and offers you a big old bag of money and you're you open up, you open up the books and they're like, well, actually, we're going to rescind our offer because, you know, it's not worth what we thought it was worth. No, thank you. Yeah. You know, you got a big egg on your face. Yeah. So I think that's a big takeaway. So in your process, right? So you've meet with these sellers. You've got this event. You've got these activities. You're doing new things. What I'm taking away is a little bit how I sell. And I'm really it's consultive selling. Yes. Right? So we're not we're not I'm not here to buy your business,

24:53right? I'm here to to learn about it. I'm here to see if there's a fit. Does it great? Is it a fit? That's exactly it. And it's consultive selling. And so for those that are out there, if you haven't, there's plenty of books on how to be a consultive selling. But it's having those things. So where I also like to focus on and maybe you hit on this too, is the tax side. So I've always learned in my conversation. I've got a couple little like things that I say over and over again. But as I get deeper into the relationship, I start talking about taxes, right? That, you know, are you familiar with what you're you're what you've depreciated over the last few years, right? There's a thing called accelerated depreciation. And it usually these guys are like, what? You know, and you're like, yeah, you're like, if if I buy your assets, you're going to have to pay back your depreciation or percentage of it. Have you done an analysis? Have you thought about it that way? And so then I get into this conversation of like, hey, why don't we, you know, so it takes the now I'm now and I'm not doing this to they really need to know, right? Sure. But on my side, there might be a way for us to structure it where

25:57they don't have as much tax burden, right? We just may not pay them as much. So on my side, I'm learning these key things, but I like the tax conversation and my consultant selling. That's that's kind of where I like to go. Do you guys get into the tax conversations with these guys? Yeah, I imagine it's like a monster part of once they're like, hey, I want to sell. You're like, well, then hey, what is your tax going to look like? Yep. No, we kind of act like we kind of act as the quarterback. You know, we're obviously not CPAs peer, but you know, we get a CPA involved, we get the M&A broker involved, we get a TPA involved a lot of the time. So like as an example, you know, we've got a company who, technically it's two companies. He's spinning one off and selling them to the two separately. And then he has real estate as well. And what we're doing originally, it was one of those situations where he says, well, you know, if it's, I don't just use the right like dates here, we'll say it's summer. He says, I want to sell at the end of next year. So let's just say I want to sell at the end of 2026. And I said, okay, we'll have you filed your tax return yet.

26:58And he says, well, not yet. And that's okay. Why don't you wait to sell until January of 27? And what we can do as one tax reduction strategy is A, we can set up, well, first of all, we can max out 401k for him and key staff. We can do profit sharing max that out, reduced taxes today. We can set up a cash balance plan. And based on his age, he could put away somewhere in the ballpark, about 3, 350 per year tax deductible per year. So he could do it for 24, in this case, because he hasn't filed his tax return yet, he could do 25, he could do it for 26. And if we sell in Jan 27, we can do it again for 27. And his cap gains tax, if it's cap gains, aren't due until April of 28. So we can, so that's an example of one very common strategy that we use when, we're on the other side of the fence. Obviously, I'm working with a lot of sellers. So we're kind of looking at the runway and saying, okay, I can be extend this runway out a little bit in a way that can help reduce not only our income tax now, but try to minimize or at least mitigate taxes that we're going to have to pay when this thing's all said and done.

28:00So that's an example. And it's probably shocking how many of these guys have never had this conversation with. No, I was talking to an owner literally last week, who owns a remodeling company. They do, I don't know what their average ticket is, but they do almost 300 remodels per year. That's a lot. And he's got him and a partner and a great team, very successful company. He's 55 years old. And he was talking about taxes and he says, I was like, what's your, how's your retirement plan set up? I was like, I don't want to step on any toes, but you know, how's your retirement plan set up? And he says, I have a simple IRA, I'm like a simple. So he can only put away $17,000 per year. For all these years, he's been maxed out at deducting his income by 17 grand plus a 3% match. That's it. So there's, there is great smart, hardworking, successful people out there that are just getting maybe they're not the best advice in the world. And something I wanted to say earlier was that when we're talking about all this stuff,

29:01I think a big question that comes up especially with buyers, but sellers as well is, okay, this is all great guys, but how do you do it? And the answer is hire people, hire help. Because, and I'm not talking about me necessarily, I'm saying, you know, hire the corporate attorney for help. Hire the, you know, talk to a business broker. Talk to someone like you guys, you know, somebody who knows more than you do, because you can't sit around here and think that by going, going it alone, you're going to save all this money and that, you know, you'll make more in the end, because in reality, whatever you pay for all the professionals you hire to help you figure out how to get out of this cycle, this death cycle of being an employee for your company, minimizing your taxes, keeping your profits low, all that stuff, ending up with, you know, amortization issues with recapture issues. The, if you, if you don't hire people, then I think you're going to end up with less at the end of the day. And honestly, the buyer is going to get a great deal. Yeah. No, I mean, I think that's right. You always have to, you have to invest in these people around you, your team, right?

30:01Yeah. So, I mean, I don't think that, and I'll, I'll also say, you know, I mean, it goes back to your earlier statement about just bringing in folks that can kind of potentially run parts of the company without you being involved. 100 percent. A lot of people are, they, I mean, we're all type A. It is an entrepreneur like, well, I'll just do it. I'll just do it. And you end up doing five people's jobs, right? And then you're probably doing five people's jobs not all that well either, right? So, I mean, we've seen it on negotiations where, you know, we had a seller and, you know, I mean, he was trying to poor boy the thing. I didn't have a lawyer at first. And we finally got to a point where like, we can't have any further conversations with you until you, you get a lawyer involved, right? Because he was just wasn't picking it up. Because I think what people realize is like, some of this stuff is like, and we'll come up, we know how to structure deals. We know a lot about finance and taxes and all the other things. A lot of these folks don't. And then they kind of, they kind of get turned off because they think that you're trying to talk down to them or they get, they get really, they kind of get, you know, protective or defensive because they don't understand it. Right. And so I think that that's where, like again, as a seller or a potential seller down the road,

31:02not only getting your house and, you know, in order, get a team involved, but also just getting yourself educated on how the sale process works. Right. How could a potential sale work? Right. Because a lot of this stuff is just lost on people. They might be the smartest guy when it comes to running that company and they've been very successful for decades, but they have just never sold a business before and they just do not know how it works. I don't know if you have to get to talk to the experts. I don't know if you two are Dan Sullivan fans at all, but I'm a big Dan Sullivan fan and I live by the whole unique ability, you know, where the only thing I should be doing in my business was what I'm uniquely born to do, you know, what I'm best at. And then right along with that, his whole, who not how concept, you know, you don't need to learn how to do something else, you need to hire more who's, like get another who. Yeah, I worked at a private equity firm and that's what Tom had always said to me. He was like, it's who not how. And so we did the dance and we did the Sullivan stuff. It was really good.

32:02I'm a quick start, by the way. That's that's my personality type. It's like full of string and restart. That's me. And you're like, oh, you know, I was like, you're ready fire him all the time. And I'm like, the other day I was like cranking the generator and stuff and she's like, you have to turn it on. And I'm like, shut up. If I crank it, I'm just getting it ready. I'm priming it. Yeah. That's funny. Oh, that's great. So kind of as we're getting to wrap it up and all I get is to talk to us real quick, you know, for the people or listeners, majority of them are in that process to not, they probably haven't even met with their first cellar yet, right? They're thinking about it. What is your, you know, and I know we talked about consultive selling. We talked about these things, but from a psychologist kind of mentality, how would you advise them to get in contact when they're talking to them and how to guide to at least to where they can get a really good successful first meet? We're talking about the buyers of the buy side. Yeah, the buy side. Yeah, the buy side. I would say make a list of the companies you're interested in.

33:04If you don't know who those companies are, there's websites, there's people like you to help. There's business brokers, make a list and put together a template email, use, find their emails either on your own through their websites or use an app like hunter.io, Apollo is another good one, use LinkedIn to find them. So build the list out first, build your template out first, and just start banging out the emails, and offer to buy and launch. Everybody's got to eat, you know, coffee is probably less likely, but buy and launch happy hour at the end of the day and just come in with the intention of talking. That's it, you know, it's come like, I'm not looking to, you know, come in here like a bull in a china shop. I just want to learn about you, understand your business. So worst case scenario, I'm going to learn something and you're going to get free lunch, you know what I mean? So I think coming from a passive, kind of modest standpoint where you're just trying to plant seeds out there, you know, and different types of varieties of seeds, you know, the more seeds you have out there,

34:06I think being cultivated and then touching base with those people over time, I think the higher probability you have of finding something really special. And then, you know, business owners, no other business owners. So they might know someone who's interested in selling that maybe they're not ready, but maybe they know somebody who is and it would be a great time to make a connection, but the biggest thing I would say is there's so many people out there, business owners like and people looking to buy businesses that can analyze and over analyze and re-analyze and plan and re-plan and redo the spreadsheet, but you can have the best list in the world of companies you're interested in, but if you don't go out there and you're like relentlessly execute, you're not going to, it's not going to happen for you. So you got to do the work. Yeah, God do the work, man. There is no, there's no way around it, right? And sending one email is not going to get you the answer, right? But pretend like don't treat it like it's sales, treat it like you're going out to hang out, you know? I think that the best deals are made by people who meet and become friends first. Yeah, you got to like knowing trust. I mean, that even happened, it doesn't matter where you end up

35:08in the the buy side process or where you end up finding, you know, potential sellers. It's all about making that connection, building that rapport, because again, we talk about like, hey, this is their baby, they've been connected to this baby for maybe 30, 40 years in some cases, right? They want to make sure that that baby's taking care of, you know, post acquisition or post sale, right? So they're not going to just do that and with somebody that they don't like. Yeah, no, I mean, there's been so many times when we've talked to potential sellers where money's really not even the top factor. Yeah. And if tax planning in a lot of ways, they want to make sure they're going to net the most money. But also, I think most of the time, it's legacy taking care of their team. You know, what are the future plans for the company? Like, are you guys going to try to grow it? You're going to try to modernize it. You're going to do other acquisitions. That's what gets them excited. They want to see that you're going to grow their, their, their, their, yeah. I think some of the coolest deals don't end with a handshake at the table. That, you know, ends with a hug. I mean, that's, that's pretty cool. I love that.

36:08I like that and I am a hugger. So be careful. Ready. All right. So, ready hire, ready hug aim. Yeah. Whatever, whatever it takes, honestly, you don't like hugging. We'll, we'll just debt, you know, whatever. You know, awesome. Well, Adam, it has been incredible to hang out with you today. Thank you. And more. We're going to jump right now into our rocket round. And this is where we ask our guest, three of what I think some of the most important questions. I don't think I'm ready. Go ahead. All right. Well, here you go. So first question is, what do you like to do in your free time? All right. In my free time, my wife taught me how to play volleyball. And we place, we've been playing San volleyball every Thursday night for 18 years. Wow. OK. I like it. Year round, even indoor. So it's a, it's not my chosen sport, but it's a good time. It's good exercise for a 46 year old. And, you know, bonding. It's a good time. Good luck. I like it. All right. Next question, man.

37:08Most memorable moment in your business journey. Most memorable moment. It was, I guess. We've won a lot of awards. And I don't really take myself very seriously. My wife always gets mad at me that I don't really think too much of all the recognition we've received over the years. Because I just don't, I don't know why it doesn't. I know it's important, but at the same time, it's not. There's other things that matter more than me in life. But when we won the Better Business Bureau Torch Award for Ethics, I would say that was probably one of many, but one of the top, off the top of my head, one of the top moments, because being in the financial industry and knowing everybody who's listening and watching, listening to or watching this knows that ethics don't usually go with finance very well. And to be, we're still the only, in Central Ohio anyway, the only financial advisory and exit planning for ever win that award, which is pretty cool. So that's, that's exciting. Congratulations, man. That's awesome. Thank you. All right. And last question here is, what is your favorite tool or resource?

38:09Oh, man, I wanted to be unique here. But chat GPT, man. Chat GPT, Claude, they're my best. I mean, I use, I don't even use Google anymore. Everything is chat GPT. It's, it's, it's the buzz. I mean, I've been to a lot of events last couple of months. I think everybody's using it for one way, shape, or form. Yeah. So, you know, no, you're not the first guest to, to say chat GPT, but it's all about the prompts, right? I've got to have the right prompts. Hey, and I just got my plot. So I've, I've got to set it up, but I'm, I'm, I'm excited about it. Yeah, no more no taking the thread. Right. That is awesome, man. Well, Adam, how could people get a hold of you? If you look up just my name, Adam, last name is filled K, double OS, okay, OOS. You can find me on LinkedIn. You can find our podcasts. We also have podcasts that we run. Maybe we ought to have you guys on, actually. Love to do a home and home. But those are probably the best ways. You can find the, the website for our exit planning company is at elevateandexit.com, and then

39:10libertoswell.com for the financial advisory firm. Awesome. We'll put those in the show notes as well. So people can reach out to you and get some more information. Yeah. All right. Cool. Cool. Well, thanks again. No, no, a lot of great valuable information today. You know, we wanted to, we wanted to thank you for being on the show and. Thank you for honoring me with you, with allowing me to be on the show. This is, you guys are doing some really, really impressive stuff. The conferences. I'll definitely, I'm definitely trying to make it to the conference next year. This one in Chicago coming up looks awesome. I'm just not able to go because I'm speaking at another conference in Philadelphia, but, but what you're doing is really impressive. I think it's really cool and, um, you know, I'm looking forward to seeing you to succeed. Cool, brother. We appreciate it, man. We'll talk to you soon. All right. Thanks Adam. Thank you for listening to the MNA launch pad podcast. If you've enjoyed today's podcast and would like to support us, please leave us a rating and a review after you listen. If you're looking for guidance on your next business acquisition or sale, capital to support your next business transaction or to invest in a private equity opportunity, visit equitylunchpad.com to learn more and to connect with our team. If you know of an individual, you would be a great guest for the show head over to equitylunchpad.com

40:13or slash nominate where you'll have the chance to refer yourself or someone else to be a guest on our show. I'm Casey Menshu and I look forward to talking with you next week.