Getting Out! The Best Way to Exit Your Business

 

So you're considering selling your business. What is the best way for you to do that? Should you sell on your own, use and intermediary, or a broker? Join us as we talk with Paul Curtiss of EBIT Associates as he shares his thoughts.

Who is Paul? Paul spent his formative years growing up in Sun Prairie, WI where his father was the youth services detective until leaving the department to start a non-profit organization while running a home remodeling company.

In his sophomore year of college, he entered the navy reserve and became an 8408 Corpsman.

Paul then finished his Communicational Arts Degree at the University of Wisconsin-Madison. Paul started his professional life in Real Estate nearly 25 years ago, then realized quickly that he liked the role the lender held at the closing. He transitioned into mortgage lending and stayed there for nearly 15 years. Once his family started moving around as a result of my wife’s career he transitioned into title work, which lead him into owner representation, commercial brokering, and finally business development for Peridot Construction Management.

Paul has enjoyed giving back in any area he can, whether in his community or his faith. With over 20 years of experience sitting on a non-profit board, an active commissioner for his municipality’s Planning and Zoning, as well as giving back at the local food pantry.

https://ebitassociates.com/paul-curtiss-business-broker-with-ebit-associates/

[00:00:11.880] - Alice

Hello. Welcome to Books in the Biz, a podcast that looks at both the financial and operational sides of success. Please welcome our hosts, Dan Paulson and Richard Veltre. Dan is the CEO of Envision Development International, and he works with to increase sales and profits through great cultures with solid operations. Rich is CEO of the Veltre Group and a financial strategist working with companies to manage their money more effectively.

 

[00:00:44.470] - Dan Paulson

Hello, everybody. Why, hello. Welcome to Books in the Biz. Welcome, Paul Curtis. Thank you for joining us today. Rich, how are you doing today?

 

[00:00:55.930] - Rich Veltre

Doing well.

 

[00:00:56.760] - Dan Paulson

All good? Well, hey, we're here to talk about selling your company. So if you are in the mood to sell your business, you said you've had enough of this crap, you want to get out. Paul Curtis is one of our experts on that. Paul, how are you doing?

 

[00:01:10.840] - Paul Curtiss

I'm doing well. Doing well, Dan.

 

[00:01:12.350] - Dan Paulson

Great. And you are a Principal at EBIT Associates. Is that correct?

 

[00:01:17.180] - Paul Curtiss

I am a managing director at EBIT Associates, and I absolutely just love what I do. That sounds so odd and cheesy to say, but it's true. I've worked my way through a number of industries, and this one is the one that I don't ever foresee me leaving.

 

[00:01:35.580] - Dan Paulson

Well, we'll talk more about EBIT Associates. Why don't you give us just a brief bit about your background? Where you come from? You're a grocery guy, aren't you?

 

[00:01:43.850] - Paul Curtiss

Yeah. No, actually, I came from mortgages.

 

[00:01:47.240] - Dan Paulson

Oh, mortgages? Okay. Mortgages.

 

[00:01:49.560] - Paul Curtiss

Yeah, yeah. Back in the day, straight out of school, I have a BS and BS, meaning I have a Bachelor of Science in public speaking. I'm really good at BSing my way through things, or at least know how to tell people a whole bunch of information about stuff they probably think is just BS. And so that's where I started. And from there, I really loved real estate. I went into real estate. Two years into it, I realized I like the other side of the table. The mortgage guy was the one who appeared to be running the show and I had the best handle on everything and coordinated everything, and I enjoy that coordination. I went into the mortgage industry for a good 10, 15 years of my life, then worked through title because my wife's job moved us around from that. When we moved back to the Wisconsin area, one of the title companies that I had worked with, the owner wanted me to come work for her. And in that process, I became an owner's rep for the commercial side of things. She wanted to develop a multifamily property. Then I got recruited from there into the whole multifamily world and worked for a local GC as a business development.

 

[00:03:12.030] - Paul Curtiss

From there, Todd Cushing, who I've known, who is the principal at EBIT. He and I go back almost, well, we figured out it was just over 30 years now, and we were at school together. He is about 10 years my older. His family-owned a business, a very successful audio business that would pipe in music. And so he left the family biz to come to school. And so our freshman year, first class, first hour, we were sitting in Spanish. I could speak Spanglish at best. Todd could speak, could say Ola without an accent, maybe. And so we would get in so much trouble because we'd have our books in front of us, right? And the teacher would ask a question. I go, Hey, Todd, I think it's this. His last name is Cushing. So he sat right behind. My last name is Curtis. And so he'd have his book open. He'd be like, I think it's this. And so we would be doing this throughout the whole class. Well, I went down the real estate and mortgage path. He went back to business. His dad wanted to sell the business. So he left in his sophomore year, started it.

 

[00:04:25.210] - Paul Curtiss

And that's what inspired him to create EBIT because there was money left on the table. The earnout wasn't properly documented. So they lost money there to the tune of almost $700,000 in those two parts. It was brutal. And so he's like, there's got to be a better way to do this. So he started EBIT Socials. Been trying to recruit me for a good 10 years, and I was resistant because I'm like, Todd, they're not the same. They're not the same. And he goes, your dad ran a business and you closed its doors. You didn't even sell. You didn't even know you could sell. You need to help other people that are like that. And I go, okay. And I looked I got it, fell in love, and I enjoy the finance and the structure side of it. Oddly enough, due diligence is one of my favorite parts of the transaction. And most people, Todd says due diligence is like having a colonoscopy, and he really can't stand it. And so I handle most of our due diligence and just really enjoy that whole side of digging in and figuring out, okay, here's what we need.

 

[00:05:24.570] - Paul Curtiss

What document do I need to show that? So I've been doing this for now around four years. I don't remember. I don't remember right after COVID, so I can't remember if it was the end of '20 or the beginning of '21. That's why I say four years-ish. But the transition was exceptionally wonderful because we both had business in our families, right? And so it was really easy to make that transition and look at the balance sheet, the income statement, put those, meld those together and figure out how do we value this out? And what do all those numbers mean? How do they give us an end goal? And so that's what I've done. That's what I love to do. And that's a little bit about how I got to here.

 

[00:06:10.090] - Dan Paulson

Well, and that's why we wanted to have you on because you do have some experience in this. We are both talking to numbers of people that, for whatever reason, maybe want to get out of their business. Some cases, they want to buy their business. We'll deal with that in a different episode. But I think there's a lot of misunderstandings or misconceptions when somebody says, hey, I'm going to my business, and this is what I'm going to get for it, and I'm going to be out in six weeks, and life is going to be good. And we have to educate them a little bit that there's a little bit more to it than that. I'm exaggerating in some cases, but in other cases, I'm not. I don't think people really realize what all goes into selling your company.

 

[00:06:50.480] - Paul Curtiss

Yeah, there's a lot more to it than almost anybody thinks, right? And there's different stages that you can go through. You can have representation. You can try and sell it on your own. There's different levels of brokerage, even. And with that comes different fees. So there's a lot of things out there that I would love to get into in our time here today. And so for instance, I can jump into a really relevant situation that just happened. So I was at breakfast on on Tuesday with three different accountants, one I knew who I wanted to introduce to another guy, and he wanted to introduce me to one of his people on his team. And in talking, we realized that when is the right time to start? Everybody had a different message. Someone like, Oh, well, you should start thinking about it three years. I mean, that's when we really started talking about it. And that was the accountant who gets a lot of his referrals from wealth management. So you got to prep for the tax side of things. There comes the accounting tax side of things. Then you also have to look at, Oh, but what if they're ready now?

 

[00:08:09.650] - Paul Curtiss

What if some catastrophic thing happened either in the family or an illness, or they just are fed up, or I'm just tired. I'm 72. I've loved what I've done. This is my baby. This is my life. This is what I've been doing. This is all I know. They're harder to... They want to get out, like you said, six months. I'm ready to be done. That's going to be really tough because a successful business, when being purchased, the buyer wants the owner, regardless of size. I don't care if it's a $300,000 hair salon or it's a $6 million HVAC transaction or larger. It doesn't matter. They want the owner to stay on for a bit of time during that transition period to help get the clients to understand their customers, the selling entity's customers. Are we going to be good here? Do I need to find new services? What's going to change? The employees, Oh, my goodness. What do I do? Am I going to get fired? How long do they want me to stay on? I've been here 15 years. Now, what do I do? Okay, hold on. Take a breath. It's all good, right?

 

[00:09:27.880] - Paul Curtiss

And so we got into that interesting discussion, and it swirled around and around because there are all of those factors have to be taken into account. One of the biggest things that we got talking into was the idea of, well, Where does our value come from? And so I'm going to address that in a little bit deeper detail. But what came out of that conversation is, well, there's these things called addbacks. And there are certain line items in your and your income statement that we can add back. Everybody knows that we use most business owners, actually, I don't know any singular business owner that hasn't done this, as some form of pass-through. Either it's their car, right? Normally, it's the car. If they're going to leave the car with the business, okay, great. Then we can just leave that value in the business. If they're taking the car with them, we have to figure out what is the car worth or what is the company has been paying you for that car that we can add it back to the value. And in my world, that becomes a multiplier. I have a client right now that I'm working with, and they were doing all of their tax protection, if you will, at the end of the year as a distribution or dispersion, either one.

 

[00:10:52.400] - Paul Curtiss

And when they were doing the distribution, they were taking 200, 275 off of the bottom so they weren't getting taxed on it. I had this conversation with them. I'm like, well, here's the challenge. You can do that and you're going to pay less taxes. That's great. You're going to save yourself in taxes. However, if you And her salary, she kept her salary nice and low because she kept feeding it back into the business. I'm like, Great. But if we increase your salary, she was only taking $60,000. I go, if you could legitimately double that. And she goes, Oh, Well, like 120. I'm like, Yeah, you could put 120. Now that is a value to the business. That is essentially an ad back, her salary, because they may not need somebody to earn that much to do her job because maybe she was doing two jobs instead of one. That gets split up between two people. Then with the dispersion, I go, let me do the math. Let's just make it simple and do $100,000. If we take $100,000 and you disperse it, I I can't prove where it came from. Well, it's on my books.

 

[00:12:02.230] - Paul Curtiss

It was on your books. It definitely was on your books, but it is not on your books anymore. I can't track where that came from. So if we take $100,000, it's gone. I can't add it back to the bottom line. Let me take it one step further. If you take that out as a bonus, oh, but that's bonus tax. Yeah, bonus tax. It's almost 40%, it's almost 40 %. It's like 37 %. Okay, let's go at 40. Make simple math. $100,000 You're paying $40,000 in tax. You're only taking home 60. Oh, bummer. Well, I lost $40,000. No. If we take that $100,000 and do it as a bonus, I can add back the entire $100,000. Now, if your business is at a three or four multiplier, I just earned you $300,000 off of your $100,000. And then you can deduct things. Yeah, you're going to have to pay tax on that, capital gains. But if you have a good accountant, they're going to find ways that they can write off all that. My services is one of them. The attorney services is another. There's so many services, all of your accounting fees to prep for the sale, those can be written off.

 

[00:13:12.560] - Paul Curtiss

So we have all these write offs that you can take to cover that earning, where you were thinking you were saving yourself $40,000, but now I can't do it. I want to make you $400,000. So that's just one example that I've used with her. And she And he goes, oh, I go, yeah, we'll talk to the accountant. He'll tell you the best way to do it. And so it's one of those things that when you have an advisor in the process, whether that's your accountant, whether that's your wealth manager, whether it's a broker, whether it's a fractional employee, CFO, CEO, COO, I don't care who it is. They probably are a good team to ask, Hey, what do you think I should do? Because they've probably Have you seen this before. I imagine the two of you have been asked that question before, right? And so that's one of the best examples I can give of what's involved in the sale. That's just one aspect, right? When do I start? Going back to that circle that we got into, usually it's about a two year window that you need to really start thinking about it.

 

[00:14:24.210] - Paul Curtiss

That's the safest one. That's the safest one. And so those are some of my thoughts on What have you guys experienced with... I know you both have had fractional experience, correct?

 

[00:14:37.900] - Dan Paulson

That is correct.

 

[00:14:38.740] - Paul Curtiss

Yeah. What have you guys found out in your experiences when somebody brings you in And all of a sudden, they talk to you about, oh, I'm bringing you in because this guy retired and I'm thinking of doing the same. What do you guys find?

 

[00:14:55.050] - Dan Paulson

Rich, go ahead.

 

[00:14:56.590] - Rich Veltre

Yeah, I think it depends on the size of the business. I think the smaller the business, the shorter the window. The bigger the business, the longer the window. So I've seen people go into a sale process that they probably were thinking about it. They probably had some of their skeletons out on the table and figured out how are we going to answer these things when people start asking the questions. But it wound up that I had a couple of companies that are under $15, $20 million that they're selling in two years is probably fine. And then when you get up into that $100 million range, there's no way. They tried to shorten that window ridiculously. And the number of professionals and the amount of professional fees they paid in order to get it done in the time they wanted to was really outrageous. And And they said, oh, by the way, we've never been audited before. We never had a QV before. We never had all these other things that suddenly at that size becomes relevant. So they had to get all that done in nine months.

 

[00:16:13.050] - Paul Curtiss

Oh, brutal. That's That's what that came up also in the conversation with the accountants. Is an audited tax return needed? Sometimes. Do we need a QV? Sometimes. Because we do a QV in our valuation.

 

[00:16:31.250] - Dan Paulson

And just to be clear, Paul, what's the Q of E?

 

[00:16:33.520] - Paul Curtiss

Oh, quality of earnings. Sorry. Thank you. Quality of earnings.

 

[00:16:36.420] - Dan Paulson

We do- Don't worry, I catch Rich doing that, too. I'm like, you better explain. Not everyone's- Every conversation.

 

[00:16:41.430] - Rich Veltre

Everyone. Every conversation.

 

[00:16:43.640] - Paul Curtiss

Well, and Rich too. Like value, I've noticed that anything under 2 million can close a lot faster. We're talking months, right? If you're Main Street, that beautition that I mentioned earlier as an example, I've seen them close as quick as 60 days, right? Especially if someone's coming in cash, a cash on cash purchase versus they are a strong buyer and they're doing an SBA loan, right? That's going to take a different time frame, too, right?

 

[00:17:19.940] - Rich Veltre

Yeah. And the SBA adds a ton of complication, no matter what.

 

[00:17:23.710] - Paul Curtiss

Small business administration, by the way.

 

[00:17:25.390] - Dan Paulson

Yes. Thank you.

 

[00:17:26.350] - Paul Curtiss

Yeah.

 

[00:17:27.670] - Rich Veltre

He might have known that one, but he's not going to tell you.

 

[00:17:32.090] - Paul Curtiss

Sorry, Rich. I jumped into that. So you said the SBA adds a what?

 

[00:17:36.570] - Rich Veltre

Complication. At that point, you're dealing with, like you said, cash. Forget about it. You have all kinds of options if you're dealing with something in cash. So the smaller you go, the better. Well, the better on the time frame. Not necessarily any better on the risk profile or what the lawyers might want to do for you to make sure that you're putting up cash and you have no protection. So they're going to do a lot of other... They're going to want to do a lot of other work. So small business without baggage can go really quickly.

 

[00:18:13.200] - Paul Curtiss

I had a transaction last year that was a $25 million transaction, and that one was ridiculously slow. We were ready for close, and then it was asked. The bank had asked for a verification document, and that document wasn't prepped and ready, and they didn't tell me during due diligence that they needed it. So they asked a month out from closing, and we tried to get it done. We didn't get it done. And then what happened is that closing was at a end of a quarter. And so we tripped into the next quarter, and they wanted to refresh everything. We're like, really? So you run into that, too, right? I'm not sure if you've seen in that, Rich, where it's just you're set, you're ready, and all of a sudden one little thing kills a timeline, which adds exponential challenges. That's why if you can do as much pre-due diligence collection of verification That's all due diligence is. It's a collection of verification so that when the buyer, when the bank asks any questions about, well, where did you derive that number from? You can go, Oh, well, that off of our income statement. And the income statement, we bought a new vehicle.

 

[00:19:35.330] - Paul Curtiss

Okay, can you prove that? Do you have the titles for the vehicle? Do you have the... Is it free and clear? So you add all these layers. And the more things... I use vehicles all the time because there's been very few businesses I've ever sold that there wasn't a vehicle tied to it, whether that was the owners or the companies, it didn't matter. It's just really easy to do the math So it's just interesting how you trip into those nuances and the timeline. The timeline can definitely change.

 

[00:20:14.580] - Rich Veltre

Yeah. And Dan and I talk a lot about being proactive as opposed to being reactive. And if you're trying to sell and it's reactive, just whatever number is in your head, cut it in half.

 

[00:20:27.270] - Paul Curtiss

Right. Yeah. And whatever Or time is in your head, double it.

 

[00:20:31.920] - Rich Veltre

Yeah, double the time.

 

[00:20:33.240] - Dan Paulson

Or triple it. I mean, so no matter what, if we tell people, look, be proactive.

 

[00:20:41.420] - Rich Veltre

If you're thinking about selling in the next couple of years, start thinking about it in terms of detail. Don't just pie in the sky, think, well, two, three years from now, I'm going to retire. And then two years and nine months later, you say, it's time. Let's go. That's reactive. It creates a real issue. So for us, we've been telling people, look, think about it ahead of time. And that way, don't just think about it, start to actually act on it. So if I go off of what you've been saying, and what you're going to need in diligence, it's a whole lot easier to start what the diligence professionals all call the data room, right? You start a shared drive, or you start something that allows you to start putting things in there, and start putting things in there related to what you believe they're going to ask for. You You can't possibly get them everything. No. Because they will ask you for something. No matter what, they will ask you for something that you weren't ready for. That's okay. If that's the only thing. If everything in your data file wasn't there, they'd be asking you for all of it.

 

[00:21:43.890] - Paul Curtiss

All of it, yeah. We start our data room at the point of valuation, in the first contact. When I ask for their three years income statements, three years balance sheets, and three years taxes, And people go, why three years? Well, five years is better. And then they can look at me and go, oh, wait, what? You ask. I was starting small, right? Because if you're at two years, especially with COVID in the background, there's a lot of people that they want that long term play. They want to know, okay, are you on a increase or are you on a decrease in growth? And stable is fine. But if you have one of these other two, they You want to know why? When did it start? What did you change? Was it a person that you let go that was able to increase this because they were holding it back or their income was too high for what they were doing? The cost of doing business, right? As soon as it's in your mind as a business owner, I'm in my three-year window. Talk to somebody. I don't care if it's your accountant. I don't care if it's your attorney, which we could probably break these talks into each one of those different entities.

 

[00:23:07.960] - Paul Curtiss

And it'd be fun to do one where we bring an attorney on with someone like myself in the M&A field, right? And just get into this fun banter because I have a questionnaire that I give to all of my clients when they say, oh, I have an attorney I've been working for years. Excellent. Ask them these four questions, right? And it's experience. It's how many, how big, how often, right? And so doing an M&A transaction, okay, That's not that big a deal. Depends on size, depends on focus, right? There's all these things to depend on. Same thing with accountants. Your accountant might be good at tax protection, but they may not be great at figuring out what does a quality of an earnings look like, right? Or what do I do with adbacks? Because the way I look at adbacks is different than the way an accountant looks at adbacks. I had this conversation for a good 10 minutes at breakfast. All three of them were berating me with different questions, except the guy who specializes in quality of earnings. That is what he does. And so he was a lot of times backing me up.

 

[00:24:28.720] - Paul Curtiss

He's like, oh, yeah, I mean, if you You can add this back in, you can also add that back in because you're adding this back in. And so it's just like, oh. And addbacks, let's define that, right? Those are expenses that are deducted to protect you from a taxable situation that is a specific use, a one-time use, or has an earmark that may change its amount for the new buyer. So that's really the best way that from a layman's term, who is not an accountant, who is not an attorney, and I just look at these quality of earnings all the time, is my best way to explain it in the realm of adbacks, right? Because I look at them different. And I got into that circle with the accountant on Tuesday. And he's like, wait, but the distribution, it's there. I'm like, yeah, I know it's there. It was there, but it doesn't show up in your taxes, does it? No. Then how do I prove it? How do I show it as income? How do I show it as an expense? What expense is it? It just disappears. You don't have to pay taxes on it.

 

[00:25:42.790] - Paul Curtiss

It's a beautiful thing. But I also took away $300,000 of value. You put a four multiplier on that and you're over a million bucks. Why would you do that? Why Why would you? Yeah, no, I've never understood that one. And when I explain it because I'm so passionate about it, and they see a number, they go, wait, 300 equals a million? Yeah, 300 equals a million. I'm taking your taxes off. So, yeah, it's pretty cool.

 

[00:26:20.560] - Dan Paulson

So paying some of those extra taxes might not be a bad idea if you're getting ready to sell.

 

[00:26:25.040] - Paul Curtiss

Yeah. Well, in any business owner who's ever had to go try and get a loan, I If they're claiming $60,000 on their taxes, but they're actually cash flowing $200,000 in their business, they can go buy a car, but they can't buy a house with a $60,000 income? Well, let me take that back. Yes, you can. But it is very challenging to buy the size of house you could buy with a $200,000 income. So I always encourage business owners to put their actual salary. What would it cost to replace you, your role, whether you're the CEO, COO, or you're just the guy who coordinates all of your people? Maybe that's what you're good at. You learned how to wrench, but then you became really good at project management, and you figured out how to get the cars in the bays better than sitting under the car and wrenching on it. So what does that cost to replace you? Put that into your income and pay the taxes on it for two years so that we can show that that has its value, right? Now you don't have to try and say, Oh, well, we don't need $100,000 for their income.

 

[00:27:44.170] - Paul Curtiss

They're earning 60, right? Okay, seller or buyer, I can't argue that. You're right. So it's figuring out where flow is, right? And One thing I wanted to bring up is the idea of... I've mentioned building a team, and I've mentioned the account and the wealth advisor, and that doesn't need to be a wealth manager, right? It doesn't need to be a financial planner. There's a lot of people who, I would argue, play that role as wealth advisor. And then you got the brokerage and the attorney. But I I also wanted to just mention at some point the different types of me's that are out there. What is the different ways you can sell your business? And so I didn't know if that's something you guys wanted to bring up now, or if you wanted to- Actually, I think we could jump into that and admit there was something you had spoke about earlier that made a nice segue into some of the stuff that we talk about on regular occasions, where you're talking about what's that owner doing, and what should they be doing?

 

[00:28:59.230] - Dan Paulson

Now, In my experience, most cases, the owner does a lot, in many cases, too much. And this could be a small company of a million dollars all the way up to, I've seen companies as large as 100 million plus That's where that owner pretty much dictates everything that happens in the business, top to bottom. Now, do they have employees? Yes, they do. Are those employees trained to the point where that business can run without that individual being there? That's where it gets a little bit So I'm curious what your thoughts are on how does that affect the value? Because we've talked a lot about numbers here. Some things are easy to quantify. How do you quantify when the owner is the CMO, the CIO, CEO, The CFO.

 

[00:29:45.980] - Paul Curtiss

The CFO, the C-suite, as we say.

 

[00:29:51.560] - Dan Paulson

Now, they might have people again. They might have somebody that's doing the task, but everything goes through the owner. Yeah, everything goes through the owner. And that's what I don't think people understand, is when the owner has that much drive and control, and basically the business stops on a dime if the owner isn't there to make a choice on something, because everyone looks to that guy to try and figure out what they should be doing. To me, that affects the value as well. Because I look at it that, well, if you take that owner out, and he was, let's say, the top sales guy. He had all the connections, all the relationships. He brought in all the business. Other people were there taking orders. What happens when he leaves? Well, there went out the door, not only your owner, but your top salesperson.

 

[00:30:34.550] - Paul Curtiss

Yeah, right.

 

[00:30:35.560] - Dan Paulson

The guy that also makes all the decisions on the efficiencies, on how the place runs, on the hiring, on the firing, everything else. What happens when they walk out the door? Well, there goes your top operations person. Now you've lost three positions with one. And in many of those cases, those positions are not cheap fills.

 

[00:30:52.030] - Paul Curtiss

No, and they're hard to find. Exactly. Like the value person. The question I always ask to get to that point is, Mr. And Mrs. Owner, if you had to be gone from your business for 30 days, what would you come back to? And I wait to see their face. I don't wait to hear their answer. I wait to see their face, right? Because that's the tell. I'd come back to a mess. Would you still have a business? If they say that line, I then ask, Would you still have a business? And if they say, well, yes, but it would not be generating what it does now.

 

[00:31:35.260] - Dan Paulson

And they'll probably be spending the next six months fixing everything. Yeah, right. Exactly.

 

[00:31:39.340] - Paul Curtiss

You need to fix that, right? It goes back to the book, Tim Farris' 4-Hour Work Week.

 

[00:31:46.530] - Dan Paulson

Yeah.

 

[00:31:47.670] - Paul Curtiss

Okay, we could go off on a total tangent on that book because there's a lot of layers to it that aren't always great. But it's his concept that he went overseas And he just wanted to see how long he could be away. And then he started to wean himself off of checking his email every five minutes. Then he weaned himself off of forwarding those emails to somebody else who could answer the question. And he had to start asking himself, what is that question that I... When I see this email, what is the question that needs to be answered? Because I'm inevitably passing that email off, that responsibility of that question from the email off to somebody else anyway. Well, could that person handle more? If you have that person in your business, could they handle more? I mean, I've also ran into this, too, where it's a, this is a good example. I have them right now. Mother and daughter, or sorry, mother and son, in this case. Mother and son. Son says, I want to take over, mom. Mom says, Great. That was after she thought about exiting, she calls us and she goes, how do I start?

 

[00:33:03.210] - Paul Curtiss

And go, there's two ways to start. We can either start with evaluation and figure out where you're at now and if that's close to the number in your head. Because everybody has a number in their head. Where they get it from, I'm not always sure. I don't even ask. I don't care. It's in their head. I have to work with that. They have to come to grips with it, because if I come back with a valuation, like I did in this case, and evaluation I did for a smaller business last year, his number in his head was like 13, 15. Well, I did a rough valuation. I didn't even charge him for it, because when he said, I It could be... Oh, okay. Rich is smirking. Sorry, I almost made you choke there, Rich. You ran into that. So after mine, I want to hear For example, so I'm talking to him and he goes, Yeah, I go, Can you give me your last year's balance sheet income statement and tax return? That's all I want, last year's. This was probably at March of this year. And so I go, Don't give me your... And he goes, Well, I don't have my taxes for last year.

 

[00:34:22.450] - Paul Curtiss

And I go, Okay, then give me ISBS, Income Statement Balance Sheet, taxes. Give me your ISBS and taxes for the year prior and end of year ISBS for last year. So I'm getting two years worth of stuff and I do a quick look down and I do a quick math. I am not putting it through my Excel spreadsheet. And I told him, I am going to spend 20 minutes on this. That's all you're going to get. And he goes, okay, I came up with a number. I go, you're closer to 800,000 And he goes, what? And I go, well, we can have that conversation and I can tell you some things you can fix. If you really want to know what to fix, we need a true quality of their earnings or you need to let me do a evaluation where I'm going to do a high level QV and then we can figure out, okay, what can you modify? What can you change? You know in your head, Mr. Seller, what you can change right now. What was it? Why is my number $400,000 different than the one that was in your head? And then they usually have a good idea and they usually know.

 

[00:35:37.780] - Paul Curtiss

And then I tell them, here's the things I want you to work on also before the next time we talk, because I saw those. You fix these three things, it changes with every person. I can't even give a good example for his case, right? I actually can. He reduced his marketing expenses because he was getting so much traffic just coming in organically off the Internet, that he was at a plateau. And I go, but your marketing expenses changed by $3,000 a month. What if? And he goes, oh, yeah, okay. I got you. I go, it doesn't have to be a 3,000 box. Just get yourself back up to the number that you were thinking you were at. So Rich, what was your nod and me almost making you choke?

 

[00:36:28.060] - Rich Veltre

Well, the I should be. I should be at this.

 

[00:36:32.770] - Paul Curtiss

Okay.

 

[00:36:33.940] - Rich Veltre

They don't know. Like you said, you don't know where they came up with the number. You don't know how they came up with the number. But generally, it's water-cooler plus owner's ego gets you the bigger inflated number.

 

[00:36:52.050] - Paul Curtiss

Right.

 

[00:36:52.270] - Dan Paulson

I think it's worth it. Or what they need to comfortably retire on and maintain their current lifestyle. Because they didn't prep for this moment properly.

 

[00:37:00.940] - Rich Veltre

It's always what it comes down to. That sucks. It always comes down to somewhere in there, they're in that reactive mode. And the scariest part is when, I'm sure like you, I can open up a set of books and I could look at them for five minutes, and I will say, there's something wrong here.

 

[00:37:24.070] - Paul Curtiss

He did that to me in his office. He pulled them up on the screen, and I go, oh, I need to look at those longer than now because I'm seeing a few things. And he goes, you're seeing things? What I do? Of course, I'm seeing things. Let me tell you what I'm seeing, and I can tell you the one thing, and it was that marketing thing. I caught that one right away.

 

[00:37:44.020] - Rich Veltre

So sorry, I had this whole conversation with a business owner that does work in the... I'll call it the construction area. So we have this whole conversation. He's talking about long term billing. He's talking about retention. He's And I'm like, okay, so when I pull up the balance sheet, I'm looking for long term receivables. I'm looking for retainage. Then there's another account. It's called Accrued Revenue. And it's...

 

[00:38:13.520] - Paul Curtiss

You're going to It's all they are. Now, you're going to joke.

 

[00:38:17.920] - Rich Veltre

So I'm looking at it, and I'm starting to ask the question, and then I'm like, Do I really even want to ask this question? Because the number was so big, it was clearly that there was something else wrong with their revenue recognition. So you start to question, Why do I even want to go down this rabbit hole? Because when I start poking at that, he's going to run for the hills because he's going to realize that I know what's in there, which is probably nothing. Is that going to convert into an invoice that you're going to receive? So I know for this call, I'm getting technical here, but these are the types of things that you want to prepare for ahead of time because you know somebody like me is going to get hired to come in and look at your books.

 

[00:39:01.540] - Paul Curtiss

Well, and here's another one, too, is WIP, work in progress. Or what's the other term they use it for? Future earnings. Okay, we'll go with that. Future business, that's That's work in progress, right? And if you have work in progress verbally and you have a board, I did an HVAC company a couple of years ago, and they had a white board with work in progress. And they took a picture of it sent to me. I'm like, no, that is not going to work for me. I'm sorry. What on there is contracted? And what on there can you get under contract and give them a thank you for signing the contract early to guarantee the business. And I'm talking it was 18 months out was their largest one. Now, granted, it was a million dollar transaction, right? And I go, put that on the books. Let me hold it here so that the buyer coming in goes, a million dollars? Yeah, but it's not happened for a year and a half. Great. I know I'm starting year two of His purchase with a million bucks on the books? Rock on, right? And so it was one of his top referral sources, one of his top builders.

 

[00:40:26.880] - Paul Curtiss

And so the HVAC guy was like, Well, I don't need it. I'm like, I know you don't need it in contract. These guys know you're going to retire, don't they? Well, yeah, some of them do. And I go, they're all your same age, aren't they? Yeah, some of them are. They're thinking it, too.

 

[00:40:49.570] - Dan Paulson

Yeah.

 

[00:40:51.370] - Paul Curtiss

That's the other piece that people don't... That's goodwill to me, right? That's the term goodwill, right? And And that's how I am. But I need to prove goodwill, right? Sometimes goodwill is just your rep in the industry. You've been doing it for 40 years. You've been successful for 40 years. And everybody knows when they call you, you're going to answer the phone right away, or you're going to call back within 10 minutes, or you've been in business for 40 years. They know that if they call the work is going to be done in less time than everybody else in the market because you just have your crap together.

 

[00:41:39.040] - Rich Veltre

Yeah, I think sometimes perception is worth more than anything.

 

[00:41:44.340] - Paul Curtiss

Goodwill.

 

[00:41:45.340] - Rich Veltre

Being able in this process, right? So if you... Another example, real quick. I ask people, show me your books, and they hand me a PnL. Never a cash It's a slow statement, never a balance sheet, right? So my immediate question is, where's the rest of them? And then I immediately get the deer in headlights, or I have no idea what you're asking for. And then the only thing I want at that point is a balance sheet. If you don't give me a balance sheet, we're done talking. Because if you're only giving me a PnL and you've never looked at your balance sheet, I'm terrified what's on it. And I don't even know you more than the five minutes we just talked. Exactly.

 

[00:42:30.000] - Paul Curtiss

And if they refer you to their accountant, great. Do an introduction. Let me call them and just ask these few questions. He will not need to bill you much for this, if anything, especially if in the email you say, Hey, I want to put you in touch with Rich. He's going to ask you a few questions about my PnL. That's all you need to say, and let us take it from there, right? Because we know what questions we're going to ask. We know how we're going to go down that rabbit hole. And you know when you're on the phone call, if the accountant is going to have to bill for it. And then, I don't know if you have done this before, but I have, where you're just like, Okay, I don't want you to recreate an entire document and build this guy 30 hours worth of work. I'm on you to find something in five minutes. Is there a report you can put out? Is there a... And 90 % of the time the accountants can, right? Or the bookkeeper can who works in-house, out of their Quickbooks, right? And so, yeah.

 

[00:43:33.610] - Rich Veltre

Totally agree.

 

[00:43:35.040] - Paul Curtiss

Yeah. But did you have another question, Dan? Because you said you mentioned two things, and Rich and I just- Actually, I think what I'd like you to...

 

[00:43:46.850] - Dan Paulson

We're getting into about 45 minutes here. It would be good to put together a lot of the stuff we're talking about. So if somebody is looking at selling their business, I pulled your Web page up for those who are listening, not watching. If you could give me a basic checklist of what you would tell somebody to say, hey, in the next 2-3 years, I want to sell this company. What would they need to get together to know that when they finally did decide to pull the trigger and say, yes, now I'm going to sell, that they're going to be in good shape and they're going to maximize the value that they're going to get for their business out of that transaction?

 

[00:44:26.810] - Paul Curtiss

I'm glad you brought up the website, because you'll see that it's scrolling through, those who are watching, where I have a valuation white paper, and then in this next one, it's going to show a seller guide. That seller guide gives a really good description and explanation of what needs to be brought together. On that, you're going to find things that we've talked about in this conversation. You're going to have to figure out what will it... Some of the simple questions that aren't always in that. That's going to talk about documents That's going to talk about actions. That's going to talk about people. That's going to talk about history. That's going to be the data that I'm going to need. But a lot of times you need to only think of a few questions. You need to be able to ask yourself, okay, who is going to be able to do what I do with just one person? Can that be done? If it can't be done, do I have somebody in my business now that does another enough of the things that I... They're in my right-hand or they're at least someone I can go to and say, Hey, I need you to do this aspect, and they get it done.

 

[00:45:42.880] - Paul Curtiss

And then they report back to you, and then you take it from there and just do that little add on. That person, you need to start figuring out how to build them up. And if they aren't prepared to take over the full role, then you have to figure out, okay, what role do I need to put in place? Or what role will I need to tell the next person to put in place? So a lot of times it's roles and responsibilities that really need to be thought about. The next thing that really needs to be thought about is true timeline. When do I really want to walk out the door and not come back? Because at the point of sale, you're not walking out the door. You're not walking out the door. You are trans Positioning your business to the next person. What is that going to take? Do you have a business plan in place that you can hand them and say, Here is what I follow. This shows me the quarterly aspects of my business, and you will be able to know what to do next as a plan to go. Does it show you your daily function?

 

[00:46:55.860] - Paul Curtiss

No. Do you need to share your daily function? No. But you need to make sure that you have that plan in place because you're not walking out the door. Rarely can I get a business owner who's been in business for more than 15 years out the door in less than six months. That's hard to do. It's really hard to do. But that business owner, when given the right people from the new entity and the new buyer, they can train those people up to be able to probably leave sooner. But you got to have that six month window in mind, six month window in mind. Got to.

 

[00:47:42.480] - Dan Paulson

Sometimes it's- Well, and to me, you got to Start thinking about this three to five years in advance. I mean, when it comes to selling your business, you can't wait till the last minute. You can't hum and haul about it. I encourage people, even if you think you want to get out in the next five years, Start planning for it then. It doesn't mean you have to, but the closer you get to that, we can turn a key business where you can just... You can leave for a month. You can leave for two months. The place runs better without you being there. To your point, that's going to go a lot further and create a lot more value than wait until the last minute.

 

[00:48:20.970] - Paul Curtiss

Well, and they need to start practicing that. Take more freaking vacations.

 

[00:48:25.020] - Dan Paulson

Yes. And turn off the phone. Turn off the email. Don't answer.

 

[00:48:29.200] - Paul Curtiss

And if it's not a vacation, go to conventions. If you want to figure out how to write it off, go to a convention in a place you can vacation, right? Be gone for a week and turn your phone off for chunks of time in a day. If we're talking a five year in advance or three year in advance, it's going to be hard for them to literally turn their phone off for even two hours. So you need to plan something this quarter right now, that you can go to in January, February, March, and practice turning your phone off for the whole morning session of that convention. And if you have somebody that you know could do well in a role, take them with you to that convention. If they're not there for the whole time, who cares? Bring them in for day one and two because you like the seminars that are going to be there and you want to see how they're going to do with the information that they take away from that seminar. You got to start putting people in place. You really got to. Or get your guys's knowledge and experience and just question.

 

[00:49:42.910] - Paul Curtiss

If they don't, and I don't know if you guys do this or not, because I can't remember. We did talk about it, so I'm going to refresh my brain. Do you just give an advisory consult, usually with pay, I would imagine, but do you do just an advisory consult versus a step in an actual function? Do you guys do that or no?

 

[00:50:12.400] - Dan Paulson

I do both. I think, Rich, you do both as well. So there are times where, well, both of us, we put together a report. So if somebody is thinking about selling or whatever it might be, we want to talk to them and lay out some of the issues that we see. I think Rich can do somewhat of evaluation. I'm looking at the operations. Can this place run without the owner being here is my concern. So we do that, and we both step in in some capacity then if there is a need, and if the owners want us to do that. Because my goal is that owner needs to repurpose themselves, because the worst thing that can happen, and I've experienced this myself, I've been in companies where I've helped that owner remove themselves from the daily operations, but they didn't figure out what else they were going to do with their time. Guess what happens? They get bored. They start looking at what you're doing in the business, go, well, I don't like the way you're doing that, so we're going to do it this way. And they completely can undo everything that's been set up to make their lives easier if they're not given a new direction to go.

 

[00:51:16.910] - Dan Paulson

So Rich, I'm not going to speak for you, but I think you can answer similar.

 

[00:51:23.260] - Rich Veltre

A hundred % similar. It's the same answer. I mean, I try now as I move forward, I I try not to get into a role of doer, a little more of stay the leader, stay the organizer, the delegator, all those words that go along with it. But I try to stay away from the doer, because once you start doing, they're always expecting you're going to keep doing, and that doesn't solve anything. It just perpetuates what was already there.

 

[00:51:54.840] - Paul Curtiss

So basically, you step in as a doer role versus a trainer Our role, essentially, huh?

 

[00:52:01.340] - Rich Veltre

I try not to. That's what I'm trying to get away from, because more and more people try to make that happen, because they're trying to get more... I don't know why they do it.

 

[00:52:16.070] - Dan Paulson

I think it's their perception of what a leader is. Most of these guys, again, are self-starters. They built this entity all by themselves or with a handful of people, and they're used to being very hands-on. So they expect anyone they bring in to be hands on as well. And in some cases, you need to do that to help get the process flowing. But then you also charge accordingly for it. And you make it clear that this is not going to be a long term solution. I'm, for example, working with the company right now on sales process. Am I doing more than I should be? Yes, I am. I have also very much communicated to them that this is only going to be for the next 30 to 60 days. And then we are putting in place somebody who now will implement the process that I'm busy threading together for you. I am not your permanent salesperson. Don't even count on me for that. So there are times where we do step in on that. But yes, you have to be very clear. Otherwise, you're just a doer, and they will keep you busy with tasks, and you will get nothing accomplished.

 

[00:53:21.440] - Paul Curtiss

Well, and I think it also goes to the idea of the fractional. They don't understand what that means. They don't understand that that's a... No one wants to use the word temp or temporary. If we could find a term between temporary and fractional, I bet it'd be great. What that term is, I don't know. But People don't understand. They think they're bringing you in, and then you just run with leadership, and they go, oh, we needed you. No, you need this position. Not me. I am helping you see that You need this position because I'm doing what is needed in this position to make it so that you can do what you're good at.

 

[00:54:09.160] - Dan Paulson

I probably call it more like, since we are in the political season, a transition team. We are there to facilitate the transition of the owner removing themselves from their own company, yet allowing the company to operate as efficiently or even more so in the process of extracting them from it.

 

[00:54:28.490] - Paul Curtiss

Right. And it goes So interesting, you and I, there's two things I want to make sure I touch on before we close up today that we talked about before we were on screen. One is that idea of transition team, and you were saying the idea of removing themselves from their daily business. Well, you need to do that if you want to build, too, and buy a new business. It is not just for the sales side. We We're not even getting into the buy side today. We can do that another time. It will probably not be as long as this one because it's not an inverse of what we do to sell. There's so much more that goes into it than to buy. But the key point here is you have to, as a business owner, be prepared to transition yourself out of what you're doing right now in this entity and redo it in the entity that you're buying to expand your business into an area, into a market, into a new widget, right? That is a bolt on or alongside another term in our industry, bolt on. Something that can assist what you're already doing that you don't do, but is a great enhancer.

 

[00:55:53.740] - Paul Curtiss

A bolt on is an enhancement, and it just you can run these two businesses the same because this one feeds this one and this one feeds that one. So that's a bolt-on. We'll get into that in the buy-side. So that was one thing I wanted to make sure I mentioned. You keyed it perfect that you don't have to be wanting to sell to need to be able to get yourself out of daily operations whenever you're thinking of expanding, you need to do that, too. I just wanted to make sure I added that in there. I imagine you guys would 100 % agree with me.

 

[00:56:28.160] - Dan Paulson

Oh, yeah, definitely. You said there was a second one as well?

 

[00:56:31.000] - Paul Curtiss

Yeah, the second one was I mentioned it to you, and you asked me about it in the past, and that was describing the difference between representation in my world, in the M&A world, right? So there's really three ways that you can look at it. Okay, let me take that back. There's four, right? There's a broker, there's an intermediary, that's what I am. There is a realtor, and there is solo, okay? Commercial realtors can sell your business. I'm going to get to that. Let's go down the M&A world first, and I'm going to go to the last ones because I would highly discourage you from doing them that way. Realtor and solo, commercial and solo. I'll explain why. I love me a good commercial realtor. I I have them involved in a lot of my transactions. Don't let them sell your business unless they have experience. A broker is someone who represents you in this transaction in the market. That's the most generic explanation I can give you, right? Most generic explanation I can give you. And that is all they do as a broker. They will take your business. They may not ask for the books like I do.

 

[00:57:58.300] - Paul Curtiss

They may say, I I just saw this listing this morning for a buyer that I'm working with. It's a listing where they have a list price of 2.5 million dollars on one site and a listing price of 2.6 on a different site. Okay, why? Then I look at 2.6, they base it off of their cash flow value. So I took the value, divided it by the cash flow, and came up with what their multiplier is. They are not in the right multiplier. I went to the other one, and they were basing it off of EBITDA. That's a much better number to come from. Much better number to come from. I then took the 2.5, divided the EBITDA. These aren't even close to each other. Not even close. Because when I did this division and then I went, well, that's multiplier is still a little high for the industry. And I put the multiplier on EBITDA, which is what most buyers are looking at. Rich, can you explain EBITDA for me? I probably should have one of us explain that.

 

[00:59:10.240] - Dan Paulson

That one we've explained multiple times, but go ahead. Oh, it is. Okay. Okay. Either way, Rich, go ahead. Make sure we got it.

 

[00:59:16.770] - Rich Veltre

Ebitda is earnings before interest, taxes, depreciation or amortization.

 

[00:59:22.160] - Paul Curtiss

I don't have the DA. It's the only thing I don't have. And so when you look at all of those things, And that gives you a number that is true NOI, true net operating income or true net income. I don't care which one. If you don't want to include operating, don't care. True net, right? That's what EBITDA is going to give you. But in EBITDA, we can add back value, right? We can't do that if you're just giving me cash flow. So you run in the challenges. So a broker is just going to look at one of those two numbers and throw it out there. And you may have been the one who gave them the 2.5 million bucks. Well, somebody like me is going to look at it and go, you're on crack. And you're asking too much. I'm sorry. And I'm going to come in and I'm going to insult you because I'm going to take your numbers and I'm going to say, out in the industry, this is only getting a four multiplier, not a six multiplier, which is the math I came up with, 2.6 to their cash flow. It's like six.

 

[01:00:28.080] - Paul Curtiss

No, you're crazy. I'm going to give you four. I'm going to give it on your EBITDA, and it now has your business worth closer to 2.1, not 2.6. And they go, oh, crap. Right. So you need to have somebody who can give you the value you, whether that's a third party valuation or that's somebody in the industry who also does those, or at least have them look at your books and figure out why you came up with that number and then go out. Because a broker is just going Most. I know some really, really, really good brokers. I know some really good just brokers. I'm an intermediary because I do the valuation, because I put the entire team together and make sure that you have an advisory role, and I play a slightly fiduciary role in my responsibility in my contract that you sign with me. I have some fiduciary roles that fall into that paragraph. That's the difference between a broker and an intermediary. I, unlike just a broker who will list you, there's brokers who cross the line. We do this crisscross between intermediary and brokerage. I'm giving generic terms for broker. I'm not trying to insult any of you brokers out there because we've all come through it.

 

[01:01:51.430] - Paul Curtiss

But if you just list and you just give a price, 90% of the time the buyer is going to start at that price and do what I just did and reduce it. Where if you use an intermediary, I don't give a list price. I have people call me all the time, what's that business worth? You're going to tell me what that's worth when I share with you the SIM, which is the Confidential Information Memorandum. They're also called other terms out there, but that's what we use, C-I-M, SIM. So when I put your books in there, I put your employees in there, I put your history in there, I put a crud ton of stuff in there. And I take that and I send a profile, which is blind, that doesn't show you, it'll say, HVAC Company in the Upper Midwest Revenue of six million plus, and cash flow or net income of 300,000 or greater. Theirs was actually closer to two million when it was all said and done. And so you're doing this multiplier off of usually the boil down to get to your net, right? A lot of times people are trying to offer you what their revenue is.

 

[01:03:13.320] - Paul Curtiss

That is not the value of their business. That is what their cash flowing. That is not what they're worth. I mean, I've seen businesses say they're doing $2 million worth of business and their net is $200,000. Okay, please tell me you're writing off a whole lot of crap, because if not, we got other issues we got to talk about, right? Because you're not going to get your $2 million value. So that's the difference between a broker and an intermediary. I go directly out and find a strategic buyer for you. A broker lists you on the market, sends you out to his buyer list in his email. I do that, too. I have 100,000 names in mind. And I also go buy your SIC code and go, okay, what are you according to the government? What are you registered as? And then I go find other entities that are like you and I market them directly. Sometimes That's 1,500 names. Sometimes it's 500 names. Sometimes it's 5,000 names. It depends on your size. It depends on what you're listed as. It depends on your geographic area. That's what I'm going to do different. Now, if we go to someone someone who's thinking of selling and they go, I want to know what my business is worth.

 

[01:04:33.520] - Paul Curtiss

I call my my commercial realtor and they go, oh, you're thinking of selling your business? Well, I can include that in the sale. I can help you do that. Great. Awesome. But the person who listed the business is going to be looking at what the value of the real estate is. And then you're going to have this thing that Rich and I talked about earlier called due diligence. And if you don't have all your numbers together because the realtor isn't going to ask you to put all that stuff together, it's not going to happen until the sale. Now you've got an offer to purchase on your real estate that has a timeline, and now you're just going to add even more time trying to come up with all the numbers. And who is going to give you the advice on is that what your business is worth? I have an HVAC company. Their business is worth around four million bucks. Well, let's take my one that I closed at. It's around four million bucks. Their real estate was actually worth around $900,000. They made the mistake of talking to the buyer without me verifying and sold their property for $500,000.

 

[01:05:41.050] - Paul Curtiss

It's like, oh, crap. But I still was able to get them 6.2 for the sale. 375 was their value, 6.2 is what I sold it for. But if I start with a number and I have nothing to show what that number is worth, I don't know what to do with it. If I put real estate on it, they're going to always try to bring it down That's the challenge with using a commercial realtor to sell your business. Selling it solo. Let's touch on that one. I'm sorry, I just looked at the time. I'm going to try to make this four minutes. So I just showed you the professionals doing it for you. All of them will get you more money than you'll get for yourself. Everybody thinks that they can sell their real estate on their own and do a great job. You can. It will sell. And you're going to think you're getting a good price. Or you're overpricing it because you don't know what your price is actually. Or you're going to get somebody who's going to call you who is either representing a buyer or who is a buyer and is going to know how to look at your books and boil them down and not cook them up.

 

[01:06:50.310] - Paul Curtiss

I'm not going to try to cook them up. I'm going to get them to the best operating temperature I can so that we can get the best flavor out of this thing. Because if we cook them too high, they're going to bring us down and boil it off, right? And so I'm trying to help the person who I have a hope too soon to be client. Unfortunately, he's going to become a client of mine. Not unfortunate because I can't help him, but it's unfortunate for him because he had someone call him in February of, no, November of last year. I had him call in from November of last year is when he got called by a buyer. They put a letter of intent in place. That letter of intent had a timeline that made it so that they couldn't market his business until June of this year. I met him in February. And I said, Well, let's talk in June because I would like to know what your exit was and how it worked for you selling on your own. That's awesome. Looking forward to having an exit conversation. I called him in June. He didn't have an exit conversation.

 

[01:08:07.950] - Paul Curtiss

He now was in a window between this LOI expiring and them writing a new one. So it didn't sell yet. Are you sure you don't want me to help you with that now? No, because they're ready. They're good. They solved this and this. Okay. I talked to him at the end of last month. We're close I'm sorry, that sucks.

 

[01:08:34.410] - Dan Paulson

Just sucks.

 

[01:08:36.710] - Paul Curtiss

And when I talked to him in February, I figured out that he had already left $300,000 on the table. Because I just asked him, hey, can I have these three numbers? This is all I want. Give me these three numbers. Oh, what did they offer you? Oh, he goes, that's not a good No, you've left $300,000 on the table. How? Hmm, this one and this one. Oh. We should talk at the end of the year, huh? And he goes, yeah, they're saying we're going to close by January. And I go, I will call you January 10th. That's what I told him. I will call you January 10th.

 

[01:09:22.350] - Dan Paulson

And he still won't have sold the business by then.

 

[01:09:23.840] - Paul Curtiss

I hope he has. I'm not going to say no But I believe you could be very right. There's a high probability.

 

[01:09:36.270] - Dan Paulson

So if- That's the problem with. If there is a company that is starting to think about selling, why don't you give them a little bit information about how they get a hold of you?

 

[01:09:45.730] - Paul Curtiss

Sure. They can either... Well, the easiest way is to go to the website and look us up.

 

[01:09:52.490] - Dan Paulson

And that is ebitassociates.com, correct? Yeah.

 

[01:09:56.550] - Paul Curtiss

And my email is pcurtiss@ebitassociates.com. You can call me. I actually have an Illinois phone number for our company because that's where we originated, even though I'm based in Wisconsin. And the principal lives in Arizona. And so, yes, we still operate in Illinois, but neither one of us live there anymore. So it's 847-566-0500. And my direct extension is 259. That's 259. And I would love to just answer questions. You don't have to be ready. Don't call me if you're 100 % ready. Well, okay. Yes, please do. But I'm pretty sure you're probably not. You need to call one of the three of us to be able to get you on the right track and figure out when an actual timeline is. If you want to retire in six months, you better call one of us and we can figure out if that's a reality, because I can I'll tell you in six months. It may not be anywhere close to the number that you had in your head. Those are my suggestions.

 

[01:11:07.870] - Dan Paulson

That's a good segue, Paul. So Rich, how about you? How did they get a hold of you? Using the new email address And I always forget whether it's R Veltri or it's Rich.

 

[01:11:20.560] - Paul Curtiss

It's Rich, right?

 

[01:11:21.090] - Dan Paulson

It's Rich.

 

[01:11:22.640] - Rich Veltre

Okay, so it's rich@xcxo.net.

 

[01:11:25.830] - Dan Paulson

And you can get a hold of me at dan@xcxo.net. Xcxo.net. Paul, thanks for coming in. This has been really informative. It's been fun. And yes, we do need to get you back to talk about the buy-side and what needs to be involved in that. And maybe we can drag a lawyer in on that one, too.

 

[01:11:41.900] - Paul Curtiss

Absolutely.

 

[01:11:43.100] - Dan Paulson

All right. Thank you both. And we will see... Well, you'll watch us from the other side next week, Paul. But Rich, I will see you next week.

 

[01:11:51.320] - Rich Veltre

Sounds good.

 

[01:11:52.030] - Paul Curtiss

Thanks, guys.

 

[01:11:52.950] - Dan Paulson

Thanks.