1 00:00:00,000 --> 00:00:02,220 Todd Kane: My guest today is Amy Babinchak. 2 00:00:02,940 --> 00:00:05,590 If you have been in the MSP industry for any amount of time, 3 00:00:05,590 --> 00:00:06,659 you probably know the name. 4 00:00:07,119 --> 00:00:11,350 Amy is a 22-time Microsoft MVP award winner and co-host of 5 00:00:11,350 --> 00:00:15,151 the SMB Community Podcast and a well-known speaker in the industry 6 00:00:16,151 --> 00:00:17,606 Amy, welcome to the Evolved Radio 7 00:00:17,606 --> 00:00:18,146 podcast. 8 00:00:18,869 --> 00:00:20,039 Amy Babinchak: Hey, thanks for the invite. 9 00:00:20,039 --> 00:00:21,269 I really appreciate being here. 10 00:00:21,821 --> 00:00:27,761 Todd Kane: Yeah, this is a useful topic that we're gonna get into that, uh, I, 11 00:00:27,761 --> 00:00:32,651 I think a lot of people need to think more deeply about and prepare for before 12 00:00:32,651 --> 00:00:34,061 they really start getting into, uh. 13 00:00:34,866 --> 00:00:37,926 Positioning and thinking about selling their MSP. 14 00:00:38,286 --> 00:00:43,236 So this is an experience that You have lived personally and have written a book 15 00:00:43,236 --> 00:00:49,386 on that is titled 20 Questions Every Owner Asks Before Selling Their Uh, MSP. 16 00:00:49,806 --> 00:00:53,976 So, um, this is a great framing for this and really helps people think through 17 00:00:54,006 --> 00:00:57,186 the process, and I think this is. 18 00:00:57,596 --> 00:01:02,126 As I said, something that people maybe sort of fall into based on 19 00:01:02,306 --> 00:01:06,086 pressures of, well, everyone else is selling and I keep getting these 20 00:01:06,086 --> 00:01:08,306 calls from these PE companies. 21 00:01:08,306 --> 00:01:12,566 Maybe I should do this and maybe come to it for the wrong reasons. 22 00:01:12,566 --> 00:01:16,556 You want to maybe kick us off on the emotions that you kind of go 23 00:01:16,556 --> 00:01:19,796 through in the consideration of selling your, your business and 24 00:01:19,796 --> 00:01:21,206 how you ultimately come to that. 25 00:01:22,124 --> 00:01:22,634 Amy Babinchak: You know. 26 00:01:23,069 --> 00:01:27,329 I hope that my book is gonna land with people who want to think about 27 00:01:27,329 --> 00:01:31,739 selling their business and not just wake up one day and go, that's it. 28 00:01:31,949 --> 00:01:33,269 I'm retiring tomorrow. 29 00:01:33,329 --> 00:01:33,569 Right. 30 00:01:34,979 --> 00:01:37,469 I see that happen way too much. 31 00:01:37,469 --> 00:01:43,019 That, you know, over at Selma, MSP, we, we work with a lot of people one-on-one, and. 32 00:01:43,464 --> 00:01:47,724 More often than not, it's, it's like a last minute decision. 33 00:01:47,844 --> 00:01:53,004 Like they started talking to somebody they met at a conference, or you know, a 34 00:01:53,004 --> 00:01:56,394 firm that they've known for a long time in their, in their neighborhood, reached 35 00:01:56,394 --> 00:02:00,274 out today and now they, now they gotta get their business ready in a hurry. 36 00:02:01,009 --> 00:02:02,209 Like, what do I gotta do? 37 00:02:02,359 --> 00:02:06,319 I'm like, man, you, you really needed to start to think about this before. 38 00:02:07,129 --> 00:02:11,179 So that's what I'm hoping that the, that the book will help people do. 39 00:02:11,779 --> 00:02:12,079 Right. 40 00:02:12,259 --> 00:02:14,599 You don't need to start thinking of it the day you wanna sell. 41 00:02:14,599 --> 00:02:18,169 You gotta start thinking about it three to five years ahead of time's. 42 00:02:18,169 --> 00:02:20,149 A great sweet spot for doing that. 43 00:02:20,701 --> 00:02:20,911 Todd Kane: Yep. 44 00:02:20,911 --> 00:02:21,331 Amy Babinchak: So yeah. 45 00:02:21,481 --> 00:02:23,101 When you decide to sell your company. 46 00:02:23,606 --> 00:02:28,166 You are entering into a major life event probably. 47 00:02:29,156 --> 00:02:31,736 Um, I know it was that way for me. 48 00:02:32,486 --> 00:02:36,116 You know, I, um, I put the, put a chapter right at the beginning of 49 00:02:36,116 --> 00:02:40,346 this book on the emotions of selling your business because it totally 50 00:02:40,346 --> 00:02:42,116 took me off guard when it happened. 51 00:02:42,956 --> 00:02:46,346 Um, you know, I had been helping people sell their business for 10 52 00:02:46,346 --> 00:02:48,806 years, but I'd never sold my own. 53 00:02:49,646 --> 00:02:54,356 Um, and when I sold my own, the after effects was like. 54 00:02:54,776 --> 00:02:55,196 Grief. 55 00:02:56,786 --> 00:03:00,356 It wasn't like, Ooh, I got a big FB check and a Happy Bank account. 56 00:03:00,356 --> 00:03:03,416 You know, my retirement is is perfect now. 57 00:03:03,806 --> 00:03:06,506 It was like, oh, there's a hole in my heart. 58 00:03:07,466 --> 00:03:08,786 You know, something's missing. 59 00:03:08,786 --> 00:03:11,756 And I tell a lot of people, like, I felt like I just sold my cat. 60 00:03:11,756 --> 00:03:13,706 Or maybe you rehomed your cat. 61 00:03:13,706 --> 00:03:14,186 You know? 62 00:03:14,786 --> 00:03:22,076 Um, just, just that level of attachment that's now gone and it leaves a space. 63 00:03:22,316 --> 00:03:23,031 You don't know what to do with. 64 00:03:23,778 --> 00:03:27,728 Todd Kane: Yeah, is a similarly, I, I advise people, they're saying, oh, 65 00:03:27,728 --> 00:03:28,898 I'm thinking of selling my business. 66 00:03:28,898 --> 00:03:31,028 I'm like, great, you know you're in your. 67 00:03:31,208 --> 00:03:32,588 Mid to late forties. 68 00:03:32,618 --> 00:03:34,658 So what do you plan to do with your life? 69 00:03:34,658 --> 00:03:38,228 And the the inevitable answer is, oh, you know, I'm gonna, uh, gonna 70 00:03:38,228 --> 00:03:40,988 get it a lot more into fishing and gonna pick up my golf game. 71 00:03:40,988 --> 00:03:41,918 It's like, okay, great. 72 00:03:42,158 --> 00:03:44,528 Imagine you're six months from now, you're gonna be bored with. 73 00:03:44,528 --> 00:03:45,398 that every day. 74 00:03:45,751 --> 00:03:45,998 So, well 75 00:03:46,051 --> 00:03:46,341 Amy Babinchak: Yeah. 76 00:03:46,358 --> 00:03:46,641 Todd Kane: are you doing? 77 00:03:46,748 --> 00:03:49,028 They're like, I don't know. 78 00:03:49,328 --> 00:03:52,628 Or like, it's, it's wild how people don't think about. 79 00:03:52,873 --> 00:03:56,803 The, sort of the longer impact that selling their business will have on their 80 00:03:56,803 --> 00:04:02,443 life, especially because entrepreneurs are so, have such a, a wrapped identity 81 00:04:02,443 --> 00:04:07,543 with the business that they've probably spent 10 to 20 years building, and 82 00:04:07,543 --> 00:04:11,413 to just sort of detach from that and be okay with it, as you say, is like 83 00:04:11,413 --> 00:04:14,923 a, a, I think a huge emotional hurdle that people don't really consider. 84 00:04:15,566 --> 00:04:18,416 Amy Babinchak: Yeah, I, uh, I have, I have two other 85 00:04:18,416 --> 00:04:20,481 businesses, so for me, I was not. 86 00:04:21,191 --> 00:04:25,061 Retiring, I was just gonna get to spend more time doing other things I love. 87 00:04:25,991 --> 00:04:29,573 Um, and I'm, I also have a million hobbies, so my 88 00:04:29,873 --> 00:04:30,323 Todd Kane: helps. 89 00:04:30,671 --> 00:04:33,251 Amy Babinchak: threat of getting bored is like, is like zero. 90 00:04:34,391 --> 00:04:36,371 I always have a new idea, a new thing. 91 00:04:36,371 --> 00:04:37,421 I love change. 92 00:04:37,421 --> 00:04:39,461 I love, you know, getting into new stuff. 93 00:04:39,791 --> 00:04:42,161 I've got cell MSP, I've got third tier. 94 00:04:42,161 --> 00:04:43,781 I'm still, I'm still out there, right? 95 00:04:43,781 --> 00:04:46,661 I just don't have my MSP anymore, but. 96 00:04:46,986 --> 00:04:53,826 Um, I just, I just, um, one of the guys in my peer groups is 36 and he's selling 97 00:04:53,826 --> 00:04:58,446 his business and it's gonna pay him enough that he does never have to work again. 98 00:04:59,526 --> 00:05:06,996 But it's can't just be about the money because he's got another 99 00:05:08,136 --> 00:05:11,496 40 plus years of life to fill. 100 00:05:12,186 --> 00:05:13,176 We're humans. 101 00:05:13,266 --> 00:05:15,426 We need some purpose, right? 102 00:05:15,426 --> 00:05:15,846 We gotta have. 103 00:05:16,331 --> 00:05:20,321 Something to do with ourselves or we're gonna fall into a major depression. 104 00:05:20,891 --> 00:05:24,311 If you've ever read any of the, there's, there's statistics out 105 00:05:24,311 --> 00:05:27,311 here and I, I can't quote 'em 'cause I'm not that familiar with them, 106 00:05:27,311 --> 00:05:29,201 but I've seen them over the years. 107 00:05:29,621 --> 00:05:33,851 The people that do not have a plan for after they leave their 108 00:05:33,851 --> 00:05:37,181 business, after they retire, whatever, this major life change, 109 00:05:37,601 --> 00:05:39,221 they don't live very long afterwards. 110 00:05:40,001 --> 00:05:41,141 People that have a plan. 111 00:05:41,936 --> 00:05:45,986 Go on to go on to, you know, be happy with the rest of their life 112 00:05:45,986 --> 00:05:47,336 as they were when they were working. 113 00:05:47,336 --> 00:05:47,876 Hopefully. 114 00:05:48,338 --> 00:05:48,548 Todd Kane: Hmm. 115 00:05:49,028 --> 00:05:49,358 Yeah. 116 00:05:49,388 --> 00:05:50,978 Really important to have that plan. 117 00:05:50,978 --> 00:05:55,448 It's either maybe you start something new, maybe you focus on philanthropy. 118 00:05:55,538 --> 00:05:59,438 Uh, maybe you've got some, some other businesses you could start to dig into. 119 00:05:59,618 --> 00:06:04,268 But I think, uh, you're right, like there needs to be that forethought of then what. 120 00:06:04,483 --> 00:06:04,783 Right. 121 00:06:04,783 --> 00:06:05,923 Like this is a great event. 122 00:06:05,923 --> 00:06:10,303 It's amazing to be able to, recognize the success that you've 123 00:06:10,303 --> 00:06:12,673 had and pull equity off the table. 124 00:06:12,673 --> 00:06:16,453 And for a lot of people, it sets them up for a comfortable life. 125 00:06:16,483 --> 00:06:20,863 They don't necessarily have to work anymore, but, uh, retiring at 35 126 00:06:20,893 --> 00:06:25,273 maybe sounds great in your head, but it will be incredibly challenging 127 00:06:25,273 --> 00:06:26,803 once you're six months into it. 128 00:06:27,536 --> 00:06:29,456 Amy Babinchak: You can only sit on the beach for so long. 129 00:06:29,756 --> 00:06:30,283 Todd Kane: Exactly. 130 00:06:30,523 --> 00:06:31,046 Yeah. 131 00:06:31,346 --> 00:06:31,556 Amy Babinchak: Yeah. 132 00:06:31,556 --> 00:06:34,946 You've, you've read all, read all the books you wanted to read your, you know, 133 00:06:35,276 --> 00:06:39,806 your, your buddies are not retired, so you can't go hang out with them, you know? 134 00:06:39,976 --> 00:06:43,966 It would be a thing you, you have to have your, what's next as part of this plan? 135 00:06:44,326 --> 00:06:47,926 I don't encourage people to rush into selling because they think, 136 00:06:47,926 --> 00:06:49,816 oh, it's a seller's market. 137 00:06:49,816 --> 00:06:51,436 I gotta sell right now before. 138 00:06:51,436 --> 00:06:52,726 Before that goes away. 139 00:06:53,146 --> 00:07:00,226 The lucky thing for us is we're at the point of maturity in our industry, right? 140 00:07:00,226 --> 00:07:05,056 This industry is about 40 years old and now. 141 00:07:05,501 --> 00:07:07,901 Uh, merger acquisitions, sales. 142 00:07:07,901 --> 00:07:12,371 This is just part of the way that business is done, and I don't think 143 00:07:12,581 --> 00:07:14,801 that will go away from now on. 144 00:07:14,801 --> 00:07:18,251 It will always be the strategy that as people are bringing up an 145 00:07:18,251 --> 00:07:22,031 MSP, they naturally go out and they make some acquisitions, sometimes 146 00:07:22,031 --> 00:07:24,131 small, sometimes bigger, right? 147 00:07:24,131 --> 00:07:26,381 But that, that's a normal part of our industry. 148 00:07:26,381 --> 00:07:29,981 That means that there's always gonna be an opportunity for you to sell your 149 00:07:29,981 --> 00:07:32,801 company when the time's right for you. 150 00:07:32,861 --> 00:07:34,391 You shouldn't feel any pressure. 151 00:07:35,086 --> 00:07:38,296 Outside of what's right for you and your family and your situation. 152 00:07:39,248 --> 00:07:41,258 Todd Kane: I think that's a really important thing to hear. 153 00:07:41,288 --> 00:07:46,268 'cause like I would say maybe five to years ago, I necessarily, I wouldn't 154 00:07:46,268 --> 00:07:47,768 have necessarily agreed with that. 155 00:07:48,078 --> 00:07:52,398 But I think you're right that there, it's not something that you have to time. 156 00:07:52,398 --> 00:07:54,828 I felt like five to eight years ago there was a pressure of 157 00:07:54,828 --> 00:07:56,748 like, the multiples are so high. 158 00:07:56,748 --> 00:07:59,688 Like if you don't catch it now, like maybe it's gonna start to dwindle. 159 00:07:59,688 --> 00:08:05,178 Like, like the PEs won't be as in, uh, as interested or all the good 160 00:08:05,178 --> 00:08:06,558 sales are already gonna happen. 161 00:08:06,558 --> 00:08:10,098 I think there was a bit more of that narrative, but I, I think your reflection 162 00:08:10,098 --> 00:08:12,108 on that is, is wholly accurate. 163 00:08:13,018 --> 00:08:17,008 things are stabilized and there will will always be sort of a good deal to be had. 164 00:08:17,008 --> 00:08:19,768 Don't rush into things, which we'll certainly get to. 165 00:08:20,218 --> 00:08:24,148 But, uh, I think the pressure is off of like having to time the sail or 166 00:08:24,148 --> 00:08:26,068 feeling like you're gonna miss the boat. 167 00:08:26,248 --> 00:08:30,028 And I think that that does apply a lot of pressure to people where they feel 168 00:08:30,028 --> 00:08:34,528 like, I'm not necessarily ready to sell, but you know, maybe I'll miss the window 169 00:08:34,528 --> 00:08:36,688 if I don't do this within the next year. 170 00:08:37,351 --> 00:08:40,621 Amy Babinchak: Well, you know what I tell people is there's always a market 171 00:08:40,621 --> 00:08:43,073 for a well run profitable business. 172 00:08:43,373 --> 00:08:43,583 Todd Kane: Right. 173 00:08:43,621 --> 00:08:45,841 Amy Babinchak: It doesn't matter what else is happening out the world. 174 00:08:45,841 --> 00:08:50,221 If you are the person with the well run business that's making money reliably year 175 00:08:50,221 --> 00:08:52,471 after year, someone will be interested. 176 00:08:53,573 --> 00:08:53,843 Todd Kane: Yep. 177 00:08:54,233 --> 00:08:54,563 Yeah. 178 00:08:55,598 --> 00:08:59,348 Alright, so there's, I would say also two parts to timing. 179 00:08:59,588 --> 00:09:03,278 The, the sale for yourself and prepping for it, I think is maybe 180 00:09:03,278 --> 00:09:04,568 a better way to position this. 181 00:09:04,628 --> 00:09:09,968 There's both personally as well as prepping the business and I think, uh, 182 00:09:09,998 --> 00:09:11,678 some people will, will get this idea. 183 00:09:11,678 --> 00:09:15,823 We can expand on this a little bit of like, You should spend time optimizing 184 00:09:15,823 --> 00:09:17,978 your business so that it is a better. 185 00:09:18,923 --> 00:09:22,463 attractive, sellable asset, you could potentially get a higher multiple because 186 00:09:22,463 --> 00:09:25,193 it's more, uh, organizationally sound. 187 00:09:25,193 --> 00:09:27,833 You are not sort of the center of of, of the business. 188 00:09:27,833 --> 00:09:30,383 You have a team that can organize things. 189 00:09:30,383 --> 00:09:34,583 You have SOPs, a good, you know, well run organization that will 190 00:09:34,583 --> 00:09:36,653 get you a higher sale price. 191 00:09:36,713 --> 00:09:40,283 Ultimately, I think the part that people will sometimes miss in this is that 192 00:09:40,463 --> 00:09:44,483 you do actually need a couple years to prep your personal finances as well. 193 00:09:44,858 --> 00:09:48,758 And, you know, you know, I think there's good money to be spent on a great tax 194 00:09:48,758 --> 00:09:52,838 lawyer to prepare you for, you know, the, the windfall that you'll get. 195 00:09:53,018 --> 00:09:55,898 It depends on the structure of how you sell your business, but I think 196 00:09:55,898 --> 00:10:01,148 ultimately you wanna have that forethought of, if I'm, gonna have X amount of 197 00:10:01,148 --> 00:10:05,018 dollars in capital gains, you know, potentially millions of dollars you 198 00:10:05,018 --> 00:10:06,343 wanna prepare for how that actually. 199 00:10:06,683 --> 00:10:09,773 Lands in your bank account and what the tax implications of that 200 00:10:09,773 --> 00:10:13,133 will be as well, You wanna expand a bit on sort of the, the business 201 00:10:13,133 --> 00:10:14,813 prep and the personal prep as well. 202 00:10:15,806 --> 00:10:16,076 Amy Babinchak: Yeah. 203 00:10:16,076 --> 00:10:16,586 You know, I'm. 204 00:10:16,586 --> 00:10:17,036 well, I'm. 205 00:10:17,921 --> 00:10:21,611 I, I'm not on the financial side of selling businesses. 206 00:10:21,611 --> 00:10:26,201 I'm more of an operations person, but everybody does need a tax lawyer. 207 00:10:26,861 --> 00:10:27,671 Absolutely. 208 00:10:27,701 --> 00:10:32,081 You need to, you need to involve your CPA and you need to get a tax lawyer. 209 00:10:32,081 --> 00:10:33,401 And there are different people 210 00:10:33,863 --> 00:10:34,283 Todd Kane: Yes. 211 00:10:34,583 --> 00:10:34,821 Amy Babinchak: think that, 212 00:10:35,723 --> 00:10:36,383 Todd Kane: often not recognized. 213 00:10:36,413 --> 00:10:36,833 Agreed. 214 00:10:36,863 --> 00:10:37,103 Oh, I 215 00:10:37,366 --> 00:10:37,656 Amy Babinchak: yeah. 216 00:10:38,003 --> 00:10:38,363 Todd Kane: No, no, no. 217 00:10:38,363 --> 00:10:40,073 You need to go to talk to this person too. 218 00:10:40,721 --> 00:10:41,171 Amy Babinchak: Right. 219 00:10:41,171 --> 00:10:41,621 Yeah. 220 00:10:41,951 --> 00:10:42,521 Um, yep. 221 00:10:42,581 --> 00:10:47,171 I, I learned that by accident because I had a client that was in that business 222 00:10:47,171 --> 00:10:50,801 and so I, you know, I got to see a little bit of what, what they did and 223 00:10:50,801 --> 00:10:52,751 how they did it and the importance of it. 224 00:10:53,471 --> 00:10:54,311 So, so, yeah. 225 00:10:54,311 --> 00:10:57,881 You know, the accountant cares about, you know, money in, money out. 226 00:10:57,881 --> 00:10:59,381 Oh, bottom line, here's what you owe. 227 00:10:59,411 --> 00:10:59,741 Right? 228 00:10:59,741 --> 00:11:02,261 But they're not gonna sit there and optimize it for you. 229 00:11:02,561 --> 00:11:04,781 That's what the, that's what the tax lawyer is. 230 00:11:05,171 --> 00:11:07,421 You, when you sell your business to, you need, you need. 231 00:11:08,231 --> 00:11:09,701 You need at least three people. 232 00:11:09,701 --> 00:11:10,871 You need that tax lawyer. 233 00:11:10,871 --> 00:11:14,501 You need the CPA, um, maybe four people. 234 00:11:14,531 --> 00:11:16,751 You need a financial planner to help you know that. 235 00:11:17,231 --> 00:11:20,891 You've got the right number that makes sense for your future. 236 00:11:21,581 --> 00:11:25,601 Um, and you know how close, how close you are to your, your ultimate 237 00:11:25,601 --> 00:11:28,691 need and you know how you're gonna fill those gaps if there are any, 238 00:11:29,411 --> 00:11:34,931 um, and business lawyer to actually go through that, that transaction. 239 00:11:34,961 --> 00:11:35,111 Yeah. 240 00:11:35,171 --> 00:11:38,231 So if you've got those four people on your sale team, you're gonna be, 241 00:11:38,651 --> 00:11:40,121 you're gonna be set up really well. 242 00:11:40,811 --> 00:11:43,986 Um, but, and you know, when buyers come to you. 243 00:11:45,011 --> 00:11:50,141 And you get that letter of intent from them, what they're offering 244 00:11:50,141 --> 00:11:53,471 impacts all of those things, right? 245 00:11:53,501 --> 00:11:58,481 They're gonna offer to pay you in a certain way to structure the payout over, 246 00:11:58,541 --> 00:12:04,211 you know, some period of time, make it, uh, an asset sale, a stock sale, right? 247 00:12:04,211 --> 00:12:05,111 All these different things. 248 00:12:05,111 --> 00:12:07,241 And they will have that in their lois. 249 00:12:07,241 --> 00:12:10,601 So that is a large part of your consideration, right? 250 00:12:10,601 --> 00:12:11,081 Not only. 251 00:12:11,816 --> 00:12:17,666 How much am I getting paid, but how am I getting paid and does that, does my team 252 00:12:17,666 --> 00:12:19,376 think that this is a good deal for me? 253 00:12:20,376 --> 00:12:23,376 Todd Kane: Yeah, the structure of the sale, I think is, is another aspect 254 00:12:23,436 --> 00:12:27,606 that, you know, someone who's not familiar with the, sort of the details 255 00:12:27,606 --> 00:12:32,616 of m and a. There's a whole, you know, there's probably four to five to 10 256 00:12:32,616 --> 00:12:35,476 different ways to, to slice this, up of. 257 00:12:36,516 --> 00:12:39,846 you would actually position and what you actually want as 258 00:12:39,846 --> 00:12:41,076 a part of the deal structure. 259 00:12:41,376 --> 00:12:46,176 So I usually position this as like, uh, how much cash you want up front, how much 260 00:12:46,176 --> 00:12:48,786 time you want to have freedom, Right. 261 00:12:48,786 --> 00:12:52,116 Like, do you, do you have to, you want out immediately, like you're ready to retire 262 00:12:52,116 --> 00:12:55,296 tomorrow, or you're ready to move on to your next thing tomorrow, or you willing 263 00:12:55,296 --> 00:12:57,306 to stick around for a year to three years? 264 00:12:57,306 --> 00:12:59,766 Like understanding those things is, is important. 265 00:12:59,766 --> 00:13:02,096 And then there's, you know, the. 266 00:13:02,166 --> 00:13:04,116 The amount that you'll actually get. 267 00:13:04,116 --> 00:13:08,046 And this is sort of like a, like a, like a, a bit of a, a bit of a 268 00:13:08,046 --> 00:13:11,796 triangle where like you, you have to shift the, the, your demands 269 00:13:11,796 --> 00:13:13,356 around, but you can't get all three. 270 00:13:13,626 --> 00:13:18,606 So you're, there's either more time in and more money or faster payout, 271 00:13:18,666 --> 00:13:20,226 but you know, less money, right? 272 00:13:20,226 --> 00:13:22,999 So you kind of have to factor in what are the parts that I want 273 00:13:23,299 --> 00:13:23,589 Amy Babinchak: Yeah. 274 00:13:23,676 --> 00:13:24,366 Todd Kane: I go here. 275 00:13:25,194 --> 00:13:27,144 Amy Babinchak: That, that's super critical. 276 00:13:27,144 --> 00:13:31,824 You know, when I, when I, um, when I sold my business, I 277 00:13:31,824 --> 00:13:34,704 knew I'm a strong entrepreneur. 278 00:13:35,904 --> 00:13:39,264 I, I knew it was gonna be impossible for me to go work for somebody else. 279 00:13:39,264 --> 00:13:43,494 So I had to fall in on the, I'm selling the business and it operates 280 00:13:43,494 --> 00:13:46,974 without me today, so it doesn't really need me to go forward anyway. 281 00:13:47,214 --> 00:13:47,484 Right. 282 00:13:47,484 --> 00:13:48,984 I, I made it that way. 283 00:13:49,614 --> 00:13:50,004 Um. 284 00:13:50,544 --> 00:13:53,814 I knew I did that because I knew I didn't wanna go with 285 00:13:53,814 --> 00:13:55,404 the business even for a year. 286 00:13:55,764 --> 00:13:57,804 I would be completely miserable. 287 00:13:58,074 --> 00:14:02,934 And that emotion part that we talked about, that grief would've been extended 288 00:14:02,934 --> 00:14:05,394 through that whole period, right? 289 00:14:05,694 --> 00:14:07,524 So that, so that. 290 00:14:07,999 --> 00:14:09,619 That's how it landed for me. 291 00:14:10,099 --> 00:14:15,169 A lot of times, um, I see offers coming in for businesses up to, up to three 292 00:14:15,169 --> 00:14:18,919 years of somebody still working in there, like one to three is really common. 293 00:14:19,879 --> 00:14:24,859 Um, however, when I, when you talk to other business owners, uh, two 294 00:14:24,859 --> 00:14:28,579 years is probably that sweet spot in the middle where they'll, they'll try 295 00:14:28,699 --> 00:14:30,019 to get you in there for two years. 296 00:14:30,499 --> 00:14:30,919 Um. 297 00:14:31,919 --> 00:14:35,159 People almost uniformly tell me that that was the worst 298 00:14:35,159 --> 00:14:36,539 two years of their whole life. 299 00:14:38,099 --> 00:14:41,759 Working inside of a business that you don't own anymore, you don't 300 00:14:41,759 --> 00:14:43,799 get to make decisions anymore. 301 00:14:44,369 --> 00:14:50,489 You have to implement the changes that the owner, new owner wants to make, 302 00:14:51,149 --> 00:14:54,329 and you have to sell it all to your clients that have been with you for. 303 00:14:54,929 --> 00:14:55,769 20 years. 304 00:14:55,919 --> 00:14:56,249 Right. 305 00:14:56,819 --> 00:14:59,129 It's a really difficult position to be in. 306 00:14:59,339 --> 00:15:04,709 It'll get you a little bit more cash upfront, but it's a hard place to be. 307 00:15:05,666 --> 00:15:06,986 Todd Kane: Yeah, I strongly agree. 308 00:15:06,986 --> 00:15:10,796 Um, I, I often joke with very entrepreneurial people that, uh, 309 00:15:10,796 --> 00:15:14,621 you know, they, they basically never really had a. A real job outside of 310 00:15:14,621 --> 00:15:16,391 maybe some retail or some fast food. 311 00:15:16,391 --> 00:15:19,721 And then they started an IT business and have done this for 15 years. 312 00:15:19,721 --> 00:15:21,641 I'm like, congratulations, you're unemployable. 313 00:15:21,911 --> 00:15:22,211 Right. 314 00:15:22,384 --> 00:15:22,571 Uh, 315 00:15:22,684 --> 00:15:23,174 Amy Babinchak: Exactly. 316 00:15:23,321 --> 00:15:24,551 Todd Kane: an important reflection. 317 00:15:24,551 --> 00:15:24,761 Yeah. 318 00:15:24,821 --> 00:15:25,841 'cause people end up miserable. 319 00:15:25,841 --> 00:15:26,441 They're like, what? 320 00:15:26,446 --> 00:15:26,686 What? 321 00:15:26,741 --> 00:15:28,181 Look what they're doing to my baby. 322 00:15:28,181 --> 00:15:28,511 Right. 323 00:15:28,811 --> 00:15:32,501 Uh, as they sit there, you know, with very little influence on, 324 00:15:32,531 --> 00:15:36,131 on what the, the outcomes of that business can be is very challenging. 325 00:15:36,629 --> 00:15:37,289 Amy Babinchak: Oh yeah, yeah. 326 00:15:37,289 --> 00:15:41,639 When I reflected back on my career before I started my business, and 327 00:15:41,639 --> 00:15:44,999 I, I did have one, not for a lot of years, about five years or so. 328 00:15:45,509 --> 00:15:49,469 Um, and I, I was actually in the environmental consulting field 329 00:15:49,979 --> 00:15:52,919 and I was really lucky to have. 330 00:15:53,804 --> 00:15:57,494 Bosses, and I knew this of myself, so I was really careful to interview 331 00:15:57,494 --> 00:16:02,054 my employers to make sure that they were gonna let me run because 332 00:16:02,084 --> 00:16:04,544 I could not, I could not be. 333 00:16:06,044 --> 00:16:10,484 I could barely be managed, much less micromanaged, but I'm gonna be the most 334 00:16:10,544 --> 00:16:15,314 productive person and fast learner that you've ever seen if you just let me go. 335 00:16:15,344 --> 00:16:15,494 Right? 336 00:16:16,016 --> 00:16:16,256 Todd Kane: Yep. 337 00:16:16,814 --> 00:16:20,264 Amy Babinchak: And I, I had a couple of great bosses that, that let me do that. 338 00:16:20,834 --> 00:16:24,974 Um, so yeah, I always tell people like, oh no, I, I'm a lousy employee. 339 00:16:24,974 --> 00:16:26,924 You do, you do not want me to come work for you. 340 00:16:27,924 --> 00:16:29,314 Todd Kane: Stuff will get done, Yeah. 341 00:16:29,647 --> 00:16:32,647 Amy Babinchak: Stuff will get done, but you know, it's not 342 00:16:33,007 --> 00:16:34,927 gonna be the way you think. 343 00:16:34,927 --> 00:16:41,107 It's structure is not, not quite the same as a person you might hire who's used to 344 00:16:41,197 --> 00:16:42,967 happy to work underneath other people. 345 00:16:43,207 --> 00:16:43,957 That was never me. 346 00:16:44,389 --> 00:16:44,689 Todd Kane: Right. 347 00:16:45,709 --> 00:16:48,919 So we're sort of suggesting people should, uh, think about, you know, the structure 348 00:16:48,919 --> 00:16:52,369 of the deal that they want, thinking about, you know, uh, the preparation 349 00:16:52,369 --> 00:16:54,109 to sell, having their team in place. 350 00:16:54,409 --> 00:16:58,399 Um, what about sort of how you value the MSP? 351 00:16:58,429 --> 00:17:02,209 Like you, you should, you, you talk about sort of knowing your number in the book, 352 00:17:02,209 --> 00:17:05,179 and I think that that's a really important aspect of what do you want outta this? 353 00:17:05,617 --> 00:17:05,869 Uh, 354 00:17:05,917 --> 00:17:06,157 Amy Babinchak: Yeah. 355 00:17:06,199 --> 00:17:09,049 Todd Kane: one of the sides that I see of this, I think you, we have sort of 356 00:17:09,049 --> 00:17:13,579 a. different, uh, ends of the, the, the spectrum here as far as perspective that 357 00:17:13,579 --> 00:17:14,869 I think will be interesting to get into. 358 00:17:15,229 --> 00:17:20,509 But one of the situations I see is the smaller operators that have maybe an 359 00:17:20,509 --> 00:17:24,469 inflated sense of what their business is worth, because either they hear the 360 00:17:24,469 --> 00:17:28,609 stories in the industry of so and so got X amount, and, you know, I think 361 00:17:28,609 --> 00:17:32,269 my business is worth this, or they ascribe a certain number because that's. 362 00:17:32,339 --> 00:17:36,239 What they want, not necessarily what their business is worth, right? 363 00:17:36,239 --> 00:17:40,079 So they end up, uh, way I describe this is they almost wanna get paid for the sweat 364 00:17:40,079 --> 00:17:41,729 equity that have put into the business. 365 00:17:41,969 --> 00:17:46,049 They've worked so hard, so therefore it should be worth, worth x. It's like, 366 00:17:46,049 --> 00:17:50,339 well unfortunately it's not really how, you know, bankers and spreadsheet 367 00:17:50,339 --> 00:17:52,049 people will value your business. 368 00:17:52,049 --> 00:17:55,409 So how should people think about understanding the value of their 369 00:17:55,409 --> 00:17:59,039 business, assuming maybe they don't have a great sense of m and a finance. 370 00:17:59,947 --> 00:18:02,827 Amy Babinchak: Yeah, the buyer's gonna come along and they're 371 00:18:02,827 --> 00:18:06,192 gonna value your business based on a whole bunch of factors. 372 00:18:06,292 --> 00:18:10,327 But if we just kind of boil it down to the top ones, um, right. 373 00:18:10,627 --> 00:18:12,187 How standardized is your business? 374 00:18:12,187 --> 00:18:13,957 How well does it run without you? 375 00:18:14,557 --> 00:18:16,177 Um, how much profit? 376 00:18:16,822 --> 00:18:18,082 Pushing to the bottom line. 377 00:18:18,742 --> 00:18:19,732 Net profits. 378 00:18:19,792 --> 00:18:20,152 Right? 379 00:18:20,212 --> 00:18:22,282 And they're gonna do their EBITDA calculation. 380 00:18:22,282 --> 00:18:26,992 And I hate EBITDA calculations 'cause every firm seems to have 381 00:18:26,992 --> 00:18:28,509 their own little twist on it. 382 00:18:28,809 --> 00:18:29,079 Todd Kane: Isn't it. 383 00:18:29,182 --> 00:18:29,512 Amy Babinchak: But 384 00:18:29,799 --> 00:18:32,619 Todd Kane: is supposed to be a universal number that allows businesses 385 00:18:32,739 --> 00:18:36,519 to compare more organically to each other, yet none of them are 386 00:18:36,519 --> 00:18:37,749 really calculated the same way. 387 00:18:38,617 --> 00:18:40,747 Amy Babinchak: None of 'em are really calculated the same way. 388 00:18:41,017 --> 00:18:46,687 You know, when I see the P firms come in, they're using EBITDA as just a like, uh. 389 00:18:48,667 --> 00:18:51,337 Bottom level, like we're not gonna go below this. 390 00:18:51,337 --> 00:18:53,737 So there's sizing businesses by ebitda. 391 00:18:53,737 --> 00:18:56,017 They're not valuing businesses by ebitda. 392 00:18:56,437 --> 00:19:00,217 What they're valuing the business on really is the net profit. 393 00:19:00,247 --> 00:19:03,037 What do, what net profit have you been operating at? 394 00:19:03,367 --> 00:19:08,107 Is your business showing a nice smooth growth line over the last five years? 395 00:19:08,797 --> 00:19:09,967 Uh, and. 396 00:19:10,177 --> 00:19:11,917 Can they get that same profit? 397 00:19:11,947 --> 00:19:13,747 Do they think they can actually raise it? 398 00:19:13,927 --> 00:19:14,257 Right? 399 00:19:14,257 --> 00:19:17,317 Can they, can they add efficiencies to what you've already got there? 400 00:19:18,127 --> 00:19:22,147 Um, that's really where their, that's where the valuation part 401 00:19:22,147 --> 00:19:26,707 comes in, and it's very, um, yeah, it's very kind of analytical. 402 00:19:27,457 --> 00:19:30,157 They don't, they don't have the same emotional attachment 403 00:19:30,157 --> 00:19:31,447 to your business at all. 404 00:19:31,987 --> 00:19:32,317 Right? 405 00:19:32,317 --> 00:19:35,077 They're just, they're looking at, you're, you're gonna give them 406 00:19:35,077 --> 00:19:36,847 a bunch of financial reports. 407 00:19:37,807 --> 00:19:40,507 They're gonna come back at you with some questions and a number. 408 00:19:41,437 --> 00:19:46,507 Um, and so they're not gonna ask you about, you know, how do you 409 00:19:46,507 --> 00:19:48,337 like that guy over at that client? 410 00:19:48,337 --> 00:19:50,017 You know, do you, are you guys buddies? 411 00:19:50,017 --> 00:19:51,667 Do you go to their birthday parties? 412 00:19:51,907 --> 00:19:54,187 Like none of that matters to them, right? 413 00:19:54,637 --> 00:19:55,867 As small businesses. 414 00:19:55,867 --> 00:19:58,117 That kind of stuff matters to us. 415 00:19:58,357 --> 00:20:02,022 'cause that's our, you know, you've had a client for such a long time. 416 00:20:02,992 --> 00:20:04,882 You know, your, your friends, right? 417 00:20:05,332 --> 00:20:06,532 All that stuff doesn't matter. 418 00:20:06,532 --> 00:20:08,662 That's not part of the valuation of your business. 419 00:20:08,692 --> 00:20:11,452 The valuation of your business is, what does it make? 420 00:20:12,862 --> 00:20:17,572 Um, you know, are, is your, is your pricing in line with the industry, right? 421 00:20:17,572 --> 00:20:18,502 Are you overpriced? 422 00:20:18,502 --> 00:20:19,582 Are you underpriced? 423 00:20:19,912 --> 00:20:25,612 Is your staff up to standards on today's skillset, or are they lagging behind? 424 00:20:25,612 --> 00:20:27,202 How much are you paying your people? 425 00:20:27,742 --> 00:20:28,102 Right? 426 00:20:28,102 --> 00:20:31,942 Are you paying them too little or too much or, or just Right, right. 427 00:20:31,942 --> 00:20:34,492 Everything you can get into that just right zone. 428 00:20:35,707 --> 00:20:39,457 The buyer's actually gonna offer you more for your business because 429 00:20:39,967 --> 00:20:46,867 it hits all of those middle, middle places where the standards are right. 430 00:20:48,522 --> 00:20:50,582 Speaker: Tired of fighting the MSP fires alone? 431 00:20:50,792 --> 00:20:53,682 The Opsleader Pro group connects service delivery professionals who 432 00:20:53,722 --> 00:20:55,312 understand your daily challenges. 433 00:20:55,582 --> 00:20:59,372 From KPIs and workflows to career planning and team management, Opsleader 434 00:20:59,392 --> 00:21:01,082 Pro has systems for you to use. 435 00:21:01,582 --> 00:21:05,722 Join operations leaders from successful MSPs who are sharing real solutions for 436 00:21:05,722 --> 00:21:09,932 managing client expectations, optimizing service delivery, and making your service 437 00:21:09,932 --> 00:21:12,132 delivery team as effective as possible. 438 00:21:12,132 --> 00:21:15,712 Opsleader Pro, 'cause your service desk deserves more than just survival mode. 439 00:21:16,152 --> 00:21:16,502 Visit opsleader.co. 440 00:21:16,502 --> 00:21:23,592 That's O-P-S leader dot C-O to apply to join the public community. 441 00:21:24,618 --> 00:21:26,898 Amy Babinchak: let's get into your thing about, um, business 442 00:21:26,898 --> 00:21:30,468 owners may be thinking that their business is worth more than it is. 443 00:21:30,858 --> 00:21:36,018 I, I'm gonna blame our industry press for that because the only articles they 444 00:21:36,018 --> 00:21:42,633 ever write are the, are the miracle sales where somebody got, you know, 10, 445 00:21:44,093 --> 00:21:46,728 13 times multiple for their business. 446 00:21:46,728 --> 00:21:47,118 Right. 447 00:21:47,868 --> 00:21:48,048 It. 448 00:21:48,468 --> 00:21:50,538 That's, you know, one in a thousand. 449 00:21:51,018 --> 00:21:55,398 Um, and, you know, everybody else gets something less than that. 450 00:21:56,058 --> 00:22:02,448 Uh, I heard recently of a firm that sold up in Alaska for really high multiple 451 00:22:03,078 --> 00:22:09,318 because it was one of the only well-run firms in the area that they, that they 452 00:22:09,318 --> 00:22:11,178 wanted and they wanted to get a foothold. 453 00:22:11,178 --> 00:22:13,038 So they're willing to pay a premium for that. 454 00:22:13,578 --> 00:22:15,558 But most of the time that doesn't happen. 455 00:22:16,338 --> 00:22:16,698 Right. 456 00:22:16,848 --> 00:22:22,068 If you're a smaller MSP, you're gonna be in the four to five range. 457 00:22:22,908 --> 00:22:30,588 If you're a medium-sized MSP, five to eight range, and if you're, if you're 458 00:22:30,588 --> 00:22:33,798 a true outlier, you'll go above that. 459 00:22:34,128 --> 00:22:34,278 Right? 460 00:22:34,278 --> 00:22:37,458 But our industry is made up mostly of those small players, 461 00:22:37,788 --> 00:22:40,098 and they don't ever hit the news. 462 00:22:41,805 --> 00:22:41,985 Todd Kane: Yeah. 463 00:22:41,985 --> 00:22:46,335 so that, that's, uh, the, the, the four and five, uh, uh, four and five x is 464 00:22:46,335 --> 00:22:49,665 a multiple of ebitda as, as, as the number here just to, to fill in that. 465 00:22:50,303 --> 00:22:50,593 Amy Babinchak: Yeah. 466 00:22:51,105 --> 00:22:53,655 Todd Kane: the other part that I see you had a different perspective on 467 00:22:53,655 --> 00:22:58,615 this is, um, a lot of, you know, if you're over 10 million, then you know, 468 00:22:58,615 --> 00:23:01,875 you, you're a much more attractive acquisition target and we'll potentially 469 00:23:01,875 --> 00:23:05,235 pull a higher multiple just based on, on that revenue number We're. 470 00:23:05,390 --> 00:23:07,760 You know, hopefully your EBITDA is good, but you know, just 471 00:23:07,938 --> 00:23:08,148 Amy Babinchak: Yeah. 472 00:23:08,780 --> 00:23:11,270 Todd Kane: will tend to make you more attractive, as you noted. 473 00:23:11,690 --> 00:23:15,620 Um, one of my favorite stats about the industry is 90% of the industry 474 00:23:15,620 --> 00:23:20,090 is sub 1 million, which is a massive, massive portion of the industry. 475 00:23:20,180 --> 00:23:23,330 And you had a perspective that you, you, uh, shared with me before 476 00:23:23,330 --> 00:23:25,550 we started recording about, um. 477 00:23:26,215 --> 00:23:31,585 A lot of those businesses, um, may or may not feel like they have something 478 00:23:31,585 --> 00:23:35,665 to sell, and you tend to bump into this occasionally in, in your travels 479 00:23:35,665 --> 00:23:38,965 in the industry of like, well, who would buy this, this business? 480 00:23:38,965 --> 00:23:42,175 Like, I need to get bigger before I could actually sell my business. 481 00:23:42,175 --> 00:23:44,335 And you maybe tend to feel that's not true. 482 00:23:44,545 --> 00:23:45,385 You wanna expand on that? 483 00:23:46,113 --> 00:23:49,683 Amy Babinchak: Yeah, that I, I honestly didn't know it was 90%. 484 00:23:49,683 --> 00:23:53,523 I knew it was a lot, and I usually think of it as sub 2 million, right? 485 00:23:53,523 --> 00:23:56,103 Almost all of our industry is sub 2 million. 486 00:23:56,103 --> 00:23:59,253 So if it's 90%, it's sub 1 million, I'll, I believe you. 487 00:23:59,943 --> 00:24:03,183 Um, and yeah, these, you know, they tend to be. 488 00:24:03,708 --> 00:24:05,538 Sole proprietors, right? 489 00:24:05,538 --> 00:24:12,198 It's one, one guy running the business or maybe one with a other, you know, 490 00:24:12,198 --> 00:24:13,758 a second person in the company. 491 00:24:14,658 --> 00:24:18,348 And, um, their plan is usually just to. 492 00:24:19,308 --> 00:24:21,108 Taper off, right? 493 00:24:21,468 --> 00:24:22,278 What's your plan? 494 00:24:22,278 --> 00:24:25,488 Well, you know, I'm just getting rid of some of my clients that I don't 495 00:24:25,488 --> 00:24:28,248 really like are the ones that aren't that profitable and they just sort 496 00:24:28,248 --> 00:24:32,238 of shrink, shrink, shrink, shrink, shrink, shrink until one day there's 497 00:24:32,238 --> 00:24:36,558 like four clients left and they're, they're 70 years old, and then they 498 00:24:36,558 --> 00:24:40,248 just give it to somebody else that they know from a user group from years ago. 499 00:24:41,628 --> 00:24:43,248 I see that all the time. 500 00:24:43,848 --> 00:24:45,738 And I think it's really sad. 501 00:24:46,278 --> 00:24:49,998 You know, you've worked in this business for 20 plus years. 502 00:24:50,388 --> 00:24:51,738 It's not worth zero. 503 00:24:52,068 --> 00:24:53,088 It just isn't. 504 00:24:53,448 --> 00:24:55,788 There's a, there, there's a number there. 505 00:24:56,208 --> 00:25:00,798 Your business is probably the largest asset that you own, even if you're 506 00:25:00,798 --> 00:25:03,228 in that sub 1 million range, right? 507 00:25:03,768 --> 00:25:07,458 You're still probably the largest asset that you own and. 508 00:25:08,163 --> 00:25:09,423 You should get paid for it. 509 00:25:09,423 --> 00:25:12,843 That's a, that's a valuable thing that, that you can add to your 510 00:25:12,843 --> 00:25:14,113 retirement next day when you're ready. 511 00:25:15,315 --> 00:25:17,565 Todd Kane: Because even selling a book of business is still a very 512 00:25:17,565 --> 00:25:22,185 viable way to, you know, to sell your business and for other businesses to 513 00:25:22,185 --> 00:25:24,405 grow is in an acquisition strategy. 514 00:25:24,405 --> 00:25:29,175 I know a number of large MSPs that really like buying books of business. 515 00:25:29,175 --> 00:25:31,635 It's very uncomplicated and they're very. 516 00:25:31,955 --> 00:25:36,245 Confident in the fact that they can retain those businesses and they can 517 00:25:36,335 --> 00:25:40,295 grow, you know, um, depending on their size obviously, but, you know, five 518 00:25:40,295 --> 00:25:45,335 to 15% pretty easily By acquiring a stable book of business that would've 519 00:25:45,335 --> 00:25:50,195 taken them years to grow organically or, you know, to, to fund the sales 520 00:25:50,195 --> 00:25:55,625 group in marketing group in order to acquire, uh, a, an equivalent base. 521 00:25:55,793 --> 00:25:56,045 So 522 00:25:56,093 --> 00:25:56,393 Amy Babinchak: Yeah. 523 00:25:56,693 --> 00:25:57,605 Todd Kane: viable strategy. 524 00:25:58,113 --> 00:25:59,583 Amy Babinchak: It's a, it's a great strategy. 525 00:25:59,583 --> 00:26:01,683 I did that four times in my business. 526 00:26:02,283 --> 00:26:05,553 You know, I, I bought small books, small books of business, and added 527 00:26:05,553 --> 00:26:10,473 them in and paid out the owner over the course of two years from what those 528 00:26:10,473 --> 00:26:13,083 businesses, what those new clients made. 529 00:26:13,083 --> 00:26:17,043 A hundred percent of the time that I did, that, I always made more money 530 00:26:17,043 --> 00:26:18,903 from those customers than they ever did. 531 00:26:19,710 --> 00:26:19,930 Todd Kane: Yes. 532 00:26:20,193 --> 00:26:22,953 Amy Babinchak: they were, they, they were, they were tapering off, maybe 533 00:26:22,953 --> 00:26:24,723 not doing all the latest things. 534 00:26:24,723 --> 00:26:25,353 They just weren't. 535 00:26:25,673 --> 00:26:28,103 As involved in it anymore, and Right. 536 00:26:28,343 --> 00:26:31,223 It was always that case where I talked about, right, they tapered off 537 00:26:31,223 --> 00:26:36,203 and they got down to their last 4, 5, 8 clients and I would say, yeah, 538 00:26:36,233 --> 00:26:37,823 I'll buy those from you, no problem. 539 00:26:38,065 --> 00:26:38,485 Todd Kane: Mm-hmm. 540 00:26:39,173 --> 00:26:42,443 Amy Babinchak: And then we just built them up and he's, and they were surprised. 541 00:26:42,443 --> 00:26:44,933 They're like, wow, you're making more money than I ever made. 542 00:26:45,555 --> 00:26:45,775 Todd Kane: Yep. 543 00:26:46,553 --> 00:26:48,683 Amy Babinchak: Like, well, you know, that's why I bought 'em. 544 00:26:48,833 --> 00:26:49,073 Right. 545 00:26:49,335 --> 00:26:52,755 Todd Kane: if you're, if you, you have organizational maturity enough that 546 00:26:52,755 --> 00:26:56,415 you're growing and able to acquire, you're probably gonna be sophisticated 547 00:26:56,415 --> 00:27:00,195 enough to increase the share of wallet with that, that, that client base, right? 548 00:27:00,285 --> 00:27:00,555 Yeah, 549 00:27:00,798 --> 00:27:01,788 Amy Babinchak: Yeah, absolutely. 550 00:27:02,205 --> 00:27:02,565 Todd Kane: So that 551 00:27:02,658 --> 00:27:02,778 Amy Babinchak: Yeah. 552 00:27:03,078 --> 00:27:05,925 Todd Kane: to, to, uh, uh, finding the right buyer. 553 00:27:06,015 --> 00:27:08,805 Um, so there's, you know, the PEs. 554 00:27:08,865 --> 00:27:12,615 Uh, that everyone's familiar with is, is sort of what I think everyone 555 00:27:12,615 --> 00:27:17,355 thinks about in general in the strategy is, you know, there's some massive 556 00:27:17,355 --> 00:27:19,035 company that's gonna come acquire me. 557 00:27:19,455 --> 00:27:20,895 Uh, that is a strategy. 558 00:27:20,895 --> 00:27:23,565 Uh, there's, you know, as you mentioned, some rollup peers. 559 00:27:23,595 --> 00:27:26,325 There's, you know, the, a larger MSP in your region 560 00:27:26,325 --> 00:27:28,065 that's potentially an acquirer. 561 00:27:28,455 --> 00:27:31,245 Uh, and what I wanted to, to bounce off, you see how much you see of 562 00:27:31,245 --> 00:27:32,745 this is seller based financing. 563 00:27:32,835 --> 00:27:34,035 Uh, I know you mentioned this in the 564 00:27:34,278 --> 00:27:34,568 Amy Babinchak: Okay. 565 00:27:34,868 --> 00:27:37,190 Todd Kane: and, um, one of the ones that I feel like. 566 00:27:37,540 --> 00:27:40,540 Has more of an opportunity than maybe comes to light. 567 00:27:40,810 --> 00:27:44,050 Is the owner actually selling the business to the employees? 568 00:27:44,050 --> 00:27:48,190 Not in an ESOP way, but seller based financing, say to the leadership team. 569 00:27:48,550 --> 00:27:51,220 And I, I wish this was maybe more prevalent than it is. 570 00:27:51,490 --> 00:27:53,830 I've seen this ha transact in a couple of cases. 571 00:27:54,130 --> 00:27:58,480 Um, but I, I think it's a really underserved and potentially valuable 572 00:27:58,480 --> 00:28:01,720 strategy, especially if you've got a team that you really like and. 573 00:28:02,060 --> 00:28:05,990 You, you feel like they could carry the legacy for that organization, so 574 00:28:06,200 --> 00:28:09,920 maybe work backwards from there in the different acquisition strategies. 575 00:28:09,920 --> 00:28:12,200 What, what's your thought on sort of seller based financing to the 576 00:28:12,200 --> 00:28:14,090 existing, um, leadership team? 577 00:28:14,928 --> 00:28:19,248 Amy Babinchak: I think that's an, an awesome idea and it's incredibly rare. 578 00:28:19,758 --> 00:28:23,778 And like you, I, I'm, I'm not really sure why, although, you know, I 579 00:28:23,778 --> 00:28:31,278 will say that in my own case, um, I was interested in doing that, but. 580 00:28:32,133 --> 00:28:36,303 It's different to go from being an employee to an owner and you have 581 00:28:36,303 --> 00:28:38,943 to have your family backing that. 582 00:28:39,243 --> 00:28:44,973 Then in my case, the, um, the, the guy that was running my business, his 583 00:28:44,973 --> 00:28:46,893 family was not in support of that. 584 00:28:47,753 --> 00:28:48,053 Right. 585 00:28:48,203 --> 00:28:50,243 They wanted, they wanted more flexibility. 586 00:28:50,243 --> 00:28:54,023 They didn't wanna be tied to a place they, you know, so, so it wasn't, 587 00:28:54,023 --> 00:28:55,403 so, it wasn't gonna be viable. 588 00:28:55,823 --> 00:28:59,213 Um, I do, I do know someone who is doing it now though. 589 00:28:59,903 --> 00:29:02,873 Um, and I think it's gonna work out great. 590 00:29:02,933 --> 00:29:07,283 You know, I mean, there's no more stability than someone 591 00:29:07,283 --> 00:29:09,773 who has been in that position. 592 00:29:10,428 --> 00:29:13,098 Running this business for a number of years already. 593 00:29:13,638 --> 00:29:16,728 Like that's a pretty safe bet, right? 594 00:29:16,728 --> 00:29:20,358 So if you're confident in your team and they're not gonna all of a sudden 595 00:29:20,358 --> 00:29:26,088 break out and do something bizarre after you leave, um, you know, I think 596 00:29:26,088 --> 00:29:27,588 that's a, that's a great way to go. 597 00:29:27,858 --> 00:29:33,198 And I do, I do also know an ESOP firm where the owner sold to the 598 00:29:33,198 --> 00:29:37,338 six employees that she had, um, and. 599 00:29:38,028 --> 00:29:40,158 I will say that they are. 600 00:29:41,283 --> 00:29:46,143 Struggling a bit to understand how to navigate the relationships that 601 00:29:46,143 --> 00:29:48,495 an ESOP enforces on everybody. 602 00:29:48,795 --> 00:29:49,335 Todd Kane: Yes. 603 00:29:49,635 --> 00:29:53,223 Amy Babinchak: that's a, that's, that's I think, a little bit more difficult 604 00:29:53,223 --> 00:29:57,513 than selling to maybe one or two, you know, leaders that you have in your team 605 00:29:57,990 --> 00:29:58,320 Todd Kane: Yeah. 606 00:29:58,413 --> 00:30:00,603 Amy Babinchak: have been more, hopefully working together for a long time. 607 00:30:00,603 --> 00:30:04,023 I, I wouldn't do it unless you had, um, a business that 608 00:30:04,023 --> 00:30:05,583 really they're already running. 609 00:30:05,703 --> 00:30:07,653 Like you guys just need to keep doing it. 610 00:30:07,773 --> 00:30:08,103 Right. 611 00:30:08,283 --> 00:30:09,033 And it would be good. 612 00:30:09,585 --> 00:30:12,705 Todd Kane: Yeah, I've seen ESOP explored a number of times, but it, 613 00:30:12,705 --> 00:30:16,785 the, the extent of it is usually paying, you know, $20,000 for an ESOP 614 00:30:16,785 --> 00:30:18,705 consultant and then it stalls out there. 615 00:30:18,765 --> 00:30:20,895 'cause everyone sort of realizes like, whoa, this is 616 00:30:20,895 --> 00:30:22,155 actually kind of complicated. 617 00:30:22,155 --> 00:30:26,085 Like, am I gonna get my family's, uh, support of funding this? 618 00:30:26,085 --> 00:30:28,545 You know, how am I actually gonna raise the capital for this? 619 00:30:28,545 --> 00:30:31,425 Am I gonna, you know, take the equity outta my home in order to 620 00:30:31,785 --> 00:30:33,195 have the initial capital for it? 621 00:30:33,195 --> 00:30:38,145 So it is, it is complicated, but as, as we say, I, I wish it were more prevalent, 622 00:30:38,145 --> 00:30:42,315 but I get that these, these, uh, these models, uh, tend to be a little more, 623 00:30:42,705 --> 00:30:47,290 uh, a little more risky and not from a outcomes perspective, but just, um, 624 00:30:47,510 --> 00:30:49,335 for the people participating in them. 625 00:30:49,335 --> 00:30:51,135 They're like, they're also not. 626 00:30:51,210 --> 00:30:55,260 Familiar with m and a and, uh, the acquisition strategy versus, you know, 627 00:30:55,260 --> 00:30:58,980 the PEs and the VCs that, you know, they do this stuff all day, right? 628 00:30:59,283 --> 00:30:59,763 Amy Babinchak: Right. 629 00:30:59,913 --> 00:31:00,273 Yeah. 630 00:31:00,278 --> 00:31:00,568 Yeah. 631 00:31:00,753 --> 00:31:05,793 The, the p VC market though, starts to fizzle out around 5 million. 632 00:31:06,543 --> 00:31:10,143 So, uh, and some of 'em will go a little smaller, maybe down to three, 633 00:31:10,143 --> 00:31:12,183 but like, none of them go below that. 634 00:31:12,295 --> 00:31:12,785 Todd Kane: Exactly. 635 00:31:13,085 --> 00:31:15,903 Amy Babinchak: So you have to be a business of a certain size. 636 00:31:16,233 --> 00:31:21,903 Um, and, and in the MSP world, there's a gigantic hump at 2 million 637 00:31:22,443 --> 00:31:24,258 that makes it difficult to grow. 638 00:31:24,993 --> 00:31:25,773 Past that. 639 00:31:26,193 --> 00:31:28,323 And, uh, so most people don't, right? 640 00:31:28,323 --> 00:31:30,903 That's like a, there's a, there's a big stopping, there's 641 00:31:30,903 --> 00:31:32,043 a big stopping point there. 642 00:31:32,523 --> 00:31:34,803 Um, and that's for a whole other discussion, but, 643 00:31:34,935 --> 00:31:36,555 Todd Kane: That's what I refer to as Death Valley. 644 00:31:36,615 --> 00:31:37,905 Between one and 5 million. 645 00:31:37,995 --> 00:31:39,915 Yeah, Either you make it or you don't. 646 00:31:41,193 --> 00:31:43,683 Amy Babinchak: Yeah, that's a, it's a, it's a tough place to be. 647 00:31:43,773 --> 00:31:46,863 Um, there's a lot of reinvestment, restructuring, reorganizing that has 648 00:31:46,863 --> 00:31:48,423 to be done in order to grow beyond it. 649 00:31:49,113 --> 00:31:53,673 So, um, which means, you know, that's another reason why most buyers won't be 650 00:31:53,673 --> 00:31:56,943 looking at the, at the PE VVC marketplace. 651 00:31:57,303 --> 00:31:59,403 I wish they would come down a little farther. 652 00:31:59,403 --> 00:32:05,223 'cause there are some excellent businesses in the one to $2 million 653 00:32:05,223 --> 00:32:09,603 range that I think would make make sense for the PEs even to. 654 00:32:10,518 --> 00:32:11,808 Pace them together, you know? 655 00:32:12,558 --> 00:32:12,858 But, 656 00:32:13,005 --> 00:32:14,565 Todd Kane: seen as a, as a decent strategy. 657 00:32:14,565 --> 00:32:18,345 Like I've seen a few organizations where they kinda work together to 658 00:32:18,345 --> 00:32:20,805 cobble together a larger organization. 659 00:32:20,835 --> 00:32:23,715 So you take kinda one company that acts a bit more as the 660 00:32:23,715 --> 00:32:25,065 flagship, maybe they're doing. 661 00:32:25,440 --> 00:32:27,030 You know, 2 million, 3 million. 662 00:32:27,030 --> 00:32:30,300 And then they pull together a couple of other groups that are doing a million, 663 00:32:30,300 --> 00:32:33,660 million and a half, and then they, they pull together and then maybe do one 664 00:32:33,660 --> 00:32:37,380 or two more acquisitions and then do another turn and sell, uh, once they've 665 00:32:37,380 --> 00:32:39,150 sort of pulled that, that unit together. 666 00:32:39,150 --> 00:32:42,780 I kind of, I describe this as a bit of the acquisition drag effect 667 00:32:42,990 --> 00:32:44,485 where people try to sort of. 668 00:32:44,785 --> 00:32:49,075 Build themselves up to be a bit bigger, to signal to the larger entities that 669 00:32:49,075 --> 00:32:53,275 are more at, say the 10 million and the 8 million is sort of the more their sweet 670 00:32:53,275 --> 00:32:56,845 spot if, but if you can pull together a business that all of a sudden clips past 671 00:32:56,845 --> 00:33:00,715 five or six, then you know, all of a sudden you'll have, uh, a lot of people 672 00:33:00,715 --> 00:33:02,305 circling you with interest as well. 673 00:33:02,305 --> 00:33:02,545 Right? 674 00:33:03,643 --> 00:33:07,363 Amy Babinchak: Yeah, you have to reach a point of stability though after that. 675 00:33:07,363 --> 00:33:10,273 So they're not gonna want, they're not gonna be interested in you right. 676 00:33:10,273 --> 00:33:11,803 After you make those acquisitions. 677 00:33:11,803 --> 00:33:15,613 You have to have made them a couple years ago and proved, proved that, 678 00:33:15,673 --> 00:33:17,233 you know, this is actually working. 679 00:33:18,233 --> 00:33:22,433 So, um, what was the other thing that you wanted to talk about is, 680 00:33:22,433 --> 00:33:22,673 um. 681 00:33:22,973 --> 00:33:28,345 Todd Kane: the, I I would say just, uh, you know, PEs rightly and wrongly get a, 682 00:33:28,375 --> 00:33:30,415 maybe a bit of a bad rap in some cases. 683 00:33:30,415 --> 00:33:35,125 I've seen some absolute horror stories of, uh, acquisitions that. 684 00:33:35,540 --> 00:33:39,830 Uh, you know, the, the owner ended up really regretting the circumstances 685 00:33:39,830 --> 00:33:43,970 that they ended up in because despite all the niceties in, in, in sort of the 686 00:33:43,970 --> 00:33:48,380 description of how this is partnership is, gonna go, uh, the, the truth was 687 00:33:48,380 --> 00:33:52,550 much different and they were very interested in growth for growth's sake. 688 00:33:52,610 --> 00:33:53,720 There was a lot of cutting. 689 00:33:54,110 --> 00:33:56,870 Uh, client relationships were not maintained. 690 00:33:56,930 --> 00:33:59,990 Uh, you know, the respect of the owner was a bit dismissed. 691 00:34:00,380 --> 00:34:04,220 Uh, those, they can end up in some of those really awkward situations because 692 00:34:04,220 --> 00:34:07,970 some of those companies are really not in it for the surface in the service. 693 00:34:07,970 --> 00:34:08,455 They're in it for. 694 00:34:09,330 --> 00:34:12,660 of growth and, you know, they're, they're, they're looking at the spreadsheets. 695 00:34:13,020 --> 00:34:13,500 um. 696 00:34:13,530 --> 00:34:16,650 and I think that that can be a difficulty in finding the right partner. 697 00:34:16,680 --> 00:34:19,440 'cause there are absolutely great PE groups that, 698 00:34:19,463 --> 00:34:19,883 Amy Babinchak: Mm-hmm. 699 00:34:20,490 --> 00:34:22,920 Todd Kane: uh, you know, a legacy for those people. 700 00:34:22,920 --> 00:34:26,130 Give them even growth positions to go into in some of the umbrella 701 00:34:26,130 --> 00:34:27,300 corps and things like that. 702 00:34:27,630 --> 00:34:31,410 So I think, uh, there are good ways to get into this, but maybe. 703 00:34:31,725 --> 00:34:35,895 You can get sold on a bag of goods on, you know, this is supposed 704 00:34:35,895 --> 00:34:37,215 to be an amazing strategy. 705 00:34:37,245 --> 00:34:39,735 Here's what we propose, and then it ends up being different. 706 00:34:39,765 --> 00:34:40,575 So how should 707 00:34:40,748 --> 00:34:41,038 Amy Babinchak: Yeah, 708 00:34:41,115 --> 00:34:43,905 Todd Kane: about almost interviewing the PE groups that 709 00:34:43,905 --> 00:34:45,075 may potentially acquire them? 710 00:34:45,340 --> 00:34:45,460 I. 711 00:34:45,763 --> 00:34:47,743 Amy Babinchak: well, you know, they're, you're right. 712 00:34:47,743 --> 00:34:49,603 They come in so many different flavors. 713 00:34:49,753 --> 00:34:55,598 One of the trends that I see right now is, um, those firms taking. 714 00:34:56,608 --> 00:35:02,338 Some of the money maybe up to 20% and saying, oh, you're going to, you're 715 00:35:02,338 --> 00:35:06,508 going to, we'll pay you, we'll pay you the 80% on this typical, like, 716 00:35:06,508 --> 00:35:11,128 you'll stay here, work two years, we'll do all this stuff, this 20%, you're 717 00:35:11,128 --> 00:35:13,108 gonna invest that in our company. 718 00:35:13,708 --> 00:35:16,783 And then, you know, when we exit. 719 00:35:17,818 --> 00:35:21,658 You'll, you'll get more than that 20% back. 720 00:35:21,658 --> 00:35:21,928 Right? 721 00:35:21,928 --> 00:35:25,408 So you're, you're, you're now an equity partner in their business. 722 00:35:26,338 --> 00:35:32,308 Um, there's a lot of risk in that, you know, I, uh, 20 percent's a lot. 723 00:35:32,848 --> 00:35:36,718 So, um, and that seems to be the number that they're going for. 724 00:35:37,198 --> 00:35:39,838 Uh, it's taking a lot of risk off of, off of them. 725 00:35:40,048 --> 00:35:44,223 And, but that's placing that risk on you, so you have to figure out. 726 00:35:44,778 --> 00:35:50,538 Where you're, you know, are you willing to gamble 20% of your company on the 727 00:35:50,538 --> 00:35:52,818 success of the firm that bought you? 728 00:35:54,348 --> 00:35:57,528 Um, that's a, that's a huge decision point. 729 00:35:57,978 --> 00:36:03,708 Um, you know, and they will typically offer you maybe a little bit more because 730 00:36:03,708 --> 00:36:05,478 they are asking you to accept some risks. 731 00:36:05,478 --> 00:36:09,678 So the more risk you're willing to accept, the bigger the number 732 00:36:09,678 --> 00:36:11,268 will look on the bottom line. 733 00:36:11,598 --> 00:36:13,428 But it may or may not actually happen. 734 00:36:14,383 --> 00:36:14,713 Right. 735 00:36:15,913 --> 00:36:21,283 Um, if you are more risk adverse, you know, and you just wanna get your 736 00:36:21,283 --> 00:36:25,333 money in the bank, then the number itself is gonna look a little smaller, 737 00:36:25,333 --> 00:36:27,913 but it'll be in the bank, right? 738 00:36:27,913 --> 00:36:28,903 It's a sure deal. 739 00:36:29,443 --> 00:36:36,223 So you all, all of these negotiations, like you said, it's that triangle, right? 740 00:36:36,223 --> 00:36:39,073 You're trying to figure out is this the right person? 741 00:36:40,078 --> 00:36:46,228 On the emotional side of things, you might say, man, I really don't wanna sell to 742 00:36:47,188 --> 00:36:55,288 a huge firm that's gonna roll us up into a national MSP because, um, you know, I 743 00:36:55,288 --> 00:36:57,208 know my clients aren't gonna like that. 744 00:36:57,208 --> 00:36:59,248 You know, this is not, it's not me. 745 00:36:59,608 --> 00:37:00,598 You know, I want. 746 00:37:01,738 --> 00:37:04,708 This, this business grew up here in this community. 747 00:37:04,708 --> 00:37:10,558 And you know, the offer from the local MSP, um, that wants to come into the, the 748 00:37:10,558 --> 00:37:14,848 mar marketplace that I'm in, you know, that's how it happened with my company. 749 00:37:15,088 --> 00:37:16,348 They were in a smaller market. 750 00:37:16,348 --> 00:37:18,418 They wanted to come into the market that I was in. 751 00:37:19,108 --> 00:37:26,128 Um, then you essentially have a transaction that's more like you. 752 00:37:26,503 --> 00:37:29,113 Right, and it maybe feels a little more comfortable. 753 00:37:29,773 --> 00:37:32,323 Um, the numbers probably are slightly smaller. 754 00:37:32,905 --> 00:37:33,115 Todd Kane: Yep. 755 00:37:33,895 --> 00:37:36,715 Yeah, I, that's a really important consideration is it's 756 00:37:36,715 --> 00:37:38,455 not just about the money, right? 757 00:37:38,455 --> 00:37:43,045 Like this is, uh, this is in a way your legacy, uh, and you know, 758 00:37:43,045 --> 00:37:47,605 the continuity of, uh, employment for your staff, how your, your 759 00:37:47,935 --> 00:37:49,585 customers are supported long term. 760 00:37:49,585 --> 00:37:52,375 I think those are really important considerations when you're, 761 00:37:52,405 --> 00:37:54,025 you're considering offers. 762 00:37:54,325 --> 00:37:55,435 And it may not just be. 763 00:37:55,675 --> 00:37:58,615 You know, these, these guys offer me, offer me seven x and this 764 00:37:58,615 --> 00:38:01,825 other guy offered me five, so of course I'm gonna take the seven x. 765 00:38:01,825 --> 00:38:03,295 Well, you know, hold your horses. 766 00:38:03,295 --> 00:38:07,555 Like maybe that situation is, uh, is not, not as simple as that 767 00:38:07,735 --> 00:38:09,205 number defines it as you know. 768 00:38:09,953 --> 00:38:12,173 Amy Babinchak: Some people are really cutthroat that way. 769 00:38:12,180 --> 00:38:12,400 Todd Kane: Yep. 770 00:38:12,503 --> 00:38:15,083 Amy Babinchak: you know, oh, whatever happens to my employees, 771 00:38:15,083 --> 00:38:16,163 I don't, you know, whatever. 772 00:38:16,163 --> 00:38:17,453 They'll, they'll find jobs. 773 00:38:17,483 --> 00:38:18,143 They're good people. 774 00:38:18,143 --> 00:38:19,013 They'll find jobs. 775 00:38:19,523 --> 00:38:19,943 Um. 776 00:38:20,278 --> 00:38:24,208 Others, you know, for me, I always felt really personally 777 00:38:24,208 --> 00:38:29,818 responsible for their wellbeing, for their, their, their livelihoods. 778 00:38:29,818 --> 00:38:33,388 They were supporting their families off of the, you know, money I was paying them. 779 00:38:33,388 --> 00:38:38,308 So, like, I'm supporting all of these different family groups out there, right? 780 00:38:38,308 --> 00:38:41,128 That was a responsibility that I took very seriously and I think a 781 00:38:41,128 --> 00:38:42,658 lot of small business owners do. 782 00:38:43,618 --> 00:38:49,768 So, um, yeah, so they're, I, you know, you can put guarantees in the deal, right? 783 00:38:50,308 --> 00:38:52,738 You gotta, you, you need to hire everybody. 784 00:38:53,188 --> 00:38:55,348 You gotta keep 'em for a certain amount of time, right? 785 00:38:55,348 --> 00:38:58,678 You may want, want them to all have employment contracts that they're, 786 00:38:58,978 --> 00:39:02,668 have some place to safely land, whether they choose to stay there 787 00:39:02,668 --> 00:39:04,288 or not, you know, that's up to them. 788 00:39:04,348 --> 00:39:06,388 But at least I've given them a safe place to land. 789 00:39:06,388 --> 00:39:07,528 I haven't just abandoned them. 790 00:39:08,248 --> 00:39:12,718 That's, that's often really important to, to business owners that that happen. 791 00:39:14,415 --> 00:39:14,805 Todd Kane: Agreed. 792 00:39:15,855 --> 00:39:19,245 well, there's some great, Amy, uh, anything we haven't covered that 793 00:39:19,275 --> 00:39:20,925 we should dive into from your book? 794 00:39:20,925 --> 00:39:24,435 Obviously I'll, I'll link to, to the book and, and show notes and things like that. 795 00:39:24,435 --> 00:39:26,775 Anything we haven't covered that you'd like to, to dive into? 796 00:39:27,448 --> 00:39:30,928 Amy Babinchak: You know, uh, the reason I wrote this book is because 797 00:39:30,928 --> 00:39:34,438 I wanted people to start to think about selling their business. 798 00:39:34,438 --> 00:39:37,438 I wanted 'em to think about it earlier than they probably were going to. 799 00:39:38,368 --> 00:39:40,168 Um, so I mean, just. 800 00:39:40,573 --> 00:39:43,423 Tell folks sort of the way that this is, is structured too. 801 00:39:43,423 --> 00:39:44,713 I wanted it to be easy. 802 00:39:45,073 --> 00:39:47,623 It is not a book you don't like open page one and read it 803 00:39:47,623 --> 00:39:50,203 till page, whatever it is, 244. 804 00:39:50,773 --> 00:39:55,063 Um, you can jump in at any of the 20 questions that is speaking to 805 00:39:55,063 --> 00:40:01,213 you at this moment and, um, you know, I write a few pages of, you 806 00:40:01,213 --> 00:40:02,803 know, answering that question. 807 00:40:03,458 --> 00:40:06,308 Then there's uh, you know, some key takeaways for you to 808 00:40:06,308 --> 00:40:08,048 remember about what you just read. 809 00:40:08,468 --> 00:40:12,338 There's a story, 'cause a lot of us learn through stories. 810 00:40:12,338 --> 00:40:13,778 So you get to see sort of what an. 811 00:40:15,433 --> 00:40:18,943 When, how they, how particular MSP went through, thought about 812 00:40:18,943 --> 00:40:20,803 it and what their outcome was. 813 00:40:21,313 --> 00:40:24,943 And then there's a series of questions at the end to help you go through and come 814 00:40:24,943 --> 00:40:26,833 up with your own answer to that question. 815 00:40:26,893 --> 00:40:29,623 'cause we're all just a little bit unique from each other. 816 00:40:30,583 --> 00:40:33,133 Um, so it's a, you know, so it's a little bit teaching, 817 00:40:33,133 --> 00:40:35,203 it's a little bit work workbook. 818 00:40:35,653 --> 00:40:39,253 And, you know, I think there's a lot of stuff in here that if you 819 00:40:39,253 --> 00:40:42,193 did this, you just are gonna come out running a better business. 820 00:40:42,823 --> 00:40:43,303 And it's. 821 00:40:43,573 --> 00:40:46,933 I keep telling people it's never too soon to start running a better business. 822 00:40:46,993 --> 00:40:52,093 And so you know this, this can also help people do that even if you don't decide to 823 00:40:52,093 --> 00:40:54,073 sell your business for another five years. 824 00:40:54,685 --> 00:40:54,905 Todd Kane: Yep. 825 00:40:55,000 --> 00:40:56,770 As a, as an ops person. 826 00:40:57,250 --> 00:41:01,780 Degree more is, uh, you know, the, the revenue is the size of your business. 827 00:41:01,780 --> 00:41:04,960 The bottom line is how well the business runs. 828 00:41:05,350 --> 00:41:09,610 And you know, if you, if regardless of if you intend to sell anytime 829 00:41:09,610 --> 00:41:12,190 soon or you have no thoughts of. 830 00:41:12,550 --> 00:41:16,870 Of selling, uh, at the time you should think about your bottom line and 831 00:41:16,870 --> 00:41:19,960 the improvement of your operations because it's easier to get those 832 00:41:19,960 --> 00:41:24,520 things started now and position yourself for potentially millions more. 833 00:41:24,820 --> 00:41:28,570 Not only will your, your company grow in a more stable fashion, but 834 00:41:28,570 --> 00:41:32,110 you can get more money for it when ultimately you are ready to sell. 835 00:41:32,110 --> 00:41:36,520 So I really, really strongly endorse that approach of think through these things. 836 00:41:36,990 --> 00:41:41,310 Uh, for the, for the, for the ideas themselves and just figure out what 837 00:41:41,310 --> 00:41:45,150 you could potentially improve to set yourself up for a potential, uh, 838 00:41:45,150 --> 00:41:46,740 better, better situation in the future. 839 00:41:46,800 --> 00:41:47,160 Agreed. 840 00:41:48,178 --> 00:41:48,628 Amy Babinchak: Awesome. 841 00:41:48,628 --> 00:41:50,308 I couldn't say it better myself. 842 00:41:51,660 --> 00:41:52,200 Todd Kane: Well thanks Amy. 843 00:41:52,230 --> 00:41:55,890 We appreciate you coming on and, uh, encourage people to check out the book and 844 00:41:55,890 --> 00:42:00,030 improve their operations and then position themselves for a better sale of their MSB. 845 00:42:01,498 --> 00:42:01,918 Amy Babinchak: Thanks for having me.