Navigating Business Transactions with John Martinka

0:00All right. In today's episode, we interviewed John Martinka, where we talked about what it's like to be an intermediary, right, and really representing buyers and sellers. And what are some things that he's seen in the industry around buyers and how that changed over the past 30 years? And at the same time, right, what's going on with sellers? What do sellers do well? What do they not do well? What should a seller do in terms of preparing their company for an exit? So, Casey, what are some of your takeaways? It always comes back to the numbers, man. I just, the thing I could say on every podcast, everything that we talk to, you know, you've got to know your numbers. You've got to take care of your accounting as it's the most important thing in your business, right? I mean, I know sales is always important. Trust me. Sales trumps everything. But at the end of the day, you've got to do your accounting, right? So, if you short side your accounting, you're going to be, you're going to pay for it on your exit. You're going to pay for it at some point, right? So, know your numbers, grow your numbers, man, I took that from John in a lot of ways. And the kind of some of the funny things is really talking about, okay, on the buy side, right?

1:00We know that space has changed. There's more unsophisticated people coming into the market. And that's a given. But on the sell side, right, sounds like not much has changed and you still have sloppy sellers, right? Regardless of having better tools out there, it's just that most businesses, especially in the small and medium space, just aren't that sophisticated. And I think that's the opportunity, right? That's what we look for whenever we buy a business. It's really taking those family-owned businesses and making a management lead. So lots of information on that topic. Welcome to the M&A Launchpad podcast with your host, Casey and Ferris with Equity Launchpad. On this podcast, you will get insights on acquiring, investing in, and selling profitable businesses in the lower-to-middle market. Whether you're a business owner, investor, or a spa entrepreneur at Equity Launchpad, we will provide you with the knowledge, guidance, and capital to navigate the world of mergers and acquisitions. All right. Hey, it's Casey here. Mark your calendars for November 1st. It's going to be another M&A Launchpad conference. This is going to be PowerPack. We continue to add incredible value around independent sponsors, the ETA, women in entrepreneurship,

2:04anybody that's thinking about buying, selling, acquiring, growing, anything around your business. This is going to be very, very nice there in Chicago on November 1st. And you can find us at the M&A Launchpad.com. You're going to use the code launch, and this is going to give you $150 off of the event. We look forward to seeing you out there November 1st in Chicago, M&A Launchpad. John, welcome to the show. Glad to be here. Yeah. You're joining us from Seattle, huh? Outside of Seattle, Kirkland, Washington. I know exactly where that is. It's driven by that Costco a million times, although the Rose Hill Starbucks there was my favorite place to go sit and work for hours upon hours. But, John, for listeners, right? So you obviously work really closely with buyers and sellers. So you want to just give the listeners a little bit of background about yourself? Sure. I've been doing this for a long time. I got into it through serendipity. Timing was right when a guy I had become friends with said, I've always thought you'd be

3:06good in this business. And we've got to know each other as back-to-back presidents of a small local rotary club in Kirkland. And you go to all those board meetings and all the other stuff, and you show what you can do. He just said it, and the timing was right. And I was back in the mid-90s. So that's just about 30 years. And that's how I got into it. It had done a lot of work with buyers. My daughter started working with me seven and a half years ago. That's great. And she actually came to the conclusion, I like to sell side better. And so, while she helps out when we have some buyers, we really concentrate on the lower middle market selling, and she likes that a lot. And are you focused primarily in Washington, Seattle, where you're focused or are you nationwide? How are you, how are you, your projects usually run? We've had clients in at least 15 states.

4:07Most of what we are focused on is in the Northwest, Seattle, Portland, et cetera. The world is getting smaller. The country's getting smaller with things like we're recording online and Zoom and Teams and all of that that I used to think, well, why would anyone here in Seattle be listing with an intermediary in Denver or Chicago? And but we're getting leads in different places, and even with a local client and a local buyer, we're doing Zoom meetings to start off, you know, and you think about it from an owner's side, I don't want that, I don't want too many people coming through the business unless I'm sure who they are. And Zoomer Teams is a great way to do that. Yeah, it's a nice little introductory touch, and then you've got to get it out of the Zoom, right? You've got to get in front of them in person just to really solidify that. You have to, but it's better than a phone call.

5:07Yes. Got it. So, so John, I mean, you've been doing this for a while, right? Maybe before we kind of hop in to buyers and sellers, the question I have actually is like, what have you seen change in the industry, right? You know, in the 90s, what were the buyers and sellers? What did they look like in 2000s? What did they look like? And, you know, we're in 2025 now. What are the transition that you've seen because I'm guessing it's been very different or maybe I'm wrong? Yeah. Oh, yeah. Things are different. Technology. Back in the 90s in the arts, how you want to sell a business, you were in, you know, as an intermediary or an owner, you ran an ad in the newspaper. Now where do you go? You go online. And, you know, to get the, you got the biz by sells in a world which, as you know, there's a lot of junk, a lot of small stuff, and of course, it's evolved into other sites like Axio, which is aimed at the PE world and buyers like you. The fundamentals of business haven't changed that much, though, and of deals.

6:10It still have to get a return on investment. You still have to get working capital. I heard you say on one of your podcasts, you know, you're working capital to fuel that runs the company, and you still have to get that stuff and you still have to investigate the books and talk to the employees and talk to some customers blindly, of course, you don't. You're doing a reference check or something like that, but those fundamentals haven't changed. What has changed is the plethora of younger inexperienced buyers in that whole search community. And, you know, I got into this business and people were saying 90% of buyers, individual buyers, never, never buy business. I don't know if you guys know Richard Parker with the Omo, he has said a course for 20 some years.

7:11I've got it here. He's a good friend. How do buy a good business at a great price? I've heard that one, yes. Yeah. And he's an investment banker in Florida. And I asked him a, you know, a while back at Richard, you always said 90% never buy. What do you think it is now? He goes, I'm saying 94 because there are more tire kickers than ever. And they also have a way to get out there on, on different sites like search funder and you know, other communities that they're more visible. So that's something that's changed. Got it. So I mean, also you're saying less, basically more noise, right? Maybe less sophistication. And I think it's, you know, with technology, right, there's more information out there like this podcast, right? It's easier. 10 years, 20, 30 years ago, you couldn't find information on how to buy business. So now people find it and people are infatuated, right? It's sexy buying a business is the entrepreneur's dream, right? It's, but then they kind of, you know, ignore how hard it is, right?

8:14And so it's a lot of people get out there, they're infatuated with the idea. But once it comes time to put pen to paper and commit and maybe put money up and go close on something or act, they, they sample, they don't act, right? And you know, you see that kind of rinse and repeat itself. It's usually when they have to sign for the personal guarantee. It is, it is a common thing. This is a, I've written a, you know, one of the books I've written the first one is called Buying a Business that makes you rich, it's aimed at the individual buyer. And then the preface says, you're going to make a leap of faith. You just want to, you know, do your homework and do it off its share, not the rough. I like that. And you get in these, a lot of these buyers get in their, their little groups and communities and to politely say that it can be like the blind leading the disabled, that they, you know, they start talking about certain things and that have no basis in reality. And they convince themselves that's the way to do it. And that's where, you know, whether it's the, some of the other people I've heard on

9:14your podcast, the due diligence, QV guy, the attorney, people like us. That's where, you know, the experience that those of us have that can say, either slow down, you're moving too fast or speed it up. You're going to drag this out into, so it's going to kick you out. So, John, you make a point here and this is, so you know our listener base, you know, we've got a large amount of people that are considering buying a business for the first time, right? Yeah. And for you, they have dealing with thousands and thousands of different buyers and sellers, what can these listeners do today to when they work with a guy like you on a deal for you to respect it for you to be like, yes, you know, I understand this is your first time. And like what are those, what are those norms that we need to do in order for them to validate to you? Because there's, look, there's a lot of new searchers and there's a lot, I was, I was a first time searcher and, and I had to close a deal.

10:14So, what can they do, what are those steps, what are those little checkboxes you think when you talk to these people that you're like, you know what? I'm going to help this person or I believe in them. Well, I think one big thing is to realize sellers control the deal on a good company. The buyer controls the deal when it's a lousy company. And you know, you can't convince yourself that just because you're there and you're smart and you got an MBA or whatever, that, you know, they're going to give you the deal of a lifetime. Because if it's a, if it's a good business, they control it. And there's going to be multiple buyers for it, qualified buyers. I mean, you guys, you know, as I see you, you're not looking, you know, like you, you know, this is your first rodeo on, on business, you know, you, uh, first you went, you worked at Microsoft, you got experience, you worked with other people, you ran things. But, you know, that, that's really important that, that experience. Another thing is, you know, don't get by your fever, you know, don't get so enamored

11:19with something that you suspend common sense and, you know, realize that you are, you know, turn around and make a, make headlines for a reason. They're rare. So if you're looking at something, it's great even, but I can fix this pretty easy. Okay. Hope you have a lot of cash to fix it. Yeah. No, and people, people need to understand, I mean, it's, it's all statistics, right? Most businesses fail, right? So again, the business you're going to buy, if you buying any business, it's most likely to fail. So if you buy a business with a track record of success for many years, well, now you're reducing the odds, right? Well, in addition to that, not only do most businesses fail, now the ones that fell, the turn around is even harder than the business. So, you know, why make your first acquisition a turn around? Right. Like it's really hard to do that. And so statistics are not in your favor. And yes, sometimes they work out and they can work out really well, but at the same time, you still probably, if it's your first acquisition, you probably have a lot more to learn. And so why do that on turn around that's going to burn you out and you're probably never

12:20going to do that acquisition again versus something that's steady, Eddie, and you're just looking at making incremental improvements. Yeah. I mean, you're right. You know, another thing is too much debt. And I'm sorry, but there are lenders out there who will go to very low debt coverage ratios. And they just want to make the loan. Good bankers, good lenders will insist on a solid debt coverage ratio. I say at least 1.5 to 1 unless there's some extraordinary circumstances to making a little lower. But in the, you know, the SBA world where individuals are, it's 1.5 to 2 should be mandatory. Because you know, that's how you, that's how you grow the company is having some working capital. Yeah. Yeah. I was here on the other day. I was talking to somebody and I thought this was maybe a podcast or something I was listening to, but I thought it was very astute. The guy said, assume the first year that you buy a company that whatever multiple or

13:24whatever your EBITDA was, it's going to cut in half. If you assume your business that you buy just that first year, change, switch over and all that, can you make it work if that cuts in half? And that was really, you know, because I've now experienced on three acquisitions on two of them, you know, that that's kind of been kind of the trend. It doesn't stay that consistent growth model because there's change. There's now debt. There's all these things that you're adding to it. So what are your thoughts? What have you seen over the years? What have you seen in that first one or two years after these guys close? Or do you even stay in contact with these guys once they buy them? I do. Get repeat business too on the buy side. Just a past client called me the other day and say, yeah, I had dinner with a, you know, my number one competitor, he wants to sell to me. Can you help me? Of course I can. Here's the information you need to get. I haven't seen too much that drastic as cut in half, but any kind of stress tests.

14:26I know banks will run a stress test. What happens if the business goes down 20% if they have a top customer? What happens if that top customer goes away? And that's part of due diligence because you know, you say, what is, this one customer is 22% of our sales. What is it to your gross profit? I've got a prospective client and he, you know, he keeps talking about, I've known him forever, is latest classic entrepreneur, is latest business is really doing well. And he goes, I go, you have a dominant customer, they're 20%, he says, yes, although their margins are so low, if I lost them, I could recoup that pretty easily. That's different. And if your top customer is your, you have 20%, has a high gross margin. Yeah. I mean, it's a sophisticated buyer understands there's a difference between top revenue and top profit. There are two different lenses to look at it and it's not about just, hey, I lost my biggest customer. Now it's terrible. Well, if you're not making much on them to begin with, it's not so bad. Maybe your second largest customer is actually the more important one.

15:28So yeah. Yeah. Yeah. You know, we're, you know, it's all those things we're working with a company now. And let's put the owners are of an age where they don't want to do much, but check in. Sure. And they make that very clear. And it says, how would you grow this business? They say, well, at first, if we were younger to, don't want to grow it, but if we were younger, we wanted to grow it, we would replace, you know, this segment of business that's commodity, very low margin and go after the higher margin stuff that's out there. So that's the kind of, you know, that's two diligence that buyers have to go into, not just get enamored by, here's my bottom line. And, you know, I heard your one podcast. You're talking about the QV guy. You're talking about EBITDA and one of you interrupted him and said, no, EBITDA is not profit. Absolutely. And CapEx intensive business, you know, and you know, a little later, he said, EBITDA is

16:29cash flow. And I would disagree with that too, it is not always cash flow because, you know, I've seen, you know, you've seen it too, but the people, they go and buy a new piece of equipment for half a million dollars. And the CPA says, well, you've got a five year note and you should depreciate this over five years and they say, no, I want it all now. Well, you're two, three and four, you're making principal payments with nothing to write off against them. Yeah. No, I mean, and again, EBITDA, like, you should not base your buy on the EBITDA. You really got to look at net cash at the bottom line because otherwise, again, it depends on the business software company, great, your EBITDA is very reflective. You're in a manufacturing company, it is the worst number to even really base anything off of, right? And so you really have to dig in and understand the nuances and that's what experience matters. And that's where, you know, having a good intermediary helps guide you that, to some extent too. So, John, I think, you know, from, if I'm hearing you, right, it sounds like you're seeing less sophistication from buyers. What about sellers though, right?

17:30With technology, with ease of accounting, all these things, are you seeing over the years, have you seen more sophistication come from there or has it been kind of the same thing? Can I laugh out loud? Sure. Go for it. I used to phrase small business accounting because you never know what you're going to get. It's, you know, too many small businesses. The accounting department is, you know, I call it Cinderella syndrome. The weak little steps stepsister off in the corner. The owner wants to manage the customers, the product, the sale, whatever, the operations. And yeah, the accounting's a necessary evil. And, you know, there's some really good ones. You know, we've been fortunate to a lot of the companies we've represented lately have been clean as a whistle, no personal expenses, good books. But there's one now and, you know, the two owners, the wives do the books and the CPA told me, yeah, they do the books, but they're not bookkeepers. So, it's concerned.

18:31We have some work to do at the, yeah, when he gets in there. Yeah, it's, I wouldn't say it's improved much at all, because you're in quick books, doesn't mean you're entering it into the right accounts, et cetera, et cetera, still kind of a mixed bag. So John, here's, here's kind of my, my big question here. So over the years, you've seen people buy companies, grow them and try to sell them in five years, flip out of them, try to make profit. And then you've seen people buy companies and then they have the, the hold mentality. They want to hold them and grow them. Yeah. Where have you seen the most successes, right? The, is it the, is it the buy hold mentality, the evergreen, the buy it, grow it, continue to go? Or are you seeing more like, hey, get it to where you need to go. The best time to sell it is when you're at the top and get out. Yeah. So we can differentiate if we have on one end, we have private equity, family office buyers, and there are different private equity does a lot of the, your true private equity with

19:34the fund wants to buy and get out. And if you have a 10 year fund and they buy you and you're four, they're going to start selling you in five years later. Family office, you know, professional buyers, but they want to hold. Individuals tend to want to hold. And I've had numerous clients, buyer clients that have bought multiple companies, like one of my favorites is a guy who bought four in his one industry. Another client who's become a good friend is bought three. He's grown, he's grown from first acquisition was a five million dollar your sales company. Last time we talked he was at 50 and huge chunk of that came from a couple acquisitions. And that creates generation of wealth, right? I mean, when you see these buyers that are trying to just, hey, let's make some money, let's get in, let's buy, let's pay out our investors, but I, at least my experience from the people I have seen that have had the buy hold mentality, they're focused more on creating wealth than just trying to generate, you know, a return.

20:39And so it's, and it's also a different way of how you're going to enter the business. Yeah. And the last one I mentioned, he's, he's brought his two sons in to work in the business. One of them from, it took, took a pay cut from a very lucrative position in the tech industry to come work in dad's company. And he hopes they will take it over someday. Yeah. I love it. I have the conversation with my wife, you know, I always tell her, I'm like, I would love the kids to come, I'm building enterprise so the kids can come. She's like, they're their own people, do not force them to come work for you. And I'm like, but why is it like me? I'm like, I'm thinking legacy, right? I'm thinking like, how hard is it to be an entrepreneur? You know, my dad was, get a job, go to school, you know, that was his mentality. When I said I was going to be an entrepreneur, he just was like, you're crazy. And then all the work that I've done over the last 25, 26 years in entrepreneur to stabilize and grow a business, I want those kids to be able to, to take advantage of running a business, right?

21:40And then not the idea of the, hey, let's just go out and it's one of those mentalities when you talk to people who are having to come work for you. So it's a big thing for me is legacy, you know, that, and I buy on legacy when Ferris and I are talking to customers or we're talking to a seller, you know, we want to respect the legacy, respect the business, and that's a big conversation that we come from. Yeah. So I think it's always nice, especially for our listeners, you know, that everybody wants to buy something, clean it up and make a quick product. But that generational wealth usually comes from that mentality of, let's buy a business, let's get it into a position where, hey, it could be sold because we're doing the right things, but have the mentality that that first five years you're probably not going to make a ton of money. But then after you get the debt paid down, then if you got things cleaned up, you get the right people in the right seats, right? It's that five year on is where that that generational wealth, where that money starts to come in where you can make another acquisition, where you can develop and grow your enterprise. Is that kind of what you've seen for some of your long term customers that have continued

22:42to buy? Yeah. I would say that, although a lot of them, it's been quicker than five years. And maybe it's because we tend to be pretty fussy and we screen buyers hard to get the people who can do that. Does that mean they all do it? No. I think of some of my clients that have businesses now for 10 or 15 years that haven't done much, and often it's they're getting in their own way. They just can't make a decision, yeah, just aren't growth oriented, maybe to say, big risk was buying the business. I don't want to take too much risk growing it too fast, who knows. But that's every situation, people start up business, traditional business, not as tech business, and some of them make it and most don't. Yep. To the other part of it. So I buy a business. What are those things that we should be doing in those at that time to get it ready to

23:44sell? Yeah. What does it take most sellers? Because ultimately, so I did start up for 17 years and it was in our second startup when I met a guy that said, listen, you've got to start building your data room today to get ready to sell. You need to be thinking about what the exit looks like. And so make sure you put your data room when you do your financials. Make sure you get a reviewed financials or an audit or whatever these things are that then allow us, when someone does tap on our door, they come and buy it. And with energy funders, you know, we built that over five years. And I had built such a great data room. We did get our financials reviewed. We did all these things. And when the buyer did show up, they were very impressed. And we were able to get the deal done. So what is that mindset we need to have as we're buying these businesses? Well, you hit on one is financial. We talked about that a little bit before and good systems, accurate statements. Don't run personal expenses through the business. Make it clean. I think on one of your podcasts, I'm going to say buyers who would say, you run personal

24:45expenses through the business, we don't consider them, which they shouldn't. They've already been paid for that by not paying tax, which is short-sighted, by the way, because if, you know, you know, just use round numbers, $100,000 of personal expenses on the federal level, maximum 37% tax, and at $100,000 that affordified multiple, is a lot more than 37,000 for a few years. Well, let me ask you, as I preface this next one, what do you guys do on a daily basis in your companies? So let me speak, because Ferris could talk about the side he is, as the CEO, he's over several different types of business and community property management. I'll take H&M, for instance, in the early days, right? I was the integration, so I got in there to get the right teams moving. We're now 26 months later. Now I'm working with audit to get ready for, to get our opening balance sheet audit to

25:45recap the business, to do these things, because as more of an independent sponsor, we brought in an executive level management team to run the business. And so we're looking for the next acquisition. We're making board meetings, we're doing those kind of things, so that H&M is a big play. Yesterday, I was at our smaller business we bought in the wastewater business, and I was sitting at the QuickBooks, because the lady we hired quit after a week. So I was doing the basic stuff, so you kind of got a little bit of everything from us over here. Yeah, and I think... Well, other than the last one, you know, your first part of it, if I had a bell, I'd ring it and say, you know, you know, basically caching, because you're not working on in the business in a day to day, and that's the thing I hear the most from attorneys in other investment banker types, accountants, is the, you know, their clients, the business is too dependent on their clients, the owners. And it's, you know, so you asked about that, what else, get...

26:48As a seller, you have to work yourself out of it, otherwise, you know, you're too much of a valuable piece, and no one's going to want to buy the business, right? And if a business can't support you not being a part of it, then you don't really have a business. That's great. Right? Well, you're working on, you know, what Casey said in that is, you know, he's up there and working on the big picture, you know, that's what an owner should get themselves in the position to do, and they have to delegate, and it's tough to delegate, especially if you're a founder, but less so as a buyer. You know, that's a really big one, is that no matter what size company, the less the owner is responsible for on the day to day, the better. You know, I agree. And another way to maybe look at it too, except, you know, we were talking about sellers and getting it ready. And ultimately as a seller, if you don't have a way to value your business, meaning like today, if I can't tell you, my business is worth 20 million and here's the reasoning

27:49behind it, well, how do you expect a buyer to, right? And so if you don't have the financials, you don't have the organization, you don't have all the things to be able to answer that question, well then again, you're not ready to sell. And so that's kind of really another lens that look like we have multiple different businesses and some of them are in, you know, better state than others financially, profitability all the above, but like, there's some of them I can't even really quantify in case they were having this conversation earlier today. So then what is that business actually worth? And how do you explain that to a seller or a buyer? So definitely another lens to kind of people need to consider. You know, we have a prospective client and when I first met him through his attorney a couple years ago and I said, well, he sent over your financial statements. He said, I don't really, I don't have financial statements. He said, my CPA takes the stuff and does the taxes. I said, you know, you're not going to sell your business without financial statements. And I'm serious. He said, I don't have them. We just track revenue. He's worked with his CPA who is a really good firm.

28:50Good guy. He now has financial statements. The first batch he gave me, I'm, you know, I'm not an accountant. I'm really good at seeing inconsistencies. You know, the other, you know, last week I took some financial statements and just marked them up. What's this? These, uh, these items on the balance sheet look like P&L line items and stuff like that scandamin, sent them to the, sent them to the owner, but you know, you see that all the time. And he, he, now his financial statements makes sense. There's no goofy stuff on the balance sheet. The CPA did what he was supposed to do. And that's, and he said, that's a huge difference. Now, I completely agree. What do you think about reviewed, if you're, if some of the colleges, hey, you know, we review our financials every year or hey, we do an audit every year. I mean, do you feel like those give that, those businesses much more value to the buyer, more trust in the process? I think the reviewed statements really make a difference as you get into professional

29:52buyers. And that would be what you call private equity, family, office, the, you guys cut yourself independent sponsors now. Now everyone who doesn't have money says, I'm an independent sponsor, but, uh, it's true. I mean, you could put it whatever bucket you want. We call the independent sponsor, uh, basically the mindset of a, you know, we're not, we are not actively running the businesses day to day. Our attention is to buy scale with a, you know, really with that, and we don't raise a big fund. We, we're a project by project, but fundraise. The more you get into buyers, like you've bought a couple of companies, you know, you've buy more, you get into the, you know, people use the term micro PE or private, you know, they're different. He used to be private equity was big private equity, you know, five million of EBITDA or nothing. And now there's, you know, a different strat is five, three, two, whatever. But you get into those kind of buyers versus John or Jane Doe who's going to buy and run your own company, reviewed statements will make a difference.

30:53That is an important thing because I, you know, being, you know, accounting is where I typically go to in that first year when we get into a business is to really get that accounting down to a science. Yeah. And then getting it reviewed. So like right now at H&M, you know, we had, we had a great start in the first six months. We dealt with Murphy's law in year number two. It happens. We got a ton of deferred maintenance, hurricane, everything you can imagine kind of punted the audit. So right now we're, we're cleaned up our ballot sheet. We're now going into the opening ballot sheet audit and auditing 2024. So we can recapitalize and it's a bigger business. It's around 25 million revenue. So these are those steps that we're doing and we're doing it internally for our partners and our investors and our people. It's not just so we can turn around and sell it. I feel like these are the right things you do in a larger business or at least a more of a middle market business to create that trust in what we're doing. And it gets you more sell ready, right? That's the other piece of it too.

31:54So if we ever did, again, we are more long term. But if we did want to make an exit, it's a lot more, you know, it's straightforward to value and a lot more straightforward for a buyer to go pick it up and go get the financing they want or whatever else they need it for. So yeah, well, I have a friend who, who's six years now, right before COVID, 60-year-old family business, he was third generation, done very, very well, you know, he had a private equity backed firm in a complimentary industry, say, we want you. We want him, you know, we want him grow into your spaces similar to ours, but not the same. And he was ready. His financials were ready because he paid attention to the statements, his KPIs, everything else. He was meticulous on it. Yeah. You got a big exit. No. So for those listeners, we got an offer he couldn't not refuse. You know, and being guys that are aggregating and talking to sellers and doing this stuff,

32:55and I meet so many people that have it reviewed their financials, and we see those as potential buying opportunities, right, things that we can do. If somebody's still using paper for a lot of their customer relationship, we see these are all opportunities for us to bring in tech, bring in these resources and add that value, and then we'll do the review and make the value of that business better. Yeah. And for those that do have their KPIs, I do know their stuff. I mean, we respect that, and we give that a value, right? And so that makes it, hey, there's less of the sausage making to be built instead we can focus on actual just growth. Absolutely. Yeah. Yeah. You talked about paper. I think back to a guy who bought a company, it was a lower-middle market deal, it was five, six million, really nice company, and the ownership was a mess. They had brought in the sellers, the original seller, to run the company, because they were

33:55trying to run it blindly absentee. And she liked paper checks, everything was paper checks, she had a sign of him, he immediately switched over to electronic payments, either ACH or credit card, ACH coming in. What a difference. Yeah, that's what we're doing now right now. But it's freed up, it freed up people, you have time, you have a better way to audit and track it and see it all the above. And you'll reduce theft, because man, check theft is surprisingly, it's a real thing. And to you experience it, you don't know. Cool. Yeah, he also put in wherever he could pay by credit card, he had two credit cards with like half a month apart on when they were due. And so certain times you would use one credit card than the other one, so he could get the float. And the same time he accumulated, he was accumulating a lot of points or cash back or whatever

34:56else. Yeah. That's so nice. Sounds small. But. No, it's all those incremental improvements. And again, for those of you listening, that's how you get your business ready for a sell, all the incremental permits to clean it up, get it going, and that way you can make it opportune for the next buyers. Right. All right. So I guess with that, with that said, I guess we can go ahead and shift on to a rock around where we ask our guests the same three questions. Yeah. So first question for you, John, is what do you like to do in your free time? Well, the day-to-day stuff in my free time is, we've got a couple of dogs. We love playing with them. We take them for walks just about every day. And I do pay attention to working out like five times a week and stuff like that. But the big picture is I have been very involved for the last 20 years with my Rotary Club. We do a project every year. We have lately, last 15, 18 years, we've been going to Antigua and Barbuda and the Caribbean.

35:58We take high school students in a Cisco, you know, Cisco, the networking company, and they take a curriculum on how to network things. We've donated well over 10,000 laptops to the schools down there, including 3,000 in the last two years. And the students go down there, they get hosted by local families for 12 days. They work not only distributing computers, but setting up Wi-Fi networks in schools and nonprofits. Incredible. Yeah. I put a lot of very rewarding time in that, in fact, in an hour and a half, I have a meeting with someone from Antigua about our next year's project. Awesome. That is incredible. It's an awesome story. All right. Next moment, most memorable moment in your business journey. And I realized that I couldn't, I did not need to, I should not emulate the guy who got me into it, because I tried to be like him, and his personality is much different and much more direct, and I'm really more of a relationship guy.

37:00He's more of a transaction guy to get clients. And once I realized I can't be like him, life was better in business. Makes it. What you do well, find what you do well. And all right. And what is your favorite tool or resource? My experience. Okay. Fair enough. I mean, it's funny. I used to be young and naive, right? I had made money playing with the off of games of anything in middle school, then high school, I had my own web company, and you know, it did well with that, or my friends were flipping burgers at Wal-Mart, or Wal-Mart, sorry, McDonald's, and I was making good money on the web. And you know, there was a point in time where I was just like, man, like, people give too much value to experience. All right. It's very naive. And as I've gotten older, I realized, man, experience is king. There's a lot of things that you don't know that help you make the right decision. It's not about just being able to learn something. It's about being able to choose the thing that you should have chosen because of your experience. Yeah. And you're right. And you know, this whole scale of that leads up to unconscious competence that you

38:03just know what to do. My daughter says that to me all the time, you know, can you explain that because you just know it. And we found that in business buying and selling, it's really important to explain that because you know, buyers might get frustrated. Why didn't they tell me that before because they don't think about it. You know, it's just an auto pilot that they do those things. So what we do when we're marketing a company, we tell buyers, you're going to expect this. But we put out a supplemental form to the memorandum that is like, you know, follow up to an Q&A, all the things the sellers have shared or buyers have asked or we've asked after it's been written. And here's this list of stuff because they never thought about it before. It was just, you know, so second nature. It's pretty amazing. That's awesome. Awesome. John, well, thank you very much. And I guess to maybe put a wrap, I mean, how can the listeners get hold of you? They can go to our website, Nacomusadvisery.com, N-O-K-O-M-I-S, advisory.com, you know, I've

39:08got a YouTube channel and a podcast channel. Our podcast is called Getting the Deal Done. And if they reach out to me and mention this podcast, I'll send them a copy of one of my books either on buying a business, growth by acquisition or our latest book, Exit Risk Style, Grace and more money. Oh, I want a copy of those. So I'll be emailing you. Okay. No, I don't make it happen. And we'll put that in the show notes for the listeners. All right. And John, just note November 1st, we're having our conference in Chicago and we would love to have you come out and participate or be involved. So we'll send you an email about it, but it could be a way to get your new book out. Okay. Awesome. All right. Perfect. Thanks for being here with us. Thank you very much. This was really a good conversation. I enjoyed your questions, your input and the pace. You bet. Now, standing. Thank you, John. Thank you for listening to the M&A Launchpad Podcast. If you've enjoyed today's podcast and would like to support us, please leave us a rating

40:10and a review after you listen. If you're looking for guidance on your next business acquisition or sale, capital to support your next business transaction or to invest in a private equity opportunity, visit equitylaunchpad.com to learn more and to connect with our team. If you know of an individual, you would be a great guest for the show head over to equitylaunchpad.com or slash nominate where you'll have the chance to refer yourself or someone else to be a guest on our show. I'm Casey Mentshew and I look forward to talking with you next week.