Buying a Business the Right Way

44:52
SUMMARY KEYWORDS
business, buyer, sell, buy, years, good, people, money, richard, company, talking, seller, financials, started, find, pay, acquisition, understand, valuation, great
SPEAKERS
Richard Parker, Damon Pistulka

Damon Pistulka 00:03
All right, everyone, welcome once again the face is a business. I am your host, Damon Pistulka. And I am so excited for our guests today because we have none other than Richard Parker today from Rory Street and and di OMO.

Richard Parker 00:21
Did I say do Mo Yeah, do MO Yes. Yo, Ma.

Damon Pistulka 00:26
Richard, so excited to talk to you today. I can’t hire speak because you are an m&a legend. You’ve been in this for a couple of days? Yes, only a couple of days. It’s gonna be fun for us to talk about this, because let’s just, we’re gonna dispel the myths about buying a business the right way, man, and it’s gonna be fun. So welcome.

Richard Parker 00:51
Thank you. I appreciate you having me. Those are great words, as laughing goes. You know, I saw a post online on LinkedIn not long ago. And this fellow had written a very nice comment about me any mark and I hadn’t met him and he said, Richard Parker, you know, the, the OG of m&a. I thought it meant old guy shows you what the hell I know. So I reached out to them. I said, What’s with this? Like, what’s, you know, what’s what the old guy said? No, no, it’s the original gangster. I said, Okay. Got it. I figured, okay. Well, thank you. Thank you very much. So

Damon Pistulka 01:24
a long time. Yeah, yeah, it but you know, it’s awesome. And we’ll get into this, you know, when we talk about buying a business the right way. And you really have helped a lot of people do this, of course, you’ve been buying and selling businesses a long time. But let’s, let’s, first of all, we want to go into the Wayback Machine. We’re gonna go back and go, you know, and kind of understand from you, Richard, how you got into what you’re doing today. I mean, because it’s, it’s, that’s always an interesting story for us to hear.

Richard Parker 01:57
Well, I hope I don’t bore your listeners, I, I got into this, because I really didn’t have a choice. And let me explain to you what happened, I was working for a company, I grew up in Canada, I was living in Canada, 29 years old, I was working, I was a vice president of a company that was growing by leaps and bounds. Like I probably shouldn’t even been a vice president at that time. But the company was just growing so fast. And they were products and sporting goods, consumer products, mainly. And so hiring people who just couldn’t hire him fast enough. So I moved up the ranks really fast. And a lot of it sort of probably over my head and certain things, but I was working like a maniac and learning as much as I could as as I went along. And then I I was making $72,000 a year, which was quite good at that point in time. You know, we’re talking 35 years ago, 34 years ago. And then I did the brilliant thing of blowing $60,000 in the stock market buying stock on margin, which was, you know, when I heard how you buy stock on margin, the person was explaining it to me, and I put no blame on them, you know, you put up half the money, basically buy half the stock goes up, you just pay back the difference. And I the question I should have asked at that point is what happens when it goes down, and boy did it go down. And my first child was on the way I’m now four children and one grandson. And I was in a terrible financial situation. And like, I really couldn’t move I loved where I was working. So I, I couldn’t, I couldn’t really move to another company to make more money because I was already there was already overpaid, as it was so yeah, like moving somewhere else wasn’t going to happen. And as I thought thought about and I didn’t think long about is I’ve got to put myself in a position where they’re I don’t have a ceiling on my income. Yeah, that’s my only option to get out of this mess. And recognize very quickly that, you know, starting a business was out of the out of the question, because God knows how long that takes to get going. And so it seemed very clear to me it was you know, I’ve got to buy an existing business where I can generate an income replacement income and generate an income and have an opportunity to grow and not have a limit on my upside. And so my decision was really based on the fact that I had no options. And you know, when you have no options, it’s very easy to make decisions. Yeah. So your roll the dice, I invested. I, like I started a company first for a very, very short period of time, and then recognize that if I want to grow this thing, I’m talking very quickly, like after a couple of months, there was a competitive company that was available for sale small one, and I acquired them. So this my whole entry was for about at that point about $30,000. Which today’s dollars, I was just calculating recently about 75 grand so I got into a reasonable amount of money and leverage a lot of seller financing. And that started my journey and a lot of things along the way. And here we are three decades later, but 14 companies which includes one co invest and the deal sizes are all over the place like 50 grant or a little over 200,000,200 8 million and just been in this world. I know everyone calls it m&a. I’m pretty simple. I call it volume Selling businesses. And that’s what I’ve been doing for decades and have more fun every day than I did yesterday. It’s pretty crazy.

Damon Pistulka 05:08
That’s awesome. That’s awesome. So as you so you have these other companies that you bought at the beginning, when did you decide I want to start buying and selling companies as a business or as a way to make money?

Richard Parker 05:27
I never really thought about doing that to make money. Because my goal always in going into the business is I just want to work this thing and build it up and see what see what the hell happens, right. I mean, it was never like this flipper idea at all. Yeah, never, never thought about that. Always went into it, just, you know, I want to I want to grow this thing into and see what happens. And we’re focused on building something pretty, pretty nice. And I started getting a bit of a reputation because it was a young guy, and around my hometown for buying and selling businesses. So a number of people were coming to me and dispensing some advice is never charging anyone I was but I didn’t realize I was doing like investment banking. I just wasn’t getting paid for it. Yeah. So and I really enjoyed that. And then I ended up I had the rights for Sega video for eastern Canada, and that exploded my business. And I ended up selling my business, most of them in 1996 and relocated to Florida. I that was my three kids at that point. And figured oh my goodness, I was contemplating moving to Toronto contemplating moving to Burlington, Ontario, Burlington, Vermont, which is right near Montreal, which a beautiful little college town, I liked it and a big hockey guy and good college hockey there, or go to Florida. And I said, you know, I don’t know if it is cold weather and decided to relocate to Florida. And it was an easy move, because we kids were young at the time. And then I looked at an acquisition down here, which I decided to walk away from, which became the genesis for the course that I ultimately wrote. And that led into a lot of representation, buy side and sell side representation for a number of years and in countless transactions. And again, which was really nice on both sides of the table. And parallel to that I made a couple other acquisitions, which I’ve always enjoyed. Sometimes when the market dropped in 2008 2009, I, I bought a couple of companies. And subsequently a few years later as well, I can’t help myself. And that’s part of the problem, although I’ve curtailed it a little bit the last couple of years, because it’s starting to chill out a little bit on the, you know, the heavy duty acquisition mode. So, but yeah, you know, just when I think about it, going through the years, I, you know, I don’t know if there was really a specific plan to get into this and start doing it, you know, for financial reasons. I just really love the whole space. Yeah, buying, building, selling, helping people do the same thing. That’s certainly the most rewarding part of what I’ve done. And, and, you know, all kinds of time later and years later, and it’s, it’s, to me, it’s, I don’t look at it, like a job, I just, I enjoy every deal. You do a lot of this, you work with a lot of companies, you know, like every deal is different. And when I tell people, you know, yeah, I guess I do know what I’m talking about when it comes to buying and selling and business. But I’ve learned something new and every deal. It’s still astounds me no matter what. And I find you have to be on your A game that if you’re intellectually curious, and I’m not intellectual, but I’m intellectually curious and like learning and enjoy the learning about a new business and getting immersed in something I didn’t even know existed the day before. I just find that whole, the whole universe really just just loads of fun.

Damon Pistulka 08:36
Yes, yeah. Yeah. And you can hear it in your voice. And that’s, that’s why I think you and I connected so so quickly and so deeply is, is that you can you can tell you’re into it, and I get into it to people I start talking about it, people just go you really liked this. And it’s like, well, if you have not been around when you successfully buy or sell a company, I mean you’re it’s one of those things that you don’t forget.

Richard Parker 09:03
That’s a very good observation, you definitely do not forget it. It’s the process can be difficult. There’s, you know, peaks and valleys and pivots and in things that come out you know, with things that you it’s what you never planned for that comes to bite you in the rear end or things you didn’t expect and and you’re dealing with people and personalities and you don’t machinery is much more reliable than human beings. And so you got the whole buffet, right you got you got ego, you got personalities, you got money, you got people’s emotional ties to their business. I mean, it’s the whole buffet of emotions and it’s so for me, it’s navigating your way through is really a lot of fun. It’s and it’s and it’s really interesting. Yes,

Damon Pistulka 09:48
yes, it is. And I agree and you know, we’ve we’ve recently in the past couple of years as we have clients that want to grow growing by acquisition has been one of our focuses in helping our clients do that. And, and while I’m telling you when you’re doing both sides of that, not necessarily in the same company, but when you’re buying companies and then you’re selling them, it really does help to hone your skills, because you’re looking at the deals much differently than if I’m a sell side only, or a buy side only representative throughout the year, you just don’t really get that perspective, like you have from from work on both sides of those deals.

Richard Parker 10:25
Yeah, it’s been very helpful, you know, I did the buy side for so many years, and have so much material written on the buy side, that it when I work with a seller, you know, it’s important that they understand if you’re going to go through this process, because not all easy you if you’re gonna go through this process, you really need to understand this through the lens of a buyer. Yes. And understanding, you know, things that you deem as a seller to not be at or not that important, my business or nothing, nothing to worry about those little issues and concerns. Those are, you know, multiplied to the power of 10 in the eyes of the buyer, right. And the words are always used as like what you think are incidents to them or catastrophes? Yeah, so you know, those type of things, understanding it for the buyers lender, and also understanding that the, you know, you’ve got an emotional tie to the business, what do you think your business, the value of your business is worth has nothing to do with the value. And another big part of it, which I think being on the buy side for so many years, I’m able to convey and I do always work with a handful of sellers is the regardless of the deal terms, the buyer takes the biggest part of the risk in these deals. And so this philosophy, a win win, it sounds great, but it’s complete nonsense. I mean, the buyer has to win and the seller has to be reasonably happy. Yeah, they doesn’t mean win, lose, but it’s reasonably happy and understand so that my exposure on the buy side, because it’s been incredibly valuable. And likewise for your clients, I, you know, I know that having the ability when you run a business and operating business, that alone and people are growing their businesses through acquisition, because organic growth is much more difficult. But if you’re operating a business, that generally is going to make you a better business buyer, because you have a different way of looking at the you know, the reality of what what’s involved, there’s a certain things that you’re able to look at, and especially if it’s a complementary business, you could look at it, you know, with a with a wealth of experience, even if you haven’t been operating your business that long. So it’s, you know, you become a better buyer. The more you do, the better you become.

Damon Pistulka 12:27
Yeah, yeah, that’s for sure. That for sure. So as you’re you’re helping people do this and and you’re gone along, you decide to to create a course for business buyers. What was the genesis of of deciding to create that course? I mean, because yeah, you were getting the experience itself, but what really kicked it off, like, maybe maybe I should create a course to help business buyers.

Richard Parker 12:58
I remember it like it was yesterday, actually, like yesterday, but I remember it’s like it was yesterday and I get asked this question quite a bit. I was looking at a deal to buy a company in Fort Lauderdale, Florida that was in the commercial laundry, Business Machines, washers, dryers, they were doing parts repair service, but also selling to laundromats, dormitories, condominiums, those were pay for use etc. And it was a brand name was Maytag a very well known name. And this group had the had the south eastern Florida rights to this product. And they also had, they had separate companies. One, they had one company that owns some of the machines themselves, they had another company that rented the another would do the parts. And I started looking at this deal negotiated a pretty good deal and long seller note and started doing my due diligence. And I’m not saying that they were doing anything fraudulent. There was just there was so much commingling, like they were, you know, the money was being collected for one company, if you was short, and another company, you just put them just pay checks through one company that didn’t have expenses related to that company, people who are employees of one company were getting paid by another. And so when I started looking at the financials, I mean, this whole thing was like a plate of spaghetti. And like, and I you know, the description that I use all the time is I recognized, you know, I’m never gonna figure out how to figure out this thing. I’m just never going to be able to do it. It was just was just all over the place. And so I told the owner that I was, you know, rescinding the offer. He wasn’t very happy I felt but I felt very comfortable with my decision. And I remember like it was yesterday standing outside the place, just off of Broward Boulevard in Fort Lauderdale, which is what like what are the main streets in Fort Lauderdale, and they were just a little north of there. And I stood outside in the parking lot because I’m doing that piece and I was actually looking at the inventory that day. And I remember standing in the parking lot and I said to myself this verbatim I said, you know, the average schmuck would have bought that business. And, you know, I’m not that smart, but I’ve been doing this a long time and I know that I am glad I was able to just from know how it experienced walk away. But the average schmuck would about that business. And it really like a light went on in my head. Because I started thinking about, like, what is the average person? Do I’m not talking about PE firms or institutional yeah have gobs of money and and tons of talent I’m talking about the average person wants to improve their lifestyle by a business and said, what do they do like what’s available. And this was 20, something years ago, the Internet was really in it. It was early on, I mean, it was available was early on. And financially, it wasn’t operating with any gun to my head, I was in good shape. And I became so intrigued with this, that I took a year off and devoted myself to researching this whole, the whole landscape. And I talked with hundreds of business owners, prospective business buyers, people who’ve tried to buy business businesses that couldn’t Business Brokers, accountants, attorneys, like the whole universe, of who’s involved in the buying and selling of businesses. And what I realized was, there’s nothing really to help individuals buy businesses. I mean, there’s, there’s some books, a smattering of books, and those were not in any detail. There was some very high level books for like, you know, Harvard MBAs. Yeah. But for the average person who wants to buy a business, Main Street or above small business, smaller business, there was nothing available. And then I started learning some of the stats in the business, like, you know, over 90% of people begin to search to buy a business, never complete a transaction. And that number is only gotten worse. Yeah, you know, the, there’s no stakeholders that are helpful to buyers, Business Brokers, they have their role. I mean, you do business brokerage, I do. You know, I do business brokerage, or investment bank, whatever you want to call it. So anything you say disparaging is disparaging our own trades. But yes, this brokers don’t help buyers, and B, they, they their goal is to sell you a business, there are some good hearted well meaning Business Brokers, but by and large, they’re, you know, they if they don’t sell your business, they don’t eat, and you know, and they’re not going to dispense unbiased advice to you. And so all that, when speaking to a lot of people that bought businesses, and really went through a hard time, or people who tried to buy didn’t complete a transaction, there was the informational part that was the navigation part, all the midst all the moving parts of this, but there was also the piece where they said, you know, the common thing was, I had nobody to hold my hand, like I needed someone to guide me. And through this process. And so I had kept incredible notes and all the deals that I looked at over the years. And I said, you know, I’m going to put this into a manual that’s going to, that’s going to explain to people what they need to know what they need to do, and how to do it for every single step in the process of this. Know this. And then if this happens, you do that. And if that happens, do this. And here’s the outcome you could expect to achieve for every single step in the process. And most importantly, because I love this world so much. I said, I’m going to make myself available. I’m not going to charge people, they can call me to email me anytime with any questions related to buying a business because I really wanted to, I really wanted to get into to help business. I was so I was so grateful for what I’ve been able to achieve and I liked this space so much. They said No, I never I never put making money at the into the equation like I never even thought this would become a business. That’s what’s crazy about all of this. Even told this story 100 times my wife asked me the night before we launch, how many how many things you’re going to sell and I I was I put them all together? I just printed them up, put it through your binders, how many you gotta sell it, if you don’t really if I if I sell one and I help one person buy the right business or avoid buying the wrong one. Good enough for me. You know, I really will be pleased with that. And here we are all these years laters would countless rewrites and 100,000 plus copies is sold. It’s just ridiculous. Like I never thought this was going to be I still shake my head sometimes that I can’t believe this turned into a like a serious business. Yeah. It’s just it’s absolutely wild. We and we’ve helped so many people, it’s it’s I bought a lot of businesses and had a lot of fun things going on in my life. But like from a gratifying gratification standpoint, this is the greatest. Yeah.

Damon Pistulka 18:58
Yeah. That’s awesome. And it’s awesome to hear. I mean a couple of things. This is back up a little bit because I want people that that may have started. Little later on in the show, go back to the beginning and start from there because Richard, you’ve been doing this a while help you buy in your own businesses. And now you’ve been helping people buy businesses and sell businesses for a long time. But you me everybody that’s in the space of buying or selling businesses gets contacted by a bazillion business buyers, every week, every month every year and you just said something right here 90% That 90% of the people that want to buy will not buy and I think you might be generous there and I think it’s probably actually higher than that. It is higher now because it’s it’s there are so many people that are trying to do this. They just come at it unprepared. And I said this before we got on I will say it again. You no need to go to your if someone’s late sit in here, go to your website, get your your course your book or get get it and study it because for the money you charge for this, it is well worth it for anyone that’s considering to buy a business to do this, because knowledge is power. And this and this is not something you’re going to do, it’s not buying a house, it’s not buying a car, it’s not buying a washer dryer, it is way different. And there is a lot more to consider. And as you said, if I am that business buyer, I am taking way more risks than the seller. And that is so key. And so many sellers lose track of this, because they’re sitting there with that business, they may have had it 20 years, it may have been, you know, long time ago paid off all their house and all their loans, and they’re just running this thing on cash taking cash out of it, like it’s a piggy bank, that buyer coming in there, they’re gonna have to invest money in that even if it’s money out of pocket alone, whatever. But there’s there’s cash that they have to pay back if they do that. And there’s consequences if it doesn’t, doesn’t pan out long term for them. So it it is the risk is the buyer. So those sellers really need to understand that perspective. Like you said earlier, because and I go back to my notes, it was great. You said they buyers, buyers are the ones that should win and sellers should be reasonably happy. Exactly. Buyers are taking all the risk. And I think that is it. And far too many times I think buyers overlook things and find out far too far down the road, far in there too far down the road. And these are things that can really throw him astray. So before we go in, because before we jump off today, I want to make sure we go through some of the key takeaways in your course and your books and the other things that you offer. There are just a plethora of people out there now that talk about buying businesses for no money down. In your experience. Have you seen this work at any sort of scale or fashion? They’re

Richard Parker 22:22
completely full of shit. That’s why. Sorry to be so blunt. But that’s the reality. That’s reality. I you know, I? I like to think and I know, we’ve had a couple conversations, you’re just saying where we both breathe oxygen from this planet? That is not the real world. Does it happen? Yeah, one out of 10,000, maybe one out of 100,000? Is it possible? Yes. In those numbers, if at all? Could you buy a garbage business for no money down? Of course, who wants that? But even I, you know, this, it makes my blood boil. When I hear these, you know, these self appointed gurus? Yep, selling this. I think it’s delusion. And I think it’s misleading. And I believe that they’re preying on people at their most vulnerable time, not emotionally vulnerable, but they’re at a point in their lives where they really want to change, change. They want to change their life, and they got hopes, and they got dreams. And they really want to do this in a good way. And very often, they’re surrounded by people who are naysayers, and they want to forge ahead. And then you have all these people that are preying on them, and charging them 1000s and 1000s of dollars for things 10s of 1000s of dollars. And it’s so ridiculous. Like one of these concepts of buying distressed businesses for no money down. Well think about it this way. If it’s distressed, right, there’s a reason why that happened. And if it’s distressed, and you need to generate an income, if it’s this, how’s that going to happen? And if it’s distressed, you could rest assured on day one, you have to put money into that business. Yeah. So even this concept, no money down. It. It’s grossly misleading. The the biggest part of this is as follows. You are not going to buy a good business for no money down. repeatedly. Could it happen once out of 1000 10,000 or 100,000? times? Yes, I’m doing this for 34 years. I did it once. And that was because it was a competitor of mine, we amalgamated Other than that, you’re not going to buy a good business with no money down. It’s if I if I believed that that was possible. Instead of 100,000 courses, I probably would have sold 10 million, but I would never do that to people because that’s not the way I operate. And now I don’t know about you, but like, I’m only on Instagram or as was on Instagram because my son played junior hockey in Massachusetts. So I used to follow some of the local hockey, whatever. And all of a sudden, like Mike flowing phones blowing up with these ads from these people selling these courses and boot camps and mastermind groups, and the inner circle and all these wonderful thing 4000 5020 $5,000 about buying a business and it’s everywhere. And now they have these fancy words like entrepreneurship through acquisition, and searchers, and all this wonderful stuff, and it’s it makes my blood boil, because it’s just so misleading. You can buy a good business all day long, with great deal terms, but you’re not doing it for zero money down. I teach people how to do that. But it’s not happening with zero money down of any consequence. So I’m glad you brought that up. Because it’s, I think people are just getting severely taken advantage of and it just really just drives me bonkers.

Damon Pistulka 25:26
Yeah, yeah. And rightly so rightly so because it is preying on people at a at a time when they’re trying to change their lives. And it’s not right. But we got I want to just say real quick, Harry. Harry says, Thanks for your honesty, Richard. He’s enjoyed it. That’s good. Like, pleasure, good guy. And he said, cheap, things aren’t good and good things aren’t cheap. And

Richard Parker 25:47
Amen to that. And I’m glad you pointed out with good because I’ve been a proponent by a good business, you don’t have to buy a great business, you buy a good business that you can build over time, a good solid, you know, business that can grow with you, as the owner, I’m a strong proponent of what’s really important is you want to buy a good business, that’s going to all things being equal, you know, will will sustain itself when you take over because there is a learning curve. And sometimes there’s a bit of a dip. And so, you know, great businesses you end up having to overpay for, and they’re at the top of the heap. And there’s only one way typically that they can go so you get right in the middle, like, you know, at the bottom of the heap, you got garbage in the middle you have good and then the top of the heap you got great. So you buy a good solid business. I’m glad Harry mentioned the points there use the words good, because I think that’s, you know, where people have to, you know, direct themselves that you just want something rock solid, good. That’s going to transition well to you as the new owner. Yeah,

Damon Pistulka 26:38
yeah, you know, and we, we’ve found that when we’re buying business, for our clients, we’re typically gonna be buying, you know, either vertically, trying to help integrate a supplier that’s fairly similar. So they understand what’s going on. And we’re going to be doing it horizontally where we’re getting geographical footprint by doing what we do. And when, when you’re doing that the buying a good business, especially if you’re going horizontally and just increase in geographic footprint or something like say, I’m a plumber, and I want to buy the plumber down the street from me. You know, you really can, I think it’s a triple win. Really, it’s a win for the seller, because if you and I are across town, and we’re good business people and businesses staying in town, yes, that’s one of the things those employees are going to stay paid, right? They’re gonna Yes, keep the jobs, because so the community wins, the seller wins, because they can leave a legacy they can stand up and be proud of, and the buyer wins. Because when we know each other, we’re not going to doesn’t mean we’re not going to do unfavorable terms one way or the other. But there’s a lot more latitude, we have to really talk about what is best for the business going forward as a whole use someone selling me business and me as the buyer doing it with full transparency. And what we want to do,

Richard Parker 28:01
it really works out well, it does. And you know, one of the points you bring up something that’s it’s almost magical, this, this whole equation, when you paint the picture of, you know, I see two plumbers walking down Main Street, figuring out how they’re going to sit one by the other one’s business. And so there’s a lot of that wonder to the whole transaction. But most important is, you know, I get what you’ve identified is when people go into this equation, as a buyer, you know, buyers that go into this, like a bull in a china shop, usually rarely do a deal. Yeah, you know, you when you go into this, and you you, first and foremost want to make sure like the negotiation pitch, which usually flips people out and they do it the wrong way, is you want to have a thoughtful, meaningful conversation with the owner. Because what the way this starts off is the owner, you know, has a lot of emotion tied to this transaction is a piece of themselves that’s disappearing. Most of them don’t even know what the heck they’re going to do after they sell the business. Yeah, but a part of their legacy is really disappearing. And when people come in guns blazing, and point out all the things that they’re doing wrong in their business in an effort to pound down the price, they’re doing excels a terrible disservice. Because chances are the seller, you know that they won’t have get any sense of comfort with this person to even run the business, let alone take care of the employees, if that’s important. The minute is important to some not to all for some, it’s just the price in terms but going in there and having meaningful thoughtful conversation, getting to know each other, you know, not drawing lines in the sand, not being a hard ass not trying to win every battle. Like you know, I have a pages it’s three pages and of course of the do’s and don’ts of negotiating and very often people are are stunned that a lot of them are you know are emotionally related. Yeah, versus saying you know, when they offer this do that, of course we go into that but it’s looking at this like from a much more much from a 30,000 foot view of how you should be approaching In this from a philosophical perspective and an attitude perspective, and I’ve seen it on the site as being a, you know, representative of a seller, someone comes in and they start knocking the seller, they throw them, they have no idea, they have no desire to do business with that individual. And I’m sure you’ve seen it all the time with a buyer and seller, like each other, and they trust each other and one wants to buy one wants to sell, you can’t stop them from getting a deal done. And even tell us when the seller thought I need this, I’m going to sell it for x. And they’ll take x less just based on the personality it happens far more often than people would believe. So you know, the example that you painted the small town plumbers typically, right or, you know, guys in H Vacher, electricians, that that type of conversation a good back and forth and getting to know each other. And then you can find you can work your way around in almost every issue. Yep. Yeah, I

Damon Pistulka 30:54
just, I’m just listening to because you’re preaching to the choir here, I’ve seen it work both ways. And when you just sit down as the buyer of that organization, and start talking with the one that the person that wants to sell it, and you What do you want to create with your legacy? What are you hoping to do by this? And then then, then then the buyer can take turns, this is what I what I hope to achieve by doing this, and it’s why none of us are talking about price. Now, I was talking about terms. No, we were worse establishing a relationship based on do what you want to do and do what I want to do. Does that kind of match up? Right?

Richard Parker 31:35
Exactly. Yeah, it’s exactly. And when those when that becomes a line, then oftentimes it doesn’t, but when it does become aligned, and you get to finding out that by conversation, not by saying, oh, yeah, you know, what the, their asking price that way, you know, it’s way above? I’m gonna put it a low offer, and I’m gonna have to you don’t you don’t even go there yet. Like I have the conversation because all of that stuff. You’ll deal with it at the appropriate time. Yes, yeah, it’s going to be dealt with. But at the beginning, good conversation, let’s fake conversation. I mean, you really want to have the agenda, I want to get to know this person, I want to understand how they think. Because once as as when I’m a buyer, I look at and say, when I understand how they think I’ll get a real good insight to how they run their business. How they treat people, how, you know, how they, how they deal with a difficult point, are they you know, if I say something difficult, do it immediately throw a left hook, or they take a step back. And they process what I said, because that the ladder example, you recognize that they’re not going to just, you know, go nuts on employees, that they’re going to let people by and large, do what they have to do, that people will make mistakes, and they’re not going to chop them off at the knees. So you know, all those type of things, if you’re observant, and the more you do this, the better you get. Those things will come to the surface very quickly. And it makes the whole process even makes the whole process nicer. Can’t be done all the time. Sometimes Sometimes you have some hard headed, you know, egotistical maniacs, and it can’t be done. But most of the time, it can be.

Damon Pistulka 33:06
Yeah, and as I mentioned before, with the ones that we’ve been doing with our clients, it’s been that way and our clients are in the industry are ready. It’s it’s just more of that. And I know if you’re if you’re a deal person, it seems like it’s slow. And why are we just set it in here talking about what we want to do. But as you said, those conversations, give you so much information. And then they give give you that indication of how is this deal going to go? Do we even want to go any further because if we don’t align, if we’re north and the other person’s east or west, they might we just, we might want to say, well, this is awesome. But Richard is, we it’s not. It’s not gonna work for us right now. And that’s cool.

Richard Parker 33:54
And that’s cool, too. Right? I will have a webinar that I’m doing tomorrow with a bunch of business buyers, and talking about one of the points that I have on there is, you know, very often you go in, they go into these meetings, and they’re at work, very early stage, they’re asking about the financials. They’re asking about the competition. They’re asking about the industry, you’re asking about the employees, they’re asking about the suppliers. They’re asking about the contracts, the leases, that seem you know, ladies and gentlemen, those are all great questions, but they’re all coming at the wrong time. Yeah, like you got plenty of time to address those at the appropriate time. early on. It’s we just want to have a conversation like you and I are having Yeah,

Damon Pistulka 34:33
yeah. Because it just establishes so much by doing that conversation that you you will get to the value conversation, the terms conversation, the operational conversations, but those are those are later down the road because you got to really understand what you’re trying to do first.

Richard Parker 34:52
Absolutely agree with you 100%.

Damon Pistulka 34:56
So, as you’re creating your course you create the core years, and you’re going through this things, what are some of the key takeaways that you hope that people that go through your course, and your materials and are really studying what you’re teaching hope to find out their two or three main points that they or five, or whatever the number is, but what are some of the main points, these business buyers really should concentrate on our will will learn as going through your stuff? Well, I

Richard Parker 35:27
think at the first, you know, at a high level, I would say that it’s doable by anybody. That’s really important, I think, yep, people should understand that this is doable by anybody. It really is. Additional points that are really high level important points without getting into the weeds is understanding that this, you know, we have 23 chapters, because that’s what the buying process is from chapter one of considerations that you have to do. And there’s family considerations, and what have you straight to post purchase priorities those Soto’s are and everything in between. So that’s those are the 23 chapters. But you know, one of the things that I tell people is, the single most important thing that you could do is you’ve got to get the business, right, and the business does not the right business, it’s got to be you have to be right for the business. Because a good business run by the wrong person will go out of business pretty quick. It’s not like a building you overpay, it’ll still be standing in a year, as long as you service the debt, you know, business will be gone. And so the single most important thing that you have to do is you have to get in tune with your greatest skill set, because that has to match the business. And if you do an average job on the 22 other chapters, but you do a terrific job, a flawless job on chapter number three, the right business for you and identifying that, chances are, you’re going to be successful. Now, if you do it the other way around, you got everything else, right, but you buy the wrong business, you’re gonna you’re gonna go out of business. And so that’s really important. The right business. A couple of other things is sorry, go ahead. You had a question? You know, I’m

Damon Pistulka 36:53
just I’m just saying that is one of the things whenever I actually talked to a business buyer, and they said, Well, you know, we we’d like to have it, have you help us find a business? They said, No, I really think that’s, that’s something that’s good for you to try to pay somebody because the business that you’re going to find for you the right business for you is going to be as hard as finding a spouse. And we’re harder, are harder. Yeah. Just because of the the difficulty in doing that. And this is a note example. I wanted to make sure we talked about this briefly. Because a lot of people will tell you, you you pay us money, we’ll find your business to buy and

Richard Parker 37:35
total farce, nonsense. They’ll get they’ll find you a business, but it’s not the right business for you to buy. If you want to pay me $10,000, like some of these search firms to get you some businesses, I mean, I wouldn’t take anybody’s money to do that. But there are people who will take that. And they’ll say, Well, here’s a list of 25 businesses that are willing to sell. But you have to drill down into what’s right for you. And you’re right, I can’t go out and find your wife. I mean, there’s certain countries, there’s arranged marriages, so maybe it’d be a little easier. But here in America, I mean, for the most part, we don’t do that. And some of the identification of what business is right for the individual is everything so that that’s clearly a high level very important thing. Other things related to like valuation, for example, you’ll valuations, sellers, typically or overvalue the business because it’s they have what it’s worth to them. buyers need to get comfortable with financials and understand the need to compile a defensible valuation. I tell people never pay attention to the asking price, it’s completely irrelevant to me. Because it shouldn’t influence at some point, you may want to think about it from a standpoint, how are they thinking about this business, but for the most part, I pay no attention whatsoever to the asking price you have to come up, it should never influence your decision, you have to come up with your own solid valuation that’s defensible. I’ve you know, we’ve identified over two years 50 fundamentals that go into a valuation. So we do it in a different way. We we put the financials together the adjusted numbers, and then we have like a 50 point questionnaire that people answer related to the fundamentals of the business, such as you know, including the filters with customer concentration, any key employees the barriers to entry, a lot of uncommon ones, which are the condition of the fine financials, the inventory being good and resellable, can any of the employees leave and quickly go into business, you realize how quickly how steep is your learning curve, those type of things, and then we marry that with the number to come up with a multiple so then there’s the valuation piece. It’s got to be defensible. So you have those three so far. Another point from talking about negotiation, then related to the due diligence, people need to understand that the due diligence on a business begins the second you find a business that’s of interest you because oftentimes a good business is going to sell quickly. And you have to start doing your homework and your research immediately the internet. If you conduct yourself in a good way you can get good research. You could be Yeah, you can go off the reservation pretty quickly too. But you could do it in a very good way. And because what you want to do is when you get to the formalized due diligence phase, you want that to be confirmatory, you don’t want it to be exploratory, you want to just confirm what you’ve learned to this point, you know, you won’t even have enough time to explore it. So not so so you’ve got to do that very early. So those are really four things that I know are really critically important. And you know, the right business, of course, and people is a drop down to that. And I’m, I’m actually doing a session tomorrow for a bunch of business buyers talking about you know, the right business and deal flow and how to go to vote because most people go about it the complete ass backward way. Right? They, they get online, they started looking at all kinds of business, figuring out which one, if any, is going to be right for them and the wrong way. First, you have to figure out which one’s right. And then it’s so damn easy to find them by it. I mean, it’s, it’s like, it’s really easy. People don’t believe don’t realize how easy it is. It’s just if you’re, you know, it’s like if you’re going hunting. I’m not a hunter, I’m a fisherman little bit. But if you’re going hunting, you want to take someone who’s savvy about where you’re going hunting and knows where your prey is, right? Compare and contrast that like going hunting with Stevie Stevie Wonder. It just like it just doesn’t make sense. So people go about this whole process is such an ass backward way that that’s why I really, you know, it’s very gratifying when we get people settled away. You know, one of the things that I talk about a lot of people that we’re looking at for for a long time. And so you got to forget every first of all, if you get it, forget every new loan, you’ve thought about this, you got to be open minded. And don’t confuse your education with knowledge. Yeah. And we’re seeing more and more of that. So yeah, it’s a good way to go about doing that. Those are the big level ones, though, that I would

Damon Pistulka 41:48
that it just shows I mean, your experience just shines through on this getting the right business for you. I mean, that is the biggest, biggest thing, I think. And then the other thing you said that was you gotta start due diligence quickly. It’s got to be you know, all the way up to the offer. But you got to your your formal due diligence really is about confirmation. It’s not about finding problems, you may find a problem there, but you should have any big ones should have been done before you even got an offer out there. That’s what I think a lot of people waste their time in that they may throw an offer before they do any diligence at all. And that’s a waste of time for everyone. Because there’s a lot of red flags, you can hit pretty quick. I’m sure your materials cover that, and I’m not gonna get into that too deep. But it’s awesome talking to you today, Richard. And our time got went so quickly.

Richard Parker 42:45
That’s it. Wow. Okay, well, yeah, yeah. It goes, because fun conversation,

Damon Pistulka 42:52
thank you. It’s just your experience, and really teaching people about buying a business the right way. And I just want to I want people if you’re listening now, and you didn’t listen from this beginning, go back to the beginning, listen to what Richard said, and and just take heed to what he’s saying. And then if they want to see more about your course, materials, and all the other stuff, what’s your website? How can they reach out to you, Richard, what’s the best way?

Richard Parker 43:21
It’s pretty easy to go to Richard parker.com. We have hundreds of free articles, free reports, the courses there, I think it’s Richard barker.com, forward slash course. But go to Richard parker.com. There’s plenty of information that keep you very busy for a long time and great articles and helpful articles. And if anybody wants to get a hold of me, just send them a message through the Contact Us page, and make sure they ask them to direct it to me, and I’m happy to get on a call or email with anybody and I’m happy to answer anybody’s questions.

Damon Pistulka 43:49
Awesome. Awesome. Well, I’m so I was excited for this when we first started talking about it, Richard, and I’m even more pleased now that we’ve been able to get on here and share, share what you’re helping people do buying a business the right way. And thanks for all you do helping everybody and thanks for stopping by with us today.

Richard Parker 44:08
Well, thank you. I appreciate you having me. I was very excited for this conversation. We spoke briefly before. And I know you have to sell in the in the broker pedigree behind you. So I knew it’d be a real fun conversation. And so again, I really appreciate you having me. Awesome.

Damon Pistulka 44:22
Awesome. Well, thanks again. Well, I just want to say thanks, everybody for being here today. Those of you that didn’t leave comments, we want to make sure to recognize you out there. Listen, I can see we had a lot of people on today. I want to thank Harry once again for stopping by and dropping a comment in there on a thank everybody. We got some comments over there on Instagram as well. Thank you for those. We will be back again next week. Have a great weekend everyone. Richard hang out for a moment we’ll end up here