Keys to Preparing for a Successful Business Exit

• 42:33
SUMMARY KEYWORDS
business, buyer, business owner, owner, work, company, people, sell, exit, rich, good, financial goals, number, transition, financial, run, multiples, seller, valuation, years
SPEAKERS
Damon Pistulka, Rich Hall

Damon Pistulka 00:02
All right, everyone, welcome once again to the faces of business. I am your host, Damon pistulka, and I am excited for our guest today, because we have none other than rich Hall from the rich Hall group. We’re going to be talking about keys to preparing for a successful business exit Rich, thanks for being here today, man,

Rich Hall 00:23
man, we are thrilled. Let’s get on it. Let’s have a good time.

Damon Pistulka 00:26
Yes, yes. Well, rich, I’m just I’m excited as heck, because we’re talking a little bit more about this. And I want to first of all bring up what you do. It may not quite say this in your headline on LinkedIn, but you are a business value advisor, and I think that’s that’s an interesting title. I know what it is, and appreciate it, but we’ll get into that a little bit more. I just wanted to bring it up, but we always like to start out with your background, because I think that really kind of helps us understand the person behind rich Hall, yeah, hey,

Rich Hall 01:04
I love it. It’s so my career, and I went back and looked at it, probably, you know, six months ago, and said, you know, how did I learn this stuff? And the reality is, all of my career has been some either as an employee or an executive with companies has been some form of turnarounds, whether it was a turnaround because it was they were really struggling, or it was, listen, we got massive growth, and we gotta get on it. And each one also had increased responsibility. So after I went through the gamut, and I finally was brought in as president of a multinational, multi generational, family owned business. I took a step back and said, what I really enjoy doing, and it is, I love the challenge of helping businesses right side and get where they need to go extremely fast. So I went down the business advisor route and had clients, and then actually got pulled into being more of a Exit Planning advisor by Wealth Advisors. Yeah, they were saying we got clients that are business owners, and they’re looking to do something in two to three years and rich, we need somebody that we trust and know, and your name keeps coming up. So I went down that path and absolutely enjoyed it. Yeah, so you,

Damon Pistulka 02:33
you mentioned Exit Planning, and I, I want to ask you this question, because I think what you’re doing is a bit different than Exit Planning and and, but yet that’s kind of the universal term. So if you could kind of give us the flavor of Exit Planning that you do, because a lot of people look at Exit Planning, they think of somebody working in a magic calculator and coming up with numbers. Man,

Rich Hall 03:01
I’m glad you brought that up. Number one, I hate the word exit, right? Because everybody hates it. Business owners hate it. I hate it, you know, because number one, it infers binary buy or sell, right? And that’s not, you know what we do? I actually go in and I work with the business owner two to three years in advance of some kind of transition. It could be a money raise, it could be sale to management, it could be a buyout, it could be strategic buyer, all kind of things. But here’s the key, the business is not what I talk about. First, I actually sit down with the owner and or owners and their spouses, and we talk about number one, what’s your personal goals? What’s important to you? What does life after the transition look like? And we get crisp on it, because that’s the number one priority you follow all the way through the rest of the selling a business a transition, and you get down to the the time to sign on the dotted line. More businesses fail because the owner starts reflecting and saying, maybe this is not what I want after all. So we cover the personal then cover Alright, how does that translate into financial goals? Because 80% of the business owner’s wealth is tied up in the business, so their expectation is they’re going to sell the business and it’s going to end up fulfilling their financial goals. What if it doesn’t? So we get crisp on that, right? The other part is the their business goals, is, Legacy important are, are what happened to the employees? Important? You know, I got one client that’s like, yeah, man, these people have worked 20 years for me. I want to make sure they’re taken care of. Okay, that can dictate the type of buyer, right? But on the flip. Side, I got another one that said, Hey, rich, I’ve given people great jobs for 15 years. Now it’s my time. I want max value. Okay? Now we know, because that can dictate the different kind of so we cover that first, then we go in full blown 360 comprehensive assessment of the company, and it is very detailed, and in essence, think of due diligence, own steroids, before the sale. And then we actually the other piece is we actually do a evaluation of the company. I personally bring an outside firm in. They do at least five different methods of valuation, and I use different firms depending on the size of the company. And then we layer on top of the valuation, the assessment, and it gives us a very good idea if it’ll sell, and if so, where it’ll fall in the dollar amount, and if that amount matches what the owner’s financial goals are, minus fees and taxes, of course, then we’re good to go. Let’s go ahead and get this thing going. If not, then we roll up our sleeves and we start working with the business and the owner over how to get that business from where it is today to where it needs to be to meet those goals. Hopefully that helps. That was a long answer, but no, no,

Damon Pistulka 06:26
I’m glad you went through the process, because, you know, a lot of people, a lot of business owners are sitting there today, as you said, they’ve got 80% or more of their wealth is tied up in that business, and it can be significant amount, significant amounts of money. I mean, there’s a lot of legacy businesses out here with 10s of millions and sometimes hundreds of millions or more, that’s sitting in those businesses, and they don’t have a good idea of the valuation. And that’s, that’s a that’s a mistake that can surely bite you in the

Rich Hall 06:56
end. Yes, yes, absolutely. And

Damon Pistulka 07:00
I also like covering the personal goals I’ve I’ve seen that happen even when you think you’ve covered the personal goals, even when you’ve done those things up to the end, they still an owner, still looks at it as, I don’t know that this is the right thing or not.

Rich Hall 07:20
Yeah. I mean, it can come down to their identity. Yeah, yeah, when most people think of moving on because they’re either tired or, you know, hey, it’s time to retire, or I want to sell and do something different, or whatever that looks like, but once they realize that, hey, even with negotiations and everything else taking place. Money issue is off the table. That’s no longer an issue. Now it gets real, is it? I really enjoyed being the boss, and now I’m no longer going to be the boss, or I enjoyed going to work every day and seeing everybody friends that I’ve had for years and years. Is this really what I want to do? I hit them up that very first thing. Because if we don’t, you’re right, they spend a ton of money all the way to get toward the end, and they’re not happy with what they decided or move. Yeah,

Damon Pistulka 08:10
yep. And I love how you talk to that personal because it’s not just financial, it’s what’s going to going to happen after that? What are the way, you know, what’s their life going to be like? There are so many other things. And then as you, as you go into the financial goals and the personal about what I’m going to do so they, even if they’re fulfilled, then you have to walk through the legacy piece, because there are a lot of people that that care or don’t care about what happens to that business after but that can, as you said, I think is really critical decide where you really want to try to transition out of who a great buyer or a great next owner is going to be for you. Yeah,

Rich Hall 08:53
they, they, most business owners, have no idea how this whole process works. Uh, even, you know, they don’t know what the value of their company is. And, I mean, if you think, if the company needs blood, then guess who the blood’s going to come from? Yeah, the owner. You know, if it needs money, guess what? They’re going to try to find away the money. So owners don’t typically take care of themselves throughout the process. When, when we do the financial goals, for example, I have their financial advisor sitting down with us so they hear the conversation, and if they don’t have one, I refer them in it’s amazing the number of highly successful business owners that do not have an advisory team around them and they don’t understand things like, how much do I need? What about taxes and all of this stuff needs to be planned out before the sale. Or, what happens if that checks written in your name, Uncle Sam’s going to get 40% yes, we talk about all of this stuff willing in advance, so when it comes time. Them for the transaction. No surprises.

Damon Pistulka 10:03
Yeah, they that that is, that’s key. I mean, and you hit a hit on one that I think a lot of people don’t realize is that if you do tax planning, especially if you’re going to sell your business for 10s of millions of dollars, it will save you probably a million or more dollars if you start your tax planning, 567, years early because of some of the waiting periods, some of the other things you can do, and you just get, you know, those, those smart people at that point are worth their weight in gold, almost, yes,

Rich Hall 10:37
I I do a lot of networking like you do, but a lot of my networking is with those type professionals, Wealth Advisors, estate planning attorneys, transactional attorneys, CPAs, you know, on and on. Because as we go through this journey, the owner is looking at us as the person to guide them, and we need to make sure that it’s not solely about the business, that we’re also focused on getting them in front of the right people to take care of themselves, uh, financially in the best way possible. And most just have never navigated this. They don’t know what it means.

Damon Pistulka 11:24
How many people do you work with have had the same CPAs, you know, from many, many, many years, and have outgrown them and not realized it?

Rich Hall 11:35
Man, you’ve been around, haven’t you? Um, I have conversations with clients, because most of them, those people that started off, great, great, great example, somebody may have been a bookkeeper with the company. Companies grown, then all of a sudden they’re like, hey, I want a title. I want a controller. Okay, great. Now they’re a controller. Then they keep growing as a company, and next thing you know, they’re like, hey, I want to be the finance director, or I want to be a CFO. And lot of business owners, again, they don’t know what they don’t know. So there’s so many things that as a company grows and its size and responsibilities and the complexities occur that that person that helped them start out may not be the right resource at the next level, and I see that constantly, and I do my best to help them, to train them, to give them insight and etc, but sometimes it’s also a hard conversation is that maybe ought to consider outsourcing or bringing somebody else in, just for the reason you mentioned.

Damon Pistulka 12:48
Yeah, yeah, because the one thing that most business owners don’t realize, I believe, even in a larger business, is the financial I should say, the financial resources that a business transaction will take to actually get it done, especially when you get bigger, is if you’re not ready to go, if you don’t in the amount of prep work and the 10s of 1000s of dollars you’ll spend on experts to get ready for your financial stuff, is is a shock to most business owners, yeah,

Rich Hall 13:25
you know when. And it’s also one of the biggest delays that I have, yeah, as far as getting these valuations done, because I walk them through and I say, Listen number one, we gotta have about four years of prior, plus we need a rolling 12 months of the current year. They want to see trends, and the different valuation methods require that. And and it’s amazing, the amount of businesses out there that either don’t close their books on a timely basis, they’ve got their account, either their accounting team, or they may use an outside that hadn’t filed their taxes and keep doing, you know, you know, postpone and etcetera. And during those circumstances, I look at them and say, you know, how confident are you in these numbers? Because I’m saying, Let me tell you, once you get a buyer involved, they’re going to look at they’ll walk through this concept called quality of earnings. They may do a QoE on it, I can guarantee you, if there’s any problems, they’re going to find it. And if they find it, they’re immediately skeptical and going to say, Well, what else may you either be hiding or not aware of and it can kill the deal. So there’s a lot of times I’ll bring in my own firm and say, Alright, we need to go through and just take a look and validate these these numbers. And it takes time, and it takes a lot of resources, but it’s better to do it up front than spend all of that money and you’re. Get killed on the back end.

Damon Pistulka 15:01
It will, and it in, you know, at the least, I think you’re going to lose millions of dollars out the backside because of, like you said that the lack of trust in the numbers. So they’re going to figure that as more risk and reduce the reduce the potential price. And when you look at it, if I got to spend 50 or $100,000 on a on on a finding the problem and fixing the problems. It’s, it’s well worth it when you consider the millions it costs on the back end.

Rich Hall 15:28
Yes, yeah, 100% I actually, when I do my initial assessment, the valuation of the company, I actually give them a grading on the different areas, like comments this dragging down the value, and I can show em that. Listen, this drag down is going to impact you by X amount of dollars. So when they have to turn around and spend money to fix it, we have the conversation says, Yeah, you may spend $50,000 but guess what? It’s going to impact your valuation by, you know, $5 million or whatever the number is. Now they get business. People can get it when it’s put in terms of business. You know, if not, they’re just like, Wait a minute. People try to get me to spend money every day. Man, why should I spend money on something when I got a perfectly good bookkeeper, slash, you know, accountant and but when you put it in terms, they understand, then they’re like, alright, rich, let’s get on it. Yes,

Damon Pistulka 16:33
well, and this, this is where, this is where I love it when I’m talking with a with a business owner about their exit, if they’re thinking about selling their business. And I always say it like this, ask them what they think their multiple is on the sale their business. Whatever it is, could be two, could be 200 doesn’t really matter. What do they tell you? Oh, it’s way hard. It always is, because they read a public company statement and they use that. Lot of people think that that, but there’s no, no comparison. But that’s what they always say, and it’s always and even if they’re close, they’re usually, you know, a few multiples higher. But this is really in the in, in the exit era of your business. It’s really the only time where you can get multiples of your profitability, the increase you make, right? So if I can increase my profitability by $1 I might get six, 810, whatever the multiple is, $4 in at the exit. So when we talk, talk about that with somebody, you can see the really, that this is a time when, if it is a good investment, at this time, there’s really not other times in the business that you can get that kind of return that quickly, multiples in a return what you’re doing that

Rich Hall 17:56
that’s and I explained to him when I Speak, there’s a difference between an income based business and a value based business. You know, value is determined by the buyer, right? Whoever’s willing to spend that kind of money. But I’ll even explain this. Listen, you can have a really strong income, profitable company, and it still may not be sellable, yep, and they’re looking at you like, you’re out of your mind. I’m making a million dollars a month in my business. I’m like, Yeah, but if you’re the guy that’s got all the relationship with the primary suppliers, you play golf every weekend with the your top customers, 50% of your revenue is coming from three different customers. Guess what? Your business is not going to sell as is. Then they pull a step back, and they’re like, man, you’re right. Okay, what do I do? Alright, now let’s get to work, and it’s exactly like you’re talking about. Now you got their attention. You help them understand how this stuff works, then they’re willing to do what it takes, until then, hey, I’m putting a million a month. Man, don’t tell me my business not worth something. Yeah, spend a few million. Go to market and see what happens. Yes,

Damon Pistulka 19:07
well, and you make a great point, and it happens every day, every day, I don’t know how many people, and even if, even if you say you won’t sell, you won’t be able to sell your business. It doesn’t mean you won’t get an offer. It means if you get an offer, it could be so ridiculously low that you will never take it in a million years, because they’ll they’ll discount it so so poor or so much. And it just really is an opportune time for people that want to listen and take the direction and make those changes. I mean, we’ve seen incredible swings in in from I went to, I got an investor that wanted to buy the company Investment Group, and it was, you know, a third of what it was should have been, or half of what it should have been, and to fixing it, and go. Out and getting your market premiums if you do what you’re supposed to do. But those things, like you said, Owner, dependent, dependence on the income, dependence on a customer, those are real big. And it’s, it’s easy to build up like in your area, right? There’s, there’s a few big companies in Houston and and it would be very easy to build 100 over the years. If you were in Houston, long time ago, build $100 million company, let’s say it does something with energy. And you could have two customers, literally, yep, and or one. And it could be, like you said, it could be, I’ve known rich for 40 years. We do vacations together, we go golfing together, we hunt together. It’s whatever we do. And that thing is not sellable. Yeah. And, and the thing is,

Rich Hall 20:59
you’re exactly right. And the tough part is, owners don’t understand that, because, hey, what they’re doing today works. So why is there an issue? But when you use the exact, exact same example within you tell them, Okay, but if you go back and tell that guy you’re playing golf with, who’s your number one client that you know, hey, I think I’m going to wrap this thing up unless you’ve got a long term contract that’s rock solid and locked in, and that’s part of what we talked with him about, then he’s going to go back and say, hey, the relationship is no longer there. Let’s open it up for bid, and guess what? A buyer? One of the things I you know, we look at is we talk about, what are the contracts look like? Are they assignable? Cuz you you can have a buyer come in the contract’s not assignable. Then guess what? All of them could go at the bid, if need be. So depending on how the contract’s done, how the sale is done, it can be pretty complicated, but the buyer’s going to do that, he’s going to have a legal team that’s going to say, I want to go in due diligence, and I want to start seeing the contracts at the top, you know, clients and vendors and suppliers. Yes, same way. Yeah,

Damon Pistulka 22:23
it is. We actually ran into that a number of years ago. Now, that business that we had was was getting an offer, and we knew that the the support, the customer contracts had to be approved by the customer. And just so happens that when we went to that customer to talk about getting it approved, they decided that they wanted to bring those contracts back in house.

Rich Hall 22:49
See, imagine if you just bought that company, and then that happened to you, so it that’s why they don’t, and you brought it up earlier, very I’m glad you did buyers look at the kind of risk associated with the company, and they discount the price or factor in dependencies a lot of different scenarios To minimize that risk as much as possible. And revenue risk is huge. Employee risk is another top employees, top sale. I’ve seen the company that man, they went from like zero to a valuation. I didn’t do it. I just, I know the the owner, um, you know, $200 million in like, three years. And the owner was like, Man, I’m going to go buy an island somewhere. But they got their due diligence, what they found out was the salespeople were 1099, contractors. Ooh. And the buyer’s like, wait a minute, you don’t have long term contract. They’re not employees. I can’t pay you that kind of money. What happens if they leave? They’re not a I don’t have an employment contract with a 1099, employee. The whole deal fell apart. And I was like, Man, if I had known that, I’d have told you, all you had to do is lock them down, put a good retention bonus in front of them, and then you would have been sitting on an island right now that had your name on it, yeah, yeah. They don’t know about that kind of stuff in

Damon Pistulka 24:25
it, then, yeah, it’s, it could be, because it does not, it does not affect the day to day operations of the business. Your business can continue to run, as you said, you could be making a million dollars a month. It could be very successful in this industry could be you could be smart. You could be running it wonderfully. But if the the team is not there, if that those relationships aren’t going to be retained, just as strong the day before the transition as they are the day after all that is figured into what a buyer is going to consider you.

Rich Hall 24:59
Yes, and see that’s there’s the concept as we know, of how important the financials are, and when evaluation comes in a market approach, as they call it, for the valuation. So it’s a multiple of EBITDA, Well, number one, they don’t all understand that it’s an adjusted version of your financials, right? Yep. So you have to go through that. But the other part, the biggest driver of higher multiples is not your financials, is your intangibles, like your leadership team, the capacity of your company, the upside of the market you’re in. What kind of customers do you have today? Systems, processes. Are they scalable so they can grow such that the buyer has a very large and nice upside? That’s what gets a higher multiples. And that’s where guys like you and I go in and help them understand, evaluate it, and then let’s help them get to where they need to be so they do get to our multiple Yeah,

Damon Pistulka 26:04
so as you’re working with companies, and you’re you’re seeing them transition out, and they do the work, they put the work in, what kind, what kind of are you seeing that these people can get premiums when they sell. Or, or, do you, do you think that this is just more making it so they can get sold

Rich Hall 26:30
depends on what we’re we’re working on, right? Or, yeah, if they got a good product, good service, good market, then doing the things that we talk about are very attractive to buyers, because buyers are much more sophisticated than sellers. Buyers already get the teams to do people. You know, you may have worked on the buyers out some and as as an advisor in helping, but they go through a number of businesses before they may find the right one to buy. So when you go into a you know, a dance where there’s discussions to see whether or not you want to move forward with a deal, before you go under, you know, loi, etc, then you talk with a buyer, and you say, Listen, yes, we have our top employees. We’ve got a retention program already ready to go. We’ve communicated to them. Our owner takes out Monday and Fridays and works half days during the week. Okay? Our systems are documented. Our processes are we’ve got great leadership. And, I mean, you start laying all that out in front of them, their eyes get massive because they’re like, Wait a minute. That means my risk is low and I can hit the ground running with this company. And then when I tell them, Listen, you don’t even have to negotiate. The owners already agreed to a six month, you know, earn out period and do a owner finance as part of the deal. That’s not a negotiation that falls apart. We’ve already set that owner up with the Fed far in advance. Buyers will they go nuts over a company that’s laid out like that for him.

Damon Pistulka 28:23
Yeah, you’re that you’d said a couple things in there that I really think that if, if someone’s listening today, that that is considering and transitioning out of their business really needs to understand, because you said, you talked about working with the the seller to get a number in mind, get terms in mind for the sale that business, so that the transition can be pretty smooth, rather than tons of negotiation where you’re starting too high or too low, or wherever you’re at and all the the angst that that caused. And I’m probably not using the right word, but because if you get that done ahead of time, like you’re saying, you don’t get that deal fatigue like you do if you’re back and forth and back and forth and back and forth with that deal. Because you you can make it easier for the buyer. You you’ve satisfied a lot of their risk, risk challenges, and as a seller, you’re really comfortable with the number you’ve talked about then, because you’ve had time to think about it. It’s not like we’re sitting here today and oh, we got a counteroffer today, and we got another offer back. We got counter again. The owner doesn’t the seller doesn’t have time to really think about it. If you talk about this three months before you you go to market, or whatever you’re going to do with this, have a lot of time to think about it. Jake, you can think about it and get comfortable with it and go, I’m good, and I actually,

Rich Hall 29:47
you nailed it. I run a CEO roundtable as well to some other things, and one of the owners and my roundtable had a family on. Office, dive in, and they’re like, hey, we want to buy your company. If you don’t sell to us, we’re going to buy your competition, put you out of business. So, you know, they were, they were in a spot, yeah, um, and got a great deal. But there was also some things, and he had a long earn out period. There’s some other things that popped up. And I asked him, I said, Hey, man, why don’t you put together, sort of the lessons learned, because you just went through it. And he did, and he sent it to me, and every other word was, I wish I’d called or knew or worked with an, you know, an exit advisor like you and me, or somebody like and I said, Listen, man, you can’t put that out there, not you know that that looks like it’s an advertisement for me. I said, What did you learn? And he came back and and I, you know, I can send it out to people if they want it, because it’s cleaned up, but it’s in detail. It’s like, I wish I know more about the process. I wish I’d had the right team around me. I leveraged some of the buyers resources because, you know, everybody shook hands and sang Kumbaya, but at the end of the day, I found out things afterwards that I would have done different. And it’s, it’s real life, but not being prepared and not understanding how it works is tremendous, both personal and financial risk for a seller.

Damon Pistulka 31:19
Yeah, you know, as you said, the title says, you know, preparing for a successful business exit is is something that, while worth the effort almost all the time, I don’t think you can run in a time when you’re not going to benefit from it. And like you said, you you’re not stuck with trying to use whatever resources you have available. You can have time to get the right resources and get the right advice and do the right work at a time. So as you’re looking at this, what is talking to the visit, source cross, the cross, across the mall, if you had a name, the top two things that you see consistently in businesses that you’re going to have to do some work to what would they be? What?

Rich Hall 32:11
Number one is they don’t know how the process works. That’s probably the bigger thing. So it’s educating the business owner what to expect, and all the stuff that we need to get done and to work on. I think then after that is you gotta get the financials squared away and cleaned up. Because, I mean, hey, here’s the thing we all know, run everything you can through the business legally to minimize your profits, therefore you pay less taxes. But when you go through a transaction, you know, the buyer wants to see the true picture. So now you gotta go back and do an adjusted version that says, hey, you know the boat in the house it’s run in and, you know, maybe those weekends and etc, we need to scrape those back out so now it gets a true picture. So that’s one of the biggest things of the cleanup that needs to be done. And that education of the difference between income versus, you know, value after they get it and it clicks. These other things just make sense to them, because then they understand. Mm, hmm,

Damon Pistulka 33:26
that’s a good point. That’s a good point. So what do you like the most about helping people do this?

Rich Hall 33:35
Um, man, we change lives, right? I mean that to me, is probably the biggest thing, yeah, is that they’ve got some kind of goal, some kind of dream, some kind of plans, and being able to affect that and them seeing the results. Man, it’s why I do what I do, yeah, is because I know I’m and it’s not just live for the business owner. It may be their couple, the owner and the spouse. It could be the entire kids, it could be the generations. It can be the other employees. And, man, remember we said earlier, 70% of the businesses that go to market don’t end up selling. Yep, imagine those families, the baby boomers that are, you know, they’ve worked their whole lives with the expectation, hey, I’m going to sell my business. That’s my retirement, and it doesn’t happen. So getting in front of that and helping make sure it does happen, that’s what gets me up. Man, I love it. That’s awesome.

Damon Pistulka 34:48
And I agree too. It’s just such a it’s such a great thing to be able to help people realize a result from their hard work. Yeah. Yes, because it’s, it is and it and it’s, it’s understandable when you, when you’re running a business, that you may not know about what the end looks like, in what an exit is, or a sale looks like, or even a transition to a succession with a family member to do what you need to do. But it really is in in the middle of your career, I think if you spent time figuring that out a little bit, you can, you can come out the other end a lot better.

Rich Hall 35:34
Yeah, people don’t know. Lot of owners and a lot of people in the market are in this sort of business, whether it’s buying and selling and advisory service, all that they don’t know that people like you and I exist, because today, what happens, you know, if an owner wakes up one day and says, You know what I you know, I’m thinking about doing something with my business. Alright, well, here’s the two scenarios that play out. Um, oh, Mister Hall, I heard you may be interested in selling your business. Man, I know this great whether it’s broker M and A investment banker, you know, my neighbor got 10 times X, okay, and it’s a very attractive story. And I’m not saying that these these people do a great job of what they do, but their job is to sell the business, and that’s how it’s compensated on it, versus somebody like you. And I said, Well, Mr. Business Owner, we really need to talk, because we need to understand a little bit more about what your goals are, how the business is performing, and to see whether it’ll sell at all, and if so, give you a pretty good idea where we sell at and if it works, fantastic. Let’s go. If it doesn’t, we got work to do. Which one of those sounds the best? The first, what’s best for the business owner and their families, the second, in most cases. So the delta between the two is, don’t wait to the last minute when you may have to sell your business because you’re exhausted and worn out. Plan far enough in the head. Educate yourself, have a conversation with people like you and I, and learn how all of this works, then you can take time and prepare. Right what’s the other thing happens? 50% of businesses close involuntarily, right? You remember, what are they? Divorce, yep, death, distress, death, you know, disagreement, yeah, whatever. Those things happen, you know, alright, somebody’s Yes, business owner died. Guess what happens to the business? You know, odds are pretty good. It goes to whoever is the spouse or is in the will of the business owner. Yeah, they know how to run a business. Boom goes under, versus doing things like we’re talking about. So the business is not so dependent on the owner, and it could run effectively. Lot of things you can do in advance, but if they don’t know they don’t know any better. Yep,

Damon Pistulka 38:09
and that’s where you said, getting educated about the process early of how to build that business that is going to be a valuable business at the end, rather than just an income generator for you, yeah? So that you can then they have choices in the way they exit.

Rich Hall 38:27
That’s exactly right. It’s their it’s their path forward, and they can make choices with educated, you know, information around them. So by by far the best way to do it, yeah, yeah, yeah. But it’s

Damon Pistulka 38:41
good how you put that together, because it’s not at the the first look of the two options. You may, you may think that at the that there is an easy path, but there’s very rarely an easy path to get in the business, get exited a business. Yeah,

Rich Hall 38:56
it’s people, don’t, you know, it’s, as you said earlier, when the process starts, you may think it’s taken forever, but when that final negotiation hits, very stressful. People just want it to be over with, but when it is, it’s amazing how the deal can change. It may not be in the seller’s best interest, yeah, just because all the thing risk aversion, things we talked about, but knowing it up front, being prepared, knowing what the value of the business is in a very close range, I know what I’ve got, so I’m willing to stand firm and work with the buyer, but you’re not going to come into here and tell me all the things that are wrong with it. I already know where we’re at. So yes, this deal huge,

Damon Pistulka 39:49
huge. You said we’re getting close to time, but I do have to bring that up, because when a buyer is armed with knowledge. For seller is armed with knowledge. They know where the warts are at, and they’ve worked on them, and they know where they’re still at, and they know and they’re comfortable with that, and their business is moving in the right direction. And they know that, that the difference in the whole process is remarkable, because, as you said, I can sell it to you today at the price we think it’s fair. Mm, hmm, or we can wait and I can sell it to somebody else, because I know what I’m doing. I’m only getting better.

Rich Hall 40:34
Amen brother, doesn’t that provide tremendous negotiating ability? Yes, it does, and it’d be great for the business owner to be in that chair when it happens. So you nailed it, man, I’m glad you said that. Well, rich, it was been

Damon Pistulka 40:50
incredible talking to you. And again, we’re talking with rich hall here, from the rich Hall group. And if someone wants to get a hold of you, Rich, what is the best way to do that.

Rich Hall 41:01
Hey, I tell you, hit my website, richall group, com, I’ve got emails, got ways to collect on LinkedIn, and I’ve also got documents out there on the process that we’re talking about. Yep, and that’s not only for business owners, but also for advisors that may work in the exit. You know,

Damon Pistulka 41:23
I’ve downloaded, looked at them. You’ve got some good quality downloads there for people, my friend and I, and I do it, advise people to take a look at the rich hallgroup.com website. Reach out to rich Hall if you want to talk with him yourself and get yourself as Rich said, and I agree with 100% get that education early. Know what you need to do to build a business that’s going to be valuable and provide you the income you want while you’re doing it, so that you can choose to exit the way you want.

Rich Hall 41:54
You’re the man. Thank you.

Damon Pistulka 41:55
Thanks for being here today, Rich. Thank you for listening today. We got someone that commented day. He said, awesome insight. Thank you so much. We couldn’t say your name, but I tell you what, we appreciate you if you came in late to the show. Go back to the beginning. Listen to what Rich was talking about. He was talking about some of the things that make deals go bad or not as good as they could. He talked about the importance of education and getting yourself ready and finding that team that’s going to help you get out the right way. Ahead of time, we will be back again next week, rich hang out and we’ll finish up offline.

Rich Hall 42:30
You got it? Thank you. Thank.