SUMMARY KEYWORDS
Scaling for sale, business value, exit planning, financial planning, business owners, wealth advisory, business growth, cash flow, business valuation, investment bankers, transaction process, estate planning, business transition, financial goals, business readiness.
SPEAKERS
Doug Greenberg, Damon Pistulka
Damon Pistulka 00:00
Awesome. Alright, everyone Welcome once again to the faces of business. I am your host, Damon Pistulka, and I am so excited because today we’ve got none other than Doug Greenberg from Pinnacle wealth advisory, today we’re going to be talking about scaling for the sale, and what we’re specifically going into is preparing your business to maximize the value at the exit. Doug, thanks for being here today. Thank
Doug Greenberg 00:38
you for having me. I look forward to sharing some good advice.
Damon Pistulka 00:41
Awesome, awesome. Well, we’re going to have some fun today. And like we always do on the show Doug, we want to start out with, how did you get into what you’re doing today? What really you know, was the the thing I said, Oh, I want to help people with wealth advisory.
Doug Greenberg 01:02
Boy, that’s a great question. Damon, I’m going to go back to when I was six years old and just start year by year. How’s that? There we go. No kidding aside, I was very fortunate to grow up in a regional family business here in Texas, we had 25 stores across the state. Were in the in the in the in the early 70s, doing about 50, 60 million a year in revenue and and my father and his brother ran the business, and I got to literally sit at my father’s knee and and learn business, learn how to help customers, how to help clients, how to make people happy, how to get the right thing to the right people, and and and, and to do it all with respect and kindness. And I then went through college, and did you know? Studied economics and finance and entrepreneurship and banking and I was always an entrepreneur. All through college, had a bunch of different ventures, got out of school and started working for a private company called EDS, and I, it took me six months of interviews, right? I had to wear a white shirt and a dark straight tie. I mean, it was that, you know, and I got the job, and I was, within a couple of months, bored stiff. And it was at that moment where I, like, one, working in a corporation is not for me. Yeah. And two, I wanted to use my economics and my entrepreneurship to do something I didn’t know what. So I had, I had flown to Oregon. I had about four or five job offers in Oregon, and I took the one with Merrill Lynch, because the the gentleman hiring me said, hey, if you’ll work like no one else will for the first couple years, you’ll look you’ll live like no one else can for the rest of your life. Yeah, and I don’t know if that’s a standard sales pitch or not, but it was effective, and I and I jumped in, and that was in 1994 and for the following 24 years, I grew a business helping both institutional clients as well as retail clients, and had an internal rate of return of something like 16% a year in terms of my asset growth, yeah, and I just loved it. I had a blast and was able to really, really achieve satisfaction by helping clients, whether they were business owners, politicians, whether they were kids in college, right? Just bear hugging them and being able to say, okay, at these milestones in life, raise your hand and come to me and let’s talk it through. And and so that business grew. And over time, I recognized that the institutional business was going to go away, given structural changes in the financial services industry, primarily because of what occurred in oh seven and oh eight and so I I reorganized My company focused strictly on individuals and business owners, and, to some extent, businesses. And now I solely work with entrepreneurs and business owners. And it is, it is, I mean, I get up every day. I’m excited. It’s probably like, you you get up and you’re excited. To help somebody?
Damon Pistulka 05:02
Yeah, it’s an awesome feeling to be able to do that. That’s for sure. That’s
Doug Greenberg 05:05
right. I mean, I had a phone call this morning with two gentlemen who have bought a piece of real estate. They’re looking for a private lender to cash out and then do some improvements and sell it. They don’t have any connectivity. I fired up some contacts, and later this afternoon, I’m going to be sending them four private lenders that they’re going to be able to start the process with, you know, to get the ball rolling and be alongside them as they go through that process, helping them with the things that I can, making sure that they’re getting everything done properly. Yeah? Because I want to succeed, and, you know, I want to be next to them.
Damon Pistulka 05:47
Yeah, that’s awesome. So as you’re talking to people about this, you’re standing alongside them. What are some of the things that you notice that are common that, people that are you talk about business owners, what are some of the common pitfalls you see that they’ve fallen into that, you know, conversations with you can really help them see that they’re there, that they didn’t know Were there.
Doug Greenberg 06:18
But that’s a great question, I find, and there’s no fault to the business owner. But having run businesses, we’ve run businesses that you, you know, you start your day and, and you’ve got a list of things you got to fix. You got a list of things that are problems, and then maybe you want to try to grow the business at the end of the day, right? But you got a lot of stuff in front and and so it’s getting that business owner just to open up those blinders a little bit so that they can have a different perspective. And that also helps in the conversation about getting them out of the position they’re in and get them up the org org chart so that they got someone here, doing the problems, managing the issues, so you could be more of a thinker, a grower, a connector, and, and, and, you know, business owners, that’s a new concept to them, because that’s not in their org chart, Right? There’s no one above them, yeah. So, you know that is that that right there, provides a lot of heavy lift in the beginning, because it sets the tone for this is where we’re going. Okay, yeah, so, so, so, so that’s a big lift. The other one, which, which kind of ties into what I do with business owners is, you know you you’re having that discovery conversation, and you know you’re talking about sports and your favorite teams, and where do you go to college, and where are you going on vacation, right? And then you get down to the business stuff, and you’re learning about the business. And then you throw out, hey, what do you think kind of a the value of your business is, and you probably have to say they’re like, I mean, I don’t know, is it 2x sales? I could do that math. And I’m like, so business owner does know the value of his business, and I think it’s important for that business owner to know the value of their asset. Now, it’s not for the perspective of, you know, I need a high valuation for my bank statements. It’s just more about a peace of mind. What am I running here? Is this a 2 million business, $2 million value, or is it a $20 million value? And clearly, we’re going to do things differently at different levels. So it’s, it’s getting them in that mindset of going, let’s figure out the value of your business, and many times, that’s going to uncover some of the things that they’re lacking. I was on the phone with with a current client. He has a he has a great business model. They’re growing. And with the discussion came up about whether or not he needs to raise some money to further the growth of the company, and so I asked him, I said, When do you need this money? And he goes, I don’t know. I said, let’s look at your cash flow. He says, Well, it’s in a work in progress. He says, it’s really hard to do. And I’m like, Okay, why? Yeah, so. So he gives me the downloads. Okay, I go, I go away, I I create the schematic of how you think about it. Flipped it back to him and said, We need a cash flow. So he came back two weeks later with a beautiful cash flow. I mean, detailed, fantastic. And I asked him the question, when do you need the cash? And he goes, July, like, Okay, we gotta start. We know we need cash in July. Yeah, so, so me asking him that question got us to push him on creating this cash flow statement, which, of course, we know he needs. He’s never run a business. This so he didn’t know the importance of it. And so getting getting him to be accountable for those projects is important for that business owner, because they could slide by the by the wayside. Once you got that value the business, it changes kind of who you talk to, you know, do you talk to business brokers? Do you talk to investment bankers? Right? So, whole different strata. So I think, I think that’s important. And I think the final piece that business owners tend to not know is, what are the constructs for them to exit their business? Is it a date in in the, you know, March 12? Is it we get certain sales? Is it the valuation? Because, because we know that when you look at that business cycle, you know, he’s going to be up here, he could be sliding down to, you know, to low sales or low valuation, you know, and then we pick it back up. So if he’s here and he’s like, I’m thinking of selling, I’m not sure, and then he’s like, I don’t want to sell. And it’s like, remember, you’re going to have some sort of a dip in your industry. You tell me what it looks like. If this is five years, we’re wait five years. If it’s seven, we wait seven for that high valuation. So it just allows them to recognize that just because they want to sell it today. It’s not like going and buying gum at 711 Yeah, we start at the peak of the market, and we’re going to be selling at the bottom of the market. Yeah? Because it takes time.
Damon Pistulka 11:46
Yeah, the timeline. There’s a couple things, and I’m glad you brought up value. I mean, because, because the, you know, in my experience, too, most business owners don’t have a clear value of their business, the actual value, the clear understanding of the value of their business, or what really drives the value of their business. Because you talk to a business owner that says, Hey, I got a 10 million business, and, like you said, they think it’s a multiple of revenue, but that’s a, I’m a general contracting business, and I make, I make, you know, 5% or 3% net, net at the end of the day, which, if I my math is right, that’s a few $100,000 on 10 million in revenue. That’s drastically different than a ten million business such as SaaS business. And I make 60% margins on my 10 million and that the but yet they go, they’ve seen something that says, Well, this business, maybe, in my industry, maybe not, got valued at 2x of revenue. And revenue, you know, is only one of the indicators of value, and my The reason not to dispute value, but the only reason to talk about value in the case that you run into is if I don’t have a good understanding of my value, and I don’t have a good understanding of the exit costs, I really don’t know when I exit how much money I’m going to have to do whatever is next in my life. So one of the big things that we talk with everybody about clients, non clients, I’ll spend a lot of time talking about this, because if that owner has not established a reasonable value for their business, and when I say a reasonable value, I said, don’t pay somebody a little money to go out and get a real valuation. Don’t try to do a free online thing. Don’t do that. Make sure they’ve done some things to really go through your business a bit to do it. Because the you know, if it’s a few 1000 bucks to get a reasonable valuation, or 5000 whatever it is, you will far exceed the value of that, because your decisions will change as soon as you know the value of your business and what changes the value of your business. Because the biggest mistake that I see in valuation is I think it’s two times that, 10 million and we come time, when I’m I’m ready and, and we go, Okay, I’m ready to exit. I want to sell it. I’m going to get $20 million it’s going to be great. Blah, blah, blah. And they come to that point and they realize, no, really, your business is worth about six or $700,000 and, and, I mean literally, these kind of things, these conversations happen. And not only is that a huge bummer, right? And that’s I’m understating it a lot, yeah, but they’ve massively, massively, massively missed the mark on what’s next for them in their life. And that’s, to me, is a bigger, bigger thing, and that’s why I think you. The in what you’re doing, helping them early, helping them, you know, understand that as an asset in their total quiver of what I’m going to use for my next phase in life, or what I have available to me in my next phase of life, is huge,
Doug Greenberg 15:16
well, and to that point, it’s probably, it’s been at least 20 years, you know, I came across that once and, and, I mean, we didn’t get very far, but I had that. I had that disappointment, you know, you know, the the emotional gamut is disappointment, anger, frustration. You know your numbers are wrong. I mean, you know, you know. And quite frankly, you know we want to add value to that. Business owners value, right there, there. Their lives are busy running a business, and as as you and I know it’s constant, so to eliminate that. So what I did is I created this process, and it’s two pronged. You come to me, you say, Hey, what’s up my business? Okay, okay, great. Let me dive into the financials. Let me talk to some people around the business to kind of triangulate some information. And then I’m sitting down with that business owner, and I am building a robust financial plan for that business owner, and I’m going to include, you know, evaluation on the business. I’ll probably do, you know, a low and a high, okay, and whether, whether he’s had a valuation study done, or I’ll go to a buddy and give him the numbers, and he’ll give me a rough draft, you know, and then I run that plan. Because what that plan tells me is, if I if I have a business, I sell the business, I net the business. I now have this much in assets, this much in assets is going to generate this much in cash flow. Business Owner, it’s two or 3x what you need. Feels this works. Stage one. We will then on a, on a kind of a rough, rough brush, rough draft, have some preliminary conversations with them around any sort of estate planning, business planning, tax planning, charitable planning, load that up into my my financial plan. Here’s the number, right? And the number is always better, because if we use some tax advantage stuff, it’s going to help, right? So then he goes, Okay, I got a range of value. It’s a range, right? We’ve got to stay in a range. I don’t want to be picking a number. We got a range of values at the end. And he’s like, Okay, I’m ready now, clearly all the other checks boxes have been checked, and we’ve done some things. At that point. What I’ll do is, I’ll take that business owner now I know pretty much. I know a lot about them because I’ve done a financial plan. So we spent a bunch of sessions together, but now it’s about creating a team around that business owner for a transaction. The first thing I say to a business owner is, is there anybody in your industry, a competitor, or someone you know really, really well, that might want to buy your business? Okay? So you know, if that’s the case, then we simply need to get a, you know, a transactions attorney, an M and A attorney to manage the transaction. We don’t need a banker, and that’s the way I like to start. Because it’s less expensive, it’s easier, we don’t go have to find anybody to buy it. If that doesn’t pan out, then I’m going to help the business owner go through a process of interviewing at least two, most, most of the times, three, a mid tier investment bankers that fit his industry. I want to find someone who buys and sells gas stations right all day long. I want the expert, and I’ll set up calls with the business owner and the expert, the banker. I will facilitate the call beyond the call, and as I share with with business owners, I said, so here’s how this works. Investment bankers, they want information about your business and industry. Okay, you we, we want information about the industry, what he’s seeing, who’s buying, who’s selling, and it’s and we just pass information. It also is educating that banker, even if we don’t pick them to run the transaction, that there’s a company. Here for sale. So if he’s got a buyer, he’s going to call us, I got a buyer. Because, remember, those investment bankers get paid when they do deals. So we, we narrow it down, we pick the investment banker, right? We have, you know, if we need a deal. CPA, if, we need to do any sort of, you know, you know, quality of earnings, or any sort of audit, you know, get everybody in place. And then I drop down to the CC line, finish working with the business owner on the financial plan, and the investment banker takes it right. And then I’m there seeing every email, because there’ll be a point in time when the business owner has a question and he wants to ask me, rather than the banker, yep, right. So now, you know, you know. Now we fast forward. You know, we won’t talk about the business transaction. Now we fast forward. We have found a buyer. We’re signing docs. We’ve traded, you know, you know, fed wire transfer numbers, and you know, the deal gets done a week later, the deal funds. And for the past three or four or five months, I’ve created a transition plan for the proceeds, and that plan, at least in the beginning, is typically going to do a few things to make that owner feel very comfortable. One, we’re going to set up a simple draft that goes an ACH draft that goes into his checking account on the first of every month, just like he was getting paid from the business, right? Boom, every month. Now it may be the right number, it may be too high, maybe too low, but we want to, you know, we want to let him know that we’re, you’re going to have all this money. It’s great, and this is how we’re going to, you know, pay it to you on a monthly basis, yeah, and by that time we he and I have have already completed the investment process. He knows where it’s going. He knows how it’s going to work, because I don’t want a business owner. It’s stressful enough around the sale, stressed about, oh, I got all this money in my in my checking account at the bank, wrong place to keep it, yeah. And what do I do? And, you know, all of that concern and that anxiety, we just put it to bed,
Damon Pistulka 22:36
yeah, yeah. So as you’re doing this, what are some of the realizations that you see your clients having,
Doug Greenberg 22:49
some of the realizations that they have come from disbelief that it’s finally going to occur? Yeah, I can imagine that, right? I mean, I mean you grind away for 10 or 15 years, you know, and in those and in your eight and nine and 10, you know, it doesn’t even matter what it’s worth, because you’re just grinding, Mm, hmm. And so, you know, it’s, it’s disbelief, it’s happiness, it’s joy and and in those moments, it it tends to be very easy to be able to have those conversations with them around, what is the ultimate purpose of this money? What is our goal? Is this a pot that that, that we want seven generations to be dipping out of. And, you know, in 700 years, is this a pot that you want run down to zero? You know, bounce the last check. How do we manage kids with a lot of money, sticky situation? So providing that business owner with some of that education around each of those little events, um, kind of brings them up to speed and puts that worry away. I think, I think some of the other things is, you know, is that, that they then, once they realize that, if I, you know, the value to this is x, if I sell it for x plus plus one, I’m going to have more money. I’m going to have charitable stuff set up. I’m going to have kids trust set up. And now, what am I going to do, live my life, right? So we spend a lot of time talking about what’s next? Yeah, right. Because, again, you know, they, in most cases, this is the first time that they’re selling a business. Yeah, and we’ve transacted, I mean, more than we can count. So helping them with that additional knowledge in a place that they’ve never been, they just. Just soak it up, right? And provides that calm level of of it just kind of big breath. Well,
Damon Pistulka 25:09
yeah, I mean, a lot of businesses actually don’t sell because the owners get to the end, they go, What am I going to do tomorrow if I don’t have to come here? I mean, it literally kills a lot of, you know, eight figure deals, because they just don’t, they’re like, Well, I, I don’t care about selling it today. I don’t need the money. I think it’s actually easier if you don’t really need the money, right? Because it’s like, Hey, I just want to keep coming here until I can’t anymore. Don’t feel like it. And, you know, that’s a, it’s a costly decision, but it’s a common a common one, and I’m glad that you brought up the fact that you need to spend time on what’s next, because you really need to make what’s next more impactful in its own way than growing your business was,
Doug Greenberg 26:01
well and, and, you know, the you know, as as that business owner has been growing that business, you know, and anticipating some sort of a transaction, as we’ve discussed, there’s a lot that they just don’t know because they haven’t encountered it. But I think the, you know, what I want to, what, what I try to, tend to focus on, you know, after we got the big heavy lifting done, is that softer stuff around money and kids? Yeah, right, you know, how do we not for lack of spoil or ruin? Yeah, you know, because, because, again, you know, look, I help, I help. You know, clients and client kids from age 21 you know, all the way up to 80, yeah, right. And they each have their different little and, and so just making sure that that we don’t create additional problems with, you know, a check of $100 million into someone’s account, yeah, yeah, right,
Damon Pistulka 27:08
yeah. Well, and it’s, it’s, you bring up a great point, because money education is, is very important for the business owners as you’re talking about what you’ll be doing, and then the education for their children, spouses, anyone else in their family that could receive a significant amount of money too. Because, you know, we’ve, we’ve all seen how lot of really winners, you know, turn up the next day with hundreds of millions of dollars. They usually end up not, not that great after a number of years. No, they don’t, no matter how much money, which is hard to believe, but it does happen, and it happens every day with business owners that build great businesses, sell it, and tend to set up their their next generation, only to find that they didn’t educate their next generation well enough to, you know, invest money, to spend and to invest it in things that are going to be good long term income generators for them. Because it just is, is it’s so common to see that if you don’t put that educational time in, that it they’ll be five years down the road. A lot of times, won’t have it,
Doug Greenberg 28:23
right? Well, and, and, you know, there’s always this conversation around, you know, business owners ask, well, when should I start getting ready to sell it? Well, how about 20 seconds ago?
Damon Pistulka 28:34
Yeah, yesterday. Yeah.
Doug Greenberg 28:38
And it’s funny, because, you know, we can get transactions done fast, if you have to. You know, it’s not fun, not always on a percent, but you can do it. But, you know, I will talk with those business owners right way early on. I mean, they may not even thinking about an exit right when, when I’m starting to sprinkle in right things about what they need to do with their business. For instance, you know, you know, I developed a checklist that I sent out to business owners, and it’s not inclusive, but it definitely helps you think about, Wow, do I have, do I have a facilities guide, a book that shows where all the switches are and the HVAC is, and you know, who are the HVAC contractors, right? Do I have, you know, do I have my customers set up properly? Do I have diversification, right? And so, so, so, you know all, I’ll go to launch with business owners, once a quarter, clients, and we’ll tackle this stuff. I’ll be like, hey, talk about your customers. Well, we’re working down from we had three big ones. Now we’re working down. We got 10, yep, right? And each along the way, looking to improve those client relationships as you start new ones, right? Same thing goes with with a. You know, on the accounting piece, right? I mean, you know, I’ll look to you for this, but you know, I would love to have whether it’s a quality of earnings or even heavier audits, you know, audit statements, so that we are golden. We don’t have to talk about financials note, so to speak, except the notes, right as a way to check that box and go, Hey, we’re clean, right? Yes. And there’s a whole list, right? Financial Systems, legal, you know, goes on, yeah,
Damon Pistulka 30:31
yeah, there, there are. And I think that when you when you talk about these things, you bring up a few good points and, and, first of all, importance of accuracy and third party checks in your data. When you get to, you know, you get even close to 10 million, you get above 10, you get above 20, you get above 50. I mean, you just get above a certain point. And you got to spend the money to get the right, the right checks on your your financials right, because it just and then if you’re going to do something in a high volume transactions, like an E commerce business, you got $20 million e commerce business, you better just plan on getting the quality of earnings, because it’s not going to go anywhere without it. And that means you’re also going to do a review and all that good stuff. Because, listen, those people, you got to think about what you would do on the other side, if you’re writing a check for for whatever it is, $15 million 20 million, $50 million you know, you don’t just do that because someone says, oh, yeah, these are the numbers. Yeah, right. They’re good. Look, go check. You don’t have to check them. Yeah, yeah. It’s all. It’s all. It adds up. One plus one equals two, right? And this, this is where you can run a large, large business if it doesn’t have significant debt or investors, without ever doing an audit or a financial review, right? But when you come to a sale, you’re dead in the water if you don’t want to do that, in some cases and in a lot of cases, it just it’s the difference between doing it or not. And these kind of things are where you really have to step back and talk with someone like yourself, someone that understands the business transactions that goes Listen, I know you don’t care about how much market share you have in your market, but the buyer certainly will. And if you’re at 90% that’s that’s a big that’s a big thing, because they want growth. It’s the same thing you said customers had this a few years ago. Oilfield services company, almost 90% of their company revenue was from one, one customer. Wow, now, great. Multiple eight figure business, right? Wonderful, long term relationships, clients couldn’t sell. It couldn’t sell. Have to go back to the drawing board. You have to work on that. You have to make those things you said, they’re just some things that when you step back, I you don’t have the buyer does not have 1015, years to get used to this, get the risk profile, talk to their investors, and go, Okay, we’ve been at this long enough. We’re all I’m comfortable with with Susan. I’ve been doing business with her for a decade. She’s going to keep doing business. Her business is strong. They don’t have that. They have, you know, buyers are going to buy something that’s, you know, above, just say, $5 million they’re typically, they’re going to be investment buyers. Listen, they’re spending other people’s money. They have to know. They’re making a good decision. They don’t know about your business. They have to get up to speed to spend that money in about 90 days. Yeah, all the way from all things. They’re going to negotiate a letter of intent. Then they get to do their diligence. That diligence period of, just say, 60 to 90 days, whatever it is, is their time to get comfortable with spending the the millions of dollars. So when you back up and stand back, a business owner stands back in that, think about what you would need to make that to make that same kind of investment in your business, and you’re in the industry, you would be wanting that kind of stuff too. Because if, if Damon and Doug weren’t that good at accounting, and we did a little flip on the numbers somehow, and it didn’t show up quite right,
Doug Greenberg 34:31
I could not find out for 568, months.
Damon Pistulka 34:34
Yeah, yeah. And you know, it could be that we’ve made a million, multiple millions, 10s of million dollar blunder, right? And that that costs a lot and that it’s so I think putting yourself my whole long diatribe there, is putting yourself in the position of the buyer, talking to someone like yourself that really understands my holistic financial picture. Hmm, that can say, Listen, Steve or Susan, we’ve looked at the value your business that looks reasonable. Your portfolio comes together like this. You know you’re going to be fine. It’s going to set your family up. Your philanthropic desires are going to work like you want. It’s a good thing and let and then they have that comfort. And then you say, and by the way, we want to make sure that our buyers are comfortable by getting the right people to help us eliminate any questions Yes, and get it to the end easier. Because I’ll tell you that in my experience, there’s nothing more disheartening for someone that’s trying to sell a business to get to the to the 20 yard line, you’re in the red zone where I like to play when we’re doing it, yep, and and not score. And it’s because you didn’t do that, because you didn’t address customers, because you didn’t address your your financial, you know, whatever it is, because it is the work to get there is massive, and missing that little incremental piece that you should have Taken back months ago causes a tremendous difference in that in that point. And I really what you’re doing to help people put this all together, put it into a plan, go through the stages and do this is wonderful, and
Doug Greenberg 36:34
it’s a blast, and it’s a blast. You know, you brought up two things that I want to touch on when you are selling a business and you anticipate Lois coming in, it is critical to do planning, estate planning and business planning prior to the receipt or signing of the LOI. Oh, yeah. Now, now I say this, and you’re like, Well, of course, of course, right? But, but the minute that loi gets signed, it’s like, there’s a wall built and everything back here you can’t mess with you can only do stuff on the go forward, yeah, yeah. And, and there’s a lot of great stuff you can do before the owner has the LOI in his hand. Yes. The other thing I’ll point out, which I think that again, business owners get focused on the checklist of things they gotta, gotta fix or make sure, is right. You know, the value of of the future, value of of any business is what, what kind of Rev are they going to do in the future? How are they going to grow that Rev? And so if you’ve got a business that is doing well, and you’ve got another 10 strategies that you would be like, Man, if I was here, I’d implement, putting those in to that presentation and showing the effects of that future opportunity. Shows a couple of things, one that there’s additional value in the business on the go forward, but that this is a even more viable business because I got these 10, whatever it is, 10, you know, initiatives that I’m going to hop on, because the previous owner wanted to, but just ran out of time. And it’ll add value, you know. And so being able to to show that, you know, obviously increases the value of the business. Yeah,
Damon Pistulka 38:40
yeah. And when we do, when we do that, we we usually want to have a one, three and five year plan. And the the one year plan you’re currently executing, where you’re going to go, and if it’s if it’s only going to if your growth initiative is really going to keep going beyond the one year plan, it can fold into the three year but usually the three year plan switches from one of the your growth strategies into the second growth strategy, which by the time you start to sell your business, you should really be working on implementing the second growth strategy at the ground based level, because if you don’t, it’s all pie in the sky, and That’s the a lot of it’s a trap of business owners, because you can sit there and say, Ah, these are great opportunities, and tell a buyer that, and they’re like, Well, if it was so great, why didn’t you do it? And so you really need to think about the fact that you know something that’s started down the road is way more valuable that’s something that’s resting in your head. Because all of us know how much difference from your head to actually doing it is that are in business, and this is a great thing, though, that you hit on a really, really important thing to maximize that that last real desirable trait in your business is to you. To put that buyer in a position where they’re going to succeed really well over the next three to five years.
Doug Greenberg 40:09
And I think, and you know, being in Austin, this business community is phenomenal. And you know, I’d love to have you come down and spend some time in here and meet some people, but it’s a really cool community. It’s very encompassing. And, you know, it would not be unheard of right to have those advisors, you know, selling the business, the buyer, and then having, you know, the the big pow wow of the previous owner, with the new owner and the advisors talking about the business and how, you know, now the deal’s done. I got my cash. Yeah. Now let’s talk about, right, all this stuff, right? That that I see out there, right? Because it’s going to help them. And we want to help people, right? We want to help people at the end of the day,
Damon Pistulka 41:05
yeah, you know? Yeah. So you brought you, and I want to make sure you had something, a slide or two, that you wanted to go over. I want to make sure, if we haven’t covered the stuff in the slide, let’s get it up on the screen, because when you’re ready to go, let me know. I’ll put it up,
Doug Greenberg 41:19
pop it up there, because I think it’s great. It’s great timing. Well, it’s not that, oh, I know what happened. Or let’s pull that down all right, and now pull it right. There we go. We got oh, there we go. So, you know, one of the things that’s difficult for business owners high net worth individuals, is to know who to call when, right? And and I have structured my business over the last 30 years to to be the consigliere, to be that point person that when that business owner you know, receives a phone call from, from from someone that wants to buy them, right, the first calls to me, right? So we can think about it. So I put myself in that position because it allows me to kind of manage the team. So it’s a, it’s a football analogy. You know that owner is, I mean, the the clients the team owner, right? And I am the general manager, and then below me are investments attorneys, CPAs, investment ideas and so, you know, we’re working with them as a way to manage this process, so that the team owner has one mouth that goes through that they trust to help understand how all of these opportunities fit into their risk profile, right? And so, you know, it’s always difficult for me. You know, when someone says, Well, when should I call you? And I’m like, Well, if you got a question about something that’s got $1 sign in front of it, just call, yeah, there you go. I mean, because, I mean, that’s, you know, I mean, if you can handle, you know, you know, the the car loan, and you don’t want to check car loan rates, you’re good. I’ve had people call me up. I’m buying a car. Can you get me a better rate than there? Of course, you know. So we’re always want to be there. But these are, you know, kind of the five big ones. You know, you have liquidity events, selling a business, getting an inheritance, you know, getting a big deal done. You know, you got those life transitions, which are, you know, more more human ish, with the retirements and divorces and and death. You know, you know big milestones. You know kids getting that big chunk of inheritance at 40. You know, when it finally coming through and and a lot of that also comes into play with folks who are, I’ve got this money, but who am I, and what am I? And what are this for? What’s this for help me set goals around the use of this. Help me set goals around being a good steward of of these funds, wherever they came from. And then, of course, you know the most fun is, is helping business owners get their businesses ready and selling them right. Because that’s the most fun, because you can make such a difference in that business owner’s life? Yes, it blows away if you’ll hit that, if you’ll go to the next or maybe I did, so you gotta go the next slide. Yeah. So I’ll tell you a quick story. Real quick story. A guy runs a machine shop. This is, this is an Oregon he runs machine shop. He’s always thinking about selling it, right? But it’s not going to get much and he’s not doing much revenue, but it’s a place for him to go to. And so I gather all his info. I do my financial planning. I bring the husband and the wife in to talk to them both, okay, standard, and I start sharing with them that you know you could if you want retire right now. I. So you can, you can toss the keys of the shop to the next guy down, and if you got zero out of the shop and your inventory, you can still retire. And this is the deal. And the wife looks at him and goes, I mean, I kid you not. What did you do? Like accusing him of doing something wrong so they can retire. And she starts to cry, and he looks at her and is like, I don’t know, right? Yeah. And it’s just like, I just, I just smiled so big. And here’s what it did, here’s what it did. It allowed them, that business owner then was able to do like this and like this, and that business was able to make the decision that says, here’s what I’m going to do, I’m going to work a little less, I’m going to hunt a little more, because that’s what he liked. And they ended up buying a small lake house outside of Seattle that they are going to with the grandkids. So, you know, just the conversation about, I mean, it just all starts from that beginning, right? They had no idea of the capabilities and how they could lead their life because they hadn’t done any sort of analysis, yeah, or sat with a professional who could, who could, you know, decipher it for them. And that, to me, is, that, to me is, you know, it’s just killer. That’s
Damon Pistulka 46:23
awesome. That’s awesome. Well, Doug, it was great having you here today. And I just appreciate you stopping by and talking to us about, talking with us about, you know, the financial planning aspects, some of the consideration these business owners really want to look at when they go to prepare their business for sale, to get more money and really achieve their goals in that so if people want to reach out to you, what’s the what’s the best way? We had your we had your QR code, your links up there, can they reach out to you on LinkedIn? What’s your website address. Give me that stuff. Yep,
Doug Greenberg 47:01
the website address is Doug at p, n, w, advisory.com, okay, pretty simple, my and that, and that gets you everywhere. I’m on LinkedIn as well. Doug Greenberg, the name of the company is Pinnacle wealth advisory, and we gotta get you down to Austin. Damon, I mean, there’s some good food, some good music, some good people. Yeah,
Damon Pistulka 47:27
there is, there is, that’s for sure. Well, Doug, thanks for being here today. And uzman, thanks for dropping a couple comments in there. Appreciate you stopping by and all the, all the people that were listening, but you didn’t comment, I appreciate you. Well, I can see you. We’ve had some people on here today, and appreciate you listening and sharing your time with us today. If you got in late, go back to the beginning. Start over and listen to Doug, because he left some golden nuggets for business owners to help to really think differently about their exit. Plan better for it and really maximize that value going out the door. Doug, hang out for a moment. We’ll finish up offline. Thank
Doug Greenberg 48:08
you, sir. Thank you, everybody. Bye.
