The Quiet Light Podcast

What are the different aspects needed to grow a sustainable business that is transferable and valuable? Today's episode is all about planning a successful strategic exit plan when selling your business. Whether it be online, offline, or hybrid, how you lay the foundation for your business is the key to a smooth transaction even before you start the process of selling. We are talking with Ryan Tansom, a fellow podcaster, consultant, and successful business seller all about how he turned his sale into a springboard for helping others accomplish a great exit.

Episode Highlights:

• How a strategic exit compare to a financial exit.
• Figure out how to align growth strategy with exit strategy in order to get what you want out of the deal while taking into account the financials, the company culture, and the potential legacy involved.
• When an offer comes to the table it is important to weigh all the variables.
• Think about any way that the buyer can do to add to his profitability. Show them all the things the things they can do and package it up for them.
• Network early and often with people who align their motives with yours.
• Make sure you know what the buyer's business continuity goals are. From knowing their goals you can come up with ways to fill their strategic plan.
• Understand the industry on both sides of the transaction so that you can design how the business can look for a strategic exit.
• Prepare early for the sale of a business so you don't get any nasty surprises during due diligence or negotiation.
• Ryan lays out the framework of a strategic sale.
• When strategic exits work and when they don't.

Mark: Joe, how are you?

Joe: I'm good, feeling old and tired but pretty good how about you?

Mark: You are old and tired and I'm catching up quickly.

Joe: But I'm not cold it's 63 in North Carolina today and you going to get snow this weekend right?

Mark: Stop it, Stop it, by the time this episode airs it's going to be a beautiful year and I will no longer be recording episodes, I'll be outside enjoying it.

Joe: Yes. I mean 36.

Mark: Something like that, alright when we talks to people that want to sell their business, pretty common scenario, they're looking for a strategic exit or maybe they'll say, you know, we go to the whole valuation process and then they come back and then say "I've got a couple of companies of mine that might be really good fits to acquire the business right?" Nothing about strategic. I'm sure you get the pretty often on your side.

Joe: Sure. Yes.

Mark: Yeah, right. So strategic, how do you actually do them? Are they worth it? Do we actually get more money from them? That is the subject of today's interview. I sat down with Ryan Tansom. Ryan has his own podcast which we talk about a little bit, but he's got a really cool story, he and his dad were in business together in a traditional offline business. They are selling copiers and had all sorts of contracts there. And they went to the process of merging that company with another one. They first try to sell the company, and found out how difficult it was, then they spent some time retooling in and really planning their exit, and after they've retooled and planned their exit they were able to do a deal in just a few weeks. So his whole thing right now is to help people plan their exit and build value on the business at the same time, but I wanted to talk to him about how do you plan an exit if you want to do a strategic sale? Does that make sense? That you actually get more money from it and what are the chances that's going to happen? This is a fascinating conversation.

Joe: Good. One thing that most people don't do, and that's plan their exit. They usually just wake up one day and decide, "I'm tired I want to sell the business I'm ready to move on, So you know I've talk to Ryan a number of times and I think He's life experience, what he went through with his business with his father trying to sell finding, it was difficult and then actually putting a plan together and deciding, when he executed that plan and he'd sold the business very quickly and I think to a strategic buyer. He learned a lot and he's sharing that with people now. So It's nice that he's got the first hand experience in the sharing with people and I think he does a really good job at it.

Mark: Yeah, and so in this we're going to talk about what do you need to do to get strategic exit setup and not surprisingly, it's a lot of the same stuff you have to do if you're going to have a financial exit or a regular market type sale. Just take a little more upfront work and we talk about the chances of it actually happening. I also talk about how that it's not always the best thing. The very first business I sold went itself to a strategic exit. We ended going to a financial buyer because they actually got more money from it so we talk little about that as well. Well we get on into it because it's a lot good mini topics in this episode.

Joe: Let's do it.

Mark: Ryan, hey how are you?

Ryan: Good Mark, how are you doing?

Mark: Thanks for joining me. It's been a while since you and I met, well I think we're just talking about this a year and a half ago or something like at Caribou Coffee here in the Twin cities. Yeah you're local to me which I like.

Ryan: I know we're local yet we're sitting here on video right?

Mark: We should've done the very first podcast with [inaudible 0:03:58] and where he would have be like saddled up right next to me. Alright cool, well on our podcast we like to better a guest introduce him selves, probably because we're really lazy and don't like to do the upfront research but also because guest do a better job at introducing themselves. So could you introduce yourself a little bit to our listeners? What is your story, what's your background and why are we talking.

Ryan: Yeah, I appreciate it, I'm glad to be on the show I'm usually the one doing the interviewing so this is actually a lot of fun. So Ryan Tansom, my Dad and I had a family business kind of a little bit of backdrop back in 2014 we end up selling it. He grew it from the ground up, bought a semi [inaudible 0:04:32] of copiers in the mid 90's and ended up growing a very substantial business that I think we've topped for about 20 million and a hundred employees, and I joined the firm full time in financial crisis, and it was pretty much lot of all hands on deck for the seven years I was there. It was.. We realized that company was not sellable because there's a private equity firm that was buying out platform companies in each marketplace, and we have the opportunity of potential to be one of those, and they passed on us so we spent pretty much in next 6 years, 7 years going. Okay what do we need to do to build a sellable business that either I buy it or we sell it to someone else we didn't really know what were options so we just roll up our sleeves and did a bunch of stuff. Build out the outsource, the IT. Remarketed ourselves, did a bunch of stuff, and then in 2014 ended up selling it to a local competitor here which the sale went very well financially, but we left a lot of money in the table from a lack of tax planning and some other deal structure that things we could done creatively, and then also we found out a strategic sale like that that there's a lot of redundancies, so I ended up having to fire a lot of my good friends, and family and the employees, so since then I've been in a mission to figure out how do you align your grow strategy with your exit strategies so that you will get what you want, regardless whether it's financial or you know, anything associated with your business that you know, whether it's legacy or culture, and stuff like that. Hopefully I sent too much but it's definitely the backdrop of why I'm doing what I'm doing.

Mark: Alright so there's a lot that we can unpack here and we're going to have try to pick a branch and go with it, because I think there's a lot that we can unpack here. Business that you and your dad sold, this is more of a traditional offline business right? copier sales?

Ryan: Yeah, where on we have15 sales representatives that were knocking on the doors and I wish we would have done something that would have been a hybrid, and we would have probably gone that direction, had we, continue grow on the business, but I think, you know, every offline businesses, which is what we were, has the opportunity to have the hybrid online stuff that a lot of that community that you're involved and I'm involved you know.

Mark: Yeah, I think a lot of the online community is moving towards this more traditional business model, at least in the E-Com Space and you've seen it all. So in the and largest as company, because they do develop our staffs and in onboarding, customer service and all that. So similar to your stuff.. So I guess, let's talk first about the fact that you left money on the table, with your.. You spent six years trying to hammer the business industry, I think there's a discussion in there on it's own, like, how do you line your crawl strategies and your business strategies with an extra strategy, but I like to know a little more about the money on the table. A lot of times when we say people leave money on the table, that's because they have maximized the sale price of their business, but were there other areas where you've guys felt that you left money on the table?

Ryan: You know, I think yeah, there's a lot of different variables in this, and you know, I've got a Podcast too. I've interviewed lots of entrepreneurs that have soul and I've tried to unpack this exact topic as well and there's the "Hey there's a price so I might want to give you 2 million dollars for your business" it doesn't mean that you're getting 2 million bucks because you're paying taxes, so there's the whole deal structure whether it's asset sales or stock sales, or how the deal structured from earn outs, from an SBA loan financing, whatever it is, you know, when someone starts courting you, whatever dollar amount is thrown out, there's a lot after the fact than what actually comes in your bank account. So whether that's a tax planning, the deal structure, you know, escrow all that kind of stuff, and then there's the maximize the value of the business, so there's kind of, two different key components to it.

Mark: Yeah and I think, just by way of example, within online businesses, say that your [inaudible 0:08:10] corp, and somebody wants to buy your business for 5 million dollars. Great, and they're getting an SBA loan and everything looks good, but then you get to it and at the end of your purchase agreement there's this asset allocation agreement that's to how is this been allocated tax wise, and the buyer says "Well, we want to pay, out of 5 million, we want 1 million to be your salary for the next 2 years for consulting, that's part of the purchase price" well now that comes at ordinary income tax, cruise up your whole tax, percent tax situation..

Ryan: Because you know [inaudible 0:08:41]?

Mark: Yeah, how much are you getting from that point, and you're from, for buyers trying to relegate towards income, makes sense because they can learn it off in a way, because they were going towards assets, it's a long period of times that they can make that of. So, there's a lot of, like you said there's a lot more complexities there, in terms of the deal structure. So let's talk about maximizing the value, the dollar amount. Did you feel like you guys left some money on the table with that?

Ryan: No, actually we did as much as we could of, because our business naturally.. I got it appearing to what is the, honestly the best kind of business because we had contracts, that were locked in with reoccurring revenue, backed by bank financing, we've bundled them with maintenance, so like, if you want to buy, manage IT services with.. You know, bundle them with servers, firewalls, maintenance, copiers. I mean you'd be bundled in finances and then, it'll be 60 months typically and it'll be in.. It's as good as a mortgage, so when you're looking at what we did and what our industry.. It wasn't something that we were like geniuses or anything, either the whole industry, I've been gone that way and I think the whole industry was built of greedy sales people. In reality it was good as mortgages because you can't cancel. So, it didn't really matter when you think about a strategic sale like that, the relationships of the sales people, the admin, all the infrastructure was redundant. Because we can literally just take a bunch of paperwork and give it to someone else. And so what you're mitigating less on the sale on like the, EBITDA, multiples, because the cash flow is not the situation, it is your Han dinging over contracts. So I don't think there's anything we could have particularly done on that aspect to maximize the sale of the business, but the industry itself taught me, what, "we got lucky, is pretty much what it came to" versus "we could always use other business, where it might be, a 50 million dollar consulting company and there's nothing to sell besides a bunch of people". So, I realized, after the facts that we got lucky and there's a lot of other ways to maximize the value of the business from the strategic operational side of it. And then it comes down to, we sold a couple of branches prior to selling the corporate headquarters, so the first time we sold our branch we got about half the price because we didn't have preliminary due diligence done, they didn't trust us, we couldn't get the right documents and all these different things so there was technical stuff on that aspect that we, by that time we ended up selling, we knew what questions are coming at us and why.

Mark: How did that impact the price the second time around?

Ryan: Second time around when we ended up settled… I mean we closed in 2 weeks.

Mark: I know how.

Ryan: Very substantial sale so average closing is, either we talk in months and months and months, either because, we came there with a package and said this is exactly what we have, here's our profitability, here's where every single dime goes in and out of the business, here's why, here's our, I mean employee contracts, customer contracts, lender contracts. I mean everything was just ready, versus the first time and we knew it was like, we're bumbling idiots. Didn't have any clue what they're asking and why.

Mark: Yeah, we've created a very simple paradigm at Quiet Light Brokerage that we call the 4 pillars of value and that is, look at the risk of your business, the growth opportunities, how transferable it is and the last one would be in documentation. Now I think sometimes people take that documentation that light as to.. Well, it may not really make that much of a difference on the value of the business, it's just going to make it easier, actually makes a difference in the value of the business too.

Ryan: 100% yup, I got people that I know, that I've interviewed and talked to, where their value actually went up by 30% because.. But with a click of a button, especially by drop box these days and software where you can, "Hey here's everything" A – you can get more buyers at the table quickly, if you can do that instead of having threads through all these documents, but, you end up as the seller end up guiding the process more than the buyers. Because in the marketplace 90.. No, plus % the time the buyers are coming in there and they're going to find every reason to discount that companies so they can make in return.

Mark: Right! and on top of that it's risk right? So a buyer takes a little good in business with poor documentation, and they don't know what they don't know. And so they see that as being risky and they will discount an account for that risk as well on the purchase price, and you don't have your stuff together, you can't defend against it. Alright let's talk about strategic sales. Because you guys did a strategic sales and this is something that I find a lot of questions on. First let's talk about what was the difference between a strategic and a marketplace sale in your realm.

Ryan: So it's my world it's every world right? So a strategic sale realm, let's start with the financial sale. The financial sale whether it's an ecommerce business or if it's a traditional business or whatever it is, someone's looking for a cash flow. What's transferable cash flow? So if I want to buy Quiet Light, if you guys are dropping a half a million bucks to the bottom line or whatever it is, I want to.. How transferable is that? So that's where the multiple EBITDA comes from. So, if I can buy that chas flow without having any risk that it's going to decline, and you apply a multiple which is how many years, what's my rate of return that I want, 3 years, 5 years, whatever it is, and the more transferable that is the higher the multiple goes up. So, I mean someone that's looking for cash flow as a lifestyle buyer, a private equity buyer, I would say that there's also strategic financial buyers which is someone that understands MNH extremely well and knows how to do this, that's kind of like a hybrid. So they're looking for cash flow and they're applying a rate of return based on the risk of the business and the asset. Then you and this strategic sale which I think is one of the funniest ones because every business owner, every entrepreneur that I sit down in front of, or I talk to, you know your business, you're intrigued better than anybody else out there, right? So you know who you'd partner with, where they collaborations with you, all these different things, and I don't want to say the multiples even they go out the window, but it's more of how fast, in terms of, if thinking of rate of return from 3 years to 5 years, or wherever the buying might be, and the rate of return is, how fast can we pay for that? So regardless of the EBITDA, now you're saying "okay well, are there complimentary products and services? Is there a cross pollination between customer list" Is there horizontal ways, there are vertical ways you guys can expand, and if you can think about everything in the terms of the buyer, the strategic buyer and what they would do with your business, you can literally model it out for them, how fast they can pay you for your company.

Mark: Yeah, so this is great. I want to talk about this because we get this question, wow goodness, probably one out of every four or five people that contact us to sell. One of the very first things that they say is "Well I have a few companies of mine that might be a good fit for us" and they're thinking it in terms of that like strategic sale, they think it's going to be much more valuable to them and there is some truth to this the webhosting industry it's a classic example, webhosting, at the very first I sold working with Quiet Light Brokerage, first started Quiet Light Brokerage was a webhosting company, and webhosting company has a tons of roles because it has a bunch of user accounts that is on our servers and it's very easy to migrate that user accounts over to another server, keep the packages the same as really just paste and transfer it **** sometime **** and a monthly contract so it's really really easy without transfer overall stuffs, so like you said all of the expense profile of those companies you do really care about that because if I me acquiring a company I already have those expense profiles. I know what to cost me to host for 500 clients, so it will become a client count. Now when you're talking about strategic sale, like I said, there is not only to redundancies which you dea'lt with, first hand, it sound like, in your sale redundancies where you have multiple sales people doing the same thing so you a lots of people go, but there is also the synergies of my crop up with one company that is a name in an industry right?

Ryan: Right! And there's [inaudible 0:16:28]for us, it was, that we didn't sell telecom. It was the one thing in outsource, the IT in office technology that we didn't do, since okay, we got, you know, 2 or 3 thousand accounts, how many people can you sell telecom to? A lot, probably. So that is not guarantee in profit that they're going to make, but it makes a deal look better, you know, then you can make some basic assumptions or something like that, and then you know, cash or order discount on suppliers. We weren't taking advantage of that. So we start to think about any way. Going to that buyer and saying, here's all of the things that you can literally get packaging up for them, and you know, I think there's some people that you and I know in Rhodium, and why see that, the reason that they start on their family to start in the retail, wedding industry, they got online… well, weddings usually don't have repeat customers, you know there are couple every now and then.

Mark: Hopefully not.

Ryan: I usually do subscription services so, what are different ways that they can expand their products and services, because they have a crazy amount of volume that come through their doors every single year. Because they got a very good foothold in Minnesota here, but so it's their robes, it's their jewelry, it's there. Other things that they can sell them and they know the volume of their customers, so you know, yeah there's the sale or the purchase price and the profit but they're more looking at do I build it or I buy it? So they know how long it's going to take the opportunity cost of how long it's going to take to build it, screwing things up, all that kind of stuff.

Mark: Right, alright so let's talk about how you would.. Let's say, we have a listener out there, they own a business and they're thinking, "I've really like a strategic sale just because my business is unique enough I think there will be enough benefit for maybe 3 or 4 companies that are sort of [inaudible 0:18:03]my industry. How would they want to go about preparing their business and thinking about that exit, a potential strategic sale.

Ryan: That is a good question and I think you know this whole conundrum of exit planning and grow planning.. I believe that if entrepreneurs are running the business the way that they should and working on the business not in the business, and treating their business like an actual investment, then it is like, where are all the different options that I can sell to whenever and how fast can I [inaudible 0:18:29] so it's being ready no matter what. If you are in love and addicted to a girl then you're having a blast, great! But always be ready for industries that change, Google changes their algorithm, Facebook gets kind of a little bit a heat like they are right now, always preparing yourselves so that, the first and foremost is the due diligence, your docs, and knowing, and really cleaning up your financials because, if you can answer any kind of questions that even your friend would ask, the buyer is gone just, completely slam you down. So getting your house in order, the financials, and the due diligence is one thing, but then, thinking about, "Okay so these are going to be.. These five companies are companies that i can eventually sell to" Who are they and what, why and how will your decisions in the business affect where you're going. So for example if one of the companies is running and you know, he is an Amazon merchant or something or someone is running on Shopify, don't go build out a Magento, you know, spend 300 grand in Magento if someone that you're going to sell it to is doing Shopify. I mean, that's the same thing that we did. We spent 300 grand on an ERP's because 85% of the people on our industry had it. That's why we could close in 2 weeks. Knowing how you are spending the money and why in relationship to where you're going to sell, and again, so if you think about, if your service has complimentary service to just someone else. Don't go spent a bunch of money building out something that they have. Because you are not going to get a return so you're going to spend, your immediate cash flow, but then you're not going to get the attitude because they don't seem [inaudible 0:19:58] I think it's aligning where want to go and why and then also that strategic decisions that you are doing in between there.

Mark: Yeah, alright I want actually bring a really basic level here, because the thing is important point to make special more talking about strategic sales. I think people get with the financial market sale where you take a look at the profitability of the company and you have Joe blow buyer come in who really isn't related to the industry. We all know that he wants to get return on that investment after 3 or 4 years, you'd see that investment come back in so it's pretty easy to apply a multiple. Sometimes when we're talking about strategic sales people come and go crazy and they start thinking, well, look at all the upside potential that is going to come about from this and so they start lowering their valuation expectations through the roof because sometimes strategic do get really high relative valuations of this realm to the financials, that said, I'm going to make a very basic statement here and I'm sure you'd agree. Strategic still need to see an ROI, right? They still need to see a return of investment. Yeah so, what you're saying is when you're building out your company, when you're really planning that exit and working on the company, think about the ROI that the potential buyer is going to have and don't build something that's going to super expensive for them to migrate it over, right?

Ryan: Right and it's like, so how we went about it is, I want to know this business, I want to know why they should buy this business more than anybody else. So like, I want to know everything about their business, I want to know exactly what their marketing strategy is, what their profitability strategy is, I want to know their strategy just as well as they do, whether you can or not. Because then you can show exactly how you fill their strategic plan, based on what they're buying.

Mark: Right, so let's talk about modeling a little bit. When you're talking about strategic sale in your case with your dad in your business, [inaudible 0:21:41] done in season staff and so, when you're looking at presenting the financial picture to potential acquiring company, how did you go about that? How did you pitch it as far as the ROI?

Ryan: So, I had like literally our entire.. I mean we have cash list statement and we learned a lot first time, right? So I knew every single penny that went in our business and why, so we did some serious cash flow modeling so we had our whole P&L, and then we had the forecast of what was going on to the sales and the cost of goods, our profitability, and I hacked a bunch of stuff through it, and I said okay, and I buy GL code Mark..

Mark: Wow

Ryan: We did a.. Yeah, I know. Because there's the, in the financial buy, there's the add backs, right? So, a hundred grand might be 300 grand on the value, whether it's being added to the value or not. So, usually in the financial buys, you want to take that off to increase your EBITDA, so that way it's applied to the multiple. But in this system the same thing were [inaudible 0:22:41] you don't need these people, you don't need these servers, you don't need these things because you already have them. So, that is all dropping to the bottom line which will then help them calculate the ROI's so, we just looked on them and say okay, here's how much of the expenses you can take out of this, with these assumptions and then move back and forth, you said, what we actually need these people, we need these things, and then you're just negotiating back and forth but it was not more in the add backs, it's more of understanding the redundancies and the strategic value behind this. So it's a similar exercise but, you know, and now comes actually kind of the same but it's more specifically to operations.

Mark: Well on the key pieces I think, needs to be understood is you need to understand the industry and the business itself. We work for the financial, forex leads site, this was several years ago. And they were getting lots of leads that they were selling and they wanted to arrange a strategic sale to a forex broker. Because they knew that they were jittering these leads and so that the equation really became okay. We know how much we're getting paid out on their [inaudible 0:23:43] basis for these leads. But as a forex broker, here's where the dollar amount for the valid leads are, and now we can start modeling our what does this look like, how much revenue is this site really making, from a forex broker's standpoint and then the other value proposition there.

Ryan: Yeah it's literally of about knowing both of the businesses and the industry as well as you possibly can. So you can just design exactly how it looks. And then you backing up numbers, you know, I'm just kind of making some other things up but like, you and I have talked and I think that was when you were on my show, we're talking about the hybrid of the online versus offline and so, if someone has literally the best data ever on their drip marketing, their automation in their online marketing and knows exactly the entire cost of acquisition of one wheel, and whether it's Facebook ads or Google ads, all of what the email mark and you say "here's how much all this stuff cost," they can go in and if you're going to [inaudible 0:24:38] and sink that up with an offline business, like there's some huge power there because you know that they're not doing that potentially. So you can, there's just so many different ways to design that I guess. That's kind of the fun part.

Mark: Yeah and the nice thing about strategic is that there's really, you have the ability to blow a traditional valuation out of the water, right? That's one of the big advantages. Transitions can also be a little bit easier because they already know the industry and so you don't run saying "here's how you do this little process that you should probably know anyways" it's a little easier to transition. When I talk to people about doing strategic, so I often tell them that I don't think it's a good idea for them. And the reason I say that is mainly because they're difficult to do if you haven't been preparing. How long do you think it takes to really prepare business for a strategic?

Ryan: So I think maybe I'll go back with remarkable steps which is what's the order of operations I think you should do to do this correctly, right? So kind of the assumptions to repeat is beat your foundation setup, build your financials, build healthy business from recurring revenue, the clarity of all these different things, making sure you don't have a bunch of concentration in one client, all the typical ways of de-risking your business and if you're striving to make a healthy business like that then you'll have lots of options. So at the bare minimum, you should be able to sell to a financial buyer, so then called to 3 to 5 times multiple EBITDA. So you know that, financially going okay, if it's 200 grand, I know that I'm going to be getting 600 or a million. Whenever it might be, right? So I know that's how or that's my target. But with a strategic sale, you could completely blow it out of the water, but that's kind of like hunting. It's hunting for unicorns or really specific synergies so you mention 5 people, that's fantastic but, what if they don't want it? What if they're struggling? What if they don't have the money? Don't have the ability to get banked? All those different things. Those are things that you don't know and yes you should work towards them so I think, to answer your question, I don't know but really helps with that, it's like, we knew our buyer. Like half of our employees has hog back and forth, you know, we're in the same industry trade associations so, I actually had taught the woman I interviewed yesterday at my show, she would have spent 2-3 years building and fostering those relationships, so those people could have been at the table. She didn't do that, so this is more of a relationship building, going in Rhodium Weekend, going to the YC Events, going to [inaudible 0:27:00] all these different things where people build relationships. And then what ends up happening is, I [inaudible 0:27:06] the bar over a napkin, and then you're back in the stuff.

Mark: Yeah absolutely, that's actually normal when I [inaudible 0:27:13] people that want to do strategic is, if you want to know strategic, 2 or 3 years down the road, contact the companies now and don't say "Hey I want to sell to you" just contact and do that real networking stuff and get out there. Once they've become aware of your company, and you start to learn each other's companies, then you can sort of see that conversation for down the road.

Ryan: And then you get out on their radar, right? Because you're not on their radar otherwise. So, there was actually a really interesting story that I heard Mark from one of the guys I interviewed in my Podcast, where he was at a trade association, he started talking one of the base competitors and he goes "Why don't you buy me?" and that's how he started and they started, you know, BS and then it went around and then the guy has said "You know what? Let's have a [inaudible 0:28:00] every 6 months call to see how you're doing" and these people literally told him exactly what to do, so they could buy him.

Mark: That's great.

Ryan: That was super unique, right? His name is Norm Brodsky, he wrote Street Smarts and he was a part of the small giants book, so he's on the cover of [inaudible 0:28:16] and a lot of exposure but like, I think the concept is very unique, because if you wanted to buy my business, why don't you just keep telling me what to do, and if everything works, I mean, like I said it's kind of a shooting for the starts, but I mean, you got really nothing to lose at that point especially if you don't need to sell.

Mark: Yeah alright. So you said a couple of things a while ago, I think is a good foundation I have and this is a general advise, and feel free to disagree with it if you disagree with any of the advice that I typically give people and respect them on this. With strategic, yeah you can get the out of the water valuation sometimes. But it all starts with first making their business safe, financially viable business and in someone that you can sell in a financial market. You are dealing few buyers, this is probably the biggest obstacle to a strategic sale, you might have half a dozen companies that can potentially acquire a business and the sake people make is they went in and say "I want to sell my business" then they called ABC company and ABC company's saying "Yeah we don't have a million dollars" or "You were not in our annual budget this year" or "Acquisitions were not in our plan for this year".

Ryan: Right, I'd pause you there for a second. They may have the money, but like, everybody's busy, right? So what if they're developing their own software or doing something else, they might just not have the physical time to integrate the two companies.

Mark: Right. Yeah absolutely. So you need to have that relationship in place and it has to make sense as being a natural evolution. Kind of like a marriage, right? I mean..

Ryan: Yeah, totally. I mean, you're partnering up with someone.

Mark: Yeah, and last thing I would say is, take a look to see if actually does make sense. That first company that is sold, in the webhosting space, I could've sold that very easily in a strategic sale, because there was so many strategic happening, we did a financial sale because we knew we're going to get more money. So, where you can often blow the top of the valuation with this strategic, it doesn't always happen that way. Sometimes financial actually does work a little bit better. Kind of a weird, odd case.

Ryan: Sorry you're..

Mark: No, go ahead please.

Ryan: I think the one thing to that people really need to think about, because you might blow the valuation off the charts, but I tell you what Mark, the reason why I do what I do now is because we got the financial target that we wanted to hit, I literally had to fire 60 of my friends and family. So if your culture in your employees and the clients.. You have to understand what's important here because in a strategic sale redundancies are huge. So, how will you stomached that afterwards? Like going and calling all of our employees in, they was way at 85 or something like that at that time and they only kept [inaudible 0:30:47] I mean like, that's literally the stomached ache. Are you going to be proud and happy about what you build? Is it just a financial target that's fine and you have people dispersed across the US and there's a lot of VA's and you're not orally loyal to them or if there's people that you care about, like they are role playing that strategic sale I think is extremely important so you can calibrate against all your options.

Mark: That's a really, really good point. So what do you do now? What are you doing these days? after the sale, of course.

Ryan: So other than being in the Podcast just like yourself, so, we have a company called GEXP Collaborative, so, it's Growth and Exit Planning collaborative, that's what it's stands for, and it took a lot of time, over the last for years.. Exit planning I think there's some negative [inaudible 0:31:33] to it because you might not want to sell right now, but it's literally both having a good business. So we combined the two which is growth and extra planning because it's like, we're talking about what are your plans and then how do you back in to all your strategic plans, they sell where you're trying to go with you options and I found some amazing people in the industry that have different disciplines because you got legal, finance, the front insurance, deal structures, you have the business brokers, you got all these people, and they all play a roll, and how do you back into that plan? So, if you kind of think, we're almost like a building, If you start a building you start with the budget and a blueprint, because you can't build a building without either of those, so the budget is your financial targets, where you want to go and why, so is there debt, net, the amount that you need or cash [inaudible 0:32:22] and what's the blueprint. So what are the five different strategic buyers and then you got the six financial purchase, timing, role, responsibility, and you're back and do it, so you can then hire the team [inaudible 0:32:34] so the growth next to planning that we do with the collaborative team is literally building the budget and a blueprint, and then actually coordinating the team like a general contractor because no one person can do all this stuff. I've been doing it non-stop day and day of four years, and I still couldn't single hand lay out to someone.

Mark: Yeah, there's a lot involved with that.. now if somebody is listening to this, one of the misconception running to all the time, with clients that come to us and say I want to sell, I'm not really ready because I did not plan ahead maybe should've talked to somebody 2 or 3 years ago. We try to get people to talk to us, the brokers, a few years in advance. For you, you're focusing again on that growth as well so even if somebody isn't ever planning to sell, it still makes sense to talk about that growth.

Ryan: Because the reality is you're going to do the best of your business at some point. I mean, there's people, like I work within this, the baby boomers, well they're going to die in your business but then what you're doing is you're working on the shares and the estate planning and dispersing the shares to employees, and to kids, and do trust, so he's going to sell his company, and you know what, he loves it, great! But then there's, build a business that has value and has cash flow and you de-risks then you can literally do whatever you want whenever you want. So yeah you're right it's coming ahead of time but then also knowing the people like you and building these relationships, you can't do this at the last second, you're going to leave money on the table, you're not going to be as happy with terms and conditions and so many times Mark, and I don't know if you see this, but a lot of people that are out there, and the people that are in aggressive growth path, they're all acquiring company so the out of the blue offers happen all the time. So whether it's PE firms or funds or other strategic buyers, and how do you know what to weigh that against if you don't have a plan? So you don't even know like how much I'm going to get? What terms? I mean, you're thinking on the fly and that usually doesn't go as well..

Mark: Right! The number of time I've heard from clients, get in to this process and say, "Man, I really wish I've contacted you a year ago" I mean it happens all the time, no one ever thinks about selling their business until they actually want to sell their business and I think what's really cool about what you're doing is you're focusing again not just the exit, you're focusing on growth. Because a good growth strategy is a good exit strategy they often go hand in hand.

Ryan: You're back can do it. You know, I just have a little plug for you guys too, because we do not do what you do, and I think a lot of entrepreneurs, they really think, because they understand their business so well that they can sell their business by themselves, and "Oh my gosh" it's the first time you're going to do it and why.. Like every one of those professional should pay for themselves, it should be your return of investment, what to spend, because you know it's an emotional roller coaster first of all and it's like a 24/7 fire drill while you are in the process which is what your team does, right? so I think all the people, if you have the right advisors, and that's another reason left a lot of money on the table, is you need to have the right advisers. I mean it wasn't people that do it all they want, they do transactions, they understand the market, your industry, and so having the right team is crazy important.

Mark: Yeah, alright could you plug as well if anyone listen to this and enjoys the Quiet Light podcasts, and hopefully you do if you've listened this long, Ryan's Podcast talks a lot about the same stuff, you talk a lot about selling, you talked to a lot of entrepreneur's who has sold their businesses before, and you go over a lot of the same material, but with a little bit of a difference spinned to it, really, really high quality content and another one, what was name of the Podcast where can they find it?

Ryan: "Life after Business"

Mark: Life after Business. Awesome! So we will link to it in the show notes on our Podcast page, we'll also link over the Ryan's website, and Ryan, anything else that you want us to link or to want to draw attention to, please feel free.

Ryan: We got a resources tab just like you, you're my model right? So I guess I said year and a half ago, you put me in the right direction with the presence that I wanted online, so we got white papers, and resources and Podcasts and all that kind of stuff so.

Mark: Awesome, so definitely check at his site and feel free to reach out to him, if you just want to talk, he's a good guy to talk to. You know I can talk all day about this stuff and someday we probably will. Thanks for coming I really appreciate it.

Ryan: Yeah, had a blast Mark, Thanks!

Mark: Alright.

Links and Resources:

www.gexpcollaborative.com Ryan's website

Life after Business Podcast Ryan's podcast link

Today we are talking to Chuck Mullins all about due diligence. An internet business veteran who is now a part of the Quiet Light team, Chuck purchased his first internet business while still in college and was more successful at 18 than some of the most seasoned entrepreneurs.

For both the buyer and the seller, the due diligence process is one of the most difficult parts of buying and selling an online business. Fortunately, there are a lot of tools that can be used to simplify the process.

In this episode, Mark and Chuck look at over 20 different due diligence tools and explain how you can use them in our due diligence processes.

Episode Highlights:

Chuck guides us through a group of tools that can be fundamental to any well thought out due diligence plan. Any buyer knows that this is the most important thing you can do to make sure that no stone is left unturned when preparing to make that purchase and hit the ground running.

• Try using a due diligence consultant service. We don't advise leaving it all up to them but they can take some of the work out of your hands.
• Never just research the business but remember to also research who is selling the business.
• Google trends is very powerful. Google Trends lets you read the trends that any given business may have experienced. Be sure to be aware if your acquisition is "trendy" or "evergreen."
• SEM tools can provide insight into the business potential and the size of any risks.

• Website crawling tools are used to determine customer and market trends.
• Social media tools are an additional way to gain insight into connections for that business and also the business owner's niche interactions in their niche.

Lessons from Due Diligence:

• For first time buyers the best advice Chuck offers is that you don't know what you don't know. Due diligence gives you the answers.

• Know what a tool is good at, put it in your due diligence toolbox, and use it correctly.
• Surround yourself with the types of people who can help you. Be careful to use your lawyer for law and your accountant for money. Always remember that you as the buyer ultimately make the business decision.
• Don't be afraid to ask questions!
• Keep good records of what you have looked at. Work off a checklist and be meticulous about it.
• A seller is as interested in you in the success of their business.

Mark: Hey Joe, how are you?

Joe: Doing good Mark, how about yourself?

Mark: I'm doing well, I'd talk to somebody that we both know well and that's one of our own Chuck Mullins.

Joe: Mr. Chuck Mullins, good man he is.

Mark: He is, yeah. He joins us on the interview on the video part push on the interview wearing his Quit Light shirt which he had embroidered. The only person at Quiet Light that has one. Although, He didn't tell me that he made one for you. And I haven't seen you in it yet.

Joe: He did I almost put it on today. It's just, it's a little big so I [inaudible 0:01:16] it. I need to put on some layer, run it through a two cycles of the dryer.

Mark: It would have been so appropriate because, you know, he's wearing his shirt in this interview and you've been wearing your shirt in, and he's getting, make one for me though of course.

Joe: He should. You're the founder of Quiet Light Brokerage.

Mark: Absolutely.

Joe: You should have like a logo on the back of your office chair that says Quiet Light Brokerage, what's wrong with you?

Mark: I thought about it but. Most of my office is really a mess. If you seeing this on video and we'll talk about this one a bit. My office is usually a mess. It's all about angles, right? My angles a little bit of center today because I don't want to show you the rest of my office. So, yeah. But this actual episode is going to be great for a video. If you're listening in your car, if you're listening on the podcast, you'll still get a lot of value out of it. But I'd recommend at some point checking out the Youtube channel. We are separating our channels, so we will have a new channel, just for the podcast episodes. And this episode will, going to kick that off. So make sure you'll go there and you subscribe. And the reason that is a good one to watch on the Youtube channel is because we're reviewing due diligence tools in this episode. We actually go over 27 different due diligence tools. We bring them up on the screen and you can see, we kind of browse around and fumbling around on somebody's sites. As we talk about how you can use this in your due diligence process. Any buyer out there who is looking to acquire a business in the next few years or so, you know due diligence is probably the most important part of that process for you making sure that you're checking under every rock and every hidden area to see is there anything wrong with this business that I need to be aware of. Well Chuck and I go over 27 tools that he has used personally in his past of buying businesses. So we bring real interest in episode from that stand point. He brings a lot of experience in buying and selling businesses for.. Do you know how long he has been doing it? I can't remember off hand.

Joe: In 1997 I think. He was self-employed in college, making more in one month the most people make in a year when he was in college.

Mark: Right right and then, He and I have been presenting at Pubcon for 7 years. We go over this video a little bit but we've been presenting for 7 years at Pubcon together and people always come to see Chuck and then hopefully I can pick up a couple of the scraps to come off the table when presents. So it's a great presentation on a how to go about buying online businesses.

Joe: And just a point out of the obvious remaining, not so obvious. Technically we represent the sellers in what we do. Well we can't help them and help them while unless we also help as many buyers as possible. So it's, many people would think that what you're about to present with Chuck is in contrast to what we do. But we're always about full disclosure, always making sure that buyers are making good investments and so that both they and the sellers are happy to closing table and it's successful transaction down the road as well.

Mark: Yeah, absolutely! Again, we going to do represent the sellers, but if our seller's getting sued, 3 or 4 months later that is a pretty bad job on our part. So it's important that both buyer and seller walk away from a deal, happy and when you know that deal. So that's the goal. We get a transaction wins. And part of that process is due diligence. I say, I hate like throw a due diligence. When I first started Quiet Light and I got like, you know, a monster due diligence, I would kind of [inaudible 0:04:31] and be like, Oh man, this is going to be a pain. Now when I see a well thought out due diligence, it's makes me happy because I know that, that buyer is going to be really happy and that deal is gone go through. Because where they're going to really inspect that business thoroughly.

Joe: Yeah, well thought, that was important. Not just a massive list but a well thought, that was specific to the business that's being purchased. I've seen blank at due diligence less come through where somebody clearly copied and paste it. But I'm excited about this episode Chucks a really, really smart guy and successful entrepreneur and I think a lot of people would learn some good stuff here.

Mark: That's good, very good. Let's get to it.

Mark: Hey Chuck, how are you?

Chuck: Doing great. How are you Mark?

Mark: I'm good. Thanks for joining me on the call. I see you have your nice Quiet Light shirt on. You're the only one at Quiet Light that has that shirt.

Chuck: That's because I took the initiative to have it made.

Mark: Right. We'll get them for everybody else eventually.

Chuck: Actually, I think I bought Joe one. But he didn't want it.

Mark: Oh really, I got to start getting on him so he wears it from the Podcast.

Chuck: Yeah

Mark: Yeah, anyway for this Podcast, if you guys are listening to this in your car, this would be one of the once that I would recommend over going to Youtube and we've set up a new channel on Youtube just for the interviews. We're going to put all our interviews on that channel. I'd recommend looking at that because we're going to review a bunch of due diligence tools. A little bit of background between Chuck and myself. Chuck and I have been presenting at Pubcon. What? 7 years I think?

Chuck: Yeah, I think so.

Mark: Yeah, a very long time. Chuck invited me to speak within that Pubcon a while ago. We've been doing it ever since we've had all the people join us occasionally, to talk about buying and selling websites. But he and I have been talking about that night. Typically we talk on the sell side and Chuck was talking on the buy side. And the result was that more people are interested in what Chuck had to say than I was ever had to say. So I figured, it would be good to have you on here. Both, so I think we can get to know you a bit better. I'd also review some of the due diligence that you've use in the past in buying online businesses. So let's just do a quick introduction for you as far as your background. What's your background in buying and selling online businesses?

Chuck: So, I started my first website back in 1996. Through the few years, made a bunch of money in college just a kind of doing really well. And made more money than you know, than I was living on. So I start looking at doing various investments. So, start looking at real estate, franchises, I was looking at car washes, and a storage facilities, and a Laundromats. And nothing ever, just kind of, really worked for me or really peaked my interest enough. You know like, I dabbled in real estate. But everything just kept kind drawing me back to the internet business. So then, you know, I made a few websites that were successful. But I started thinking about you know, what if I could acquire somebody's company and then just build upon that and stand on somebody else's shoulders, instead of trying to prove out a model myself. You know, use a model that has been proven by somebody else. And then just take all the knowledge I had, and expertise, and grow that. So I start doing really well, and at a certain point I just fell alive, you know presenting at a conference, and kind of just, giving back, and then that's when I reached out to you and I think my initial presentation I gave was with Jason, Quiet Light, we did it at affiliate summit. I don't even know, 8 or 9 years ago.

Mark: Yeah, I remember that. I was in the audience for that presentation and then, that was January. I remember specifically because it was really cold at that conference in Las Vegas. The fountains were frozen when we got out of the hotel. I was kind of surprised about that. So it's cool! So yeah, you've been doing this presentation for a long time and I know whenever we do the presentation, when we get to the slide on due diligence, whereas all the phones in the rooms go up to take pictures, because people are really interested to know what's our tools they can use to do due diligence. So we're going to review some of these tools here, as well as talk about some of the principles, buyers might want to apply when you're doing your due diligence. As always, we'll just throw out the blanket; cover your tails sort of a disclaimer here. Due diligence is ultimately a buyer's responsibility. Make sure that you're doing it, make sure that you are bringing in professionals. What we're going to do is were going to give some advices to things that we've seen work, but by all means, this is not complete when you're talking about due diligence. Wherein you need to apply a complete process to the business that you are looking at. So I'm going to share my screen here and open this up, and I'm just going to share the full screen, and hopefully on my [inaudible 0:08:56] of so that people don't get those. But can you see that chart does that come up for you?

Chuck: Yeah.

Mark: Alright. Good, good. So here we go, where going to just get started right away with this list of tools and I'll be browsing to the website as you talk about the individual ones. The first one that we're going to talk about is Centurica and they're full service due diligence firm. They are the only one of that sort that we have on this list. So why don't you talk a little bit about Centurica, what they do and why they made this list.

Chuck: Sure, So Chris Yates is the owner of Centurica, they've been around for quite a while and Chris runs a buying and selling website conference called and Rhodium. Rhodium Weekend I think is kind of, the official name. I ran into Chris way back when I started to look at buying and selling businesses. he was the first person.. I'm always looking for knowledge where I look into learn more. So doing some searches and came across his conference and went to it. Kind of on a whim, because there was no information about the conference because that was the first one that they've had. So it was like, trying to figure out and I thought well, for the money, maybe I'll pick up something and if not, it's not a total lost because you know, I'm just come and go to Vegas to hang out. You know Chris is really a smart guy and I ended up I think I was probably the first one we, to get into his master mind group. So I'm going to master mind group with Chris and a bunch of other entrepreneurs and he does this great due diligence product were he just kind of takes it over from you. Will do like a full blown due diligence review on a business that you're going to acquire and I would never say that you should handle fully the [inaudible 0:10:33] somebody else do the due diligence. But you should allow, if you're going to hire somebody, do it in parallel with them. So that way you're just getting, you know, a second, third set of eyes on a due diligence and on the business that you're looking to acquire. So they offer various levels and, so it looks like they've got something from 59 dollars right there and all the way up to, I think a 5,000 dollar package. That's kind of like a suit to nuts version.

Mark: Yeah and just look at the website; they have a whole team of people here that are associated with them. A lot of these people, you and I know, we know them through Rhodium Weekend and through that master mind group as well. These are some really smart guys, good guys, to be able to just get on the phone with and get their feedback. In fact, I'm seeing n a few guys here, Mike Nunez, he has been on a Podcast with us before and a super smart guy. Well, these guys are [inaudible 0:11:24] really good contact as well. These are people that you can arrange calls with and bounce my ideas of. The amount of money, 5,000 dollars, some people might [inaudible 0:11:35] sort of price tag, but what do you think? Do you think that's worth spending that much money on due diligence support?

Chuck: Yeah I mean, with Quiet Light, we're generally not dealing with the lower end deals, right? We're generally dealing with mid to high six figures, mid to low seven figure deals, so you know, five grand and that's their highest package, right? They got stuff that's cheaper, but how could you go wrong, you know, spending.. If you're on a million dollar deal, what's five grand, is what? Half a percent? I think it's probably money well spent.

Mark: Yeah, absolutely I agree. The only assets that you put an end, this is, that whenever you are hiring somebody on the outside to potentially look for problems, understand that, what they're going to do is they're going to find problems because that's what you're hiring them to do, and they should do that. So this is not a criticism or some trick or by any means or attorney that's looking up for liability issues. But as the buyer, understand that you need to take that information, process it, through a business decision that you're making. Any sort of due diligence tool? I knew the ones that we offer here, that's the way that you should be going about using that information, that fits into the larger scheme. Alright, let's move on, Centurica is a good service. If anyone wants an introduction pres, it's either Chuck or I can provide an introduction pres as well. The next two are related obviously, Google.com and Google Trends, everybody knows what Google is, I'm sure most know what Google Trends are. How would you use each of these sites in a due diligence process?

Chuck: Sure! So with Google, right? I mean, it's just a matter of Googling things either about the business, about the person, if you're buying the business, Google the terms around the business, and look for red flags, right? Look for if they've got one star review, average one star review, maybe that tells you something about the business. You know, look for complaints, things that are negative about the business, right? It's kind of one of those, you'll catch all due diligence place where you just, kind of sorting through all of the information that you can find on a given business and/or a person. Never just research the business, always research the person who is selling the business as well because, you could find out a lot of stuff and make sure that you're avoiding, potentially avoid some of the pitfalls, if somebody has done some sketchy stuff in the past, and find that out.

Mark: Yeah, absolutely. You can learn a lot about their background as well, and all you have to do is search for all of the places that I have written for, come up, but years ago, I was involved in a lawsuit in those couple of pages. And so, anyone that was doing research on me, I would often get those sort of questions, "What happened then?" everything was fine. I didn't mind the questions, but people that were being smart and doing due diligence would ask about that.

Chuck: And don't just look at the first page of Google. Look at the 2nd, 3rd, 4th, 5th, right? Because anybody can hire a reputation management company that will push some of those negative reviews, you know, to the 2nd or 3rd page. But they'll be there generally, still, just maybe a little lower.

Mark: Right, Now if anyone wonders and are looking at the screen, I did not play hockey. Even though I'm from Minnesota I'm not a hockey player. There's a couple of them, that's out there that have gotten their name out there. Google trends, what search term I put in there?

Chuck: Yeah so type in Paleo Recipe, or Paleo Diet I mean, because Paleo is a little different. So, if you look at the screen.

Mark: You changed the date range?

Chuck: Yes I changed the date range. That's, in January, you see that giant spike. Because that's when everybody is getting into a diet mode. Check that out even further.

Mark: So we're looking right now. Let's set 2004 to present. So we'll do the entire history in Google Trends. There we go.

Chuck: Sure, so you know, if you're looking to buying a business, and you're seeing.. Well use Google Trends to figure out what the trends are. Here you'll see is like a giant up peak that just kind of went up, and then all of a sudden it just kind of, trail off, and you're going to find things like this. Then you'll also notice that there is like ups and downs, like inter year, so that would be like the seasonally of the business, right? So just because you see, like this one giant peak, which correlates with January, and then you know, throughout the rest of the year it drops until December where December is at it's low, around Christmas time then it spikes immediately back up. So you're going to look for not only seasonality but you can look for long term trends. And when you're looking at businesses, think about whether the business is a trendy business first, it's an evergreen business. So, diet in general is a trendy business. If you look almost any diet, you'll see that there's a, it goes up, up , up, up and all of a sudden it tails off, right? There's something made it go up, usually it got unpopular, and then it'll trend off. I personally, one of the businesses that I bought was a Paleo website, and I managed to buy it exactly at the peak market, and then..

Mark: Right about there right? Right around January of 2013, early 2013.

Chuck: Yup, definitely it's like, it was going up, up, and up, I'm like, great! Then it went down, down, down, and it was less great. So, luckily, we were able to so a little bit of magic and kind of keep the revenue going by trying to grow the business but it's another story.

Mark: Something else that you can do with this, so as many people know, I own CatholicSingles, and the turn chart out for CatholicSingles doesn't look that great, when you look at it. Something I've learned from this chart from a few other places is, if you think that you're buying a website that gets lots of natural search traffic, be careful to make sure that it's not branded search traffic. So what's happening here is, the previous owner was losing out to a competitor who was beating him in a brand search, and so, the site still gets lots of natural search traffic to a keyword that still has a lot of relevance. But he lost a lot of brand relevance as well. So you can, if it's a large enough property you can often pick up on brands trends and what are not, you're going to have to compete on that [inaudible 0:17:34] as well. You can type in competing services and see what their trend is overtime as well. And you can actually compare the two together. So you can see how competition is playing along with. Maybe what you're looking at acquiring.

Chuck: And then if you scroll down, you can do it by region as well. So what are the countries that has something popular. So maybe it was a US based company, and you see "Hey look! It's doing well in Canada and South America" or I guess none of that case was in South America, but Australia, and I think it was Mexico maybe. So maybe you expand into some of those other countries.

Mark: Right, right. Exactly. Yeah Google Trends has some good date out there, I recommend again putting in your, whatever, competitors you know of, and comparing the traffic and the trends for the competitors and get the sense for, how those are working together.

Chuck: And one additional point would be, Google trends is the search volume of a specific keyword, so it's not some magic formula, it's how many people are searching for something. So sometimes, people search, the way they search for things changes overtime, so you just want to, kind of remember that. That just because, you know. People might have been searching for, I don't know, Blue Widgets but now they're calling it, instead of Blue Widgets, they're calling it Blue Fuzzies, right? So it doesn't always mean that the actual market is declining at it. Sometimes it can just be a change in the way people are searching.

Mark: Yeah, I think an example, that would be internet marketing has pushed toward in digital marketing. And so you see, the phrase you use to refer to something, is slightly different overtime. So, that's a good point. Now let's move off this chart because it's sort of depressing. State business websites, this is one that I haven't really seeing people a whole lot of, but it's a really good idea to use state business websites.

Chuck: Yeah, I mean it's just the basic of going to whatever state the company is in, doing a search for the business, finding out who the owners are, and if there's any kind of red flags that maybe appear on that, just some basic due diligence there.

Mark: Yeah, that one's not coming up here, but when you do the search, what will happen is, you'll see the records with the state, whether or not if filed in good standing, any other possible red flags that would come up. It's really just checking their box, making sure that everything is on the up and up with that business search. Maybe we can get back to this, if that comes up again. BuiltWith is a really cool tool and it shows all the technologies that a website was built with, right?

Chuck: Yeap! Absolutey! So if you want to look at, like the technologies that go.. Is your internet out?

Mark: No, I just typed it in wrong.

Chuck: I guess your internet wouldn't be out, considering we're..

Mark: Right, right. So we could take a look to see what Quiet Light Brokerage is built on. And you can see that we have Googled conversion tracking, you can you see the whole technology stack and all the services that are used. When this might be useful as if you're looking at the P&L and you don't see a subscriptions but you would see here Drip. And you know that Drip is a subscription based service maybe that's not their P&L. That would be something to catch and maybe ask them about to find out what's going on there. Maybe they just start using [inaudible 0:20:47]the website.

Chuck: Absolutely! And you know, one of the things you want to do as part of getting ready to acquire a site is make sure that you have the people and place to take over any kind of service that you need in advance. Right, so, if you have no idea how to use Drip and you're taking it in purchase in your company, maybe you need to has somebody in place who does know how to use it or request a standard operating procedure so that you can learn how to use it. So I would definitely have a list of like all of the kind of aspects of the business that you're not proficient at. And make sure that you have people in place that can help you with that [inaudible 0:21:26] running when you do take over the business.

Mark: You know something that, speaking of Drips, I talked to Rob who sold Drip to Leadpages a few years ago, and he talked to me about how Leadpages was completely ready and able to switch over to a new website surely after they closed. They were making plans and building out technology as they were going through due diligence so that they can hit the ground, running right away. Something that might you want to do as you're going through a website's technology stack is take a look at what services are you using. If you are going to the Quiet Light website you'll notice that we have Hotjar, for example. Now I haven't tracked anything with Hotjar on the website in a while. We use it for surveys once in a while, but this would be a service for, maybe those report that you want to ask for during due diligence. Maybe some heat mapping that would just be useful information for you to be able to see and as you're making plans. Or OptinMonster, asked, have you run these campaigns before? What was the conversion rate like on these campaigns? And you can start getting really prepared as you're doing your due diligence to make that transition. Of course some sellers may not be eager to share some of that information with you, so go about that with some level of sensitivity understanding that they might be ready to open up all the books to you, but knowing what's there can help you request different reports. And Chuck you said something before in one of your presentations, probably multiple presentations and that was ask questions. Ask lots and lots of questions.

Chuck: Yup, absolutely. I always say ask, ask, ask, and even ask questions you know the answers to. I feel like that's like some kind of weird tactic that people do. But they ask questions regardless of whether you know the answer because you almost want to get a seller to lie to you, because then you know how trust worthy they are right? If somebody's going to lie to you about something, it's a red flag. So, I've seen a lot of people that will ask the same questions in multiple ways. You don't want to be annoying right? Like, don't ask stupid questions but definitely ask. I shouldn't say, you don't want to ask stupid question because almost no question's stupid right? But we all understand there are all stupid questions that you shouldn't ask, that's just, are irrelevant. But don't feel like, if it's relevant to you then it's not a stupid question. So, ask everything. Because the time to ask is before you buy it. Right? You don't want to have a bunch of questions after you've inked the check. So, ask early and then ask often.

Mark: Then the other thing too is you can get more callers on a particular answer. I know when I talk to some sellers and ask them why are you selling? They'll give me an answer one day and had talked to them another day and they give me s slightly different answer. And it's not that they're lying. The reasons are complex. There's more than one reason going on there and you gain caller, you gain more information about what's really going on behind the sale. By asking the same question, and looking at, in different formats, I know when you started to do video interviews or recording interviews of some of our clients and part of the reason for that is because people talk about questions differently then they might write them out. So this could ask a lot of those questions.

Chuck: Yeah, absolutely! Archive.org.

Mark: This is a great one. So if you're doing some due dilligence there's a whole industry people who just buy expired domains, stir a new content on it and then run with the site. Some of the amazing firm like [inaudible 0:24:38]some of them are buying like big sites, or what used to be a big site and for whatever reason, site's no longer so, this will give you an idea like in 2008. What was the site look like? Was it a brokerage site or not back then, you know. It's not always a bad thing but if it was something spamy back then, It might still have some problems moving forward. So it's also good just to see if you had some ideas of you wanted to try this or try that. And getting an idea for some of the things they've tried in their past or looking at previous screenshots of what the site was like one, two, three, four years ago?

Mark: Yeah, I think one of the big challenges that you always have as a buyer and.. Sellers as well have this issue, right. Sellers know their business intimately because they've lived with it for so many years. As a buyer, you're coming in and trying to compress knowledge that they've gain over the course of sometimes 20 years now. And to a decision that you have to make within or week or two. Going back in the scene, what the history of the site was, just kind of, again it adds color, it adds more information into what does this person done in the past for the business. Like you said maybe we can see some things that they tried and you can ask them about that, if you're looking at the Quiet Light site, yeah, you might see that we sold some domains in the past. And if there's someone looking to buy us they could ask a question on that, you know, why don't you sell domains anymore? And we could go into that whole discussion.

Chuck: Something else to look for is to look for gaps in the years so you know, you can put something on your website, right? And your like, your a [inaudible 0:26:14]telling a way back machine not to cross your site anymore. So if there's like a three year gap, why is that gap? Most legitimate sites aren't blocking the way back machine. From calling their site, so you know, that might raise a red flag and might be something you want to dive in on a little deeper.

Mark: Awesome, alright let's move on at Trademarkia.com.

Chuck: Yeah, you know it's a, if you're, if they told you to have a trade mark, search for it, figure it out. If they have told you they don't have a trade mark, search for it. See if somebody else has a trade mark right? Make sure that they're not infringing on somebody else's.. What's the word I'm looking for.. Somebody else's IP. You don't want to buy a business if they're infringing on other people's stuff.

Mark: Yeah, and this can also be a very useful in search results if you're advertising on Google and you have competitors that are stepping all over that brand search. If you get that trade mark and you have the ability to get a trade mark you can keep all of those guys off, and brand is usually a very cheap way. But if you have competitors branding against it, that's [inaudible 0:27:16] your IP, so, searching for that trade mark is a useful thing to do. Alright, moving to the next set of tools and these tools here seem to be more of, search competitive intelligence and taking look at a site's search profile and I should just say probably maybe SEM. All [inaudible 0:27:33] right? Because this still include adwords as well?

Chuck: Yeap, yeap! So organic and paid, my likes spy for a lot. It's a.. You can look at people's history of what kind of ad campaigns they did. As so, if somebody says "Oh we've only ever run one ads set and haven't done much testing" and then you look back at, and shows you. Well actually they ran a hundred different variations of this ad. Cross, you know 5 years and blah blah. So you will able to see a.. Verify some of the information they said. You can also check and it will show you, like literally shows you, what paid ads they ran. And like detects in them. So if you think, "Oh I wonder if they try this", so you're going to look back and see what sorts of ads they've run. It's kind of interesting, you can also use this right here, like you see their competitor. So that'll show you overlap, so if you know some of, some competitors, you'll be able to see like what keywords they have overlapping using this venn diagrams. It's some really cool stuff and then you can look for opportunity, for words that they're going after, that your knots. They also have they a tool in here somewhere that will allow you to look at specific keywords over time and then it puts it over a timeline and has the Google updates. So you can see like, ok they had this key word was, you know, rank number 1111, and then drops off to like number 7, and [inaudible 0:28:57] Google get an update right when this happen so you can potentially know why they dropped off, it's because, well, Google did this update. So seeing what people are using like a private blog now, where to get a bunch of links and it's like doing really, really well then everything drops off a cliff. Because of Google did an update and it affect it, or, the reverse is true where they went from having nothing to all off a sudden number 1 rankings, just like overnight. And you can see, okay, well nobody just all send this from zero to number 1 ranking for 20 different keyword terms so then you know, Well, they must have done something to have that spike and then you can dive into what they're using like, blog that works for paid links or whatever.

Mark: Yeah, any sort of quick changes in these results are going to be something to watch out for. So that's over all a good tool. And a lot of these tools out here, Moz, Open Site Explorer, Semrush, Magestic, AAtraps, I personaly like AAtraps. These are all really good tools, using in combination. It's going to give you a sense for how the data all adds up. Understand that when you're looking at data, in any of these tools, they have to use third parties to estimate what this is, for example, they're estimating for Quiet Light Brokerage, where estimated adwords budget is 3,000 bucks. Actually not too far off from that, but it's not accurate. Just understand that these are useful for trends, these are useful for getting another point of data, nothing's going to replace first hand tracking, it should be Google and Linux, or whatever tool people are using to analyze something. But you can use all these external tools in combination as well to try complete picture of what a website's doing and how it's ranking.

Chuck: It's a bit [inaudible 0:30:45] That was I think only Google adwords, so if not taking your account, pay traffic, whether it's Facebook or other things. Right?

Mark: Yep, yep! Absolutely that's right! Let's move on to a.. You like Spy for the best from all of these?

Chuck: They are all kind of different. So there's like different reasons to use different ones, right? Some are for keyword research, some have like keyword difficulty tools, so part of due diligence isn't just looking at what the site has done, but where you can go with it. So I like to use a couple of them to do keyword research. See where their gaps are, you know, opportunity for me to grow the business. They're all kind of hit, different things to different things well. So I don't have one favorite. I do like SpyFu, I like Moz in the past, [inaudible 0:31:31], Majestic. And then on that list, we kind of didn't point it which I'm guessing maybe you thought I put in a wrong spot, but the alexa.com won. I haven't actually used this yet, but it's apparently a new tool that they rolled out. It's a competitor to all these other ones, Moz and Majestic. So they're doing a paid tool just like all these other guys. So, I haven't really dove into it yet, but it'll be interesting to maybe see how their data looks.

Mark: Yeah, I actually just saw this the other day. And was intrigued by it. I haven't dug into this at all. But you would imagine that Alexa's by Amazon. You would imagine that they have some pretty good access to tools to be able estimate this information, with some level of accuracy.

Chuck: And you know they've been around, since when, like early 2000 or earlier. So they've been crawling off these sites. So who knows what kind of information they've stored. I see [inaudible 0:32:34] has really good info going pretty far back.

Mark: yeah, I know you're right on that. I think actually Alexa may have been the first competitive intelligence tool. That try to rank websites. Maybe there was somebody else before that. But they were the first one's who really gain attraction. Or that for a long time, everybody I knew had their Alexa bar. Up in their browser and you can see what, aside Alexa ranking was along with its paid rank. Right every marketer back in early 2010 and those two things, up in their tool bars.

Chuck: It's fine, so I went to the site yet the other day, just checking it out and looking for their little site ranking. I could find it anywhere, so I'm not sure if they still have it or not.

Mark: Yeah, I don't know. I try to look that up recently as well and I wasn't able to find it. I was behind actually this pay wall which is how I came across [inaudible 0:33:24] they are now offering this.

Chuck: Yeah, yeah. It didn't, for a long time, like, right Google paid rank and the Alexa ranking have been dead like nobody uses those as a real stat anymore . But I just wanted to check it out.

Mark: Yeah, yeah I know it's always interesting stuff. Alright let's move on to page 2 here. We're going to get into 3 tools here. [inaudible 0:33:46], deepcrawl.com and Copyscape. What do these tools do?

Chuck: Yeah, The first two are pretty similar to each other. And what they do is you can plug in a domain name that it will crawl the entire site and it will look for all kinds of things. Like errors or not errors. Right, so it can show you just by crawling to the site. It will crawl every single link on the site from every single page. So it shows you like if there's dead links so if there are stuff that's going for like 404 pages, no errors, 500 errors, it will show you the redirects. So what I've used it for in the past is the one finding those dead pages or the 404 errors and then also finding the redirects and sometimes you'll see like stuff gets layered, where it will be redirected to this page, which layer's was then redirected to this page, which layer's then redirected to this page. And ultimately, what should you be doing is just going back and linking from the first page to the last page. And not using all of these bounces because with each bounce you have the a, potentially you're losing some of that authority has being passed through.

Mark: Yeah, and there are the futuristic will do an on-site SEO analysis for even, one that I've used in the past that all definitely throw a, [inaudible 0:35:01] to be Orange Fox, Jacob Hagberg, has done some reports from Quiet Light Brokerage. and a lot of these tools do is, what these services work, will do, they just to analyze in a condensed manner. Because they look for opportunities and they also look for potential issue. Like you're saying, if there's tons of redirects in there, that's a problem, you are losing out an authority on those pages. 10 pages , 404, broken images. Images without all tags, accessibility issues. These are all things that you want to be looking for. Not necessarily as like major red flags but you know, a buyer beware, but also as opportunities that if you start to fix and clean these things up, there's going to be a natural lift in rankings on its long tale keywords that maybe you're on page 10 to 20 right now for, maybe that will bump you up to the first 10 results . So wait for you to just grow some opportunity. When you're looking at these 3 tools Chuck..

Chuck: The first two are very similar, right? Screaming Frog, is one that you have on your own computer, and then it use your internet connection to then crawl the site. DeepCrawl, they are running it from their servers, the Screaming Frog is relatively cheap. I forget the amount but it's hundred to 200 bucks a year. The DeepCrawl one is fairly pricey so, I would always recommend this Screaming Frog but the other one is a good service as well. Just cost a bit more. It's a 150 pounds a year.

Mark: Right. They do have a free version? I've used the free version to be honest it's worth just upgrading to a paid version. Free version will give you just a flavor of what they can do. But if you really want to dig deep and really figure things out. Yeah, again, here's a 500 URL limit, most websites are going to blow through that 500 URLs because you have all their images, you have everything else connected with an individual page, so you'll go through that 500 pretty quickly. Copyscape is a bit different from these two though.

Chuck: Yeah, it's different. I threw it, kind of witness just because it's one of those things, where again, you're looking for problems, so you type in your domain and It'll give you list of you know, places that content made and stolen from. So kind of, similar, but different.

Mark: Right. This can be useful to see if you have people that are maybe trying' just scrape your pages entirely or if the page you're looking at for some reason is built on a shakey ground. This was something that was used a lot more probably, I don't know, 5, just 7 years ago. I know Copyscape has a really big issue on a really big useful tool for duplicate content issues. A lot of that is going away now. But I would imagine you would find copies of content that somebody's publishing their blog contents, say, on Medium or LinkedIn. I imagine this would probably pick up on that.

Chuck: Yeah. I believe so. And you know when we talk about the duplicate content issue, where talking about like, right for organic search but there's also the duplicate content issue where, "Hey everything on this website was stolen from somewhere else and you're going to get sued because you stole our base content.", Right so, I would be checking to make sure that people aren't stealing other people's content. You know, so I think that's a good part of due diligence.

Mark: Yeah, absolutely! Alright Public WWW. This is a tool I have not heard of.

Chuck: Yeah, that's a great tool. It kind of isn't a vain, of like, a Google right? But what's cool about it is instead of like.. If I want to search for something on Google. Google looks at what is this plate on the page meaning. If I search for Chuck it's looking for.. If somebody would look at a web page and see the word Chuck on it, then it might come up, right? But with this website, it's actually looking at the source code. So if somebody had a comment that was Chuck, it would potentially come up there. So, anywhere from the word Chuck, right? It's more for if you want to look a analytics code, or if you want to find somebody's affiliate ID. So if somebody's says, "Hey, I'm just running AdSense on this site, and I don't have it anywhere else.", So we could took.. Put in the AdSense number, and it will show you all the sites that are using that same AdSense ID on their website, right? So you can look for, maybe they're doing some competing stuff, maybe they just, you know, they're driving more income through the AdSense, but having a multiple sites vs the one. And it's not complete, right? There's, it's only as much as they crawl so they're only going to have as much data of the websites they crawl. But you can definitely find some stuff. You can also use a little tip here, would be.. Let's say you have an affiliate product your promoting, right? And you're making some money off of that, and say, you found a new product you want to promote and it makes 10 times the amount of money for each one you sell and you know that like, "Oh! This product, if I switch it to this one, I'm going to make 10X." Or you could look for everybody who is promoting this old product, and then you're going to try to acquire those sites, and switch them to the new affiliate product and 10X the revenue. A lot of different things you can do with that.

Mark: I've heard some of people ask about that, specifically with affiliate sites. You know, "How do I know that this is all coming from the site that I'm buying.", and so that would be one tool that you could use. The other thing I could see this being useful for is if you have a tool for it. This would be a pretty rare case, but if you're buying a business as a tool, that's using on outside websites. WordPress plugins site, WordPress themes site, or any other tool like that, you could start to get some ideas as for the installation volume. Using the tool like this. Alright, SpyOnWeb.com.

Chuck: So similar right it's a looking for people's AdSense IDs and things like that. It's not as complete, with the other one you could search for a lot more different types of things. But still a useful tool.

Mark: Right, it gives you some machine information as for our tools also sharing this IP address, DNS server. So again, not [inaudible 0:40:53] information here, but just acquiring [inaudible 0:40:56] this. We have our [inaudible 0:40:58]. So If you want to find out what the [inaudible 0:41:02] rank is, just go to SpyOnWeb and you could also see the page rank which is saying Quiet Light Brokerage just a like a question mark for page ranks. So that would be an information. That would have scared me about a 6 or 7 years ago. Alright, DomainIQ.

Chuck: Yup, so DomainIQ and the other two that were listed. This are for finding out information about a domain name. So when was it registered, how many times has the DNS changed, has the ownership changed recently, what other domains are on the same server, or same IP block or same IP address, so if you know, if you're buying something from somebody, and they say it's the only site they have and then you look start looking up and down the IP range or looking on the server or the same IP and you see there's other domain names that are the same thing and are not disclosing it you, you know, that's potentially going to be an issue. You can look up who is the owner, so if it's like similar registration name or similar email address used to register the domain, it will show you all of the domains they own. That are using that registration information. These are all for the most part paid services. So if you want to get, like the good data, you got to pay for it. But they do give you a basic level of information for free.

Mark: Right. I don't think anybody has to use all these tools. You pick 1 or 2 out of each of these categories that you want to use. The only one that I would recommend maybe use in multiples one would be in this search intelligence the SpyFu, Moz, and SEMrush. I think it might be worthwhile having upwards of three maybe four depending on how lights would turns out those services. Because like you said they all do slightly different things.

Chuck: It's a matter of like what they've indexed right? So they each have their own crawlers, and none of them are going to crawl exactly the same subset of the internet. So, it's just, you're going to find different things while using different ones.

Mark: Right, and they all have different levels of accuracy you could see here DomainIQ is [inaudible 0:43:04] to be higher than the last one. And also, few other bits of information that I would say are incorrect but again you use these points of data…

Chuck: That was 5,000 dollars? The appraisal value?

Mark: That was [inaudible 0:43:17] it's less than 500 dollars. And we have more than 24 backlinks, but again, all these tools are to be used in combination with each other to put together a large picture. Obviously a tool like Google Analytics or [inaudible 0:43:31] you'll going to want to use that first. And then, these tools are been used to fill in the gaps.

Chuck: And also like know what a tool is good at, so like last one, you're not going to use that tool for the appraised value right? Like, that's nonsense. But if you scroll up, scroll up a little bit. If you click on, click on the ownership record in the blue, the blue button is there. Let's see if we'll..

Mark: We got gears turning here.. There we go

Chuck: Okay so just search who the owner is, when is the last time you updated, when it expires, the age of it, right. So you've owned it for just about almost 11 years, you're using Cloudflare, here's the "who is" info….

Mark: It's kind of a bad corporation name, I got to update that.

Chuck: Well there you go. And go back one more time on it, I'll click on one more thing…

Mark: All these tools take too long to load up. Let's move on, because this one's getting a little bit longer. Let's get it on to a Bannedcheck.com.

Chuck: Yeah, so this one is a, and it's not 100% right. But you can type in AdSense account and I'll tell you if the AdSense account has been banned. Again, not 100%, but if it's says it's banned, that's probably a good indication. I'm sorry not the AdSense account number but the actual domain name. Right so, if somebody says, "Oh! I switched monetization methods, because I didn't like AdSense and I was making a bunch more money with this." Well, maybe that's not the case, maybe it's that they got banned. So, this is a good one. They can tell you whether they've been, not a 100% right. But if it's says that they've been band, then they've probably have been, right?

Mark: Good news with this, I'm making money with Quiet Light Brokerage because it came back and it says that it's not banned for Google AdSense.

Chuck: I wonder how that helps with our value of the 500 dollars.

Mark: Hopefully, this is a little bit, so all you buyers that are looking to buy a business, we're going to require that you click on an Adsense ad. Because I think that's completely [inaudible 0:45:16] with our terms of service.

Mark: socialmention.com.

Chuck: Yeah, so just you know, you type in various things here and it will just tell you where it's being mention as far as social goes. So just a good tool for doing some basic due diligence.

Mark: Yeah, let's repeat, useful to do, using combination with a Google trends to be able to see. Google Trends is measuring the data on Google itself. Looking at how the different social media networks are also processing the data. It's going to have a different look than just what Google has. On that note, I would say BuzzSumo, which is not on your list. It's another tool that I would recommend adding and it's a page where they do the free option but you can take a look to see what content has done really well on a particular domain name. As well as what content in that specific niche also does well. So you can really got a sense for how popular [inaudible 0:46:15] and what's getting shared and what's not. Well for then Google but also within the social media. It seems fantastic.

Chuck: This one definitely should've been on my list then I'm not sure why it wasn't but I actually like this one a lot better.

Mark: Will add this to the list. For people who want to download it. Last one it would be just going direct to the source of Facebook LinkedIn, Twitter, etc., etc. Almost every websites these days has presence on all the social media networks, visit their pages I assume that's kind of a lesson there.

Chuck: Yeah and again, with like a LinkedIn, right? Looking at the person's profile looking how many connections they have. Are they in a niche where they should have 500 LinkedIn connections and they've only got 3, Maybe that tells you something, right? Why are they connected with all of these hackers or whatever, right? It's just a matter of again, researching the people and not just the business. So I think it's a good tool for researching people.

Mark: Awesome, right. So that's a lot of tools that we just went over. Let's talk just a some couple of lessons, and we're running pretty long on this Podcast. So, we'll talk just a couple lessons about due diligence. I'm going to turn off the screen sharing here and talk about couple lessons about due diligence. What would you say for somebody who's going about due diligence the first time? What couple of lessons would you, or principles, should they really use in their due diligence efforts.

Chuck: So I think one of the biggest things, is first in for most you don't know what you don't know. right, so having people to help advice you on what to search for and what to look for can be critical. So don't just think you know everything! Because none of us know everything especially when it comes to different tricks and tactics people can employ to inflate the numbers in what they're doing. What else, do you have any idea you would suggest?

Mark: I would, and so on that note, obviously bringing people like an attorney, bringing an accountant, as I said before that be careful when you do so because they are being brought in with their specific purpose in mind, that are being brought in to look for liabilities, for being brought in to look for problems, and you are the business owner trying to make a business decision. Your accountant that's trying to make an account decision. Your lawyers try to make in legal decision. And so, you have to take their advice and put it into a broader framework business . It's a good business choice for you. You use their bits of data as [inaudible 0:48:41]data. And create a whole picture with that. The other thing that you said, where you cover this one's ask, ask, ask. Don't be afraid to ask for questions and then the third thing that I would recommend is keep good records of what you have looked at. And I'm working through the due diligence for the client, if a buyer comes back and ask for the same documents that they may have already received earlier on. Extremely annoying for a seller who doesn't understand why they even needed it in the first place. And a lot of sellers get skeptical buyers. They think this person isn't really serious about it. they're just looking fishing for information and if you end up passing the same documents 3 or 4 times, even twice. It start to grow those seeds of doubt and to bigger than just seeds and it cause a lot of problems really later on. So be organized in your due diligence just as you want your seller to be organized. Even your documentation. So that you'd know what you have and work off a check list, where be the last thing that I would ask. But don't be afraid to add to that check list as you go through.

Chuck: Sure and something else I would add, kind of similar, not a little different, is with the seller. They're interested in knowing that you're going to do well with their business and whether they realize it or not, the questions you ask them are important to them. Almost always. So if you're not asking good questions, they're going to think that you're not serious or that you're not going to do well with the business and we often see that buyers, or sellers won't always sell to the person who offers the most money often times they're selling to the person they think who's going to do best with their business or somebody that they like. I see it time and time again. Recently I had a nice 7 figure deal, I was working with and every time I get off a call, you know, I do a wrap up call with the seller, "Okay, what do you think? and he went like, "Well that person didn't ask any good questions like, I don't want to sell my business to them.", So make sure that you're doing some due diligence upfront, you're looking into these things and you have good questions that you're asking that are relevant to the business.

Mark: Yeah, absolutely! Do not research ahead of time, not wasting your seller's time on the conference call is important. A lot of good sellers, when they go to sell a business, within that first week, they're going to do half of dozen to a dozen conference calls and it's exhausting to do. So if they get into a call and somebody asks, ask them question that was covered right up front. There's a good place to ask questions that have never been answered, and there's obviously you haven't done your homework, sort of questions. So do have basic homework ahead of time so that people know about, that you've put in that upfront research. One thing I'll add at that fellows, is if there's something that you're not familiar with, ask them about it and don't be afraid about that. And at the end of the day, as a buyer you want to protect your money, but make sure you're not making a bad investment so, don't be afraid to ask those questions. If you ever have questions about, "Can I discuss this or what do you think?" Use the broker. We're here to advice with the buyer and the seller through that process, we want to see a good deal done for our client.

Chuck: Absolutely!

Mark: Alright, this has been really long, but I think, good information so, Chuck thanks so much for coming on and maybe down the road, we'll do another one of these.

Chuck: Sounds good. I appreciate it!

Mark: Cool, thanks!

Chuck: Alright, thanks everybody!

Links and Resources:

• Centurica offers a full blown due diligence services.
• Google
• Google Trends
• Builtwith
• Archive
• Trademarkia.com
• SEM tools:
• Spyfu
• moz
• majestic
• alexa
• semrush
• Website crawling tools:
• screamingfrog
• deepcrawl
• orangefox
• copyscape
• Publicwww is a source code search engine
• Spyonweb for looking for peoples adsense tools.
• DomainIQ provide information for domain pages
• Bannedcheck.com
• Social media:
• Linkedin
• Buzzsumo fantastic sm network tool.

Today we are talking to Chuck Mullins all about due diligence. An internet business veteran who is now a part of the Quiet Light team, Chuck purchased his first internet business while still in college and was more successful at 18 than some of the most seasoned entrepreneurs.

For both the buyer and the seller, the due diligence process is one of the most difficult parts of buying and selling an online business. Fortunately, there are a lot of tools that can be used to simplify the process.

In this episode, Mark and Chuck look at over 20 different due diligence tools and explain how you can use them in our due diligence processes.

Episode Highlights:

Chuck guides us through a group of tools that can be fundamental to any well thought out due diligence plan. Any buyer knows that this is the most important thing you can do to make sure that no stone is left unturned when preparing to make that purchase and hit the ground running.

Lessons from Due Diligence:

Mark: Hey Joe, how are you?

Joe: Doing good Mark, how about yourself?

Mark: I’m doing well, I’d talk to somebody that we both know well and that’s one of our own Chuck Mullins.

Joe: Mr. Chuck Mullins, good man he is.

Mark: He is, yeah. He joins us on the interview on the video part push on the interview wearing his Quit Light shirt which he had embroidered. The only person at Quiet Light that has one. Although, He didn’t tell me that he made one for you. And I haven’t seen you in it yet.

Joe: He did I almost put it on today. It’s just, it’s a little big so I [inaudible 0:01:16] it. I need to put on some layer, run it through a two cycles of the dryer.

Mark: It would have been so appropriate because, you know, he’s wearing his shirt in this interview and you’ve been wearing your shirt in, and he’s getting, make one for me though of course.

Joe: He should. You’re the founder of Quiet Light Brokerage.

Mark: Absolutely.

Joe: You should have like a logo on the back of your office chair that says Quiet Light Brokerage, what’s wrong with you?

Mark:

Ricky Brigante started Podcasting 13 years ago about something he loved, Disney. The Podcast lead to a blog, that turned into a full blown website with over 11,000 articles, 70,000,000 page views, and a YouTube channel with nearly 1,000,000,000 (that's a BILLION!) views. Ricky took his business from a hobby to being an invited guest to Star Wars openings and walking down the "red carpet" in Hollywood.

Ricky seemed to have the dream business, yet after a number of years he grew tired of it and wanted to move onto his next adventure. He tried replacing himself first, and failed. In this Podcast Ricky shares his story, his triumphs and mistakes. He talks openly about hiring friends and family, being passionate about what you do, and making an eventual exit from a business he loved.

Episode Highlights:

• Learn how Ricky built a YouTube channel with nearly 1 billion views.
• Content is critical – and Ricky talks about his approach to the more than 11,000 articles he has published over the last decade.
• When you need to hire, doing it to right way can add value, or headaches to your business and life.
• Speaking with a broker about selling your business is nothing to be afraid of.
• Planning in advance of a sale could bring a lot more value to a business.
• Why it can make sense to sell a business, even if you love it.

https://youtu.be/ivzJQpxwaH8

Mark: Joe how are you?

Joe: Doing great Mark, how are you?

Mark: I'm doing well! I understand that you got to talk to one of our clients recently Ricky Brigante, am I saying that right?

Joe: You're saying it right Ricky Brigante. He's the founder of Inside the Magic, he started of just a Podcaster literally thirteen years ago, he said "You know what this podcasting looks cool, I'm going to go ahead and talk about Disney". I love Disney! We're going to talk about that, and within a few months he had thousands of followers and it led to a, an eventual blog which became an eventual website to eventual Youtube channel to an eventual 900 million views on Youtube, I did say "Nine hundred million" that's nearly a billion views, 11,000 articles on the website, something like 64 million views, 17 million views in the last 12 months. Just incredible for volume on the numbers and one of the smartest things he said that he's sharing his advice not just in terms building a content business and the ways that he did it and following his passion, but the fact that he just sold the business, he said something most sellers don't necessarily want to hear which is, don't be afraid to have a conversation with someone like you or me or Jason or Chuck because you're only going to learn from it and he wished that he did that 3 or 4 years ago. Because he feels like he would have sold his business for a whole lot more if he just planned in advance.

Mark: Yeah, I mean, you know this Joe, a lot of times when a business owner talks to us, and they're not in the mindset of selling, they hear what we do, they always get defensive. We see this at conferences a lot, they come up to the table and they say, "So what do you do?", "We help you to sell your online businesses.", "I don't want to sell.", "That's okay, you don't need to. I'm not going to sell your business without you knowing, trust me."

Joe: Life happens, life gets in a way, get a great pair, you know, whatever happens. You mature and you realize that "I'm never going to sell my business" is a temporary mind set. You should always build your business with the idea of selling it. I talked to, probably, I asked this question about half a dozen people this week at the show, which is "Do you know what the value of your house is?", "Yeah it's about this.", "Do you know what the value of your car?", "Yeah, it's about this.", "How's the value of your 401 [inaudible 0:03:19] set?", "It's about this.", "What's the value of your business?" Silence. They really don't know, they don't know how to calculate it and in most of those times the most valuable asset that they own is their business. So Ricky talked about that a little bit and he just talks really about content sites, content development, advertising, following your passion, and there's really not a whole lot of tricks to it. No gimmicks, just really, just doing the right thing, and the traffic follows.

Mark: I love these interviews with previous clients; I think there's just so much insight to gain from them. I don't have too much more to say, so let's go ahead and get into the interview.

Joe: Let's do it.

Joe: Hey Ricky, welcome to the Quiet Light Podcast! How are you doing today?

Ricky: Wonderful! Thank you very much for having me.

Joe: Well it's good to have you on, it's good to see you, yet I haven't physically seen you and people that are listening were actually recording this as well, on video. Haven't seen you since we did the recording for getting your business launched and sold, which is now done. So we're here to talk about that process and more about you and your experience as a content creator a Youtuber, all these things that you've done with some huge members. But as I said in the intro, or as pre intro as we talked, we don't do fancy introductions about people, we want to hear it straight from the horse's mouth so, for everybody listening, why don't you just give us a little bit of a background on you, your backstory, and that kind of thing.

Ricky: Absolutely! So yeah, I'm Ricky Brigante, obviously. I started a website, well it was originally a Podcast called Inside the Magic 13 years ago, and at that time, I just freshly moved to Orlando. You know, I was from Florida, was visiting theme parks particularly Disney for my whole lifetime. Going on trips with family and all that. And then I went to school, I went to college, decided to move to Orlando, that'd be close to it all. Then heard of this thing called the Podcast and I got it, sounds fun, I had sort of dabbled in audio video production through my schooling years, and I was like, "Okay I'll just do this for a fun hobby. I'll talk about Disney in maybe 10 or 15 minutes a week, and then after a few weeks I'll probably get bored of it and moved on." And so, much to my surprise, within, literally the first episode, all of the sudden there were over a hundred of people who tuned in, and I was like, "Oh that's okay, sure, that's not bad." Started getting emails from people and then get a hundred turned into two hundred and turned into five hundred, and over the first few weeks suddenly was thousands. I was like, "Oh this is, I guess a thing that I'm going to be doing!" So, without going through the entire 13-year-history, essentially the Podcast kept steamrolling like that, eventually got to a point where I turned it into a full website, not just an audio show. Created a blog which ultimately turned into sort of a news site. Around the, not just Disney but expand more of the team that are tamed in the industry, Universal and other independent attractions and over years and years of doing that by myself. It kept growing and I realized I needed help, and so I started bringing out volunteers and then started paying people as more advertising money came in, and along the way, got accepted by Disney and Universal and others to be at grand openings and trying events, and do amazing interviews, and add some pretty fantastic times, eventually, finally realizing "Oh, this is actually a business in the making to more than just me.." So I started hiring people, went through few staff changes and ultimately found an amazing team of reporters that's really selling and impressed me like crazy. After all of that, I finally got to go to a place where I was like, you know I think I've hit where I'm good with this. Everybody's doing a great job and somebody else could probably come in and do a better job that I could know him because I want to pursue everything. That's it in a nutshell.

Joe: Well you did it longer than most entrepreneurs. Most do it for six or seven years. Some get tired after two or three but you did it for 13 which is a long time. How long was it before you went from the Podcast to the blog and generating advertising rather?

Ricky: For the first, maybe two or three years, there was no revenue at all. It was just a hobby, completely. What I did in my spare time which got increasingly more and more even into my fair time and then I was like "Ah maybe I should throw some ads on this", and so it started picking up, but it wasn't really until five or six years in doing that, you know. Because this was before Youtube, before Facebook, before Twitter, before blogs really had gotten, you know, become as big as they are. It took a while for, sort of these big companies to realize the value in allowing me to be part of their, sort of, big media festivities and arranging interviews, allowing me access to cover things in a much better way than just some [inaudible 0:08:12] and so at that point, that's when things really started to, sort of explode, particularly with the Youtube channel. That would, sort of always the bread and butter of it.

Joe: So let's talk about the youtube channel. I think you've got almost 800 million views on Youtube is that right? More than that actually.

Ricky: It's over 900 million now but, I mean it's mine anymore. But yeah, I was getting close to a billion views on the channel which is a lot.

Joe: That's really incredible, close to a billion views. Tell us how you did that, how did you.. Did you hire some, who did help you with the Youtube channel? Talk about that a little bit for anybody listening that may have a content site and wants to get that video portion of it. What is the right process and right thing to do there, in your experience?

Ricky: Yeah, I'm not sure there's a one right methodology, well it definitely helped that I was joining that very early on, you know, right when Youtube was in its infancy and so there wasn't a lot of content like I was putting out. Theme park related content at that time, so that always helps. You know when you get in early, obviously that doesn't help any of you today, but I think the key, and this would actually be true for Youtube, be true for Podcast, be true for the website, it's to produce really good quality content on a regular basis, and then most importantly, see what people pay attention. Just because you're focused on this one thing, maybe everybody is really liking this other thing that you're doing, that will sort of, not even really, it was an afterthought. You know, it's okay to gravitate towards what people are enjoying most, and just find your path from there.

Joe: So did you take.. Did you advertise on your blog, on your website that you had a Youtube channel? Did that start to get the views there? Or you paid advertising?

Ricky: Well it was kind of a combination. I never, in the history of the 13 years, I almost never paid for any advertising for Inside the Magic. I did minor Facebook ads here and there, I mean, boost a few posts but other than that, I really didn't do any. It all grew very organically. Fortunately that, what's great about a Podcast, I'm sure you know this, it's very personal connection to a certain sort of viewers, and it allows you to sort of.. They feel they're a good friend of yours and so when you say "Hey, I started this Youtube channel, come check it out", like "Oh cool! Ricky started a Youtube channel!" not like, "This corporation has tried to do this promotional thing." It feels like a personal relationship, and as long as you don't try to take too much advantage of that, you know, you treat people like people, not just as products or customers or, you know. Everybody's out there because there you sharing a passion. That's what really came down to, so that shove through no matter which version of sayings I was working well.

Joe: So the Podcast really led a lot of people to the Youtube site.

Ricky: I think so, at first. That's before it really started. But then Youtube has its own recommendation engine and it found, just a sort of, a life of its own, that there will be people on the Youtube channel that had no idea there was a Podcast, and had no idea there was a website, and there are people on the website that have no idea there was a Youtube channel. It's sort of these individual unique communities that definitely, sort of grew organically, I would say, back when Facebook organic reach was a lot better than it is now, you know, several years ago, that also help drive viewers to Youtube. You know, you used to do all the plays that Youtube video on Facebook and that would show up huge on everyone's feed, and would auto play, and that was a great way to get off, wherein nowadays you can't do that anymore.

Joe: Well on that Facebook site, you've got a pretty good following something, like three quarters of a million? a million followers?

Ricky: Yeah, almost.

Joe: I keep saying you, and it's not you anymore, it's Kurt, the guy who bought it and that owns it. So I'll sled a back and forth here, but three quarters in a million social media followers, almost 900 million video views, I would.. How many actually paid views on the website itself? Do you know?

Ricky: Oh gosh. I mean, we were at a height pushing a million uniques a month.

Joe: Okay, that's pretty impressive. How did you churn out the articles? I know there were about 11,000 articles at the time we launched the business for sale. How did you consistently write new contents on a regular basis and did you focus on certain keywords for SEO purposes or did you just write good quality stuff and people watched?

Ricky: You know that was a huge learning curve for me. I've always been a pretty decent writer but I didn't know what it, I mean I never went to journalism school, I didn't know what it meant to write a specific kind of writing. That is note informational, largely, and telling a story. And I knew very early on that I never, despite doing a Podcast for people just listen to me, [inaudible 0:13:01] on about things. I never really wanted the focus to be on me, it was always about the content, and what I was talking about or writing about, it was the information I was presenting and doing that in such a way, that made people interested in befall story. It wasn't just like, "Here's a little tidbit" moving on. You know it was like, what does that mean? What's the why? I focused on "why" a lot, really. You know, they say that there's that five W's. But to me, "why" is always the hardest question to answer, it's the most interesting question. You know, what's the reason that a designer put this thing on the wall. Why now? Why this place? Why this IP? Do you know there's a million why's people always ask and those are the hard questions that I tries to largely focus on when writing, and in the process, I definitely wrote with an SEO mindset. I didn't write traditional grabby headlines, so much as like Google friendly headlines with a lot of keywords. I definitely tried to write content that had.. If I was writing about a specific new ride that Disney opened, for example, I would make sure to include exactly that particular phrasing of that ride, five or six times in the article so that, you know, those sort of standard SEO tactics, and that works fairly well. It got us a good place when in new cycles.

Joe: Were you writing for Google or for the person that was actually going to read it or a combi?

Ricky: Definitely a combination. I tried to keep both in mind because I don't want to be illegible. I didn't want to just see like it was this keyword saturated nonsense. So I guess it was a balance of figuring out, "Okay, how much keyword saturation did I need and how long could I make the piece of it that felt very natural?"

Joe: Okay. So for those that are developing content sites, really, the way I look at yours and still do is that this is a real legitimate business, in a passionate niche that you care deeply about and share that enthusiasm with others the end result was a fantastic business that's sold at a great price for you and also provided a good living for more than a decade.

Ricky: Yeah. Definitely I think the passion is what was the most important about it all and that's ultimately what influenced my decision to sell the business. Because over the years, you know, you do something for.. I did the podcast literally, every week for 10 years I didn't miss a single week and after that got a little burned out on it, you know, the passion was starting to dwindle, and I knew that I couldn't produce my best work if didn't have my heart behind it. Whereas I saw, as I brought on new staff members, their passion was, reminded me of how, you know, when I started. Then I was like "Okay it's time to hand that off" because I have, you know other passions that I wanted to follow in life, and it's time to move on.

Joe: Talk about that process a little bit. Let's shift from the development of this amazing content site. This Youtube machine that you built, to the business you decided to sell. I think you and I, prior to listing the business, we've been chatting for a better part of the year I think, right?

Ricky: Yeah it was like eight or nine months before we finally listed it, that I first emailed you and at that time you were like "ah you've seen that, you got to work on this, you got to work on that" so..

Joe: Right, and you had made the decision at one point like many entrepreneurs, you're like "okay I'm tired, I'm done, I need to let somebody else to run this".

Ricky: Right.

Joe: And you stepped back from it, and you put other people in place. Tell us how that, worked out a little bit. And what your mindset was at that time and how you had to shift afterwards.

Ricky: Definitely really challenging process to go from what was largely a one man operation to becoming a legitimate for like a, or a better word "business" it was.. I went through almost three entire staff, sort of setups, before I finally found the right group of people and the right flow and the way that it worked. It was hard for a while you know, It's like I had some really amazing people and they just didn't work well together, and I wasn't able to give it my all to make it work and so then I was like "okay move this person out, move this person in", it was like a, you know, a chess game, figuring it out, the great pieces next to each other. It was definitely a lot of work. I didn't realize that, in trying to remove myself from the business, I was actually giving myself more works that I had ever done.

Joe: You are no longer a writer, a Podcaster, you are really manager of people that were not happy with each other, unfortunately.

Ricky: Yeah, definitely, I'm in, and ultimately people were very happy with each other fortunately. So I had to learn how to be a boss, how to be a manager, how to be a, you know, some staffing, recruiter. I have never done anything of these things before so I just figured it out as I went..

Joe: Right. So you built that up, you were a one man trip for a long, long time put staff in place. And then you stepped back from the business and I think that's when we first chatted. You were kind of burnt out and you had stepped away from the business and, unfortunately it timed with your cost going up and some of your numbers coming down.

Ricky: Right.

Joe: Then the decisions some of the people made and you stepped back in, still wasn't full time, I don't think it was full time at all, by the time we started talking. But the timing of the sale is critically important as you've learned, right?

Ricky: Yes, yeah definitely, no that's a good point cause, yeah, I had over staffed and that was impacting the bottom line, tremendously. To the point where there is even a negative month which was not happy to see. So I knew at that point, I was like even if it's not going in the right direction, and makes some drastic changes and yeah, even though I have stepped back significantly for a whole year, I had to jump in full force which of course you know, when you told me to, [inaudible 0:18:40] what I needed to do, I was not happy at all. I get it. But somehow, you know, I found it within myself "Oh my God, if I'm going to do this, I'm going to commit to this idea" and i, yeah, with your guidance which, thank you it helps, tremendously. You know, checking in throughout the months and sort of navigating the.. You know, I've never sold a business before, I didn't know what that process was like, so it helped tremendously for you to be incredibly patient. Walking through the process and eventually I fully understood what it was going to take for you to get there.

Joe: Well, let's talk about that for a moment because I've had these conversations a lot and often times I'm tacking myself on the chest and you've got to have the heart to do it. Right? Because it's easy to look at the P&L and the numbers in the trends and say like, Mark Doust told me when I first sold my business through Quiet Light in 2010. He said, "Joe, wait six more months, the trailing, 9, 10, 11, or 12 would fall off and you'd make an extra amount of dollars." and I did. I waited. You and I had that same conversation and that worked. Dozens of entrepreneurs, what you had, and what's so important for those people listening is the heart to do it. Because you were done, you were tired, you were ready to move on, you set back from the business, and you said "I've got a cash calcu, this is just going to keep generating revenue, these people that run it for me, and unfortunately it didn't work" and the trends took an ugly turn, you stepped in and you fixed it, but we had to give it sometime right? We talked for eight or nine months. So what we did, for people listening, is that we let that time pass, and then we sell at the most recent, six months did it, we absolutely did not do six months times 2 to get the trailing 12. We had to still do the trailing 12 months because every buyer wanted that. Every buyer looked at that, and the business was seasonal. It's Disney right? There's, big events, there's summer times, there's fourth quarter, there's Thanksgiving, Christmas, all those things. So we had to adjust the P&L to what you've been doing the last six months, and do, some things that you don't necessarily want to do, which is proforma stuff. What we did with Math, and logic, and a lot of work on your part, and it worked. We had a couple of offers right out of the gate and of course…

Ricky: Surprisingly fast!

Joe: Surprisingly fast, but we knew, right? That this is a niche where it's full of passion, where it goes from you and the people that visited, by the millions every month. The couple of people that come to mind, were they passionate about Disney? Or were they just investors?

Ricky: Right.

Joe: One of them was, very very passionate about Disney. I think he probably visited more than you, right?

Ricky: Lately yeah, that's probably true over the last couple of years.

Joe: Yeah, so it was a matter of finding the right person for the business and being very passionate about it. But for those listening, we did find an SBA buyers, Small Business Administration, and there were some real benefits for that, and there were never some real challenges along the way, timing wise. Typically, SBA loan is going to take an extra 30-45 days with a cash buyer. In this case, I think we were at least at 90 days, is that right?

Ricky: More than. We were pushing a hundred and something.

Joe: So we went through Thanksgiving and Christmas so console things down.

Ricky: Yeah.

Joe: But the whole process took a little long and the communication was a little hard and you were very patient. What was the upside for those who think to having to wait? It was, that you own the business for an extra 45, 50, 60 days and you got that revenue, right?

Ricky: Right, well sure . Specially in the business that I've been doing, you know, a lot of that revenue that comes in is on that 30 even sometimes on that 60, so I'm actually still even though we closed a couple of weeks ago, I'm still going to get it after we did additional chat in another couple of weeks, I'm just, from some of that residual, you know, what last, last month that was added on there that wasn't expected but sure, I'll take it.

Joe: Right. Alright so, let's talk about what if you could do it all over again, on the business itself. In terms of that transition from being a solo entrepreneur to hiring people, to trying to step back and realizing you wanted to sell. Is there anything you would do differently, for anybody that's listening, that wants to walk down your path and live in it, eventual step.

Ricky: Yeah, definitely, and this is probably the case of a lot of people that, you know, okay you're by yourself, you're working like crazy on something that you're passionate about, you want to bring on help. Who do you go to? You go to people you know. You go to your friends, you go to family, or people that feel like family. It's, you work very well with those people at first, but you don't know how that working relationship's going to be and then more importantly, if that yourself, you don't know what the fall out about is going to be. And is there, you know, the challenge of having to tell someone who is a friend, "I don't want you anymore.", that's really hard whereas you just hire someone out of the blue, a lot easier to part ways, when, you know, make those business decisions that you need to make. So, I definitely realize and I will carry this forward in any business I'm ever involved, will begin with, from in that vision that I would rather hire people that, it's like, that I don't know, or that I only professionally know. That I know they're good worker, and I don't need to try to socialize with them. You know, it was hard for me to transition into that boss role. Never hire someone you can't fire. Exactly that's a very assisting to way of putting in.

Joe: Okay, and then in terms of position, the business for sale, looking back, are there certain things that you wish you had done?

Ricky: Oh boy, I guess, well, I mean that's inter-relevant to what we were just saying. I wish I had, you know, got rid of some extra people sooner so that I wouldn't have had such, a couple of, you know, poor months that we're bringing the numbers down. I guess I wish I had started thinking about this, like, earlier. That it's not as scary as I thought. I wasn't going to be to just open that conversation with someone like you to understand what it takes to sell a business, what you need to strive for. If I had known that, two or three years ago, I probably could have sold sooner and potentially even at a higher price because I would have been more focused on putting the pieces together without even trying to rush to make that out.

Joe: Right. So, I was at the Prosper Show last week and I've said this probably 85 times. Don't wake up one day and decide to sell.

Ricky: Right.

Joe: Plan to sell. And that's what you're saying, is that if you plan it well in advance, don't be afraid to have conversations with people about the value of your business and what to do and how to do it. You're a mature entrepreneur or professional, no one is going to talk you into signing an engagement letter just to get their hooks and do for commission. Have that conversation, that's what the advices are there for. More people they talk to, the more business they get for themselves as well. So, plan to sell. Don't decide to sell. Think about it well in advance as the other piece of drives that you give.

Ricky: Definitely.

Joe: Okay, and on the content creation side, you think that, if anybody can pull off you on the Podcast, they should go for it because it gets more personal?

Ricky: Yeah, I saw a really funny video going around online, it was from Funny or Die, or College Humor, one of those. Where someone was going to start a Podcast about something in [inaudible 0:26:22] and the whole video was focused on reasons why to shoot and start a Podcast. Say, it was literally called "Your Podcast will fail", and approximate, it was essentially, there are a lot of Podcast out there. Not everybody wants to listen to you, talk about the way it's set instead of the Game of Thrones, you know. But if you do have a significant passion about something and this is why I think it worked for me, I didn't really set out to make it a business, you know. I did it because I wanted to, because I was going to have fun with it, because I wanted to connect with people, and that's what a Podcast is [inaudible 0:26:51]for. So if your goal is to do anything that's just, "Hey, I'm talking to you because I enjoy it and because I want to bring a connection together." I think that's a great reason to do it. Not so much if you're just looking to either become famous or make it click bot because you're probably not going to do either one of that quickly.

Joe: And you know what you did though, and you're very humble about it. You took a hobby, "I'm going to spend 15-20 minutes talking about something I love." every week to 11,000 articles, 700,000 social media followers, almost a billion video views. That's pretty huge, so don't go lightly about, you know, you own endorsements, you've done something pretty impressive. What do you moving on to now? what's your next adventure? I think you're staying in the attractions area right?

Ricky: Yeah, I have went on really, sort of, unexpected results of doing what I did for the last 13 years was being a, having a tremendous chances to get to know some of the top talent in the themed entertainment industry. From, you know, the best designers that have been there for decades at Disney, you know. People who I really respect and look up to, and people who I've read about in books. And I was like, "Oh, now I get to talk to this person." It's like I, over, you know. The last 13 years, I've gotten, sort of a, master class in design, in themed entertainment designs specifically. So, I've been so inspired, I went on a way that now I was re-venturing of, to be a creator instead of just a commentator or an observer. So, I've joined a company called Pseudonym Productions here on Orlando to create our own productions. We've actually already done four over the last three years, but now we're really, you know, I'm going to be spending a lot more time, full time, making a, have a more permanent place that we can, you know. People can enjoy what we do year around rather than just a few weeks of their time.

Joe: Are you future Walt Disney? Is that what you're saying? Years from now it's going to be you?

Ricky: I think our content might a little bit unique and possibly weird side sometimes. More skewed toward the older audiences, but sure. You know, anything's possible and I would love to see what we've started very small good, just like I did with, you know, beginning at a Podcast and that sort of, growing and growing and growing. That's for the next 10 years, and who knows how big this could become if it does, you know, productions running worldwide.

Joe: Right, you're passionate about something and based upon your history, I'm sure you'd going to do pretty amazing with it. Will you continue as a freelance writer for the parts of Disney for Inside the Magic?

Ricky: Well, I will say that, with the new owner occurred, I already sort of a hand shake agreement that I'm going to come back next year when the big Star Wars land opens, cause I'm a huge Star Wars nerd, I didn't want to miss out on that, so I think I'll pod back in from time to time you know whenever he might need some help or just when I'm sort a beg him to go to some cool event but, for the most part I'm going to try put myself in some distance there.

Joe: Awesome, well you probably need some break from it. In time I think you'd probably say to yourself "Gosh I wish I could get in, I wish I could meet that person". As long as you keep a good relationship with Kurt you've gotten in, Right?

Ricky: I sure hope so.

Joe: As then next, Walt Disney people will be coming to you anyway. Any last minute thoughts, any advice that you'd give an entrepreneur that's developing a content site, a Youtube channel, in terms of what they can do to do as well as you have.

Ricky: Well so, here's a thing that I'm taking forward with me even with Pseudonym Productions, because it's also, you know, we're going to generate contents, a very different type of content, but it's still content creation, and I think it's important to, well, be business minded about it. It's really doing it because you love it, and because you can, as you're saying earlier "The heart for it".

Joe: I think if you start in with a goal of something astronomical and massive from nothing, is a good chance you're not going to get there, in every, not as quickly as you hope you will. But you know it's, write what you know, what you love, you know, whether you're just making a blog or writing something or you're taking photos for Instagram. Do it because you love it and don't early have any expectations. You know, sort of clear your mind, share things that you like and follow, you know, wherever that goes. I mean it's, most of it is free to do you know, everyone's got a phone, everyone's got, you know, their internet connection, just do it, create. You know.

Joe: I like it. That's excellent advice. I appreciate your time man. We're running out, I want to make sure that we share some show notes, people to reach out to. What was the name of production company again?

Ricky: Pseudonym Productions and the website is pseudonymproductions.com, and that's where all the contact info's listed.

Joe: They can reach you there and they should definitely look it up if they're ever heading to Orlando right? As an alternative to Inside the Magic?

Ricky: Yeah. Yeah, exactly and we're, you know, looking for partners as well that create awesome new things. So if anyone likes what you see on the website and want to become part of it, reach out. You know, I'll send an email back.

Joe: Fantastic. Thanks for your time Ricky, I appreciate it.

Ricky: Absolutely. Thank you.

Links:

Ricky's Next Adventure: Pseudonym Productions: http://www.pseudonymproductions.com

LinkedIn: https://www.linkedin.com/in/rickybrigante/

Twitter: https://twitter.com/rickybrigante

Personal site: http://www.rickybrigante.com

If you've ever wanted to sell or purchase a SaaS business, listen to this Podcast because Nathan Singh has done both. He sold his own SaaS business in early 2017, only to turn around and buy a bigger SaaS business in December of the same year.

He's a former NASA Scientist who out-negotiated a full price, all cash buyer to win the deal and close on a multi-million dollar SaaS website. In this interview Nathan shares how he approached his listing review, initial seller conference call, due diligence, navigating the SBA process and the transition after the sale.

Nathan also shares why he feels SaaS businesses are the right fit for him, and what other types of website business models he looked at during his search.

• Learn how to make a buyer love you – and want to sell to only you.
• Interviews should be conversational, friendly and flow naturally.
• Nathan shares his SaaS due diligence process for this business.
• Seller was meticulous using Asana and Dropbox with SOPs and a streamlined process.
• How to navigate the SBA process and the team he worked with.
• What was it like to take over a remote team that was loyal to the owner.
• How he took over the business, worked for three weeks and then went on a three week vacation.
• SaaS Businesses produce recurring revenue without product working capital.
• Seller worked part-time and Nathan is planning full-time to expand and growth the business.
• Nathan purchased this SaaS business with an SBA Loan.
• Tax returns matching the P&L is great, but not always the case for solopreneurs.
• Keeping the sale confidential is critical until the APA is singed.

https://youtu.be/yj_XkpWdRKs

Mark: Hey Joe, how are you doing?

Joe: Doing great today, how are you doing today Mark?

Mark: I'm still under the weather.

Joe: I had somebody tell me at the prosper show recently that they obviously enjoyed the podcast they came out to pay this compliment, but that he could tell we were in different parts of the country. I'm not sure how, I said "Did you watch" he said "No, I listened". And he knows that we're in different parts of the country. So where are you in the world just so people understand?

Mark: How in the world did he know that?

Joe: I don't know. It's your funny accent I think.

Mark: I'm up from Minnesota, although people think that Minnesotans have an accent, we do, but especially up north. Not as much in the city. I'm in the Twin Cities the Saint Paul side. If anybody's ever coming to the twin cities just drop me a wine and be happy to get together. Where are you?

Joe: I'm just northern shell at North Carolina out in Morris zone North Carolina, and the more people I talk to, there's lots of sellers around here, lots of buyers around here and I've connected to just quite a few so anybody in this area, reach out.

Mark: I thought down in North Carolina you guys supposed to have a bit of a twang accent, aren't you?

Joe: No, not from here. [inaudible 0:01:47] from here. Everybody moves here because they're too darn cold up north. I grew up in Maine. We fled to the south back in 2006.

Mark: Ah, ah. Whoever that was that knew we were in different parts of the country, I want to know how. That's pretty good.

Joe: Not only did he know that, he came up to me to thank you and me personally for doing the Podcast, number one, and doing it with Norm Ferrar on SOP's because he got to connect with Norm, and it helped take his business to the next level, and he said it has made a huge difference in his business and his life.

Mark: That's fantastic!

Joe: Yeah! It's a feel good moment at that time.

Mark: We got to be careful; our heads are going to get really big.

Joe: I know, I know. Let's talk about somebody who doesn't have a big head but should, because he's a really impressive guy. That's Nathan Singh. He bought a multi-million dollar SaaS site for a million. He has also been a client. We sold his SaaS businesses before. You remember Nathan well, right?

Mark: Absolutely!

Joe: Well, Nathan is one of the nicest guys, very humble. Former NASA scientist, NASA engineer, and turned entrepreneur. We worked together first on the sale of his business last spring, and then he purchased a multi-million dollar SaaS site I've closed in the fourth quarter. And in review, we're sharing on this Podcast a lot of the things that he did right to make a great impression on the buyer, to out-negotiate all cash buyers to work with the SBA and lender to literally, quote, Nathan is one of my favorite clients of all times from the SBA lender, and the under writer as well. He instilled confidence in everyone all along the way that made him the choice to be the buyer that they approved him overlooking at other buyers as well, and he has just done a great job. Getting the business sold and then he talks a little bit about what he has done since purchasing the business including going on a three week vacation within three weeks of buying a multi-million SaaS business.

Mark: Wow that's pretty brave! I don't think I could've done that.

Joe: He had it planned, he took it and things went well, and they continue to go well.

Mark: That's really good. So I'm excited to listen to Nathan. Nathan is generally, one of the nicest guys I've dealt with in 10 years, and I've dealt with a lot of nice people but he rises at the top of the list of one of the nicest guys. I'm excited to see him in the video, because I don't think I've ever met him in person. Also, more importantly, listen to what he has to say.

Mark: Let's go to it!

Joe: Hey Nathan welcome to Quiet Light Podcast! How are you today?

Nathan: I'm doing well, thanks for having me.

Joe: Excellent man! We haven't chatted for a while. I know you've been traveling so welcome back. Listen, we've talked about this briefly but the tradition on the Quiet Light Podcast is that we don't read scripts and do flowing introductions of our guests. We'd rather hear it straight from you so, for the folks that are listening today, can you share some background on yourself as an entrepreneur and where you come from?

Nathan: Yes sure. So, before I was even an entrepreneur, I started off doing software engineering, and mostly high level stuff on requirements and project management. Work on department of defense for a couple of years and then moved on to their space operation. So while I was there, I really got the bug, for trying to start my own business that we knew we have an idea what I was going to do, but I just happen to run across somebody who was selling an app and basically started his app and it was a screenwriting program called Scripts Pro, brew that out for a couple of years and then it got acquired, and I was like "I want to do this again" so it just rings and repeat. After that I had an online ordering platform called Order Zen and had the same with that. At that time was actually easy to broker. So I brew that out till what I can do, and then we got that acquired, of course with a seller for that one. Pretty much after that, we became very tight, and I monitored your listings specifically, very closely, and then we came across the listing for Envira Gallery and that's kind of have [inaudible 0:05:57] Basically, that's pretty much the background that I had since industry extinct and that's why I [inaudible 0:06:02] it over to this senior entrepreneur acquisitions have been online businesses.

Joe: I think you sort of lightly flew, touched over the fact that you were a NASA scientist. I mean, come on, that's a glowing thing to have in your resume. Let's not make that too light. It's an interesting transition from a scientist working at NASA to becoming an entrepreneur. I guess once you get the bugs, you will get the bugging, and you can't stop. So that's great. So I want to talk a little bit about the process that we went through, and you in particular, went through in buying Syed's business. Syed was a guest on the Podcast as well, as you know. In terms of how it works for you and what we looked at, can you, for the people that are out there looking at businesses and building portfolios of online businesses, can you talk a little bit about your vetting process and how you went about it? Then we'll jump into how you handled the call of Syed and the whole process right through the closing.

Nathan: Yeah, absolutely. So the good thing, I mean I had some pretty good time between the time that I sold my last business and the time that I was working. So I got pretty acquainted to what was in the market, multiples they were going for, and the kind of business that sell out. So predominantly I was looking at SaaS businesses. I've been it in before. I love the fact that it was recurring revenue, there's no product I had to deal with, so I really zero in on that as my primary, well, it's more left open to great businesses that had good year over year return, and Syed just sort of filled all those checkmarks. They had great in over a year return, it was growing. In his case there was kind of a lower owner involvement which is great because that allows me to come in at full time and really push at the growth. So those were some of the main key characteristics. But one of the biggest ones, I know that you're familiar with this one. First question I'll ask you is, "Joe, is this taxable?" and I wanted to make sure that was it, because I wanted to leverage my money as much as possible. It may not be for everybody but we certainly list, so I've been trying to pursue SBA business and the loans for a while, [inaudible 0:08:04] And as you know that's not been easy for the last, however many years. But I would say within the last year too, I've seen more qualified banks and qualified SBA folks come in and be able to really take that sort of thing with ecommerce businesses and SaaS businesses, know what they're talking about, and present it to their credit department, and make it happen, and I actually solve with Stephen Speer, he's not even a competitor, he's a guest as well.

Joe: That's right Stephen Speer from BankUnited, for those that haven't heard the Podcast, he was a guest. Very informative, as far as lenders go, I'd say Stephen is top notch, the best, and he's an entrepreneur, sort of, himself. Yes he's a lender with BankUnited but he works from home often, more often than not, and lives our lifestyle which is really unique, and he understands ecommerce and so he is underwriter, really important. So for those not familiar with the SBA, it's Small Business Administration. If you're buying a two million dollar business for instance, you don't have to have two million dollars. You can have 200,000 dollars and really leverage your money. But note, is Austin a ten year note which obviously works very well in terms of these online businesses. Let's jump to the first call that you had with Syed. Nathan, can you talk about your objective was on that first conference call would start?

Nathan: Yeah, so the objective is pretty much similar as with most sellers, you try to get a feel for the seller and knowing the business with its seller personally. You're going to be working pretty close to this guy or girl. So, the main thing is, I want to understand what Syed does day to day, what is his outlook for the business, you know, kind of that more, the regular things that you'll for even if you're buying a house, and how the thing was maintained. So with Syed, it was really, we talked about this before. He knew early on that I was a gator so that kind of help me knock a little bit there too.

Joe: What do you mean gator? What does that…

Nathan: For the gator, so quarter gator not [inaudible 0:10:11] it's seminal, it's two different things..

Joe: Did you see the Podcast by the way?

Nathan: I heard the Podcast with Syed.

Joe: I put the hat on and I have a gator said hold up… There it is right there folks..

Nathan: But yeah, it was really bad to understand, you know, kind of gains and knots in the businesses. I was a buyer, one of the specific things you're looking for is, is there anything I'm missing that wasn't in the perspectives, in terms of, what is the seller doing that if I remove him from this equation, will I still be able to do this? Because that taught something that you will rarely see at perspectives and even on conversation. You're kind of feeling out for that but at the main time, at the main thing, what I would advise, anybody that's listening that's looking to buy a business, because I've been doing this for a while, in terms of talking to sellers, and back and forth, and I've been selling my own business. You don't want this to be a stringent interview where you're just running through all these questions, you want to be very conversational and let it flow. I've gotten a lot of good results by doing things that way. I think that was the main thing, is that we kept it friendly and conversational instead of, "I'm trying to figure out why you're selling this because I don't trust you." It was just a totally different approach.

Joe: I can tell you that, with the conversation that you had with Syed, he has told me that on that call he wasn't looking forward to it being over. He enjoyed the conversation and the things that you had in common like the gators, but more along the line of taking care of the customers, and taking care of your people or your staff first, and he really enjoyed it. Where some of the other conversations that other seller have, they can't wait until it's over. I had that experience with one of the people that called me when I had my business for sale back in 2010. He was rude, he was abrasive, and I did all I could to stay on the line and be polite, and just wanted the call to be over. Even if he made me a full press offer I would have a hard time selling him the business. So that makes a huge difference, I think when you ended the call with Syed, his thought was, "Man I really hope Nathan makes an offer, loves to do business with him, and the people that are using my services and products, and the staff that I have in place, will really enjoy working with Nathan and thrives with him as the leader of the business." Is that kind of what you were shooting for or it's just natural that you did that?

Nathan: You know I think it's a little bit of both, I've sold being on the opposite side and being on Syed's then while I was selling my business, I've come across different buyers and newer party's conversations, when you just talk to them, you're like, this is not the right fit. Even if this guy came with a complete cash offer or whatever it could be, this may not be the right fit. With Syed, I kind of guessing here, I think he was sort of looking, not so much about the deal or the money but he was looking for a right fit because he was worried about his folks that were, i mean these are all permanent employees with no contract, there's really in this business, five of them, and so he really cared about them and he really cared about the customers. A lot of it came from me just doing things that were customer centered, I've always run companies like that, I've run teams that way, and I just sort of mentioned that, I was like, I don't know who else your other buyers are, but this is the way I do things, so I don't know if that fits within your battle, it just happen to be that way, and then I heard later on that these were his core values, and those are my core values, and we just sort of mesh over that.

Joe: Yeah, it was exciting factor in choosing you over the, technically, two other buyers. Let's talk about, jump forward to your due diligence process, what was your goal in due diligence, how did you approach it, and how long did it take?

Nathan: You know, it's funny. I've done more due diligence in past businesses that was much smaller. I'll sort of elaborate it on line. So the initial due diligence I've coarsely didn't know, returns on profit and loss versus statements and all that good stuff, what you're supposed to do. I did not do as deep with due diligence solely because of the talks that me and Syed did have, and just the reputation that Syed had. So his influence in the WordPress community, he has got a lot on the line. So I didn't really have to worry about him ripping you of and stuff like that. He was really worried about, they going to the right buyers, versus me worrying I've got the wrong seller and the wrong product and…

Joe: But you still verified that financials that was to make sure…

Nathan: Yeah, the basic stuff was all done but I didn't lose any sleep worrying if it's something was going to happen because, again, there's still background that you've parked over this. When you see that the tax returns are completely reflective with the P&L that got submitted and the perspectives, that right there gives me the warm fuzzy I need as I go forward. I don't have to kick and [inaudible 0:15:00] as much, trying to figure out where am I getting ripped off. You're going more with the mindset, okay the basis is there and everything else should just work flow and it did. But that was the main stuff, it's just making sure that everything wind up with ways that it was.

Joe: You only note on the tax returns, for those buyers and sellers listening, Syed had a business partner, so often time with partners, the tax returns and the P&L's are very very clean. When you are a solo entrepreneur, your more things, personal things with the business, it can get a little bit messier. The SBA looks at the tax returns, first and foremost, they'll use the P&L's if it's halfway through the year, and three quarters went through the year, thanks for that nature. But the tax returns are first and foremost, and what they do, their valuations off of. So don't be completely afraid if you're a solo entrepreneur, that you cannot sell a business, then have it be, financed with an SBA loan because you absolutely can. With the lenders that we've worked with, they understand the add tax schedules and the personal benefits that anyone takes, and so do the underwriters within the group that we work with there. So, you didn't worry too much about the due diligence process, naturally, you verified the financials, you had several calls with Syed, and you went through the process with the SBA. Let's jump to that for just a moment, what was it like going through the SBA process and what did you had to do?

Nathan: Yeah, the fun thing is that I had actually been through this process with previous businesses before, and so I've actually gone to that fun part of the business. We just had issues and pulled out. I was familiar going in. So first of all, kudos to Stephen, kudos to you, and kudos to Syed for just being an awesome team for making it all happen. That's probably why we had them work speedy close than what's usually expected. But you know, aside from that, I think having everything ready to go, I mean, Stephen was good about that, and pretty much gave me more or less the stuff that I needed in terms of, "These are things on the checklist, you should probably have this done because from my experience I know that it's more of that likely go through". That helps, because a lot of times, there's always [inaudible 0:17:17] going on, a lot of times the buyer takes a long time to get stuff back. So we didn't really have that issue here. But you know, again, it really mattered. I've worked with SBA bankers before, and it really matters on who it is that you're dealing with. With Stephen's case, he just had everything down. He's done ecommerce, he's done SaaS businesses, there is no "Well how does this work or where is the? So tell me where the hard assets are in the business?" There was none of that. So that kind of straight lined the process really well for all of us. But I think just having that stuff done upfront, that's what helped us get really done at speedy line.

Joe: You said that Stephen and myself and the underwriters all worked very well together and Syed and so on and so forth. I happen to have dinner with Stephen and the underwriter that worked on your business, they were both in Charlotte a couple of weeks ago, and they both talked about you being one of their favorite buyers. So for anybody listening, this stuff matters, Nathan brought a business, would that note to the seller, when somebody else made and all cash offer. The seller chose Nathan over that all cash offer at the same purchase price, because he liked Nathan and what he stood for. The SBA lender and the underwriter, both said that Nathan was one of their favorite buyers of all time which makes process easier. They're going to work harder for you when they like you. It's human nature, so really really important to understand that aspect of it. Let's jump now on to closing, training, and transition, and what's taking place since then. I think we closed just before Christmas. By the way it was probably from letter of intent to closing about 50 days which is fairly short for an SBA loan, and we had a full week of thanksgiving in there, so call it 45ish. What's transpired since you close, how was it going, what was training and transition like and so on and so forth?

Nathan: Yeah, again, comparing it to the past businesses I've had and worked with the past sellers, it's been night and day. The great thing is that because of the level of business, you know that will add the seven figures, because Syed runs seven and eight figure business above, he's very meticulous. So the first thing he did was setup, you know when they found a project in a drop box to view list. With all other things that his team needed to do for me, everything I needed in there. So that made it a lot more extreme ride then. Again if you're selling your business and you're getting to that point, make sure you have something like that in place, because that's the other warm fuzz and that lets you know that "Okay it's stuff I'm not thinking about as a buyer, the seller informed about for me" and we kind of running through those checklist. So, you know, I would say the transition went pretty smooth, I mean not really that he cuts.. You know, I talked to the CTO, I talked to the CFO, we all had these one on one's where we talked about what they did, so I made sure that I knew exactly what each person role is because I was taking over a couple of people's roles…

Joe: How did they feel by the way, the staff, with you coming in and taking over Syed's role? Were they excited? Were they scared? What was that like to tell them that news?

Nathan: You know, I think that initially they were, like most transitions, they were maybe a little one sided, just because, there was a lot of grey areas up until the actual deal was inked. So they were a little one sided, they were a little confused about what was going to happen now, they are getting the impression at something else or did I keep the same things they've had. So from my end, it just took a little bit of, getting them all on, talking to them face to face and letting them know, "Listen, everything stays the same, I've liked the way that Syed have done business, I've planned to keep those same things in place, let me know if there's something you're customed to and that is done because those things have all been accounted for" and so I wanted to do it and make sure I went above and beyond what they were expecting what happened after this transition and just kind of talk them down on the fears of what naturally happens when there's a transition even in corporate out and serious stuff. We're good to go now and that's what kind of passed that.

Joe: While we kept it confidential, we didn't want to let the staff know that the business was even for sale, until everything was finalized, inked, and really truly going through. That's something all sellers struggle with, when to tell the core people. In my case, when I sold mine, I think I waited until the asset purchase agreement was signed, because she was valuable to me and I wanted her to stick around for me and for the new owner of the business. So that's what we did here, and I know that Syed said you did a great job instilling confidence in the staff and making them feel comfortable. One of the attractive things about this business is it was one of many businesses for Syed so he wasn't working full time on it. How was the workload then for you, taking over the business? Are you working full time early on or you're finding yourself with more than full time? You're working less? What's that situation like?

Nathan: Yes, I'll say initially, at first two weeks, just like any transitions, it was pretty much full time. But I had a pre-planned vacation that's about three weeks long, that I have to go to India. So for me, that was a big deal to make sure that I would be able to leave and just do the minor stuff in the background and have some question, to get things while I'm abroad.

Joe: So just, you bought the business, we closed, and then you had two and a half weeks of being around and then you went to India for three weeks?

Nathan: Correct. Yeah.

Joe: And everything still ran smoothly.

Nathan: And everything is still smooth. I mean, that was mentioned to me early on and that was again, that was a really attractive factor to know that. You know, I think you've mentioned that you could move and go to the Far East and come back. That's kind of what I did. So, it was good to come back and see that everything was still in place, that the team was, the team was phenomenal, that Syed did assemble. Each individual player plays a major part in what they do, and for that reason they're also very turnkey. That's a turnkey business, turnkey team. So, that's why when I saw where am I inserting myself, it was kind of learning the role to what's already being done. How can I improve, how can I make things better for them, and be the leadership that Syed has been able to provide and do his other businesses.

Joe: Okay, so where do you see your workload now? You were working really busy, after just a couple of weeks you went away for three weeks…

Nathan: I would say that corporate atmosphere, it's like still checking at 8:00 to 9:00, I'm out by 5:00 – 5:30 and I'm told, you know, the employees do the same thing. Let's not make this a full 12 or 14 hour a day, and I want to balance that, that work-like balance too. Because I came from that kind of environment and I know it pays good. I usually work the eight or seven hours, sometimes nine whatever it needed. Rather than that, at a certain time before my wife comes home or whatever, I'm usually done, closed out, and I'm trying not to think about it.

Joe: Well, what are you working on? Syed didn't work in about a few hours a week on the business and now you're working 30-40. Are you fixing broken things or are you working on to projects and growth opportunities?

Nathan: Now the great thing is he built a solid foundation so what I'm really doing is I'm working on the stuff that he wasn't able to do, which is the marketing advertising taking that further gain, the PPC's setup, optimizing on the SEO getting the right content writers in to put that detailed information that we really liked, that's been attracting the other folks and traffic. So it's been really centered around the business development, the marketing and advertising stuff, which has really been done, because again, he's got great and recurring revenue, we've got a great organic traffic through Google, so from that right now, it's the going above and beyond the PPC stuff. The stuff that he didn't have to give and didn't really have to focus on because the business is really self-sustained.

Joe: Right, so you want to grow the business, you didn't buy it and just collect a check every month, you're trying to grow it so you're putting in more hours.

Nathan: Aside from just the business development, it's also providing that the one on one with these folks. I mean again, these are not contracted. These are folks that have certain benefits and they've liked that type of attention and focus from a leadership. So that's what I'm enable to do, I'm enable to gear about the product road map, provide my input to that where we want to go, instead of just kind of them doing whatever, it's done and just see that the money reach the bank, it's not really that.

Joe: As far as much, one thing we haven't touched on is where they work from. You've got five employees, are they all working from an office or they're all remote?

Nathan: They are all remote, they have been doing that for many years, so again, I tried to focus and know what side has all of you been doing, since Syed has 40 plus employees, they've been doing this for years, and I think Syed began and has been doing it for 14 to 15 years. So I liked that idea, and I liked the fact that they're able to do this with milestones. I don't know, there's no… You know a lot of times, I would just set a meeting yesterday, but some other guy, they own a company here in Houston, and they were like, how do you keep track? I was like, I don't. There's a lot of trust involved, and there's milestones that are set, and as long as these milestones are being set, I don't care where they're working that 40 hours.

Joe: What's your favorite software? What system are you using to communicate and track what they do and work with them? Are you using Slack or what are you focused on? For people that are running remote staff that are having trouble with it, what would you recommend?

Nathan: Yeah for Slack it's been awesome. I'm pretty new to Slack, I used Skype on my last business. Slack is way better than that so I highly recommend that. We use Zoom, we do a lot of this, the face to face meetings. I think that matters a lot with the remote staff, was getting at Facetime, and again, letting them know you're just not an employee behind the computer that's just in another state. We're talking to each other, we're going to do once or twice a year meet ups. So we do team building activities, that's super important too. Yeah I would say that Slack, the Zoom, and also Asana. Those things are big key to really help with the project management and the milestones we've set, and Github as well for the developers.

Joe: Okay, awesome. Alright Nathan because we're running out of time, how do you see the future of the business? What are you looking over that 12, 24, 36 months? You're going to hold to stay, you grow at 10%, you're going to grow 50%, what are you predicting?

Nathan: Yeah, you know, I hate to throw a prediction at it right now, I'm happy if we're over the double digits, anywhere in the double digits will do triple digits in over a year growth, I'm a happy, happy camper. I think when possible again, got a great business, great team in place, and there's nothing but upsides so, I'm looking forward to it.

Joe: We'll going to have to check in, in the future and see how it turned out. You have any last minute thoughts for multipliers and sellers? You've been in both shoes, you sold, you offer your services, business, you bought one, any last minute thoughts in terms of what they should do or focus on?

Nathan: Yeah, I would say the huge takeaway from this and for me has been, you know, when you're doing these buyer and seller conversations, no matter what side you're on, keep it conversational. It's great to have your question beside, but don't run through it like a machine gun and keep it just robotic and mechanical. Because there's a huge human element here involved and this was a prime example that actually happened.

Joe: That's great. Nathan, pleasure doing business with you twice now, I'm looking forward to hearing some great news, great success, with Envira Gallery and so on and so forth. I hope that really works out and maybe we can check in, in the future and do another Podcast update and let the folks know how you've been succeeding.

Nathan: Yeah, I would love to.

Joe: Awesome man, thanks for your time today.

Nathan: Awesome, talk to you later Joe.

Nathan Singh – LinkedIn

GitHub

Stephen Speer @ Bank United for SBA Loans

Asana – Making Teams Work

Can Amazon be beaten on their own terms? Chad Annis is one of the very first people to buy an Amazon business from Quiet Light. He's also one of the first to demonstrate that you can do so successfully. Chad is joining us today from his RV where he is truly living the entrepreneurial dream, traveling all over the country, running his business, and never having to sit in a cubicle.

Chad is the Founder & CEO of Market Defence, a company specializing in cleaning up brands and making their Amazon presence truly profitable. After seeing a brand that he purchased a few years ago as passive side income – a top seller in the Amazon space – fall to the Amazon Direct machine, he took steps to learn how to fight the machine. He started developing a set of techniques to help brands out-Amazon Amazon. Chad proposes a team of experts who can get the brand and reputation on track simply by using Amazon's rule system to their advantage.

Episode Highlights: Find yourself a group of people who know what they're doing. They are all out there and they are good at what they do. It can take less than 90 days to get your business "clean" and from there it can be really profitable to be on Amazon. Market Defense comes in, cleans up a brand, tweaks the marketing, and gets the product catalog back into the control of the brand. Chad's team of legal experts, ex-amazonians, and marketing experts have made his techniques so successful that fortune 50 companies are knocking on his door. When a brand gets above the 70k per month mark Amazon starts calling, wooing and convincing owners that sales will grow more once part of the Amazon retail model. Chad advises against selling first-party direct to Amazon retail as brands can lose control of catalog and pricing. If you want optimal control over your product, go 3rd party. When it comes to inventory in 3rd party, the brand has complete surveillance over when and how much of a product is made available to Amazon. Chad also shares his top tips for avoiding leaky products. People are afraid of the ever-changing e-commerce climate but those who have learned how to be nimble in that environment have a market advantage.

Links and Resources:

[email protected]

marketdefense.com

thebeautyblender.com

Kevin Williams was the guy investors would call to come in and make sure their venture capital monies were being well spent. Often times he discovered they were not. This experience lead him to a methodology that enables him to test the viability of a product and see how the audience reacts, before investing monies in inventory.

He does this with a few hours of his time, and a relatively small budget.

Kevin's path also has led him to work with patent holders who are experts at what they do, but do not have the online direct marketing experience needed to take a product to market. One of his recent deals, Brush Hero was featured on Shark Tank! Kevin talks about his positive experience with that process and how it helped his business.

• Test a product concept without inventory.
• Fail fast and don't fall in love with a product.
• Know what you are looking for. Set up the test and let it run. Don't micromanage it.
• Use Facebook advertising for testing. It is not rocket science.
• Landing pages are designed and up in an afternoon, and FB testing runs for a week.
• The budget is small, $50-100 per campaign (2-3) per day for 7 days.
• A CTR minimum is established. Write the goal down, put it in an envelope, then check the number i 7 days.
• More testing can be done if the results are positive. Negative ones are scrapped.
• Licensing deals with patent holders are ideal.
• His Shark Tank experience was fantastic…did he get a deal?

Kevin's LinkedIn Profile

RGK Innovations

Brush Hero

Elevated Cook

Kevin started his online venture with a $300 content site about Tattoos. Today he runs a portfolio of SaaS businesses on behalf of investors and himself. In this interview Kevin shares insights on how to build a portfolio business and set it up to exit one or more of the assets cleanly.

He also shares his process for making investment decisions and comparing one opportunity against another. He does what he can to not play favorites because he likes the owner or the business, and let's the stats lead the way to investment decisions.

If you want to be an investor and not a buyer, Kevin's firm delivers 15-20% return on investment to investors!

• Learn how to set up a portfolio with a clean exit on any of the assets if desired.
• Discover why Kevin buys SaaS businesses over any other.
• Managing workload on each business is handled with a proven, trackable system
• Hear Kevin's thoughts on his acquisition model and process.
• The sites he likes the most are not always the best investments
• You can earn 15-20% ROI investing in Webfolio Management
• Kevin coaches others on building and managing SaaS companies.

WebFolio Management

Kevin Petersen LinkedIn Profile

Investor Contact Email: [email protected]

David Henzel is the founder of MaxCDN a content delivery network that is behind many WordPress sites. The business was doing really well and things were moving along and growing when David found out that his wife had cancer. This was an earth shattering moment for David and forced him to take a step back and reevaluate his priorities. He knew it was time to sell the business.

David is a serial entrepreneur who has built and sold businesses. He is also extremely proud of how he has achieved work life balance and promotes family time. He is also the host of the Managing Happiness Podcast. Today, one of the things we're going to talk about is reasons why people sell their businesses. Sometimes people don't even know why they are selling, but they know it's the right thing to do. For David, the reasons were pretty obvious. We discuss reasons to sell, the selling process, and what to do when life gets turned on its head.

• Planning and having everything in order with your business relieves a lot of pressure if and when you need to sell.
• MaxCDN had over 15,000 customers and was integrated on over 6 million websites.
• David knew he wanted to create a larger impact on the world and decided to sell the company.
• Motivations for selling businesses usually tend to be quite personal.
• David had received other offers to buy his business, but when his wife's illness was diagnosed he knew it was time to do something more in line with his life's calling.
• The selling process was quite involved and distracted him from the day-to-day business.
• It's a lot of work to sell a business.
• David wanted to find something where he could offer more value to the world.
• He created a course to apply business principles to family life.
• He also has an outsourcing business and he mentors other business people.
• David is an entrepreneur and is still drawn to business and business principles.
• Because of the resources and knowledge that David had it was easy to start a new business.
• Entrepreneurs see opportunity everywhere.
• How the needs of a buyer are often different than the needs of the business owner.
• When you start a business make sure you spend money on a lawyer. It's so much easier to have a custom tailored operating agreement for your business.
• David spends time making sure that processes are in place, so he can work on the business and not in the business.

• MaxCDN
• David Henzel
• David Henzel on LinkedIn
• @DavidHenzel on Twitter
• Managing Happiness
• OptinMonster
• taskdrive

Jason is more or less responsible for the Quiet Light Business model of only hiring seasoned entrepreneurs as brokers. He sold a business through QLB and then begged to join the then 2-member team. Mark said no, and then no again. And again a few days later. Mark finally (and fortunately) relented and Jason has, ever-since been helping online entrepreneurs successfully exit and purchase web based businesses.

Jason is our de-facto legal disclaimer and naysayer expert. Have an idea? Jason will poke massive holes in it that we never saw. Want to sell a business that is tanking? Jason will structure the offer that will appeal to just the right buyer, and close a transaction that is sage and satisfying for both the buyer and seller.

Do you want a broker that has started a total of seven businesses in his lifetime? That's what Jason did. One was an epic failure during the dot.com bust ($10,000,000 poof!). And one was a grandslam that will change the lives of Yelowitz's for generations to come. Jason shares his life and business experiences everyday in his work as a Business Broker/Advisor for Quiet Light Brokerage.

And during the next 30 minutes he shares some "golden nuggets" that can only be found with real, true, hard fought, failed and won entrepreneurial life experiences.

• Jason shares his success and failures over 7 entrepreneurial ventures.
• One lost 10 million in 12 months. The other made 15 million with $300 in startup costs.
• What 2-things should be the "laser focus" of every entrepreneur.
• Is "one big payday" the right path or is selling sooner the wiser decision?
• Why listing for too high of a multiple increases negotiations and reduces the final price.
• How to price a listing to sell for a higher value, even if at a lower multiple than other brokers suggest.
• How helping buyers see the "big picture" is a big part of what he does.
• Learn the top 3 things every seller should know.
• Learn the top three things every buyer should know.

https://youtu.be/DS3wVGgLbJc

Jason's Profile @ QLB

Jason's LinkedIn Profile

The Bathrobe Millionaire