clint fiore thank you for joining me today on acquiring minds will thank you for having me man appreciate it you are the president and founder of texas business buyers a business brokerage so you are a a broker and a founder of a brokerage we are going to spend the first part of our conversation today um educating searchers and business buyers on the perspective of buying a small business on your perspective on us basically brokers um brokers are frankly as you know complained about a lot among the searcher community but as i understand it um searchers are complained about by brokers so if we can we can help the audience understand how to how to cultivate better relationships with brokers i think they'll get a lot of value from this episode so before we get into that clint why don't you just tell us a little bit about yourself and texas business buyers sure i live in central texas and my company is called texas business buyers we help people buy and sell companies all over the state since i joined twitter we've been thinking of expanding some by side services outside of the state as well so we've got things in store for that but just generally encourage everyone to follow along the journey as the company evolves on twitter and um and just stay up to speed with what we're doing because we are starting uh some other programs i'll talk to you about later with like the newsletter and other things um yeah we we do main street to lower middle market so for us it's generally uh quality profitable deals we don't do turnarounds distressed situations or anything like that um you know our average deal is usually in the one to five million dollar range but a small one for us would be a half million and a large one would be 15 million and so we're usually kind of in that in that ballpark which is really i think where a lot of your your searchers or listeners are going to be looking um we feel like there's a soft spot kind of between main street where you have business brokers that would take on pretty much anything you know any type of business they'll take it on um and then there's like the boutique m a space which has they just want the you know seven and eight figure ebay on above deals and uh you know we really like these um these ones that are making half a million or uh and sell for a couple million you know like those those size deals are bread and butter uh really like those and uh you know generally we we just work as a small team we tend to have about 10 projects we're doing at any given time so when we're feeling a good rhythm we're closing about a deal every month as a group and um and that's what we like to see our claim to fame is just kind of quality over quantity and we try to do a good job when we take on a project we try to get it done every time and historically our success rate is over 90 percent that's in terms of closings versus listings so if we take on a deal the odds of us closing it are very high and i don't have any metric to compare that to in in brokerage overall what do you do you have um what the average is the industry averages 20 to 30 percent is the industry average yeah great great and so part of that is just you you filter you filter out deals that you don't think that you can aren't going to aren't going to work for you guys are going to be more challenged to sell like you'll yeah you know i want to say it's because we're we're awesome and we're really good and we are good but there's a lot of good brokers out there that don't have that high of a success rate and i think that's because they're just not as picky we we turn away probably three quarters of folks that come to us wanting to help help them sell their business just because they don't meet our minimum requirements and are those requirements usually around like ebitda size or is are there other what other quality criteria are you looking at the criteria that usually kicks them out and this may dovetail well with our conversation later will is if if you're as doing this as a searcher with a proprietary search like um you'll probably have similar criteria to us but the most common things that make us say no to a deal are it's too small it's too wrapped around the owner or we just can't get to a realistic valuation where the where the owner is willing to um go to market with realistic expectations and a lot of times we do a good job of educating them on the value and it's not that they are uh unwilling to sell for a realistic price it's just that it when it bursts their bubble a big part of the time they wanted a lot more we tell them it's worth x but that's just not the magic number they needed to retire or and they just decide you know i need to work for a few more years or i need to get my business built up a little bit better before i take it to the market and if we do a good job kind of gently educating them on the true value of their business and how the how buyers are going to look at it then they'll come back to us in one two three or four years later and then we'll end up putting it on the market either for a higher price once they've improved the business or for the same price once they've socked away a few more dollars you know from running it for a few more years and so you know a lot of our time isn't just turning people away it's just saying hey you're not ready yet or you got to do this or that to get it there and because we're an evergreen institution that's always uh working a pipeline of deals we just said hey we're not in a hurry if you need three million bucks and we think it's worth a million and a half you can come back to us when it's worth three million here's what it needs to look like or we can get you a million in half whenever you're ready it but we just gently educate and send them back and then bring them back when they're realistic and ready to go to market well i'm sure that that earns you tons of credibility with these sellers um because brokers i think in any industry um are notorious for um overselling and under delivering you know telling people that promising them the world and then uh and then it often doesn't pan out that way so that's that's a great approach okay clint let's talk about as i said at the top let's let's talk about um flip the script here so uh searchers maybe don't always you know somebody who wants to buy business um there are a lot of tire kickers is is the most common phrase you'll hear people who think that they're interested in doing that but really are just going to be a big waste of time talk to me about what your community uh how you guys react to people who are looking to buy businesses and what we as business buyers can do to differentiate ourselves and project ourselves as the serious business buyers that we are what what what are the just talk me through all this yeah sure so i i guess i could almost phrase it as what are my pet peeves with with buyers or searchers coming in and that if you can understand that then you can kind of figure out what the antidote is right and so i think the most common thing is just laziness by the searcher of you know we are a small shop every one of our deals is on our website so if if you go to texasbusinessbuyers.com right now there's a button at the top that says marketplace there's all the businesses that are for sale and then we have if it's under contract we have a section that says under contract and then we have a section of closed and what i find is that a lot of searchers just default to email and they don't bother to open up their web browser click on a website and just see what's going on on the marketplace so you may send me a form template and you gotta understand my my email box is times it's like uh crazy yeah it's just hundreds and hundreds a day i'm hit up by dozens of searchers every day and if it's just a form letter saying you know hey mr broker wanted to see if you've got anything a million ebitda manufacturing or you know just a a wide range of industries and send and it's the same one i've got 20 others every day in my inbox and if i have that exact listing on my website i'm probably more inclined to talk to the people that reach out about that listing and so just when you have good brokers out there so my advice would be to know kind of who the players are that are moving volume of businesses in your marketplace in your industry or geography and then hit their websites up and look for stuff that's on the market you're going to have a way a more successful response rate if you're inquiring about a specific deal versus just saying hey here's my criteria and will you do my job for me of looking looking for stuff um when you're a brand new broker that doesn't have buyers of sellers and are hungry and you don't have much deal flow you may have time to jump on those intro calls and say yeah let's get to know each other and all this but when you're a volume shop i think that's what searchers complain about is they'll say well you know i feel like this is a great brokerage but they never get back to me and it might just be because you're being lazy and you're just sending a form email instead of looking out what's actually happening and you have to look at their deals and jump in when you see one and then also our shop and a lot of others are starting to follow our lead on this we have an early an early notice program and so if you go to texasbusinessbuyers.com we have what's called the vip list and this is a way that you can sign up to get a notice before we put it on axial or bizby or these other marketplaces for sale we send it out to people that already have relationship with us and give them about a week head start and and that was kind of the the seed of the idea that led to the national probably a good deal newsletter which we can talk about but in texas if you want a texas deal from our shop it's no charge to get on our vip notification list and the more you can tell us about yourself um and the quicker you can open our emails look at our marketplaces and get to us about about specific deals the more success you're gonna have versus just the canvassing your uh your template form letter criteria so clint i my impression is that many business brokerages have a sign up list and right and and you know so you're put on the list and so you see all the new listings whenever new listings are published um are those typically like yours and that that they're a sneak peek and that the list will get access to to a look-see at these deals before they're uh published publicly on the website or on biz by cell or distributed other places i i can't speak for other brokerages for sure but in general you're gonna see it either early or the exact time same time that it hits the marketplaces and so for me i view it like um biz by cell in my opinion is kind of like craigslist it's just wild like anything can be on there it's for sale by owner it's for sale by broker there's good brokers there's bad brokers there's good for sale by owners there's bad for sale by owners there's really nice businesses that are priced insanely high there's really good businesses priced right there's really bad businesses that look like they're priced right but they're really bad once you get under the hood and it's just this bizarre you know of a grab bag of random opportunities and uh but it's so fun clint it's so fun to browse yeah and and so yeah well one of my favorite twitter activities i did about a month ago was we we did that you know post any deal from biz by cell and i'll give you lightning feedback in one tweet and i spent like a whole day doing that and and that just reminded me how wild you know that that marketplace is it's truly the wild west and so brian marketing on your part by the way yeah what a good idea idea for a tweet go ahead and and so i would say you know when it comes to working with brokers you know find who's doing volume find who who takes our philosophy which is only work the ones that have standards you know that work with quality stuff make sure it's priced right that educate sellers on valuations and then we can be your best friend because then when you see one what i've always tried to educate the marketplace is if you see the star from texas business buyers then the it's very high chance it's what you see is what you get if you see the ad it is on the market and live we don't as soon as it's under contract we let everyone know it's under contract so um that was another frustration of mine when i was a when i was a buyers i would see one i loved and then i would get all excited about it and find out it's already under contract and so uh you know i've been a buyer i've been a searcher before i started my brokerage and i just all the frustrations i had with brokers i tried to i try to build into my brokerage uh to be the kind of broker i wish existed when i was a buyer but that said you know as much as i love buyers and as much as i love searchers and the searchers out there listening you're probably my favorite people like you're my people i get you i i love talking uh we have very similar backgrounds a lot of times they're just young cool people that are uh ambitious and and wanting to take over the world and in a lot of ways i i relate to those people more than um a baby boomer seller you know is the buyers are very like-minded i can spend all day talking to you but i just don't have the time you know and and so that's that's what we and every other broker runs into is we'd love to just get on the get to know you calls but we're limited in bandwidth because we're working a bunch of deals at the same time and we're always working closest to closing backwards and once we're under contract we still have a lot of work to do to get to the finish line and get it done and then whenever you inquire about a deal always ask hey do you have anything else in the pipeline coming out uh that that i need to know about because usually there's you know three or four week period where for us it takes about three weeks to before we engage from engagement to on the market where there's this window of time where we have a deal and it's good but it's not on our website yet and it's not out to our members yet but if you're talking to me and we're on the phone and i have that then we'll i'll start talking about it right now um and so just getting on the phone and inquiring about specific deals and then asking that follow-up question is there anything else coming and then and then there's a whole other batch of deals that are kind of hip-pocket ones where i'm i'm talking to them but they haven't engaged yet or they they're one that i sent off into the wilderness that it sounds perfect but they were a little bit you know not ready yet if you if i could high level talk to you about it and you sound like the perfect buyer then sometimes i'll use you as the buyer to go retrieve a seller i sent off into the wilderness does that make sense yeah yeah it's fascinating and so be the reason to to talk that seller back to the to the selling table right use use search or be the reason yeah it's kind of a uh we scratch each other's back situation because i don't i don't like to just call a seller and be like hey we got lots of buyers which is what anyone can say but if but if you seem like the perfect fit and you have a background that matches and sellers usually love it when you've got a something in your history that's similar to theirs because they think yeah i think sellers over emphasize a match on background and so i'll use you sometimes if you've got the right background that i think oh this is going to play really well with the seller and i'm i'm going to see if i can pull them back uh because in my experience when a seller says okay i'm gonna call you back next year they usually will call you back in three months if they say i need to i need to own it another five years before i'm ready to retire that's what their math said but their hearts says in a year or two no i'm ready to sell that that sounds to me like what's happening is you've set their expectations about a little lower about what they can expect to sell their business for and they they end the conversation with you being like okay well it's going to take me three or five years to get the number i want but in fact what happens is they just over the next few months they get used to the number you told them and they get and they get more open-minded and then they come back to the table soon come back to the market sooner than they said they would is that is that kind of psychology do you think yeah it's almost uh universal that because because what happens is they they reach out and they're totally ready to sell they just want a certain number that's usually not grounded in reality of what the business is worth it's grounded in what they want to retire right which the market doesn't care about yeah yo as a buyer you don't give a crap about like how much their rv is going to cost them or whatever their plan is to retire you just want to pay a fair price for what the business is worth and so we educate them on what it's what a fair price for uh to be is worth we give them pointers how to increase value and then we let them go stew on it well a lot of times they realize you know they go back and talk to their spouse and they say well you know our house has appreciated a lot this year and and you know i've i got a friend that says they'll let me work with them time and and they start kind of reimagining their life a little bit because a lot of times a small business i can't get them the sale off into the sunset money they really want you know because everybody wants the whatever it is 5 million 10 million whatever they think is going to be i can't run out of money if i get this much in in a chunk and if the company's not worth that then what and this is kind of universal with retirees whether or not they're business owners is is this kind of soft retirement where people are are doing a sunset career and downsizing or right sizing and and changing things around in their financial world and once i've kind of educated on their business value and they start doing that math and having those hard conversations and building a new vision for what their retirement life could be like then they'll often come back in less time than they originally said so if they said three years for example they'll come back in one year because they figured it out and they've and they've come to grips with the reality and how to make it happen with the number i told them that it was this is all so reinforces to me the the value of of business brokers and when you do when you as a searcher do proprietary search and outreach this is all the work that you're going to have to do you the searcher are gonna have to do because the business broker hasn't done it for you and we're gonna we're gonna get there another thing about the the your listings clinton how and kind of the their their life cycle the often it's said about biz by cell like aside from the fact that it's that it can be a bizarre as you put it um it's also just stuff that hasn't otherwise sold so you're getting stuff that kind of nobody else wants and this is a classic thing in business buying it's like you always have to ask yourself like why am i why am i getting access to this deal why hasn't somebody who's more plugged in more resourced than me jumped at this deal right but so with that context you know you you said you guys have um deals that aren't even on the market yet you're talking to them then a deal that is going public and it'll go out to your vip list first maybe a week in advance then it hits your website and i assume at that point when it hits your website you also put it out on biz by cell and axial in other places is the logic not the same that like if i see if i see a deal on your website it means none of your vips were interested is that is that a fair conclusion for me to make no not really we get about half of our buyers from people we already have relationship with so there's about a 50 50 chance it's going to be someone that's already in our vip list in that system versus somebody that just inquires via advertising on those major marketplaces and so we never know and there's times where you know it kind of baffles me as a broker because i i hear buyers complaining about you know not finding good deals and how by the time they find it you know 10 other people are already bidding for it and they're just behind the eight ball but we have some really good stuff that just sits sometimes and for me i i think it it has to do a lot of times with geography industry of the numbers are great like we don't take a deal to market unless it pencils out really well and so the roi is usually always compelling on our deals but like i've got a deal right now that is a it's a restaurant that does chinese food almost all delivery and they're set up they were like the perfect restaurant for covet because they were already just like on a busy night they'll have 14 delivery drivers just zooming all over the central texas so it's like a fast growing central texas area the sde is like 562 i think on it and it's priced at a uh under 3x multiple you know it's it's maybe a two and a half i think we've got it at 1.75 the website's great the technology is great the systems are great the roi is phenomenal like every it's just a right down the fairway sba financial deal that it seems like buyers claim doesn't exist it's priced right ready to go got a bow on it and it's just been sitting there for six months we've had a lot of lookie-loos and then people are like oh i just don't want a restaurant or i just don't want to be in that particular town it's not it's it's in a um it's in one of the towns between san antonio and austin so it's like yeah it's a very specific place and and so it's not always the numbers it's not always the business there's anything wrong with the business you just have to find a buyer that wants uh the industry the geography and you know wants to live in proximity to it and and likes the numbers and stuff and so yeah it's easier it's not as easy as it sounds um these things don't sell themselves they do take a a lot of work to get done and even a really nice down the fairway deal we'll often talk to you know 100 buyers before we get uh one or two offers on it and and so it's it's that type of filtering we have to do to find the right match that's fascinating um i i want to also ask before we get off this topic about searchers branding themselves and so you know oftentimes a really serious searchers will have a website for themselves um and you know call themselves a so and so investments or so such and such fund or whatever um and short of that they might they might not do that they might have just a personal website and just kind of tell more of a of a narrative so that they're who who they are personally might hopefully resonate with the seller uh any thoughts on on any of those tactics i think branding yourself matters if you're gonna set up an a holding company that's an evergreen buyer that you're going to do a bunch of deals under if you're just a searcher that's looking for your one-off deal that you're going to own and operate and then potentially or one that you're going to buy as a platform to both do bolt-ons i don't think it's actually that important to brand yourself i think it is important to put your best foot forward and so uh you know the websites that have your your smiling face on it and your background and and willsmith.com versus at yahoo you know email address looks it plays well and looks good um i i actually think i've seen it both ways where some sellers when they see you know turning leaf capital group right is the one that wants to and sorry if there's a turning leaf capital group i just mean that sounds so real like there probably is one gonna be like how did you know about me just made it sorry you know i think sometimes it's a turn off because there's some sellers that in their mind um they don't feel like they're should be a target for a big private equity group and it almost raises a red flag if they're like this owner operated business that's making a half million a year and the owners they're high-fiving their employees every day and and is you know in the trenches owner operator solid sba kind of deal if you look like you're an institution they're going to be like why isn't this doesn't this is not what i was imagining because they're imagining a younger version of themselves is going to be the right buyer and so sometimes you as a searcher just being yourself and saying like yeah i i had a normal job or i was in the military or this or that and then i went to school for this but i really want to do this and that's kind of how they were probably because these sellers they didn't come from an institutional background right they just are joe blow that started this business and so there's a certain endearing quality to just being a quality individual that that says hey i'm just like you but younger and i want to pay you a fair price and i've got a bank ready to loan me money and i'm all-in committed to this and that plays really well sometimes and then i've had some times where i think it has impressed people to be uh you know it stroke their ego a little bit to say oh totally private equity is interesting yeah exactly and so it i don't think there's a universal right or wrong is what i'm saying is i've seen it work both ways and i have seen it um you know for a naive buyer i mean a naive seller occasionally they do feel impressed like but i don't think it gives you a big advantage i think you just got to get you got to sell yourself to the broker on a broker represented deal and then i can sell you to the seller and and that's great i was just going to ask that is there is there any way to sell ourselves to you that we haven't already touched on other than avoiding clint's pet peeves like you know if if i do get you on the phone or if i talk to one of your um one of your front line folks do i do should i have kind of a 60 second kind of narrative crafted about who i am not not overly selling myself but just kind of like be ready to present myself in the strongest possible way and and have a story about who i am is there anything is there anything to be learned here yeah i can give some pointers here so in general if you just think put yourself in the shoes of a broker like myself what we want is the deal to close and yeah it sounds stupid to say that but we're going to talk to so many people that we just don't know if if this person is going to be able to get it done and we're looking for clues so i'm wanting to see you know first off do you have money you know where's the down payment coming from have do you have this figured out or am i going to have to i don't want to tie up a deal with an lly while you go scramble to fill it with investors i don't want to tie up a deal under loi where you go and say okay now who should i go for a bank after this and then now i've got to send you five sba lenders um i would rather if i've got if i'm talking to two buyers if you can make it clear that you've got the commitment of the funds so you you can tell me exactly where the source of down payment is you can tell me the two bankers that you've already had have a relationship with and i know they're high volume sba preferred lenders that are reliably able to close deals so you've got kind of them them behind you you've got your down payment secured and you kind of and then sign the stinking nda you know that's another thing it's just the little things of um you start getting strikes against you as a buyer if um like we have our nda is just living on our website and it's one of the lightest weight i think easy easy to agree to things and uh we've we have thousands of people sign it every year but then sometimes a buyer gets it and they're like oh whoa whoa um i can't sign it on your website can you send me an editable word document of that nda and then i'm going to send it to my council and then you know they want to go into this get a high-powered lord a red line the crap out of my nda um and then i'm thinking as the broker like i may send it to you but i'm already thinking this is this is going to be a nightmare you know like every step of the way this is going to be overkill with the lawyers and and um and that sort of thing and so just uh and i know if my uh my buddy eric smb attorney is is listening to this he's gonna say don't listen to clint read every nba and and he's right like you do need to read them but you also need to be savvy enough to know when you've got kind of just a normal nda um versus a crazy one and if it looks normal-ish you need to have the stroke um like i got to feel like i'm talking to the decision maker can you sign this will like or is this every little thing you do going to be decision by committee with a lawyer looking over our shoulder and so i i'm expecting you to bring lawyers in to review certain points of it but if you can't get past an nda you know it's getting to be strikes against a red flag yeah that's this is great this is really helpful clint um hey on on the on the psychology of sellers you know one of the things that you hear a lot about in in search or land is is like a lot of sellers don't even recognize that their business can be sold they and that's where of course where some of the opportunity really lies it's like you know i as a searcher can say no your business has value and i'm willing to pay you a million or two million dollars for it and it's like they thought they weren't gonna get anything for it that's that's said do you find that to be true or and and maybe let me open up this question a little bit what do you find is um the sophistication or the awareness of baby retiring baby boomers about a younger generation of searchers who are eager to buy these businesses do they know that that we're out here like looking for their business yeah they do um most business owners that have a good business that's especially the visible good businesses they get hit up all the time by searchers and by brokers and by random friends and other people so everybody says hey when you want to sell let me know i want to be i want to buy it so they're getting hit up a lot and they usually think like you know so your case where where i didn't even know it was valuable i didn't know it was sellable i've seen that every now and then but for every time i see that i see a hundred that are over confident that it is valuable because they're hit up so much and they're overvaluing it and so when you're a searcher out there i think you're probably it's i don't think i'm exaggerating i think it really is probably a hundred to one that you're going to find a hundred people that are over valuating and overestimating how sexy their business is to the one that's like well i'm flattered that you would even want it i didn't think it was worth anything yeah and if they are like that they probably do have a sucky business that isn't worth anything but you know every now and then you do have one that's like a really good business and they just didn't know its value but that's exceedingly rare good that's that's really good to know um because i i would have thought it was a lot more than that clint we're we we've we've barely even started we have so many things to talk about okay i want to um you did these you're great on twitter we'll give people your twitter handle um and i'll link to it of course in the show notes um you've had a few of my favorite threads in the whole in this whole space uh and so two of them i want to touch on are one was about um identifying a great deal so obviously who who doesn't want to to know what to look for in a great deal and um i'll link to this in the show notes because it's too long to go over everything here but you give i don't know 15 or 20 things that people should should use as their criteria when when gauging whether or not a small business is a good deal but i do want to dive into a couple of these some of which are just not the ones you always hear about um one is the uh ebitda or the sde between two two and eight hundred thousand dollars you say two and eight between you say adjusted earnings or sde or ebitda between two and eight hundred grand is i think the sweet spot for maximizing roi on both your money and time and you're you're talking now to kind of a searcher audience so uh just elaborate on that for me that thought so i i'm gonna just speak in broad brushstrokes with a caveat of varies wildly by industry and individual company but once you're at a million in earnings you are in a tremendous uh increase of competition there are institutions and searchers and private equity and family offices that all draw their line at a million in ebitda and they have a ton of money and they're it's like they're well capitalized they're aggressive and once i once i start seeing a million in earnings my mind as a broker starts thinking this is going to go for a five or more multiple turn multiple and then there's going to be a lot of aggressive well capitalized buyers wanting this deal but there's this i i've done many that are making 700 that are probably going to be at a million you know in the next few years that you can have them now for a 3x or 4x and without as much competition and they're when you just do the back of the napkin math you're under the 5 million enterprise value threshold where you can do an sba loan um and so it's almost i i describe that as um another thread i think i did i described it as a level up approach where you can kind of change leagues and i view the under five million dollar deal as kind of like the the premium main street little league or minor league you know um play and then when you get up to above five million you're kind of in that institutional and strategic space where multiples generally start at five and you know four or five and go up and i see i i think i see searchers making the mistake of holding out for that million ebitda and taking a couple years of searching when they're competing and they don't even want to pay the multiple that someone else is going to pay when you could have just bought the one doing 700 for a lower multiple and giddy up go to work and and get it and get it there and so i think that that two to 800 k there's a there's a sweet spot of they are selling in that two to four x range in many industries and that is in my opinion one of the last great asset classes of the united states that is not at bubble prices yeah and and there's trillions of enterprise value in that under five million range um under a million ebitda earnings that i think hey just consider it you know as a searcher like we do see over a million ebitda and and sometimes you can find good deals but when you think about the marketplace it's a uh it's a pyramid structure where the the base of the pyramid is very very wide and those are the unsellable owner operator sole proprietorships that you know so i'm just gonna kind of go from memory but you got maybe 20 30 million um registered businesses in the united states and most of them clint clinton before you say because you you you shared with this with um this with me on our pre-call i want to set this up before you give the pyramid because you also gave this to me an answer to my question to you on the call like you know as as you first get into small business acquisition you read like oh the the silver tsunami 10 000 baby boomers retiring a day and you know this this massive historic transfer of wealth and and it just makes it seem like it's going to be you know apples in a barrel it's just going to be so easy to go out there and find all these great businesses to buy because there's so many of them for sale um and yet you know you start certain you you become a searcher and you find that you know you learn that in fact finding a deal takes time and is difficult it's not impossible you can probably do it in 12 months ish give or take but it ain't it definitely ain't shooting apples in a barrel is that the expression apples in a barrel anyway um and so i and i put this to you i said why why why is there this disconnect if there's so many retiring baby boomers every day you know with it and they all in small businesses not they'll but that's where the vast majority of small businesses ownership is why is it therefore so hard for us searchers to find good deals and then you answered with go ahead and so i had to learn this the hard way i thought studying the demographics and how many businesses are owned by baby boomers i was like there's not going to be enough buyers you know it's going to be this tsunami of sellers and that's kind of why i put buyers in the name of my company in texas business buyers was i was like i'm going to kiss the butt of all the buyers because i you know all these other brokers are trying to get uh sellers but i'm like man if you have the buyers in this tsunami of sellers then you're gonna be better positioned and and then you get into it a few years and it seems like every year that never materializes and there always seems to be a hundred buyers for every seller and yeah it just took it dawning on me that it's because of my criteria and my minimums and being picky like i said earlier is that we're only doing kind of the larger size deals is the tsunami of sellers most of its not even you don't even see the wave because it's under the surface of stuff that you would even consider most people that own businesses own a job they do not own a transferable asset with proven historical earnings that you can come into pay yourself well service debt and have cushion for growth and all that like once you get into that multiple six figures and into seven figures earnings you're climbing up that pyramid of of deal size into rarer rarer air each each level you go to and so if you just imagine most small businesses don't even do 100k of earnings and if your minimum is 500k you know 90 are just under you you never want you're not even going to look at them and so when you have all the searchers focusing on above a certain level of earnings that's where the least amount of firms are then you get that that silver wave never shows up because it's all underneath uh the size criteria of everyone and so that's why i think you could use that to your advantage by you know reaching down a little bit the further you look down the more deals there are yeah and um and i think that you know the master skill right now if you want to if you're just an individual or a small institution that wants to to play in this space learning how to bolt them together and uh roll you know do the miniature roll ups and play underneath the the radar screen of the private equity that's got the million threshold you're going to be able to get lots more deal flow and create a you know more value for yourself and or your investors one of the other criteria in your in your thread about identifying a great deal is that is you the searcher you having something in your background or experience that the company will benefit from and i want you to elaborate that but on that but i also want to you to elaborate on that in light of the fact that a few minutes ago you said that sometimes you think so sellers over index on this that sellers like really want to see somebody who knows from their industry buy their business and you actually think that they it's not as it might but i assume what you were saying is it's not as important maybe as sellers think so i assume there's kind of there's there's some sort of sweet spot here so go ahead please yeah so the stereotypical baby boomer they identify around their industry so they were raised in a generation that says if they did um like my family is nursery men so we do plants and and that's kind of who that's who they are my mom and uncles like that's what they are and that makes them over index on they they think that the buyer needs to be someone that knows plants because they've wrapped their identity around i know plants and i know this industry i am a millennial i'm an old end of the millennial thing and and i'm uh i've switched careers three or four times and don't bat an eye about it and i don't associate who i am with what i do you know i i'm clint and this is what i'm all about and i'm about my kids and my dog and and my hobbies and this or that oh and by the way i own a business that does this or that is how i think but it's not who i am right and so it's a business is an asset to me and i love it and i care about it but it's not who i am then it's a different mindset and so if you can just realize that if you're in those different generations if you're a millennial trying to buy from a boomer you have to find some common ground and respect that they're identific they identify more often than not with what they do and they're gonna favor buyers that seem more like them that oh i want to i am imagining a nursery men to come up and take over the nursery and you came out of you're a cpa what do you know about plants you know or whatever and so you have to get get over that hurdle uh brokers can certainly help you do that because we can explain again all the misconceptions they don't understand is most buyers are learning a new industry it's pretty rare the the you have that perfect match but it's just something to be aware of that's the mindset of sellers of that older generation but if they're in the gen x or millennial they're much more they hold their business with more of an open hand and they're more open-minded because they've probably jumped careers a few times and they know anyone can learn this thing and if you've got good business chops and you're responsible and you can learn the technical stuff and we have technical people on staff that can help you and you're good to go that's such a that's such a good insight about the the difference in culture between the generations well uh clint but now tell me about your you at the same time you did say that you good criteria in a in a deal would be something that it's the it's the you know puzzle piece b to your puzzle piece a so yeah so yeah so elaborate on that so i wasn't really meaning that in in the sales pitch to the owner i'm just talking about you internally when you're looking at a deal if you can find a deal that's that pencils out well so it's a reasonable multiple good historical earnings solid business but they just don't know how to do the thing that you know how to do then that's where your your gold mine is and so for me uh i'm good on on digital you know and on marketing and social media and when i see that company that you know is on you know they have a facebook page no twitter no instagram their facebook doesn't even have their logo on it and they're they've posted a couple times but they're still making a half million a year and they and you ask them hey what do you do with social and they're like well it just seems like a big waste of time to me you know i'm not our phones are always ringing we get all our stuff word of mouth and we haven't felt the need for it and so i i don't have time and i i don't want to waste money on it i tried i spent you know they they did some ad spin thing with somebody and it fell flat and so they wrote it off but they don't have my experience in that they don't know the power of well if you get it right you might be able to double this business yeah you know and so that that is a uh it's just kind of a self-awareness thing of you as the buyer um i think a big mistake people make is they view buying a business like you're buying a house or you're buying a thing and you've got to realize you're you're buying like you're betting on yourself more than anything else this business once you become the owner of the operator it's on you now whatever the historical p l's that you're basing your evaluation off of they're gone they're in the rearview mirror and the only way you make money is you get out you get in the on the playing field and you go play and you go win and don't come to me if you don't make it because of the past or whatever you know like you're betting on yourself and you have to realize that and so um i look for those things where where i can just add instant value for the things i'm strong at but i i also know what i'm not good at you know and and i want a business that's strong in those areas already where i don't bring value and i want to br one that's weak where i do and to me that's where you can kind of have um an instant equity kind of situation or instant win is just kind of filling that missing puzzle piece one of the other criteria was um not having an over reliance on the seller owner and in fact you devote it and then so in in listing that criteria you linked to your other whole thread about how to suss out if a business is just too reliant on the seller owner and i want to ask just about that conceptually and i'll link to that thread and people should go read it because there's all these awesome yeah all these awesome kind of like little tips and tricks to figure to figure out uh to figure this out out this question because the seller and the broker representing the seller are are very likely trying gonna try to obfuscate how involved the seller is particularly if the seller is heavily involved in the business right because that's a that's a negative a strike against the business i will say like it does seem that um is there is there any world in which a business is attractive because the seller is so involved and maybe that that presents the opportunity i think as long as it's not misrepresented and as long as it's priced right then you can deal with it either way like it's not a you know whether the owner's working two or three hours a week or 70 hours a week as long as i know it yeah i can plan accordingly right the deal i just sent down my newsletter last week this screen company in florida um the broker representing it uh said that the owner is only working two to three hours a week and he's a musician and and he we walk through okay so he doesn't do so who's making the sales and he had a sales one that makes the sales i'm like all right who's making the installs because it's a simple business they sell in screen doors and windows that go on houses in florida like hurricane screens and stuff and it's a relatively simple sale five to seven grand each deal and and yeah you you go you sell it you install it and you're done and he's got a team team members that do all that and he feels guilty if he's not going to the office at least once a week and showing up and and making busy like he's got something to do there but but you've got to just understand what are the roles and um who's serving them and sometimes if you have an overworking owner that is that's working 70 hours a week that can be to your advantage because there's something that they're doing that is is keeping the lid on the growth because it's there they haven't learned how to delegate they haven't learned a lot a lot of times if somebody's working 70 hours a week it's because they're just stubborn and they're just refusing to to hire someone to do the 50 hours of that that anyone literally any idiot can do and they're just being perfectionist or stubborn and and it's preventing it from scaling because that doesn't scale you know the owner trying to just do everything and be this the hub and spoke structure where every question and answer flows through them and no one's empowered to make a decision and the owner's overworked as long as you're aware of that and as long as it's not presented inaccurately or overpriced then then sometimes that's the very thing that you can get into and fix that start empowering people and delegating and hiring better and then then that kind of takes the lid off the growth and lets you accelerate that business and i hear the cynicism from buyers always thinking like oh yeah the owner's doing way more than they're letting on and we just don't know but i've seen the opposite sometimes too so you just never know like read that thread because i kind of go into those things but look for the vacation time of the owner um really get a detailed schedule of what they do and suss out you know if if they're they know where their time's going or not and but um like i had a korean uh owner of a business and in korea it's a very uh i learned this is like their the honor of their culture says if you're a man and you're not working like long hours then you are a loser like like men work hard men work long hours and so when i ask this korean owner like how much do you work he would tell me oh i work 70 hours a week you know and i would go by his business every time i went by there he's never there and i'm like where is this guy like he's 70 hours a week he's supposed to be here and so i i had budgeted in the cbr in the presentation i'm like okay you're going to need another 50 grand to just hire an assistant to do what half of this guy does because he's working the hours of two humans but then it wasn't playing out and then finally i just pinned him down and i was like mr kim why are you never there if you're working 70 hours a week you know and and he he fessed up and he said well my culture it's it's what you're supposed to say when people ask you that and i'm like dude that makes your business worse like it makes me less valuable and it turns out he's only there 10 hours a week or so and he was just trying to save face and so like it can work both ways but the important thing is you got to just get to know that owner and get to know the truth and figure out what they're actually doing and look at a common sense approach are all the things that need to be done here accounted for and what is the owner accounting for and can i do that or am i going to have to hire someone to do that build that into your financial model pencil it out and see how it looks so interesting i love that story now next question for you clint is is is going to push up against some obvious bias for you and we've touched on it a little bit already but a lot of searchers go try to do some proprietary outreach uh certainly when they're looking for bigger businesses they almost exclusively do proprietary outreach or they expect their deal to come via proprietary outreach um i assume that's how you guys find business i mean you're essentially doing the same thing as proprietary outreach i mean your outreach your your building lists and emailing potential sellers and owners to say hey let's have a conversation about the value of your business and maybe texas business buyers is the right place for you anyway what do you think about that approach to finding finding a business if i'm a searcher i'm trying to scare up my own deals so they come to us more often than not so i don't have a lot of direct experience with this um we but we don't do cold outreach much to sellers okay so we have referrals from past deals and also from professional people so cpas lawyers commercial real estate agents wealth managers uh we're kind of like the go-to from a bunch of professionals that refer to our firm and then we rank well on search engines so when people in texas are are saying sell my business in texas stuff like that then they find our website and we get most of our stuff as either a referral or an organic search seo thing or social media inquiry but that said i've observed and talked to enough searchers that i do have a little bit of advice on this and i think there is an over emphasis on email on just blasting out to five thousand people i think their hit rate's going to be crappy i think the very few that will respond are going to be the bottom of the barrel uh or you know turning leaf capital looks so appealing to them that they're spoken crack about their value and they're just gonna go and be like oh you know what everything's for sale if you got 10 million you know we can talk but they don't have a business that's worth that and um if i were you and i'm going to reach out cold outreach and i don't have the deal flow that our firm enjoys from our position in the marketplace i would um i would create a shorter list i would spend more time um was it abraham lincoln that said i'd sharpen my axe you know for hours before i tried to chop down the tree so i would sharpen your axe better and get a shorter list and then i would do a 10 reach out to that list instead of 10 times the quantity with one reach out or or just only email and i've heard some tricks over the years um and so if it's me i would i would do an email i would do linkedin message twitter or facebook i would do dms to the owners i would um try to call i would text i would try to get cell phones and then i would um if there was ones i really liked i would even do a fedex envelope this is like an ultimate hack that i've heard of when you're looking at larger deals is if you want to 100 percent get to the ceo doing a fedex overnight something and yeah it's expensive but you're trying to get a big deal you know you're trying to get a ceo's attention at a short list of targets if you sent them a handwritten note in a fedex envelope and you spent 40 bucks on it or something like that like the the gatekeepers deliver those to the people yeah to the decision maker you know and so uh for me i would instead of blasting 5 000 people um you know a few template emails with a robot you know or whatever people are doing i would i would make a list of 50 to 100 and i would hit them 100 i would hit them 10 times in personalized ways through every method of communication possible and and i think that that's going to yield you better results on your search than the the massive email campaign that seems to dominate and then also say get in front of people in person with um with old-fashioned networking and and you want to get to basically anybody that's regularly contacting those types of business owners and so that's lawyer cpas wealth managers the same people that refer stuff to us go educate them because now you're gonna be on the top of their minds and they're gonna they might have 30 relationships in your target area and then one of them might have confided in them recently that they want to sell and if they warm referral you end your your odds of success are 10 times better than if you reached out to them yourself we're wrapping up here clint um but tell me about your probably a good deal newsletter and uh and how it's gone since you've you've tried to monetize it yeah it's going great uh probably a good deal.com is where you can check it out um it's just a review newsletter it's integrated with my twitter account so it's if you go to my twitter at clint fiore it's right on the top there but basically when i asked searchers i asked my twitter audience hey would you all pay 20 bucks a month if i just sent you a bunch of deals before they hit the market from brokers around the country and other off-market stuff just to kind of help you with deal flow and then i would i would help kind of serve as quality control on that to make sure that it's it's stuff that sounds like it's probably good you know that's that's the shtick um the universal response i got when i pulled the audience was we would rather pay more to have it more of an exclusive group and um and then have it be 20 bucks a month charge us a couple hundred a month but make it a small list an elite thing and i was like done deal let's go and so um what what i did was i created a list that's got 250 hard cap it's a hundred dollars a month right now there's only about 60 members on it so we just launched it um i guess about a month ago as we turned on the pay gate but we're i'm i'm using my network of brokers so i'm in best practices groups with brokers around the country and that golden window i talked to you about earlier between listing a good engagement and bringing it to market there's like this three-week window where if you're a buyer if you can get in right then you're going to be so much higher odds of success of getting the deal versus waiting until you happen to refresh bus buy and or whatever and hit it once it's already been on the market for a few weeks and there's 50 other people ahead of you competing for that deal and so would you pay a little bit of money if you're a serious searcher to get first access to good deals and so what i'm doing is it's like our firm and then firms all around the country if we get the bigger better deals so the ones that are like half a million and up those ones that as long as i can look at it and say this is a reasonable expectation on evaluation this is from a trusted source this looks like it's probably a good deal and no one knows about this yet this isn't on any marketplace would you want to know about that if you're in the if you're in that group that says heck yeah i want to know about that you just go to probably a good deal click the members tab and you sign up it's 100 bucks a month it's no obligation cancel any time but the the goal is to put two to five deals every month down that list sometimes it'll be off market unrepresented stuff and the majority of time is just going to be from a quality brokerage shop like texas business buyers or our equivalent all over the country in that window of pre-market um and so i i'm charging for it because i do serve a function there as quality control and i am going to make sure that we don't send overpriced stuff or anything that i think is not probably a good deal and then i'm also because of how many members sign up i've hired the first hire and we're going to start conducting our own in-house search like the methods i'm talking about to try to find off market stuff that we can send down the list as exclusives as well so if we get enough members here the the the thought is if we can fund like this national evergreen search for quality deals and we can help a lot of searchers find a good deal um without them having to just dredge the marketplace just find it have a pipeline direct to the quality people so that's what the project's all about it's relatively new but uh if you're interested in participating or learning about it just check it out probably a good deal.com can you give me an example of a deal or two that that you've put blasted to the list yeah yeah um yeah we just did one um it was a precision farming equipment they they help small farmers increase the yield of their prop of their crops with like gps and micro like precision guidance systems for tractors and things like that um really cool niche business without a lot of competition doing a little over a million in ebitda that um the uh lauren drummond from uh one of my broker friends out of uh biloxi mississippi she had the deal and then she's got another one similar to that coming down her pipeline so if somebody wants to do a roll-up strategy that's a good opportunity but but she was kind of um she had the listing but she was waiting until after the ibba conference in may to put it out there on the market but she knew a ton about it because she's been working on these partners for years to list and so she knows this thing down cold and i'm like hey i know it's a month before you're going to take it to market but can i just show it to these people so they can call you if they if they're a fit here and can and we can we see and she got six really quality people to sign uh ndas and she's got two that look like they could be really good suitors just from that list and so it was a win for her to kind of like introduce herself to that serious buyer group and not have to wade through hundreds of tire kickers and stuff and and uh you know even before she's got her presentations ready she's got a couple good candidates on the hook that's that's pretty that's pretty cool clint um it's a great concept and obviously in the in the searcher space deal flow and exclusive deal flow is is the name of the game so it'll be it'll be cool to see see how it unfolds over the next over the next year well we are a half an hour over thanks for the extra time clint uh there's there's more we could have done as always but i i gotta call it so um give us your twitter handle one more time and uh and is that is that the best place um for people to get in touch with you yeah yeah at texasbusinessbuyers.com is the website but my twitter handle is clint fiore c-l-i-n-t f is in foxtrot i o r e and uh happy to to see you on there in the in the twitter jungle and just having fun and and just trying to educate but do it in a lighthearted fun just let's not take ourselves all too seriously kind of way and that seems to be we're all having a lot of fun on there well i i think you did just perfectly um describe how you come off lots of education but also not heavy light-hearted fun so you highly recommended follow clint fiore sir thank you for thank you for all the time today really appreciate it thank you for having me well