Know Your Broker: Chuck Campbell

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When Chuck Campbell first came to Apex, he was looking to buy a business. Less than ten minutes into the initial meeting, the point was made: Chuck, you have an impressive network and a strong history of closing deals – you need to join the Apex team as a Business Broker. So he did.

Since that fateful day, Chuck has had great success representing buyers and sellers in the small to midcap business M&A market. He will tell you that what is most important in any deal is to be a good listener – to seek to understand. When representing a seller, Chuck takes great pride in not only bringing top dollar to the business owner but bringing the buyer best suited to carry on the seller’s legacy which is their life’s work, and care for their employees who are like family to them. All sellers want to make sure that when a buyer acquires their business, that buyer understands the industry, knows how to take care of employees and customers, and can continue the growth trajectory that the seller is proud to have created. And when representing a buyer, Chuck’s highest priority is to find a business that truly matches their financial and operational capabilities to ensure long term success for the new business owner and his/her family.

When asked his advice for buyers and sellers, Chuck said, “Find balance between your head, heart, and gut, and don’t lose perspective on the overall objective.” As for Chuck’s overall objective, he says it’s his fiduciary responsibility to his client – to earn their trust and always operate in their best interest. It is of utmost importance to him to make sure that his clients feel proud for trusting him with one of the biggest events of their lives: a business transaction.

Chuck earned his undergraduate degree in Business Administration from The University of Kansas and a Master’s in Real Estate Finance from UMKC. He is a Certified Business Intermediary and a licensed real estate broker in Kansas and Missouri.

Case Study #56: Three Years from Start to Sale

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Case Study #56: Three Years from Start to SaleAndy Cabasso was a law student looking for jobs with law firms and thought that most of the legal websites he found were absolutely terrible.  He reached out to a friend with a web design background and JurisPage was formed, building websites and helping with marketing and SEO.  He ended up finishing his degree and became a licensed lawyer, but not long after that he sold JurisPage for a seven figure sum.

Focus

Early on Andy and his partner decided they were not interested in one-off work.  They would only create a website for a company if they committed to doing some kind of recurring work with them, whether that was SEO optimization, paid search, or other marketing.

They also wanted to focus exclusively on the legal field.  

These two decisions shaped the entire growth trajectory of the company.  They turned down lucrative work early on, when it was the hardest to do so, because it was either from non-legal clients or from people who “only wanted a website.”  This also meant that they were able to put an assembly line system in place in which various members of a team could simply guide clients through a repeatable process every time.

As he built SOPs that documented every step of the process he found it was really important to check with his team on a weekly basis to go over checklists in the process.  Instead of just handing an SOP to his team and expecting them to just refer to that all the time, he took the time to make sure that the SOP was working and updated it as needed.

Abundance Mindset

Andy noticed that some other firms worked off a fear mindset: they “owned” the websites that they created for companies so that if the business ever wanted to leave they had to pay a large fee to “buy” their website from the website designers.

Instead, Andy chose to lead with results.  He made sure the contract stipulated that the client owned the website and if they ever left they could take it with them.  His thinking was as long as JurisPage was delivering results, why would a client want to leave?

Acquisition

Andy did start to get acquisition calls a couple years into the business.  He would ask the caller what the investment criteria they had was and would often tell them to check back in six months or more.  Truth be told, he wasn’t really looking to sell.

That was also the case when a conversation started with Uptime Legal, which was a referral partner of theirs.  Uptime offered managed services for legal services and was very much a complementary business.  At a conference Uptime threw out the idea of an acquisition and Andy’s response was, “Do you have a compelling offer?”

Uptime came back with the synergies and cross-selling the combined company could offer as well as the fact that they were older and more established and could grow the company faster.

Andy refused their first offer and instead of countering, he simply offered some other possibilities for how they could work together.  He was able to do this because he wasn’t looking to sell in the first place, so unless he was really happy with the offer, he wasn’t interested in selling.

The Lawyer Hires a Lawyer

Despite being licensed as a lawyer, Andy begged off from working on his own deal.  Not only was he not an M&A specialist, he knew that he was too emotionally close to the deal and couldn’t be counted on to be objective.  

He ended up with a sale he was happy with and stayed on with the new company for some time to help them hit some targets they had agreed to.  His payouts came first at closing and then after he had completed the agreed-to term at the new company.

Takeaways

Andy managed to do well in the legal field, though not in the way he had originally planned when he was in law school.  Lessons to take from his story:

  • Recurring revenue matters.  Not only is it cash flow you can count on every month, it’s revenue that buyers really like to see.
  • Focus on a niche.  Despite living off their savings in their early days, JurisPage didn’t jump at every customer opportunity.  They built a niche based on their expertise and owned it.
  • Be clear on what you want.  Andy didn’t counter the first offer because he wasn’t the one who initiated the sales process.  That was smart negotiating on his part.  That led to the buyer taking him more seriously and competing against themselves for the second offer.
  • Don’t DIY a business sale.  Despite being a lawyer running a business catering to lawyers, Andy was smart enough to hire a professional when it was time for a sale.  
  • Think abundantly.  Rather than keep customers’ websites hostage and build a customer base he was afraid of losing, Andy focused on delivering best-in-class service and let the customer decide for themselves.

Do you need some names of lawyers to help you with a sale or purchase of a business?  We’ve got some great names to share with you.  Give us a call.

What are NFTs?

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What are NFTsYou may have heard about NFTs in the news at some point in the past year.  These digital assets are in their first era of growth and exposure and big brands like Nike, Gucci, and Sotheby’s are jumping in on the fray.  We thought it would be worthwhile to give our readers a simple explanation of what NFTs are and how brands and businesses are taking advantage of them.

The Blockchain

NFT stands for non-fungible token.  Money, being interchangeable and indistinguishable, is an example of a fungible asset.  Your house or the Mona Lisa, for example, are unique and irreplaceable, making them non-fungible.  

NFTs are created on a blockchain.  The most popular blockchain that most people know at least something about is Bitcoin (BTC), which is primarily used as a store of value.  But many other blockchains have other use cases.  Ethereum (ETH), for example, rose to prominence for its use of smart contracts, which disintermediates buyers and sellers in various markets.  ETH is also the most popular blockchain for NFTs.

What Can Be an NFT?

Pretty much anything can be an NFT.  Let’s start in the physical world with the Mona Lisa, which we mentioned already.  While it’s true that you can go to see the Mona Lisa in Paris at the Louvre, you can also see it on your phone.  You can print it out, frame it, and put it on your wall.  You can make it the desktop wallpaper of your computer.  But you’ll never own it.

The Mona Lisa has value because we as a society have assigned it value and because most of us in the world live in economic systems in which the owners of private property can sell items of value that they own.  But since the Mona Lisa might be too extreme of an example, think of baseball cards.

Baseball cards are made of cardboard.  They were printed by computers, not designed by a famous Renaissance artist.  They are not inherently useful.  Yet our society still assigns them value, and they change hands to the tune of millions of dollars per year (if not more).

NFTs take these physical-world principles and put them into the digital space.  Think of them as digital certificates of authenticity which show the chain of custody all the way from the original creation of it on the blockchain (known as “minting”) all the way through every buyer until it’s ended up in your hands.  

Examples of Recent NFT Transactions

Yeah, okay, but who would do this, and what would it be for, you might ask.  Great question.  Some recent examples include:

Examples of NFT Use Cases

But NFTs aren’t just for global megastars and sports leagues, they can be created, bought, traded, and sold by anyone.  Foundation and OpenSea are examples of large marketplaces where NFTs are minted and sold everyday.  A fancy digital iteration that doesn’t exist in traditional art?  You can create a setting when minting an NFT that triggers secondary revenues to the original minter of the NFT everytime the NFT changes hands.  

Band Kings of Leon included software in an album they released as an NFT which allows the current holder four front row seats to every tour for life.

Nike recently filed a patent to allow for blockchain authentication of ownership of physical sneakers.

Perhaps the most fun and interesting use case of NFTs currently is in the Zed.run virtual horse racing marketplace.  You can buy virtual horses as NFTs and then run them (and win crypto) in various races which are running 24/7.  Seriously.

Bubble?

While some might throw up their hands and say they simply don’t understand, there are lessons to be learned (and money to be made) even during bubbles.  It’s too early to tell whether NFTs are a long-term trend or just a modern day version of Dutch tulips.  

The IRS has not yet offered guidance on them, but if you buy an NFT (which is a crypto asset) using crypto, the IRS has offered guidance on that, and as such it falls under capital gains (if your NFT appreciates).  Some speculate that the IRS may choose to classify it under the collectibles bracket, which is at an even higher rate than the current capital gains tax.

What’s clear is at the moment NFTs can be created, made scarce, bought, sold, and even serve as a source of residual income.  That makes them just like many other collectible objects which you may not care about or even understand the market for.  But hopefully after reading this you understand NFTs better, even if you have no desire to ever own one.

We don’t have any NFTs for sale here at Apex, but we have plenty of businesses that will be great assets for years to come.  Give us a call if you’d like to check a few out.

Why Your Business Should Consider an Email Newsletter

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Email NewsletterEmail newsletters have been around a long time.  There’s a simple reason for that: they work.  99% of email users check their inboxes every day (some up to 20X a day!).  58% of consumers check their emails first thing in the morning.  So why should your business consider a regular email newsletter?  We’ll tell you!

Expertise and Thought Leadership

You know a lot about different aspects of your business and industry.  You can talk about issues that are timely or on frequently asked questions that you’d like to elaborate more on.  A newsletter allows you to be seen as an authority on a certain subject or set of subjects and this can open up opportunities both locally and elsewhere.  It also builds up customer goodwill as people love to learn about things they care about.

Remember too that not everyone buys on first, second, or even third glance.  Think about email newsletters as one more part of a drip campaign of consumer education.

Collaboration

As much as you might know about your business and industry, there are plenty of subjects where you might need an assist.  That’s where you might feature a vendor, a business, a local resource, etc.  An email newsletter isn’t just for your business: it’s a chance for you to share your business’ social capital strategically.  On the other side of things, a large and engaged email list is something that is attractive to potential collaborators.

Awareness

We know businesses who say every time they send an email newsletter they get at least one sale.  This often happens when nothing in the email newsletter said anything about the particular service or product that the customer ended up buying.  What happened was the email served as a reminder.  The email hits the inbox and the customer remembers, “Oh yeah, I need to call them about X.”  

Marketing

While the obvious marketing might be to the customers you already have, the hidden power of an email newsletter is in the “forward” button.  Your customers likely know other customers like themselves who don’t yet know you.  When those potential customers hear about you via a forward from a trusted friend, they will give it more attention than they would a cold email.  

Furthermore, email marketing, unlike many other types of marketing, can be closely tracked by open rate, click-throughs, etc.  Given the costs of most email newsletter programs, it’s likely to be among the least expensive types of marketing you do in any sector.

This is to say nothing of what an engaged email list can mean to your business valuation when it comes time to sell.  It’s one of those intangible assets that you can’t suddenly build up during a due diligence period.  It’s something you have to build over years.  

So start now.

Convinced that you need a newsletter but aren’t sure where to start?  We know some people who can help you put one together and a plan to send one regularly.  Give us a call and we can connect you!