Episode 82 – How Can LinkedIn Help My Business? With Special Guest Jason Terry

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Jason Terry joins Andy and Doug on today’s Apex Business Advisors podcast episode. Jason has been helping his clients use LinkedIn effectively for over 13 years. In this two part episode, Jason, Doug, and Andy discuss the importance of LinkedIn for business owners and how it can help improve their businesses. Jason shares his personal experience with using LinkedIn for sales and staying top of mind with potential clients, emphasizing the need for consistent engagement on the platform.

If your team needs some help getting the most benefit out of LinkedIn, we encourage you to contact Jason on LinkedIn (of course) or at his website.

Are you considering selling your business? Are you considering entering the world of entrepreneurship? If so, please get in touch for a FREE consultation. The best way to learn about us is at our website, which includes connecting with Doug, Andy, or the rest of the Apex Team.

Case Study #77: A Hole-in-One 20 Years in the Making

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Case Study #77: A Hole-in-One 20 Years in the MakingIf you ask Ian Fraser, co-founder of Tour Experience Golf (TXG) how he prepared to run his company, he would tell you that he spent 15-18 years being underpaid. He used that time to invest in himself and learn everything about his industry, golf club fitting, as well as the basics of business. It would pay off years later in a handsome exit.

Ian does have a Scottish accent, which doesn’t hurt in the world of golf, but he notes that while an accent may get you in the door, it’s the hard work and reputation that can keep you going. That reputation got him noticed by an investment group who made him an offer but it was clear that Ian’s ambition didn’t match the investors’ risk profile and Ian ended up partnering with a 50/50 partner with the caveat that until all the original investment had been paid back, the other partner could hold on to 30% of Ian’s 50% equity position.

Golf Club Fitting

If you’re not a golfer, you might not realize that there’s an entire universe of custom-fit golf clubs. Anyone who has experienced the difference between “off the shelf” clubs and custom ones will tell you that custom ones help you play better and enjoy the game more. Ian built a reputation for fitting and had people flying in from all over the world to work with him.

But he knew to build a business, he needed to scale himself. There were three tools he used to hire the right people:

  • Hire for EQ instead of IQ. Ian felt he could always teach the technical side of things, but being empathetic to the customer and his/her needs? That was something you wanted right away in a team member.
  • Choose the customer over the company. In the interview process Ian would offer scenarios in which the business, not the client, would win in a given scenario. Tied back to the point with EQ, Ian selected those who would choose the customer first. That was the ethos of TXG: serving customers first, profit comes as a result of that great service.
  • Consult in an open space. By using an open space instead of a closed room, Ian was able to have his trainees on either side of him, working with their own customers, and they could learn from and feed off each other on every consultation.

YouTube

Another winning strategy Ian deployed was YouTube. The channel has well over 200,000 subscribers, and because Ian spent every Sunday and Monday filming for 2 years, including a Live Q&A every Monday, he built an online reputation and customer funnel that was unstoppable. While most people spend money on marketing, Ian was actually getting paid for his marketing, as it was responsible for $30,000 in revenue per month in addition to doing what great marketing is supposed to do: bring in clients.

Before too long, TXG was at $5M annually, with a waiting list of 1,500 to get in for a fitting.

Sale

The original acquisition offer wasn’t respectful for the sort of hard work Ian had put in and the acquirer implied that they were going into the marketplace “with or without” Ian but they discovered, as many had before, that you can’t just throw money at YouTube and you can’t just buy reputation. Ian had won in the video space because he had been consistent and the other better funded companies didn’t seem to include consistency in their channel rollouts.

As the acquirer realized it would be much harder to build what Ian had already done over so many years, they decided to buy that sweat instead of trying to do it themselves.

Lessons

Ian intentionally built his business over many years. Three takeaways for those looking to exit well:

  • Duplicate yourself — by duplicating not just his technical knowledge, but his approach to customers, Ian was able to scale his company beyond his efforts.
  • Deliver content — Ian knew that YouTube rewards quality and consistency. He delivered both and got paid for his marketing efforts instead of having to spend for them.
  • Know your worth — when the acquirers tried to lowball TXG, Ian stood firm. As those acquirers started to get a better sense of the real value of the company, which would take a lot of time to duplicate, they realized their number was wrong.

We definitely have some golfers in the office, maybe even some with custom clubs! But even our non-golfing brokers can help you sell a business you’ve spent many years building. Give us a call.

Episode 81 – Facts or Myth about Marketing and Advertising for Small Businesses

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We are back with Jeff Randolph, Chief Marketing Officer of EAG Marketing and Advertising. In today’s episode, we play Fact or Myth with Jeff about various marketing topics for a small business. Topics touched on are Word of Mouth Advertising, the 2% Rule, Facebook’s Algorithm, and marketing unicorns.

Are you considering selling your business? Are you considering entering the world of entrepreneurship? If so, please get in touch for a FREE consultation. The best way to learn about us is at our website, which includes connecting with Doug, Andy, or the rest of the Apex Team.

4 Virtues Your Business Broker Should Possess

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VirtueVirtue is a key part of living a useful and rewarding life. Not only are there many virtues any of us can work to obtain, there are levels of those virtues that allow us to always keep pushing and improving over the whole of our lives. Just as some virtues, for example, patience, are particularly important for parents, so too are others for business brokers. In this article we are going to highlight four in particular (though brokers need more than these four to close most deals!).

Fortitude

A broker has to have the ability to keep going. On the podcast we recently noted that a transaction could have as many as 500 points of contact for a broker, whether that point of contact is a 90 second response to an email or a 90 minute phone call to calm nerves. The broker isn’t just responsible for keeping himself going all the way through a transaction, he needs to keep his client and the counterparty in the game too. 

This fortitude is often expressed in a calm resolve that doesn’t lead to panic at obstacles, but rather focuses on solutions.

Justice

A broker isn’t interested in everyone feeling completely happy walking away from a transaction, because it’s often impossible to get everyone everything he/she wanted. But a broker should be interested in having everyone walk away from a transaction feeling that they were treated fairly and equitably throughout the process.

A broker doesn’t want to hide anything from a counterparty or aid his client in hiding anything. A just broker takes pride in leaving a legacy of integrity through every transaction.

Prudence

Prudence keeps a broker and his clients on an even keel. It means not overreacting to adverse news, not panicking when a large obstacle suddenly appears, not allowing ultimatums to be sent in emotional moments.

Prudence also discourages unnecessary intermediaries or “experts” who can just as often destroy and blow up a transaction while they are claiming to be the one necessary part of it. Brokers try to be the neutral party in the room, offering context and advice, but not urging decisions one way or the other.

Hope

It may sound a bit cheesy, but all the best brokers have a solid supply of hope in their lockers. This isn’t about fake cheerleading or fake smiles, but about keeping a positive mindset and attitude, with a “let’s move forward” tendency. 

Interestingly, hope is contagious, so a hopeful broker often shares that with his client and even the counterparty: “we are going to get to the finish line together.”

While we are proud of the experience in our office, we’re also proud of the mosaic of virtues we hold as a team that make us better brokers and better servants for our clients. If you’re looking for brokers with these virtues, give us a call.

Episode 80 – Value Add: External Marketing with Jeff Randolph of EAG Advertising

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In Part 1 of a two-part episode of the Apex Business Advisors Podcast, Andy and Doug are joined by Jeff Randolph, Chief Marketing Officer at EAG Advertising and Marketing. The topics discussed in this episode are the value add drivers that an outsourced marketing agency can provide in helping a business get ready for sale by growing revenue and profitability through effective marketing strategies. They highlighted the time and expertise saved by partnering with professionals who can navigate the complexities of marketing, including legal compliance, technology, and AI, ultimately leading to increased revenue and brand value.

Are you considering selling your business? Are you considering entering the world of entrepreneurship? If so, please get in touch for a FREE consultation. The best way to learn about us is at our website, which includes connecting with Doug, Andy, or the rest of the Apex Team.

Do Your Legal Due Diligence

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Due DiligenceWhile due diligence is a term that encompasses all the things you need to examine more closely when buying a business (or anything, for that matter), legal due diligence is a subset of that diligence that you need to pay attention to. Each of the categories we will mention in this article can be its own rabbit hole and it can sometimes be tempting to leave rabbit holes in peace, but for peace of mind when buying a business, you need to explore each one to make sure no surprises pop out after a sale.

Leases

While the one lease that everyone thinks about in a business sale is the one for the office space, there are also vehicle, equipment, and furniture leases to consider.

In all these cases you are going to want to examine the procedures for transferring the lease to another person. Most often, in an office space lease, the lessor is going to want to extend the lease for a certain additional period beyond the current term. That length is negotiable, but never expect the transfer of a real estate lease to be a mere formality. We’ve watched location-dependent deals blow up because the buyer and seller didn’t take this part of legal due diligence seriously.

Contracts

Many businesses don’t have employment contracts but they may have licenses that they issue or obtain that function as a contract.

If these contracts are not necessary for the new owner to assume, he/she may choose to use a different mechanism to continue the agreements that the contracts currently assume.

Lawsuits

With lawsuits buyers should be looking at three “Ps”: past, pending, and potential, i.e. has there been any litigation in the past, is any pending, and is there the potential for litigation in the future? 

IP

More and more important in a digital age, intellectual property needs to be secured. Many times, business owners have never been properly advised to get copyrights or trademarks, and in the legal due diligence process these are either obtained by the outgoing owner and bundled into the sale or by the incoming owner and noted as part of the transaction.

Remember that IP can also include systems that are used internally or are licensed to others.

Taxes and Liens

If there is real estate in the deal, are there any outstanding property taxes due? What about liens on the property or business?

Environmental Issues

This is rarer in business transactions, but when it is relevant it is often overlooked. Is there any specialized care or maintenance that needs to conform to environmental standards set by federal, state, or municipal authorities? If so, has it been done regularly?

Good Standing

Is the business in good standing and is the counterparty you are dealing with the only one necessary to authorize the sale of the business?

Warranties and Representations

This is the “fine print” that people often overlook, but the overarching scrutiny here should be on what the seller is stating about the condition of the business, particularly any potential downsides.

Feeling panicky or discouraged looking at all the aspects of legal due diligence? Don’t be! We are here to help you every step of the way. Give us a call.

Episode 79 – First Days as Brokers Part 2

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Andy and Doug are back to pick up their conversation from last week about how the business has changed in the past twenty years. Today they talk about technology and the impact of COVID.

Are you considering selling your business? Are you considering entering the world of entrepreneurship? If so, please get in touch for a FREE consultation. The best way to learn about us is at our website, which includes connecting with Doug, Andy, or the rest of the Apex Team.

2023 Changes to SBA 7(a) Loans

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2023 Changes to SBA 7(a) LoansWhile no one is usually excited to hear about changes to a government program (more fine print to read?) we here at Apex are pleased to see some of the changes coming in August 2023 to SBA programs, particularly the 7(a) loan program which we see so much of. We don’t have time to get into every rule change (see your banker for those) but we wanted to highlight a few that are definite game changes.

What is the 7(a) Loan Program?

The 7(a) is the SBA’s most common loan program and is a good option when real estate is part of a business purchase, but can also be used short and long-term working capital or for refinancing current business debt. It has special requirements to obtain the loan and requirements to stay compliant during the life of the loan.

Changes

Percentage of Business Purchase

The headline-making change here is that the loan no longer has to be used for a 100% change of ownership. Starting August 1, 2023, these loans can now be used to buy a portion of a business or even a portion of an owner’s interest in the business.

What this means:

  • Key employees who had equity in the business no longer have to exit as owners
  • License holders, particularly those who hold licenses which are difficult for new owners to obtain, no longer have to exit as owners, but can stay onboard, in a way, to ease the business transaction
  • Buyers can buy part of a business to learn, then buy more as their comfort, expertise, and cash flow allows

Related to this, the old rules stated that an existing owner could only stay on in a transitional role for a maximum of 12 months. Under the new rules, the seller could stay on as an owner, officer, director, or even a key employee.

Liquidity Restriction Lifted

Oddly, those with substantial personal liquidity were formerly restricted from access to these loans. This restriction will now be lifted.

Minimum Amount Removed

Loans needed to be for businesses valued at $250,000 and above. This restriction has been removed.

Equity

The SBA changed the definition of what constitutes equity in relation to seller debt. Formerly 10% of the business needed to be financed by both buyer and seller in a traditional formulation of “five and five” in which a seller note was half of that 10% amount and the buyer put up the remainder. But the new rules indicate a 2.5/7.5 split between borrower and seller, but some have interpreted that several ways:

  • Could the part of the business that a seller keeps count towards the down payment?
  • With a seller note as the majority contribution of the 10% rule, could buyers find a way to get an SBA loan without any money down?

Alas, with governmental bodies, there are rules, and then there are interpretations of the rules. When a rule isn’t clear, you’ll see a cooling effect on those who would be interested in taking advantage of an opportunity in case they face an adverse ruling in the future.

However, where no interpretation is necessary is the new rule that if you have the same NAICS, ownership, or geographic area, this will be considered expansion and no equity infusion will be required.

As we mentioned above, your banker is your first stop for questions about these changes. Your next stop? Apex. Give us a call.

Episode 78 – First Days as Brokers Part 1

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Andy and Doug have a new broker in the office, which sparked a conversation about their first days. They started the business nearly 20 years apart, and things were vastly different 20 years ago. Hear how Doug’s “CRM” started and how it has evolved, the types of businesses listed, closings around 9-11, and more.

Are you considering selling your business? Are you considering entering the world of entrepreneurship? If so, please get in touch for a FREE consultation. The best way to learn about us is at our website, which includes connecting with Doug, Andy, or the rest of the Apex Team.