Tony Pompeo, managing director of Sunbelt Business Brokers of Boston

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0:52 Thanks for joining in again today. I'm Kevin Hallanan and welcome back to Winning Business TV and Radio on W four cy dot streaming live on talkfour tv dot com, and of course we're on Facebook live at Winning Business Radio, and we're available after the show and podcast form on every platform imaginable, YouTube, by Heart, Radio, Spotify, Apple, pretty much wherever you listen to your favorite podcasts. The mission of Winning Business radio and TV, as regular viewers know and listeners sorry, is to offer insights and advice to help people avoid the mistakes of others. Right Those are to learn best practices, the how tos, the what tos, the what not tos, to be challenged and hopefully to be inspired by the successes of others. Those consultants, coaches, authors, advisors, founders and owners, entrepreneurs, people with expertise. But of course, every successful person I've ever had a chance to has had some form of failure in their lives and careers.

1:50 So while we all have to get our knees skinned once in a while, I'm driven to keep those scrapes from needing major surgery. Let's endeavor to learn from history so we don't repeat it. I've spent the better part of my career equipping businesses to grow, and that's from solopreneurs to small and medium sized companies all the way up to the Fortune fifty. I've seen some of those companies win, and to varying degrees degrees, I've seen some fail. And I've had the opportunity to rub elbows with some of the highest performing people around and with some who probably should have found other professions, and in my own businesses, I've had lots of success, but some failures too. I like to think I've learned a lot from those experiences. So yeah, you're going to hear from me, but mostly you're going to hear from our guests, those experts, consultants, etc.

2:32 Today my guest is Tony Pompio, Managing director of Sunbelt Business Brokers of Boston. Here's his bio. Tony Pompio is an experienced business professional and entrepreneur who's owned multiple business including businesses including distribution, trucking, sports, entertainment, and consumer education. In his most long standing business, Tony bought, managed, and grew a Boston based distribution company, successfully steering the company through the Great Recession and the global pandemic, ultimately selling the company to private equity. Tony received his MBA from Babson College and has given multiple lectures at BABS on the top of entrepreneurship through acquisition and buying and selling small businesses. He's an active board member of the New England Business Brokers Association. He also served in the United States Marine Corps and because of his own experience running, growing, and selling small businesses. He enjoys guiding other small business owners to reach their own goals. His experiences, education, work, ethic and communication skills enabled him to truly understand challenges and work diligently for his client's success. Tony, Welcome to Winning Business Radio.

3:40 Thank you, Kevin. Great to be here. I'm glad we've made this happen. Tell us about your family first of all, Yeah. Sure so ols. My lovely wife Sarah, and I've two children. My daughter is twenty one years old, goes to a unh t raight now. She is a cello performance major, gifted with musician in the family. And my son, Dominic, he's an apprentice electrician, working hard, full time out there trying to get all of us eight thousand hours in so we can become a licensed electrician in a couple of years. Yeah. I was just talking to a good friend of mine about the difficulty in finding those guys. So good for him and good for her. Were musical family, and I love the cello. It's such a beautiful sounding instrument, so awesome. And do I understand Sarah's in the business with you, Sarah, Yes.

4:29 She is the real estate broker of record so not only do we help business owners when they want to sell the business, we also help them to sell. The real estate should they choose to do so. Correct. Yes, all right, So you grew up in Braintree, mass Tell people who are not from Massachusetts about Braintree and a little bit of what it was like to grow up there. Yeah. Well, Braintree has gone from a town many years ago when I lived there and grew up there. It's a city now, so it's really growing up, but pretty much a bedroom community. A lot of people knew each other. I went through the brain free public school systems, you know, all the way from second grade and graduated from from Braintree High School. I still have a good group of friends from that town, but I ventured out and so my own my own seeds in in Walpole. Ye.

5:18 Who are some of your early influencers? Oh geez. I would say that from a from a personal perspective. I really enjoyed learning from and being influenced from my coaches, primarily in sports and primarily soccer. Soccer. Yeah, so we were lucky enough at Braintreet High to have a professional from Europe come over in my junior year and assist with the head coach there and really, you know, just instilled different type of sports work ethic into us. And I got to see kind of learned from you know how he just kind of worked hard and worked his way up and stayed very focused. And that definitely is something I looked back was in inspiration to me.

6:14 That's cool. Now, did you work as a kid. Yes, I had something called a. Paper route A what no, yeah. More, but they're fantastic. It was a fit after school job and I had I had that in and started in sixth grade and I kept that like through a little bit of high school. Actually it was pretty flexible and made some money and it was a great little job to have, and then. In the morning, bigger it was. It was after school. I delivered thirty four, thirty or forty papers after school and then Saturday mornings we would deliver it. And then into high school, I ventured away from that and got you know, other small odd jobs. Yeah, well, that's cool, that's cool. Did you have any family members who were in business?

6:57 Yes, Well, my father was an independent operator of a trucking business, a solar operator. But he wanted to quote he wasn't always When I was growing up, that's what he aspired to do. He worked for another family member who owned up a trucking company, and he ended up getting his own and uh, and so I watched that happen before my eyes. And then there's other sides of my family that definitely have larger businesses that I was interested in as well. And did you spend time around them? Did you get kind of that bug early on? Yeah? I did, I think just I was. I would actually go to their businesses sometimes. I would wash and wax their trucks on the weekends to make extra money and just kind of be aboud that around that business and hear about the stresses of payroll, and it just kind of I was kind of around it more than I thought I was when you look back.

7:51 So when, and by the way, thank you for your military service. When and why did you decide to join the Marine Corps? So I joined the Marine Corps after part of my college. You know, my my college career, I guess my path was not very straight. It was very good line. Yeah. So after about a year and a half of college, I uh ran out of some money and need to kind of refocus, and I had time and and also a desire still too to want to do something with my life in terms of you know, going into the military.

8:33 Guess to say that, yeah, and and to serve my country and the Marines was a good path for me. I kind of aspired to have that that band of brothers around me. I might have been missing that a little bit at the time. I was only child, and I think having like a whole band of brothers around you, like another second family, was kind of important to me, that that mentality and that notion. And but I decided to go in the reserves, so I still had a huge aspiration to go to college. I just so they had a like a summer program for boot camp, and you went to two summers back to back SEATD one and you you went through boot camp and became a marine, went through all that training, and you went back to college, and then the following summer you ended up doing your your your training for your what you're going to do as a job in the Marines. And after that it was one weekend a month and two weeks a year, which kind of really fit in with with still wanting to go back to college, which I did.

9:33 And they he'll pay for that they'll pay for some of it. Yes, yeah, yeah, So what was the best part? Maybe that was it, I don't know, But what was the best part for you of being in the Marines? And what are maybe a lesson or two that you've taken or kept with you all these years later. Yeah. Well, my wife tells me now that because I've kept such good friends that they're really my family. Everything that happens on the weekends or we of Marine Corps birthday parties and my closest seven or eight friends are are all in the Marines. And so we've really, you know, grown that family that I looked for, you know, when I was younger. It stayed with me this whole time, which is really fantastic. And from a I guess from from a learning perspective. You know, they talk a lot about, you know, teaching leadership and and and some people there's two thoughts on that, right. Some people believe you have to be born leader. Somebody say you can teach leaders.

10:33 Similar to entrepreneurship, Are you an entrepreneur? Do you grow you know, did you grow up being an entrepreneur or can you be taught that? And in the military, I really was, I was really shown, especially in the Marine Corps, that leadership can be taught and instilled and not and not easily. It's not easily done, but it can be replicated and it can be instilled. So I had an opportunity to lead some teams in the Marines, and and that's something I can always look back at at in terms of just, you know, inspiration for myself to kind of keep going. To I mean, we'll get there. Which you've led teams since. So what was behind the decision to get a bachelors of psychology? And why you mass Boston?

11:17 Yeah, So after I went into the Marines, I went back to school for maybe another two or three semesters, and that was actually at Wentworth studying architecture, which I decided I did not want to be an architect after you know, spending two or three years learning how to be one, and and so then I just I stopped going to college for all. I still wanted to, but I didn't know really who I wanted to be or what I wanted to do. So I was working full time in sales, in sales direct sales, B to B sales, and I decided at that point I'm just I was learning about business more, and I kind of knew I wanted to get into business for myself one way or another, and I needed, I really want. I didn't need, but I wanted to get an MBA and I heard about this fantastic MBA program at Babson And so the only reason I went to even get my undergraduate degree was so I could go and get my MBA there. And so I chose us Boston, went there nights for four years while I was working full time and a couple of kids, and I chose psychology because it kind of blended with what I was doing, was I was dealing with people. I was in sales, and I wanted to go into business, and so that kind of really fit my background there, so I could focus on that.

12:39 So I'm going to take you through a few of these positions, and just these answers can be fairly brief, but let's see Network Plus a couple of years assistant sales manager. Just tell us a little bit about that job. Yeah. Network Plus was kind of my big, real, first big corporate and a company job. They had about six or eight hundred people up and down the East Coast. It was headquartered in Quincy and I came in there and I didn't really know much about it outside sales, but they were just looking for hungry people to hit the phones. And they gave me a you know, a yellow page book and said go call as many business own as you can and start setting some appointments. And there was some training that went along with it, but what there was was those great hardcore sales closers and openers there that could really mentor you in growing your book of business and learning how to you know, write contracts and get deals done. And so I really cut my teeth there and that company was growing dramatically. After my second or third year there, I was promoted to run help run a new Hampshire branch as an assistant branch manager. So I got promoted out of the Quincy office and UH and went up there to help lead a team up there, which was that was great and unfortunate only dot com and they went they went bussed, But I got a great experience there.

14:06 Then you went to Verizon, not a small company, not a great company to work for, right, Yeah. So it was funny because Network Plus we were kind of stealing business from Verizon and that's how we kind of That's how we got business. And then I went to Verizon and was kind of stealing it back. So I had the experience there and but but it was I guess it was during a recession and I was kind of grasping at you know, I needed a job and fantastic company for me. A lot of red tape, very large. I realized that this, you know, I gave it a try. It wasn't it wasn't the place, uh for me to live forever, but it was it was great to get a taste of it and fantastic company.

14:49 So then you went a little smaller to a New England Office Supply who I remember, yeah. Yeah, Well come full circle back to Network plus one of my great mentors there who helped me get promoted up to that Nash office. He was the sales manager at New England Office Supply, a local office supply company, and he was just trying to get me over there for months and months and months, and he didn't have to try too hard. But I just wanted to stay at Horizon for at least a certain amount of time before I jumped ship. I went over to New England Office Supplies as a salesperson. B to b again trying to get to local businesses to buy their office products and office supplies from us instead of competitors. And a few years into that, ended up being promoted to a sales manager there on the management team and really learned a lot about being on the management team, and that company was run fantastically. Really learning a lot about distribution companies in general. That's really what it is.

15:49 All Right, we're going to come back and talk about imported foods that people will understand why in a moment, we're going to take our first commercial break right here, everybody. We'll be back with Tony Pompio in about a minute. You're listening to Winning Business Radio with Kevin Helene on W four CY Radio. That's W four cy dot com. Don't go away. More helpful information is coming right up right here on Winning Business Radio. Best and Wealth Management is family owned for two generations. They take pride in thoughtful financial planning and wealth management with a family feel for your closely held family business.

16:29 Best in Wealth Management focuses on deep planning, integrating your business planning with personal They will help put your money to work and your mind at ease. Go to Bestinwealthmanagement dot com for more information. Advisory service is offered through Commonwealth Financial Network, a registered investment advisor. Join the Best Family and let our family advise your family. That's Bestinwealthmanagement dot com for your complementary initial consultation. Have you ever dreamt of being on radio? Well, now is your chance. Be a radio show. Guest on the number one ranked Internet radio station and promote you and your business for free. Yes, you heard it, free business advertising right here on W four cy dot com.

17:14 Call five six one five zero six four zero three to one now to get booked on one of our shows. That's five six one five zero six four zero three to one. Get your free advertising now. And now back to winning business radio with Kevin helenan presenting exciting topics and expert guests with one goal in mind to help you succeed in business. Here once again, it's Kevin Helene. We're back with Tony Pompio, Managing broker of Sunbelt Business Brokers of Boston. Now it gets cool because you founded your first no purchased a company. It was already existing, right, but you grew it. So I want you to tell us that story. Imported foods in South Boston in eight.

18:07 Sure. Yeah, so that kind of really takes me back to getting my MBA at Babson and kind of I'll start there because that's that's why that happened. While I was at Babson, I initially maybe started wanted to start a company and raise money and realized I didn't really have a passion for a product or a service and I didn't want to try and you know, go down that road. And so I started looking into investment banking, which is more about buying and selling huge companies. I really like that as much either, and I just really learned about a whole process about how buy small companies and they had a whole track on that, and fell in love with that and realized that I had a chance at doing that. So while I was in school, going nights to Babson and working full time, I had a four and six year old at the time, and realized that I really wanted to own my own distribution company.

19:06 I was working at Newland Office Supply at the time. I had the experience I felt to step into something, if possible, if something, I could find something. So I went on a search to buy a small business, made offers on multiple different ones and ended up buying imported foods in two thousand and eight, which was a food distribution company that we sold rices and spices and pastas and oils and vinegars, all the dry good stuff and kind of in big packages that you'd see kind of behind in the kitchen that the chef would use to make all the all the foods basically ingredients. And that was an in two thousand and eight. It was an upscale or they are were upscale brands.

19:48 Yes, upscale brands correct, Yes, yeah, stuff that I'm well expected called specialty foods, specialty goods. What was the hardest part of taking that over? Well, I think gaining knowledge knowledge transfer from the existing staff and owners. Did they meet around for well they did. Yeah, we had them on a consulting contract to stay in the business and transfer relationships that were multi generational. Wow. Yeah, So that is a challenge. And then making mistakes but fixing them quickly and building that trust with the with the customer base because it's going to happen. But I think that's how you really make a name for yourself.

20:33 So that's what I aim to do at the time. And let's see take us the timeline that you exited in twenty four, so that was a good chunk of time. Yeah, yeah, just before twenty four, in late in late twenty three. So yeah, I ran that business for fifteen years. My goal actually was to sell it after ten years twenty eighteen ish. Yeah, and you know, I was a little late on that, so I ended up being somewhere around twenty nineteen, started taking it to market and. Doing this yourself. I'm sorry you were doing this yourself.

21:14 No, I had broke. I had a broke, Okay, I had a business aproprage firm, yeah, taken firm, and yeah in twenty nineteen, and then we were basically at the table in February of twenty twenty then and the world, the. World fell apart, it did, man. Yeah. Yeah, so that went away real fast, and I had to, you know, hang on to that for four or more years and grow it back to bigger and better that than it was until I could really successfully sell it for what I wanted to do with it. Yeah. So you got a better price by waiting, Not that you, I mean you were forced to wait, but yeah, yeah. I was able to get it bigger and better than before, but had to work an extra four years to do it.

21:55 What changes did you have to make to survive and then flourish past the pandemic. Well, lots of changes. Actually, it's helped me to start to other companies within that timeframe. But the changes really were the bulk of the sixty percent of our business was hotels, and most of them were closed for almost an entire year, so we really had to downsize staff dramatically and change our whole stocking strategy as well, because we stored a lot of products of four thousand items, so we had to figure ways to kind of bring in just in time inventory to get stuff out the door as needed for certain customers, and just downside dramatically.

22:40 And then the bigger part that was hard for a while, and we got good at that, even though it's much smaller scale. The hardest and craziest thing really was magically growing it back. Just getting calls and everyone came back to work. I need orders, orders and orders, and well we didn't have all the inventory just waiting around, you know later, So that was a challenge. Yeah, but that's a testament to the trust you built previously. True, that's true. Yeah, And we got all of them back. We got all the customers back. All right. So there are two intriguing businesses I want you to talk about because I'm a shooter too. We've talked about that Greater Boston Gun Safety School and Greater Boston Airsoft and indoor Sure, yeah, shooting range. That's pretty cool.

23:25 So tell us about those businesses. So yeah, So during COVID, you know, prior, I was working normal, you know, business owner hours, forty fifty hours a week, running my company imported foods, and all of a sudden COVID hits and I have lots of time on my hands. Yeah, I'm done by ten or eleven in the morning most of the time. And my staff wasn't there anymore. Of the stuff that I held onto it was either working remotely or they were delivery drivers. So I had all this office space that was open and nobody there. And I couldn't like grow my company by selling different things to at imported foods. I couldn't like you know, pivot as they say back then. I couldn't sell them something else. They were closed. A lot of hotels were closed. So that with a military background and at my own gun gun license, I noticed while I was helping with some deliveries that there was a lot of riots going on in Boston and it was kind of crazy at that time, during during COVID, and I just thought to myself, if everyone's kind of want a gun in Boston right now, and there's not a lot of places that teach the gun safety certificate school in the city in the city. Yeah, So so I built a website, I hired some some instructors that that teach these types of classes, and started Greater Boston Gun Safety School. Within day one, there was literally lines out the door like I thought there would be, and uh

24:57 turned into a very successful academy and yeah, employed multiple instructors, gave all sorts of different types of trainings, not just a safety certificate school, but also pistol training. The thing is in Boston, you you can't really open another gun range or you can't get you can't really do pistol training except if you're at the existing ones. So we use something called airsoft guns, which are basically, if you know what paintball guns are, these are just the same things that they shoot little plastic babies. And there's a whole cult following of people who shoot, you know, these airsoft pistols, and so we did trainings with those and the instructors loved being able to teach with them. And then we had some people who loved playing the sport of airsoft come in to get their gun safety licenses and said, wow, we loved these guns too. And you have this whole warehouse opened in the back. Because we didn't have any food products in there at the time, we really minimized our ruminatory So, you know, I did some research there and I just had a whole band of good people that really wanted to grow an air soft business in the space that I had, and that's what I could kind of pivot to.

26:09 And I was. Enjoying myself, you know, growing another business. The gun safety school was kind of on rails, you know, just rolling, and so I started an indoor airsoft basically shooting. It was like a shootouse, basically built out an entire three thousand square foot house on the inside of our warehouse with doors and windows and everything you can imagine. And yeah, we had that. We had that running and you know, every weekend, just tons of consumers coming into to play that sport, which was great. So quick funny story about airsoft. My kids still laugh at us every time I go into my backyard where I still live in the house where we raised our kids, and I'm doing something with digging or hoeing, or I find these babies. Yeah you do, little yellow or little green babies, and I'll take a picture and I'll send it to my boys. We just laugh.

27:04 That's great. Yeah, absolutely, Yeah, we have some at our house to trust you. Yep. So when you exited from the two schools, or the Airsoft and the safety school, how did that exit take place? Yeah, so it was primarily so yeah, there was a lot of things that were timing out. Yeah, it was twenty twenty three and I was going to market with important foods, and I had these other two businesses operating in the same space, and so I knew I had to sell all of them or just spand some of them. And so I was really fortunate enough within two months of each other to be able to sell the gun Safety School to a competitor strategic purchase locally, so that business is still up and running, which was great. And they took a lot of the inventories such as the the pistol and whatnot for training purposes for that as well.

28:03 But unfortunately did have to close down the airsoft facility. Well, you probably needed a space back. Right, absolutely, I needed it back. Yeah, all right, So tell us about the transition from and we'll start this and then we'll take our commercial. But the transition from that successful exit, I want you to tell us about that, and then Sun Built. Sure, so, so the transition from from selling soasically? Yeah, So, I mean, I I just like what I did when I bought the company. I was on a consulting contract for a while, working with the with the with the buyers, and it was I had a good management team in place and the business was you know, growing, and I helped, just like before, to transition those relationships. However, the business wasn't really about just my relationships, and I made sure of that. So it was it was very smooth. It didn't take a lot of time. There wasn't a huge trust rebuilding, and everything was documented and ready to go for the most part.

29:10 That's good. That's good. And then so what drew you to business brokerage? You had multiple experiences there, so that's probably part of it. But why Sunbuilt? Yeah, Well I knew coming out of imported foods that I wanted to get into some sort of deal making, some sort of merger and acquisition type business role, and I just didn't know exactly where I was. Going to land it shows. Did you go through a search process? Did you work with a broker to identify what might work for you? Tell us about that. Yeah. So I talked to some coaches, some lifetime coaches.

29:51 I try to give me an idea of where it might be the best fit for me. And I didn't know if I was going to go and try and work at a small investment bank or an m and a form I didn't have. I'll tell you right now, I didn't have the network to get into those type of places because I did try, and I don't know if I was just gonna hang a shingle and be Tony Pompeo business broker, Tony Pompomna advisor. Yeah, And somehow sublt this opportunity at some Belt came across from my computer and there was an opportunity for the Massachusetts Emberated Island territories for a sun Belt, which is a national franchise, and I just thought to myself, Wow, this is right in my backyard, and I think I might be able to do something with this. I'm going to learn more about it.

30:34 All right, we're gonna take a break right here. We'll be back with Tony in about one more minute. You're listening to Winning Business Radio with Kevin Helenet on W four CY Radio. That's W four cy dot com. Don't go away. More helpful information is coming right up right here on Winning Business Radio. Bestial Management is family owned for two generations. They take pride in thoughtful financial planning and wealth management with a family feel for your closely held family business. Best in Wealth Management focuses on deep planning, integrating your business planning with personal They will help put your money to work and your mind at ease. Go to Bestinwealthmanagement dot com for more information. Advisory service is offered through Commonwealth Financial Network, a registered investment advisor. Join the best family and let our family advise your family. That's Bestinwealthmanagement dot com for your complementary initial consultation.

31:38 The yp dot com website is your local search engine. If you're looking for a good restaurant, they can help you find the right one nearby with ratings and reviews. Or if your car breaks. Down, you can use the YP app to find the closest repair shop, or maybe you're just looking for something to do on a Friday night. While it has great local coupons for all sorts of things in your area, no matter what, when or where. If you're looking for something, YP Local Search can help you find it. So go to yp dot com or download the app to search local to find local and save local. And now back to Winning Business Radio with Kevin Helene presenting exciting topics and expert guests with one goal in mind to help you succeed in business. Here once again is Kevin Helenett.

32:31 Okay, we're back again with Tony Pompio, Managing broker of Sun Belt Business Brokers of Boston. You chose a franchise, what are the benefits? I mean, we're a franchise too, but tell the audiences what the benefit of a franchise is benefits are and why that was good for you. Yeah, it's a great question, because I'll be very straight, I'm not always the biggest fan of franchises. I kind of like to shop local and and that just kind of that's how I've been for most of my life. But so this is kind of a big decision for me. A big choice, and I really wanted to take a deep dive into some Belt and I did a lot of due diligence on it before moving forward, for sure, speaking with a lot of other franchise owners around the country, and my take on some Belt was there very hands off, and I was very kind of excited about that. And I also my take was, I'm at a certain point in my career where I would love to fast forward things a couple of years. And I think that the training that they provided, you know, the instant website, SEO, things of that nature, we're all ready packaged up and ready for me to kind of jump right into it and then have that platform behind me as well from a training standpoint to grow a company, because I still knew that I had another, you know, enough gas in

34:02 the tank to go build another firm or too. And so that's what I was excited about, was some built. All right, So give us a thumbnail, thumbnail view of the work that you do. Sure so well, so some you know some I'll start with this somebol It's been around since the late seventies and in the nineties they really grew to be a pretty large national business brokerage. With a couple hundred offices around the country and focusing more on the more main street smaller companies, call it business companies that we use a business broker to sell their company. And these business many times have less than a million dollars in earnings.

34:47 It's kind of where a lot of people draw the line in terms of mainstream type business sometimes significantly less than that, but definitely less than a million in earnings. Sales can be anywhere from probably five hundred thousand up to maybe ten million, somewhere in that range. And so those are the types of the size of businesses that we typically work with at Sunbelt. There are also ways that we can talk with companies that are a little bit larger if we have some connections with some private equity firms as well. And the businesses we work with, they really need to be profitable, have steady or growing revenues, or also a good story to tell around that if it's not. And the reason for the profitability is many times because many times these businesses are going to be financed, and if they're not profitable or sales are way down, then it's hard to do that.

35:45 Tell us about I have a financing question as well. But first tell us about SBB Capital Partners. Sure, yeah, okay, good, I'm glad you brought that up. So SPB Capital is the M and A division of sun Belt, and so this is where we have lots of text over the years through some Belt we've pulled them into SBB Capital Partners to be able to market the larger companies. I would say with my firm, we're probably like eighty twenty eighty percent on main street smaller companies, and then we'll come across a decent manufacturing company that's got a million and a half a EBITA and we can put that in front of private equity to sell or go to strategics to sell. So it's really just a different brand and many times you kind of need that in this business because it's just different ways that you market a company. If they're smaller, you're marketing to people who want to kind of buy a job, maybe putting it out in the internet Confidentially, it's larger, you're marketing to private equity or competitors. So it's kind of a different branding to get the same thing done to a certain degree.

36:49 And so take us from from the seller's perspective, what the process of selling a business is like with your with your advice, But then I want to ask you from your PERSPECTI right, So first from the seller's perspective, describe the process. Sure, So for a seller, they're going to meet with us and we're going to just learn a lot about what they don't want to accomplish, you know, not only with their business, but after their business. It's very important what the motivation is for them to sell their company. And so they might not realize that's part of the process, but it becomes part of the process and they talk to us about these things, and then they're going to be sharing the story of their company with us, how they got there. We're going to talk to them all about operational dynamics and financials, those kind of the big things that we go through. Nine percent of the time, Kevin, business owners are not going to sell their business unless they know what the value of the company is. So that's one of the first things that ends up happening if they if they like our discussion and they want to move a little bit forward with us. In the process, we're going to put a market range of value on their company by their financials and at that point, we're going to have another discussion about that because there has to be some reality baked into right. A lot of business owners, many business don't know what their business is worth,

38:20 and they should and that's not what they do all day. They're good at running their company and they're they're not looking at their financials in that capacity. But they might have a need to make excellents to retire, but it doesn't need in the reality of what the business is worth aren't always the same thing. So we have to have that conversation as well. So there seems to be a common belief that business owners are going to be like a homeowner. They're going to value their business mentally greater than it actually is. Does that happen a lot? Many times they do, yes, and and they think that someone's going to magically come in and write a check for it. But there's you know, there's two sides of that equation as we turn on investment side, from the from the buyer as well, that's what they're looking at.

39:05 Yeah, all right, now talk about it. I think it's similar but slightly different. Your perspective when you're selling a business. So when when well, when I'm looking at a business, I see it from the buyer. I try to see it from the buyer's eyes. That's my perspective most of the time. What I what I think is kind of unique about my position is I've been on the buyer side before, so I can really empathize with that and see that clearly. And then I understand what the seller is going through as well, because they want to really maximize you know, that that price. But you know, from the the process for me is really determining if this if this business is sellable, and if the business owner truly wants to sell their company right now. So I'm really digging in deep on both of those things. And one is kind of psychological. Are they ready? Will they pull the trigger? And because it's very emotional, so they might even get required to come in and make a decent offer, and and all of a sudden they goes, oh my god, I want to stay. I don't want to do this anymore. So we really need to kind of sign yeah, we need to come to terms on that for sure, and then making sure that it's it is a sellable company and if not having that hard conversation with them, that it might not be ready to sell.

40:27 Yet, what are some of the maybe misunderstood or under understood aspects that would go into valuing a business. Oh sure, so most business owners want to reduce their taxable income, and by means of by ways of doing this, they might they might run their company car through the business. They might take their family to Disney and say it's a travel expense, so be it. I'm not I'm not the irs. But these are things that if you do too many of this, it makes it a little bit harder from a financial standpoint to really extract the true value out of the company and again make sure it can be financiable. That's definitely one key thing that people don't think about very often, especially the business owners themselves, until they go through a process with someone like me who can talk them through that. And then maybe times we take a little time to fix that. We try to do the best we can to pull it out now.

41:32 But some of the things aren't really able to do that with. So you're going to make adjustments, or you'll show the buyer, yes, those nine items or whatever it is, to show there's that much more value. I don't know, that's six thousand dollars for a car for the year. Well, that's profit, correct, we will adjust that and add that back to the bottom line and all those things. A buyer doesn't necessarily need to run that through the business a statement if they want to, but they don't need to, so that's actually profit they can use whoever they want it to use that. The other thing we run into occasionally is cash, and if cash isn't reported, then it can't be part of the vount you can do right the business either the business owner save their thirty percent when they didn't report it, but they're not going to get the three x multiple out on the other side. So we run out to some of these things too.

42:27 So what are the ranges of multiples? And it probably depends on the type of business, et cetera. But what do you see? Yeah, so that's a great question. And one thing that the people many many business owners wouldn't know is unlike Zillow, you can go on and find out where your neighbor's house is worth. Right, that's a good analogy for. A business that We actually have private industry databases for private business sales that have been recorded. So every time I sell company, I record those to these databases. Privately, it's all confidential, but you see, you know X revenue and why profit and you. Can essentially comps from the comps okay. Comps for small businesses. So we have access to that in multiple different databases and so those help us to to get the you know, the value in the right direction as well. And then from from a multiple standpoint, the majority of businesses are our value off of real cash flow earnings really and and you're looking at anywhere from smaller companies two to three usually in that range, and that's of of of earnings and it's not out of sales.

43:38 For the okay for the audiences. Yeah, we say multiple, that's eight. It's one times, two times three times earnings. Yeah. Right, And you also mentioned a term which I knew we'd get to EB to break that down. Sure, well, ebad is it's the similar earnings, except you're actually installing a manager to run the company, so it's just going to be it's just a different number. It's earnings before interest, taxes, depreciation and amortization, which is a very worthy but it's a line item on your P and L. And usually companies that are larger are sold based on a multiple of Ibata, and the smaller companies are sold on in multiple of what's called discretionary earnings, which is earnings plus all those adbacks we just talked about, and the buyer is going to step in and be the owner of the day to day person in that smaller company. Whereas when you're selling a company based on EBIT of multiple, you're assuming that someone's going to the CEO might stay, or you might be installing a manager, So it's more of an investment, right platform.

44:45 Yeah, if the owner goes away, it's got to have less value. The owner's going to stick around for a while, it's going to have more value, right absolutely, Yeah, whatever the structure of that is, whether it's a consulting agreement or a higher price, or imagine that both of those arrangements, right. And the larger companies are that are sold on you know, an EBIT to multiple. Typically the multiples are higher, and the bigger the company, the bigger the multiple. So you can have a manufacturing company with you know, three million dollars a bit, they might sell at four, five or six times, and then you have a much smaller company could be a manufacturing company with the owners making four hundred thousand dollars probably you know, somewhere between, you know, maybe three and four if they're lucky, somewhere in that range.

45:30 So it's just a stifferent on the size and scope. So now to drill down a little bit, who makes a good you talked about a good buyer, a good owner, good seller. Who makes a good buyer? Yeah, So we spend i'd say almost the majority of our time dealing with the buyers. So once we find a you know, a real qualified seller, we get them all set up and ready to sell their business. We build a nice marketing deck, we confidentially market it to these buyers, some of them who we know, who we know, and some of them who we don't. They're acquiring on that business, and now we need to vet them and figure out which ones are considered you know, a great buyer, a good buyer, and there's you know, there's lots of different checkpoints for that. But you know, initially they're introd, they're showing interest, which is great. We're finding out are they casting a y net to buy a company or or have they already narrowed that down and they know kind of what they want to do. They want to buy you know a manufacturing company or are they they looking at it companies, manufacturing companies, laundromats. So that happens, and that's okay, but that's probably not the best buyer.

46:43 We need to really kind of vet that down to someone who's very interested in this specific company that's for sale that we're representing. And then we're also looking at their background of financials, So if we need X amount of money for them to put down on a companies and then to find it's the rest, we're making sure that they have bank statements to verify that. Along with that is usually some sort of transferable skill sets, you know, so we're looking at their resume and it doesn't mean that if you never ran a manufacturing company before, that's okay. If they want to buy one, maybe they have some good management experience, then they can kind of transfer those skills over to But you usually have to paint some sort of a picture to be able to step into certain companies, especially with the lenders. But before you even get to lenders, we want to make sure that we think it's to go.

47:34 So cash buyers is probably less I don't know if scrutiny is the right word, but less requirements financially, they have to have you know, enough to run the business for a while, but you have access to financing, do you recommend you don't have to name names, but you have a stable of banks or firms you could lend, you could well, I can't even talk refer them to. Or do you have access to financing? Yeah, no, that is some great question, and you know, I don't know. Most most deals are are financed just people are People are using other people's money, and we hope that's it and we do we we what we what's important is dealing with lenders that are deal makers and not deal breakers. So we definitely have strong relationships with some of the best bankers out there that we know can get deals done. And every bank has different you know, risk tolerances as well. Yeah, so we know kind of where to steer them to for for each type of a deal or each type of a buyer, which helps get it to close, because that's just you get to the one yard line. A lot of times, it's really hard to get into the end zone when you're selling your company or buying a company.

48:46 That stuff the real catch, and that's when you get paid, is when paper gets transferred. That is very true. And I also like to say, if you know from a football analogy, when you get to the one yard line of football, you get four tries. Well, you know I get unlimited tries. I have to be creative and I got to find ways to get the deal closed. And that's what I enjoy a lot about doing this too. Well, believe it or not, a lot of time. But I've got a couple of good questions. Last two questions who in the viewing and listening audiences should reach out to you and why? In the second will be how to get in touch with you? Sure, well, I'd say business owners with great businesses that that are looking to retire or do something different. I'm glad to have a confidential conversation with you. I also many times I like talking with lawyers and CPAs and financial advisors because I think we kind of live in the in the same world to a certain degree and can work well together. And I think that that will probably do it.

49:51 With that, all right, excellent, And the best way to reach you is, yeah. My my email address, so you can go on our website. Emails T Pompio at Sunbeltnetwork dot com. And I'm on that email all the time. Perfect and the website. Is Sunbelt Boston dot com. All right, that's nice and easy. Sun Belt Boston dot com. Tony, thank you so much. I know you're busy. I really appreciate you covering it sometime to be with us today. Kevin, this has been great. Thank you so much. I really appreciate it. You're welcome. I'll see you soon, and thank you everybody for watching and listening. This is a show about business, sometimes business challenges. If you've got concerns about the sales effectiveness of your company, whether your sales team is you or small, or it's large, feel free to reach out to me on linked excuse me on Facebook or LinkedIn, And that's at Winning Business Radio. You can drop me a note to one of my many email addresses. I always say Kevin at Winning Business Radio dot com. Our company is Winning Incorporated. We're part of Sandler Training. We developed salespeople and sales teams into high achievers and sales leaders into true coaches and mentors. Hey, listen, we're not right for every company, but maybe we should have a conversation.

51:01 Thanks for producer and engineer. One for another job, Well, Don appreciate you on be sure to join us next week Monday, March ninth, when my guests will be Riley Deplacido, founder and CEO of Triumph HR. Until then, this is Kevin Helenan. You've been listening to Winning Business Radio with your host, Kevin Helene If you missed any part of this episode, the podcast is available on Talk for Podcasting and iHeartRadio. For more information and questions, go to Winning Business Radio dot com or check us out on social media. Tune in again next week and every Monday at four pm Eastern Time to listen live to Winning Business Radio on W four CY Radio W four cy dot com. Until then, let's succeed where others have failed and win in business with Kevin Helenan and Winning Business Radio