Why 95% of Business Owners Leave Millions on the Table When They Sell with Matt Uhler

95% of the people that come to me as a broker looking to sell their business, which is typically one of the biggest assets they own, they are not even remotely prepared and they are leaving hundreds of thousands or millions of dollars on the table because of it. Every business is ultimately going to sell or close, right? I mean, it's the only two options. A lot of the people who own businesses for a long, long time just literally close them. And it's amazing to me because I'm so active in this world of helping people buy and sell them, but that would be like deciding you want to move to a different home and bulldozing your old one.

Hey everybody, welcome back to the Unemployable Podcast. I'm Jeff Dudan. If you are a longtime business broker, entrepreneur, coach, speaker, and the host of the What's Your Deal podcast, if you've been self-employed since the age of 17 with nearly 3 decades in acquisitions and exit planning, completed 800+ deals, analyzed 3,000 businesses, and participated in transactions with a combined value of more than $350 million. Your name can only be Matt Uler. Welcome, Matt.

Jeff, thank you so much. You summarized that so well. I appreciate that.

Well, you have been a, a, a busy human. We're excited. It, it's very topical that you're on. Uh, so I'm excited to, to get into this. Is something that we're working with our franchise owners on is working backwards from where they want to end up and what they want the business to be. So my question for you as an opener is, should business owners run their business every single day as if they were getting ready to sell it?

The answer is yes, and with, with a caveat there, you know, obviously there are stages depending on how new it is and so on and so forth. But in my opinion, and I'm going to say 95% of the people that come to me as a broker looking to sell their business, which is typically one of the biggest assets they own, they are not even remotely prepared and they are leaving hundreds of thousands or millions of dollars on the table because of it. And so it is worth the time, even though it's not real sexy to do that.

When somebody comes to you as a business broker and what would be a typical business, a $3 to $10 million service business or healthcare, home care business or something like that, would that be a typical deal?

Not typical. So most of, there's, there's Main Street businesses, which are typically considered to be $5 million or less. In revenue.

Okay.

And then mid-market would go up from there, 5 to call it 20, someplace in that range, 15 or 20. And so a lot of the businesses that I work with are Main Street and some mid-market. So a Main Street business can be a business generally that's gonna have discretionary earnings of someplace between, you know, $150,000 to $1,000,000, somewhere in that range.

Mm-hmm.

And then mid-market is generally, they're looking at $1,000,000+ in discretionary earnings, or EBITDA is another term.

Okay. And when you say seller discretionary earnings, that is SDE, uh, in the parlance. So by definition, you've got a company, it has net income, they print their financials outta QuickBooks. What do you do to walk that net income that comes right outta QuickBooks to get the seller's discretionary earnings or EBITDA?

Yeah, it's a great question and technical answer, but it's so important because really it's critical. Business valuation to a very large extent is driven by how much the business can afford to pay for itself. And so if we can't demonstrate the discretionary earnings, buyers, lenders, their accountants, their advisors can't figure out what it's really worth. And so discretionary earnings as a simple, as a simple explanation is It's, it's really the, it's the profitability of the business. And then added back to that are any one-time non-reoccurring or expenses that are very specific to the seller. So as an example of that, let's say there's a leased piece of equipment that's actually used in the business and it's going to be paid off at closing. Well, those lease payments are part of what gets added back to the bottom line or the net profit. To help determine discretionary earnings along with owner benefits and oftentimes company vehicles. I mean, most business owners are doing everything they can to reduce their tax burden. And the more creative they get with that, the harder it can be to demonstrate what the SDE is to support a great exit.

Yeah, I look, I get that. But I also believe that, you know, two things can be true at the same time. That's one of my favorite— that's one of my favorite learnings late in life is that more than one thing can be true at the same time. So in all of our businesses that we operate, every month we scrub through the numbers and we put things what's called below the line that are one-time expenses. And small business owners that have not been through a transaction, really, they miss a lot of things. So for example, let's let's just say that you had a one-time expense to send somebody to training. Mm-hmm. And, uh, maybe you sent 4 people and they went to sales training and it cost you $20,000. All right. Well, that was a one, you're only gonna do that one time.

Mm-hmm.

It's not going to be an ongoing cost to the business. It looks like an expense. It, it, it acts like an expense. It smells like an expense. And certainly you write it off for your tax books. Okay. So you're not gonna pay taxes on that because it's a straight up expense. You're probably not gonna have to amortize that or, um, over years to write that off, right? That's going to be— that's going to come off this year. But you put— if you're running your business every, every month and you're going and you see that come in, you're like, I'm putting that below the line because that's not an expense that a future owner is going to incur. At least I'm not going to incur that on their behalf. They choose to incur it. It's up to them. So, you know, that, that and the discipline of pushing things, of analyzing every expense monthly and saying, does it go above the line or does it go below the line? Which below the line means the things that you're going to add back. It's an incredible discipline for in, in the financial IQ of a small emerging business owner.

It's huge. I mean, that, and it's, it's so great you're doing that and, and you teach people how to do that because very few do.

Yes.

And what happens if, if you, if a business owner doesn't do what you just described, then they're either looking to a business broker, an accountant, an appraiser. Sure. To try to find it. Like, okay, well, it's stuck in cost of goods somewhere. It's whatever. And it just, if it disappears, it's really hard to identify. And it's oftentimes difficult to get a buyer or a lender or their accountant to accept as a discretionary earning. And what you just, what you just described is discretionary, right? You chose to spend $20,000 in that example.

Yeah.

For training. It's a one-time non-recurring expense. And so, yes, exactly.

Yeah. So, and then, so somebody comes into you as a business broker. They've got their $4 million business. They're making 15% on the bottom line. They're making $600,000 now. And that's just straight out of QuickBooks. What they sign you, they like what you're— they're ready to sell. They like what you have to say. They sign you up. What's the process look like from the day that they sign you up all the way going through a sale? I mean, I'd love to just walk through this because for us, I mean, we, you know, our clientele is a lot of, it's a lot of the franchise industry. It's a lot of franchisees. It's a lot of small business owners. And if you haven't been through a process, it's, I, I, I say, you know, I, I sent my oldest to school and encouraged him to do finance because finance is like Russian. If you don't know it, you don't understand it. And so many independent business owners pretend they speak finance and they go out and they try to negotiate their own deal, but they actually have no, no idea what they're talking about. And they leave money on— and that's what we call a stupid farmer, you know, and they don't make much of them anymore. But I mean, people that don't understand how the finance works inside of a deal, they undervalue their business and then they— somebody gets a gets a good deal. And that's not what you want. You want to get the best outcome for your client.

Yeah, for most people, it's a— it should be ideally a life-altering exit, right?

Sure.

It's what they put their heart and soul into for a long time. So, so yeah, let me walk you through step by step because it's a great question and most people have not done it before. And so that creates an opportunity for mistakes or just concern for fear of the unknown. So number one is, is if you're going to be using a broker, which I highly recommend, it's choosing the right broker and they are not all the same. Unlike a lot of real estate agents, even though they're not all the same, that industry is much more refined. The sale of business opportunities is not as refined.

And so it's not really regulated, is it?

It's a great point. It's depending on the state, it is not regulated. So in some states you need to have a real estate license, but that does not include training for how to be a business broker and how to sell what's most often personal property. As opposed to real property. So huge distinction there. So choosing the right broker is important because once you're committed to that broker, you're, you're there and, and it's very difficult to eliminate that relationship. So, or terminate that relationship. So number one, choosing the right broker. And then in, for me, when somebody comes to work with me, it's financial analysis. Now I want to understand all the operational aspects of the business as well, but you'd be amazed what 3 years in a, in a financial statement will tell me about the business. And it's not uncommon for me and my team to spend 2, 3, 4 weeks analyzing the financials and trying to extract and identify the discretionary earnings numbers and document that and going back and forth with the client to ask questions. So part of the reason that's so important for your audience is because the last thing that I think a seller wants to do is find a good buyer, start going down that road, And then there's some mistake in the analysis.

Yeah, the numbers change. It loses. They say every deal dies at least 3 times and it'll die the last time if you— if people find out that they— if they don't believe what you've told them.

Well, then they're looking for more of what's wrong as opposed to looking for what's right. So, yeah, so the financial analysis is crucial and it's, it's very important because ultimately that's going to be a huge factor in what the valuation of the business is. And so then the broker in this example is gonna come back to the, the owner and say, listen, here's what I think. And sometimes I'll give somebody a very specific number, but I'll also give 'em a range.

Yeah.

Because a lot of business owners are like, listen, this is my life's work. I don't wanna leave one penny on the table. I don't care if it takes a year or two. That's different than somebody who says, I've got a terminal illness. I just need to be done. Right.

You know? Yeah.

So those factors come into play when it comes to what's a business worth. So once the financials are analyzed and the operational attributes of the business are clearly identified, I mean, is it, is the owner and their spouse working 80 hours a week or is it 20 hours a week and they've got 5 key people? I mean, all of those things help to add value or hurt value.

Yeah.

In the first example.

I have a question. During that preparation phase, you identify something that you're gonna say, well, it's my brother-in-law and we pay him, but he's not really that critical to the business. We just, we keep him here because we keep him here. Would you say, okay, we're gonna take the brother-in-law, we're gonna keep him employed and we're gonna put him below the line? Are you gonna say it's gonna look better if you make that change now before we go to market so that the business is more in the form and shape that you're going to want the buyer to acquire the business in.

Yes. You had mentioned there's a both, a yes twice, right?

Yeah.

So if somebody's like, I need to list it now, then we're gonna work with the brother in that situation.

Okay.

If somebody says, I've got 2 to 3 years, then we want to clean up their financial picture as much as possible before anybody looks at it.

Yeah.

And I, I would attribute it to as a simple analogy. I mean, if somebody goes to look at a car and, and they've got one car that's, they're gonna buy it and it's perfectly clean and well maintained, that presents an image. And if they go look at another vehicle to potentially purchase and it's clearly not been taken care of and it's just a mess and it's, well, which one are they gonna gravitate to? And same is true with a business. We, if we can, we want the best foot forward. We want everything clean. Concise so that a buyer feels good about moving forward.

Yeah. How much do you look at a business and say, look for growth levers? And, and of course, if the current owner hasn't pulled on a growth lever, like expanding their commercial business or some, something that, you know, is, looks like low-hanging fruit, are those things that you're going to memorialize in a deck that you put for somebody or, you know, and say, hey, you know, we see in, in studying this business, here's the opportunities that we see and show them a path to grow the business. Or do you just basically present it? This is, this is the trailing 12, trailing 24. This is what it is and here's the number.

Yeah. So we tell, ideally we're telling the story, right?

Okay.

And most buyers of Main Street businesses are looking at history to determine value. Now, I met with a client last week whose history is great, but the first quarter is down like 50%. Oh, well, that's not great, right? So that diminishes the history. But a lot of buyers will not buy potential because it's an untold story. So there's an element of that that is, that adds to value and should be taken into consideration, but it's hard to put a dollar on it. Unless you get real creative and we could get, we could get in the weeds if you want, but earnouts and there's all these ways to try to capitalize on what the future might bring. Um, but for the most part, it is a consideration. So if, if there's a business that's the seller's just tired and they're turning away work every day and they've got, yeah, you know, an opportunity here that just don't have the energy for it. That's great for a buyer to know. Got it. Or prospective buyer.

Yeah. Yeah. How long does it typically take for you to get a business sold?

Uh, so we use a term that's 7 months. Okay. And the, the, the fact is that usually when a business is listed within the first 45 days, we're gonna get the most activity we're gonna see.

Sure.

Because there's pent-up energy in the market and there's way more buyers than sellers most often.

Yeah.

And so if it's not, if it's not under contract within the first 45 days, then typically we're looking at 7 to 12 12 months.

Got it. And the market's a little tired.

Yeah. And it, well, and it gets hard to, again, how prepared is the business? Well, we could, and we don't typically do this, but about 70% of our deals we arrange the financing for.

Okay.

Well, if the business isn't prepared well, we could spend 6 months just negotiating with lenders and trying to work through issues like, well, is the brother really an employee or not an employee? And are they key? And why are we adding them back?

And, Yeah.

So momentum is our friend in this industry. I mean, if we come in strong with a clean file and we find the right person and we, and we start with the right person, which is something we may want to talk about, then typically the process can be done in 60 to 90 days, right? From the time the buyer decides they want to buy it.

Yeah. Do you ever, what's your position on recommending to your sellers that they hold some financing And I guess along with that transition participation, is it vary from deal to deal or is, is there a standard that you recommend to your buyers and sellers?

Yeah, there is a standard. And so from a seller carryback standpoint, most of the business owners that I represent as sellers, they don't want to carry a note.

Sure.

They're not interested in investing in somebody else running their business that they generally believe they ran better than anybody can, right? Yeah. So that's deemed as risky. However, I do coach them that oftentimes 5 to 10% seller carryback is customarily requested by buyers.

Okay.

And the reason it's customarily requested by buyers is because the buyer wants to know that the seller has some skin in the game, that they will show up for the transition period, that they will pick up the phone if they call them 6 months later with a question.

Right.

So from a seller carryback standpoint, that's the norm because most of the businesses I represent, I can, I can obtain financing for the buyer. Yeah. So there's, there's no need for the seller to carry back a huge amount.

Okay. And that doesn't, 10% doesn't maybe help towards the down payment or the, the, the loan-to-value ratio, LTV.

It can. Yeah. Yeah. So it can, there's certain criteria and it changes all the time, but there's certain criteria with SBA lenders, which is how most of these transactions are financed, right? Where a seller carryback note in a, in, in a certain structure can qualify as part of the down payment funds.

Yeah. Do you have, uh, do you represent buyers that are looking for specific business as well?

I do, but there's a caveat with that. So typically if somebody comes to me where they've actually found the business and they want help securing it and closing it, then that's something that we can do very effectively. Us trying to find a business for a buyer 5 states away or something, it, that gets very difficult. And it's, you know, sometimes we'll assist buyers with that and then we find it and call 'em that, well, I just took a W-2 job. I couldn't wait anymore. You know, it's, so it's, it's hard for us to represent buyers unless they actually have a target that they're clear on.

Yeah. Yeah. 30, 60 days after the deal, you get a phone call. Mm-hmm. Something's gone horribly wrong. What are some things that owners need to look out for that could turn into a horror story in hindsight?

This is such a great question. And I'll, I'll, when, when people buy a business or a franchise, right? Part of what I love about franchises and people buying a business as opposed to starting one is there's a recipe there, right? There's a formula for creating the result. And one of the things that I caution people against is that oftentimes they buy a business and they want to change it. Mm-hmm. And when they change it, they mess with the recipe. Yeah. And so, um, uh, from a buyer's perspective, one of the very first cautions is If you're buying a business, you bought it because it worked. And so to the best of your ability, until you have the experience to make wise decisions related to the recipe, try not to make 'em.

We call those genius attacks, right?

Well put. Yeah.

This business has been operating for 30 years. You've owned it for 30 days. I think I'm gonna change everything.

Oh my gosh.

Right.

So usually when I get those calls, Jeff, I'm, I'm like, okay, we need to sit down with the seller.

Yeah.

And we sit down with the seller and say, okay, well, well, what's going on? Well, we're not, we're not getting the install rate that we used to. Okay. Well, that's weird because the install manager, I mean, he was phenomenal. And what's going on? Well, we terminated him cuz my brother needed a job. And so he's the new install. And, and it's just one day at a time. They make one change at a time. And before you know it, using the recipe analogy, they got a a whole different cake. It tastes horrible, right? And they're not getting the outcome. And so ideally, they're able to get back on track with what actually worked because the owner of the business spent years developing that recipe and the franchisor spent years figuring out how to roll that wheel. And so it's very important.

Yeah, I had an investment banker and a deal that we sold, and I had some visibility into it that the buyer didn't seem to understand how to weight some of the services that were provided. And they were, not even for economic reasons, just making changes that were kind of dismantling the secret sauce a little bit. So I called my investment banker. I said, hey, this is what I see. It's not my business anymore. They certainly, haven't asked me. And he said, well, he— I said, do I call somebody? And he said, you know, sometimes there's a method behind the madness that you might not be aware of, but most often it's just madness. I would stay out of it. And, you know, and so I did. And then, you know, so who knows, you know, what happens. But I mean, it's, it's Um, yeah, but I think, I think to your point, I think a best practice would be maintain good founder relationships.

Mm-hmm.

But also, you know, the founder isn't responsible anymore.

No, they're not.

So if you can get into a mentor mentee relationship, if you can find a way, if they do roll back or, or stay in the deal just a little bit, kind of as a figurehead, the wisdom accumulated over the decades of building that business have real value. And, and that doesn't mean that to grow the business, you might not have to change a few things.

Mm-hmm.

Um, but, and, and, you know, so a lot of times if, if the buyer is an individual, it depends on their sophistication. It depends on their experience. Like, do they really have a plan to grow the business? Is it something they did before? If you, if you're talking about private equity, you know, did, do they have a, they're going to make changes.

Mm-hmm.

By the way. And it's, you know, gonna be driven from a spreadsheet. A lot of times. And but like there's, it's like anything else. There are some incredible private equity firms that have incredible track records in our industry of franchising and just everything they touch, it just is a winner. And then you have new private equity firms that come in and don't have franchise experience. They've got great experience, but in direct businesses. But they, you know, the franchise space is very nuanced and it's a game of influence. It's, it's a game of relationship with franchise owners. It's understanding the cultural undertone of of why the business works, how it works, what, what the practices are. And really, I mean, going to the contract when you have to, but ultimately, you know, there's a way that you work with business owners because you can't fire these people. I mean, you're, you, you, you, you know, our attorneys say it's not a partnership, so don't call it a partnership. Don't say franchise partners. But man, it is a partnership. I mean, it is not in a contractual way, not in a legal way, not in a tax way, but I mean, it is truly our success is just intertwined. So, you know, we, we need collaborative franchise owners that are going to resolve conflicts in a healthy manner and work together and sometimes put their individual, uh, gripes aside, you know, for the good of— to understand what we're trying to do for the good of the network that's ultimately going to help them from a unit economic perspective, a customer acquisition perspective, whatever it is. And then as good franchisors, they never forget that the franchise owners are at the center of everything that they do.

Mm.

Bottom line. I mean, like, if, if you care first and foremost about their success and you, you, and if you do that, uh, ultimately you build a healthy system. It has low churn, uh, it has organic growth and, and you will, you will make your money, uh, from the, from the scale.

Yeah. And, and I, I agree with everything you just said. It, the distinction when it's not a franchise is just that that relationship has gotta be key with the previous owner because everything you just shared is ideally what happens with the previous owner where, yeah, we, I've got a situation. I helped my oldest son and wife buy a business about a month ago. And so it's interesting to look at it from that perspective with them. And there's the previous owner is, is, um, admittedly tired, just tired, had some physical issues that were preventing him from doing some of the things that he would have liked to have done. And yet he's a wealth of knowledge. So even though my son and wife and we're discussing changes they want to make, we're typically running them past the previous owner for his input and, and having regular meetings like, how are you feeling? How are you doing? What do you think? And, and even though it's clearly challenging for him to see somebody come in and and be ready to take this to a whole nother level, he's, he's appreciating being part of it and that it's his legacy that we're carrying forward. So that relationship is very, very helpful. If you think about not having it, it can be devastating.

Yeah. Yeah. Because the, the tribal knowledge is just not, it's not available anywhere else.

Mm-hmm.

Yeah.

Especially specific to that specific business. Right. I mean, the, I'm sure you see it. A franchise, a specific franchise in one town can be totally different than another town just because of the dynamics and the demographics and the culture and all of it.

So, yeah, you know, we do our best to keep the hamburgers tasting the same everywhere, but—

Right.

How often, or, or have you gotten calls where, uh, there's non-compete issues that have arisen, whether it be from the founder going back and competing with a business that they sold, maybe in, in a way that wasn't anticipated, or key employees maybe trying to, you know, step out the door with some of the, uh, whether it be customer base, intellectual property, things like that, put up a competing shingle. You know, I, I mean, these are dicey, right? So, because now, especially now, right, there's been a lot of new regulation around non-competes. Are they valid? When are they valid? When are they not valid? What professions are they excluded from? How, how far, how wide, how deep can you have a non-compete? But as, as a buyer of a business, you bought the people, you bought the process, you brought— bought the know-how, you bought the customer base. And, you know, and, and then if people are disenchanted with the ownership change for some reason, you know, some people might try to walk out the door with some of the things that you just paid a lot of money for. How do you deal with those situations?

Well, fortunately, it doesn't happen very often. And as—

oh, you mean they get away with it? No.

Usually when I'm working with somebody there, if they're done, they're done, right? And they don't want to get back into the business.

That's fair.

If they wanted to get back into the business, they might as well just keep what they have.

Mm-hmm.

So the few occasions where I've seen that show up, one was just total, total fraud and manipulation. But the others were people ran out of money and all they knew how to do— the previous owner ran out of money. All they knew how to do is what they had done before.

Right.

And so they get back into it. That's a whole different animal than key staff. And this is important for buyers of businesses to understand is because it's very, very rare to get a key employee to be able to sign a covenant not to compete compete that's enforceable because they're not a principal in the operation and they haven't been compensated not to compete unless you get real creative with how you do that. And it may still not be enforceable. So for me, when I'm buying businesses or working with buyers of businesses, I'm looking at, is there somebody in the operation right now that could step out tomorrow and just devastate us because of their brand knowledge and competency and all of those things? Sure. That's a consideration if you're gonna buy a business. And, and yet it's also part of the value, right? A lot of people who buy businesses want somebody who's able to run the day-to-day.

Yeah.

So it's a fine line.

Well, concentration risk is real with customers and with employees.

Mm-hmm.

It sure is. If, if, if you have, and for the audience, uh, if you, if you have a business and 60% of your revenue comes from one customer, that has a contract but can break it and you buy the business and for some reason they break the contract, you just, you just bought 40% of a business that you paid 100% for. And it's the same thing with employees. If you, if it's a highly skilled situation or to your point, key salesperson, business runner, the entire business relies on one or two head, headcount. And I mean, it could be that they leave or walk out the door. It could be that they have a heart attack. So in those situations, I've seen that really impact the multiple that somebody will pay for a business.

Yeah. I'm working with a client right now who's— we're— we've got the buyer and we're working on the sale, but his key employee of 10 years passed away in October.

Oh my gosh.

That's a, that's a factor. I mean, devastating for he and his family. And from a business perspective, I, that's a factor.

Yeah.

And it happens.

Yep. Keep 'em healthy.

Yeah. Right.

Matt, what was your first entrepreneurial experience?

So my first entrepreneurial experience was when I started my first business. I was 17 years old and, and, uh, prior to that I had worked as a janitor. I came from very modest means as a family. And so I worked third shift through high school. over the weekend as a janitor. And as I was trying to, determine what to go to college for, knowing that I would be paying for it myself, my parents weren't in a position to help with that. Uh, teacher, came, you know, as I was talking with him, he said, listen, why don't you just start a cleaning business? And I didn't think there was any way I could, I mean, I just, it seemed insurmountable to me, but he, he guided me through it and, you know, it's not It's not super challenging. It's vacuums, it's equipment, it's some insurance, business cards. And so I started that when I was 17 years old and then built it up to 40 employees before I sold it, um, at 26 years old. And so that was my first entrepreneurial experience. And it's also how I saw the power of being able to help people buy and sell businesses and buy 'em and sell 'em myself.

Yeah.

Because the gentleman who bought that business was a corporate executive with 5 kids. Very successful. And it honestly puzzled me at the time, but he wanted to pay me for my job, you know, to, to— in the day after we closed, he made money and, and because of his background was able to turn it into a much bigger operation than what I had at the time. So that was my first, my first, uh, sticking my toe in the, in the pond.

So obviously somebody thought that you had the chops, they recommended that you do it. Did you have side hustles before that? Were you one of these kids that just had a rag in his back pocket and was selling, selling anything, shining anything? What, what, what, what was Matt like growing up?

Yeah, it's good question. Again, I came from humble beginnings and, and a lot of unhealthy beginnings. So Matt growing up was just a kid who learned how to work hard from my mom. And I I mean, there were times I'd shifts, I'd work 26 hours straight. And so I would say tenacity probably exceeded anything else that I had at that time, but just a willingness to do what I said I was gonna do the best I knew how to do it. And fortunately people liked that and then hired me more and more and more, and I was able to scale that.

How did you get into brokering?

Well, it was so after I ended up selling my business, which is— there's another tidbit here that we could get into. But after selling that business, I was so interested in the process and so disappointed by my broker that I decided there was— there might be room in that industry. Now, you can imagine, as a 26, 27-year-old young man, that was a tall order. But again, tenacity. I mean, I, I would talk to 6, 7, 8 different business owners a day when I started. Mm-hmm. Just getting reps in and doing everything I could to help anybody who wanted it and talking with anybody who would talk with me and, and got good at it as a result. I think I had a knack for it anyway, but, um, I had lived it. I mean, 40 employees over that many years. I had, I had learned a whole lot about business. Maybe not all of the different industries, but I certainly knew customers and profit and loss and, and employees.

Got it. And then how did you find your way to WCI?

Yeah, so WCI was the first firm that I started with and I was there, well, I, I literally just found them and started out as an independent agent. So, okay. I got a, you know, some training from them for a short period of time and they just set me free up in the woods of Northern Arizona to, figure it out. And after about 9 years, I was there. I was their top agent for 7 out of those 9 years. And so it became time for me to move on. And part of me moving on became we kind of carved out a territory of WCI.

Okay.

And so, so I, with, with the team that I had worked with in the northern Arizona part of the state, I then owned that office. And all of those agents. And we had a collaborative relationship for, for many, many years.

Got it.

With between the two offices is what I mean. Yeah.

Yeah. So you're swinging deals and hustling and you're also investing in businesses along the way. You've owned over 35 businesses and you've created multiple revenue streams that way. I think you currently are active in 20 of these businesses. So talk for some— from somebody who— and a lot of our listeners are maybe they're starting their first business. A lot of our franchise owners, not only is it their first business, they're the first ones in their family that have started the business. And I make sure to point out to our business owners that, you know, other than all the tax advantages and the be your own boss and the standard out-of-the-box stuff that a business gets you, it gives you two other things. Number one, it gives you the freedom to pursue your own curiosities. Meaning if, you know, to, to build a business and to scale a business, you need capabilities. So as you decide, okay, I have sales capability or I've got finance capabilities, as the business grows, you recognize the business needs capabilities that you don't have yourself. So now you have the freedom to say, do I pursue these capabilities myself or do I buy these capabilities? You know, who, who do I become? But you have the freedom to kind of pursue who you shaping yourself as a, entrepreneur, as a business builder, as a business owner. And then the other thing that it does is it's just really a statement of impact because most people that are successful entrepreneurs have an early entrepreneurial experience. And that's why I asked that question. And the prior to people having an early entrepreneurial experience, they usually only have that because they were exposed to a business owner.

Hmm.

So when you get right back down to it, if you're the first one in your family that has owned a business. Think about your children, your nieces, your nephews, your aunts, your uncles, your other people. Like, you are impact— everybody's watching to see what's happening with the business, how you work. My dad had an engineering firm, didn't go great. I mean, he slugged it out for probably 8 or 10 years, but it didn't really grow. He had a couple of partners and I mean, they, they made ends meet, but like they were doing the work, right? They were drafters and architects and structural engineers designing things and But I watched him. I watched him 7 days a week go into the office and do the things that he needed to do. And he— when I was a— I was an oversized kid. And, you know, he put one— I mean, he would— if he had clients coming in, he would put me in a sport coat and make me go sit in the cube in the back. And, you know, when they were in the conference room, I would just go out there and raid the snack box, you know, snack boxes. It's like, I think your draftsman's over there eating all the crackers, Mr. Dudan. But You know, you know, but I mean, ultimately I sat there and I watched my dad like prepare the meeting room, talk about clients coming in, you know, have a sales pitch, you know, talk about debrief after the meeting to see what they were going to do. So, you know, because, and I think so many, so many people, I don't know that that's true, but like I know that there are people that protect their children from the the rigors or the, the, the dead truth of building a business, like how hard it is. Hey, we got stolen from today. Somebody stole something out of somebody's, you know, all— I was so transparent with my children because why would I go through all of this and not— and then have them go into the world as adults and miss all of the experiences that I had to prepare them for the next level, right? So, you know, so I, I just think it's— so is— so people that are getting into business for the first time, they underestimate the impact that they're going to have on the people that are in proximity to them.

Yeah, absolutely. It's a— it's something that I've always wanted my kids to understand because I think the resourcefulness of being able to create your own income when you need to is, is important, especially maybe now more than ever. But to, but to answer your question, it's about why I started creating what I call a mutual fund of small businesses. It was really driven by something that touches my heart because I watched my mom as a single mom raise my brother and I. And, you know, we all, we've all heard the, the resource we all have the same of is time. And my mom worked 7 days a week for 7 years to put food on the table, and she didn't have any more time. And every time, every occasion where somebody got— she got sick, my brother got sick or whatever, and she had to miss work, she was behind. And so as I became a successful business broker, I made a great living and was blessed to have that, but it was transactional. And, and as I tried to figure out how to diversify my income by investing in the stock market or whatever, it just was a game I didn't understand. And it wasn't— I didn't see the rewards from that. And so I decided to start investing in small businesses and small again, as it, you know, $12 million in revenue or down. I mean, they can be all different flavors. But if I saw an opportunity with the right people and the right business and they wanted me part of it, then I would invest in that. And so over the years, I've done that over and over. And it's become one of the greatest joys I have now is the people that I'm partnered with. I wouldn't be with them if they weren't great people. And I enjoy them. And I love the team sport of us working at this stuff together. And some of the the, some of the times I'm most proud of are when we took a hit in some business and we rallied together as a team and got to the other side of it. I mean, to me, that's, that's what it's all about. So, so that's how it started for me. And over the years, that's accumulated to a lot of, a lot of what I call faucets, you know, one might be off because of a bad year, but the other one's full speed. And so I've got all these faucets. That's, you know, providing me with income that are not tied to my day-to-day activity.

Right. So what makes a good deal for you when you come across an opportunity? And are you participating, uh, like in a sidecar? What I mean by that is, let's just say you represent a seller, and when you're going through the sale of a business, you become pretty intimate with the buyer. And the seller. Like, you're, you're, you know everything about them, how they're going to operate the business, who's going to be involved, what else have they done. So you can size up the buyer pretty well. You've also done an in-depth market study and a deep analysis of the quality of the asset. Like, is there— what's the quality of their earnings? What's their concentration risk? What's their team? Is there upside in the marketplace? Did we identify levers they're going to be able to pull it? So now if you match up a really good underlying business that's priced fairly to a really solid buyer that has a track record of success, are those the deals that you get into?

They are. So that's where it starts. But the other aspect of it is I need cooperation, right? If, if, you know, most often when I go to the seller and the owner of the business and I say, listen, I, you know, you've hired me to sell this for you and I found a good buyer. Buyer, usually the buyer doesn't have enough money or there's some, you know, some reason that they might need help. I go to the seller and say, listen, this would change our relationship, but if you want, I can talk with the buyer about helping him get it done. I would become part owner. And if that's something you would like, I will do it. And usually they just say, I don't care what you do, just get me out of here. Right?

Yeah, right.

And then I talk to the buyer and I get to know them. We put to the test, you know, before we partner up. Is the relationship going to work? What are some of the rules of the road? Do we share similar values? What are our roles going to be? Because one of the biggest things I see partnerships fail because of is lack— too many cooks in the same kitchen.

Right, right.

Not clear guidelines about who's doing what.

Yeah.

So, so anyway, that's usually how it starts.

Yeah. I think clarity in those things, a partnership, bad partnerships are like sinking ships. You got to avoid them both. And, you know, one of the, one of the things I do with my kids is I say, before you ever get into business with somebody, find out how they make their money, because how they operate in the past is generally going to be their default, how they operate in the future. And there's no good intent or bad intent inside of that. But, you know, I identified at least 5 ways people make money. There's, there's team, there's team contributors, which are great employees who want to be part of a team. There's individual contributors. A lot of times those are like your IT people. They're going to be employed. They're, you know, they have a skill, but they just— they're not necessarily a great team player. But this is a skill that people need. Sometimes you're your salesperson, like your top salesperson might be an individual contributor because they just close everything. They sell everything. They're not going to do the paperwork. They're going to— they're going to hit 120% of their budget. They're going to be— if you call them on a Wednesday, Thursday, and Friday afternoon, they're at the golf course. They're going to pretend they're not.

Right?

And that's— but they, but, you know, they, they grow your company and they just— they're— they have a high goal orientation. They're, they're people people and they just like to close, win, count the money and, you know, go do their thing. And like, that's fine, you know, as long as they don't break the values of the company and, you know, and as long as they're not as disruptive as they are productive, then you're going to be fine with that. And then there's creators. Who these are your artists, these are your writers, these are maybe some of your marketing people and things like that. You got your creative people, right? People make money being creative, even influencers, social media people now and all of the things. And then now you get down to, okay, transactors, you're a business broker, you're, you're transactional in a way because you get paid when the deal closes. So you need, you need a funnel. You need a process, you need, and you need flow or Matt doesn't get paid. So that's right. You know, so it's, it's transactional business. But then also too, as you're getting into business with somebody, you've got to be an enterprise builder or a wealth builder, right? You got to be a company, a company builder. And that's another way people make their money. So, you know, I've had businesses that like, so in franchising, it's a highly relational business. And if we get into somebody, uh, at the, you know, that's too transactional, they're not willing to invest in the business for the things that it needs long-term in a franchise model because they wanna make money as a franchisor on day one. And that just doesn't happen. Like we, yeah, we get paid after franchise owners get paid and collect their money and we get pennies on the dollar. So when you're building the franchise company, it's like, like, it's a long way to profitability. It's, it's very servant leadership. I mean, it's the franchise owners have to be successful before you ever start making money. And you know, if you're a transactor, like, it's like, no, but I have to make money in every transaction. And it's like, well, that's, that's, that's not the model. The model is you're building something of great recurring value. You're, you're building something that's gonna be very durable because you have families that are gonna fight like hell to, stay open in all, in 100 or 200 or 300 markets across the country. And you're gonna have residual income from that. And it's gonna be very, it's, it's gonna be recurring and it's gonna be, you know, on, on 10-year contracts. And that's gonna be very attractive to a buyer. And the margins will be good at scale, but like not today. So, so, you know, when you're, when you're evaluating a partnership with people that you haven't known for more than 4 or 6 months, Like, how do you— what are— how do you evaluate that partnership?

Well, it's— there's so much there. And I think part of what you touched on that I want to touch on as well is that, you know, a lot of people, especially these days, you know, the sprint is so attractive, right? Everything's a sprint and instant gratification. And in my opinion, the marathon is really where it's at. And so by, you know, having the mindset that this is a longer-term objective, it helps me to stay consistent. I mean, you can't— at least I know I can't sprint through a whole marathon. I can't do it right. I'll run out of gas. And so I can sprint for periods of time. And I think in business that can be helpful for somebody who's trying to build generational wealth and all of that. But back to the partnership question, for me, I'm, I'm, I'm constantly looking at who is the person, right? Are they— are— and what are their core competencies? Because if they don't have a core competency in the area that the business we're going to buy needs, then we've got a huge gap.

Yeah.

So number one would be skillset, core competency. Can they fulfill the objective, the role? And quite frankly, even if they can, if from a value standpoint, we don't see eye to eye, I just, I'm not interested. It doesn't matter what's on the table financially. Right. I've learned that the hard way, of course. Fortunately, only a couple of times. But I want somebody who's going to have my back if I need my back covered and I want to cover theirs.

Sure.

And I will do whatever it takes because I'm part of that team and we're going to take the high road whenever possible. And as a method of doing business, I mean, those are just things that are important to me. And, and that's— so those are the things that I look at. And just one tidbit for your audience, the way I test that is the operating agreement. It is amazing to me. Jeff, I'm helping a client right now on a private client arrangement work through a partnership issue with no operating agreement, no lease, no— and it, it is creating serious stress for their family because they didn't do those couple of things that are easy to put off upfront.

Right.

And the reason I use it as a test is because the operating agreement that I use is filled with all kinds of things that nobody wants to talk about. How can you be fired? What happens if somebody gets divorced? What are you allowed to do without permission and what are you not allowed to do without permission? What do we need to vote on and what don't we? And those conversations, having them up front, help people to determine if they're on the same page or not and if they— if those are the rules of the game that they're willing to play by. So I use that as a great method for me to really dig into the weeds and have difficult conversations with people because we're going to have them later anyway.

Sure.

Might as well have 'em now. See how we do at 'em.

Well, good agreements up front head off bad disagreements down the road. And other things that you need to talk about is, uh, you know, is there any operational obligation whatsoever? Because let's just say that the business is missing numbers and maybe you're, uh, let's say you're a 10 or 15% owner. I don't know what size deal you typically do, but you know, let's say 5 to 20%, you're in there somewhere. You're, you're below 20%. So you don't have to sign any bank guarantees because you're not a 20% owner. You, you know, so, so what are the obligations if the business starts tanking? Other than being a board member and an advisor, like, are people going to say you need to step in and help? You know, you're an owner of this business and that needs to be clearly spelled out because if you own 20 businesses at a time and you can't do it, The second thing is how does the money flow? And if like whose money comes out first and is there, is there a carry? Is there, is there a, you know, are you, are you clipping coupons along the way? Meaning every month, you know, because of your investment, you're going to get some few thousand dollars out. If the, if the business needs money, can you be capital called or are you absolved from that? So, you know, when you really get down into playing out what are all the things that could happen, happen, you have to have an answer for that in the operating agreement, in your particular operating agreement for what happens in those situations. Because those, that's where things, that's where partnerships go bad. It's like this isn't going well and you know, you're a, I mean, I, I had one where I was a, what was I, a 16% owner in a business or something like that. And you know, I was there as an advisor and these people didn't listen to me for for 3 years. And, you know, there was, there was a bunch of— there was 3, there was 3 minority shareholders, all had different agendas. They all made their money differently, kind of by the ways that I did it. And, you know, I was the one with the franchising experience per se, and I said, look, you got to do it this way, and here's why, and here's why. But like, I didn't win that. I didn't win that argument. So 3 years down the road, when they were up against a wall and they're like, well, you need to come in here and do this and you need to come in here and do that and you need to pay. And I'm like, no, that's— there's— I have no obligation to come work in this company. I have a job, you know? Yeah. So those are situations.

Well, and everything you brought up is part of the difficult conversations that need to be had up front. And it's part of what I enjoy teaching so much about how to have effective partnerships and how to multiply streams of income. Because without agreements on some of what you just described, it just becomes train wreck and years of pain. I mean, it's just not worth doing, but there are ways of dealing with each one of those things that works. And, um, it then, then that recipe is there, right? The recipe's in place and you follow it. And for the most part, you get the outcome. So that's how I've been able to duplicate so many businesses and activity in so many businesses with, for the most part, harmony and success.

Um, Yeah.

And I love it.

Good discipline. You have a business called Amped.

Yes.

And I imagine what we've just spoken about is, are some of the things that Amped helps people with. Tell us about the Amped business and, and who does it work with?

Yeah, so Amped Success is a company that I formed a couple of years ago with a couple of partners.

Mm-hmm.

And the, the purpose of the company was to bring, I've been transactional as you you referred to for 28 years, right, right in the middle of the deal. And what I'm noticing is, is social media these days is, is minimizing the significance of what it's like to buy a business, or you just go buy an HVAC company or car wash or whatever, no big deal. However, I'm on the end of hearing devastation from people who have done that, uh, financial devastation and other things where they didn't— they weren't prepared. And so AMP Success is about helping people to learn what it is they need to do in this area of buying small businesses or medium-sized businesses effectively and how to sell them effectively so they get what they want and it doesn't turn into a financial catastrophe for them. So I provide coaching, training, speaking engagements, education on, on the things that I've lived, you know, for 30 years now. And, uh, it's a real passion of mine. You know, we also have a podcast called What's Your Deal? And it's, it's one of my favorite things to do. You and I spent some time on that show not too long ago as well. And it's just when you get to pull back the curtain to somebody's life and really dive into what are they doing and how are they doing it and what works, it's fascinating. And most often we just see superficial now. So that's what AMP'd Success does. And I really— it's a— maybe it's a new phase of life or a new chapter, but I'm real excited about it. About helping people when I can.

Is the low-hanging fruit for people that are looking to be active in the space or learn more to enter through the education side of your business?

I believe so. Yeah. So most, a lot of the buyers I work with, an example, they're, they've never bought a business, so they don't know what a personal financial statement is or how to obtain financing or what they should say to the broker or how to even get a broker to return a call. And then the sellers I work with, they're not sure how to calculate SDE, I mean, I just worked with a client, literally, there's probably, I'm gonna say $250,000 of their discretionary earnings that I cannot support with a lender or with a buyer. I mean, so they're leaving significant money on the table just because of what they've done. So I like to guide people through that process. And then of course, because we've been financing deals for so long, we can usually get a deal that is unfinanceable financed, simply because we know what we're doing. So those are the areas. Education, I think, is a great place to start to even decide if business ownership is something somebody wants to get into.

Yeah, I've heard people say that we are in the time of the greatest transition of wealth that we've ever seen in this country, from people that have built businesses that their kids maybe don't want or can't operate, are transitioning from the baby boomers to their children or to a third party. And a lot of it is in private business ownership and real estate. Is what trends are you seeing in terms of the transfer of wealth and what opportunities do you get excited about within that?

Yeah, there's a lot there. The, the reality is that the baby boomers are, are ready to stop working to a large extent, and that, that is coming. And so what that's gonna mean for the market is way more inventory of businesses for people to buy. And for as long as I've been in this industry, there's been way more prospective buyers than there's been sellers. So inventory is going to be beneficial for people that are interested in getting into business. And it's a funny dynamic that, you know, if you think about it, every business is ultimately going to sell or close, right? And it's the only two options. And a lot of the people who own businesses for a long, long time just literally close them. And it, it's amazing to me because I'm so active in this world of helping people buy and sell them, but that would be like deciding you want move to a different home and bulldozing your old one. Just like, well, I'm just gonna—

Yeah. There's no other asset class where you just, you know, walk, walk outta your house, leave the door open and just drive away.

But people do it with businesses all the time.

Crazy.

Maybe because they don't know what to do or they just don't think it's saleable or who would want my job or whatever. So it's a fascinating time and it's, I, I personally have been served very, very well by being self-employed. You know, my whole working life. And I think it's a great opportunity for people who are ready to put their head down and want to create something with their initiative. The freedom, like you started out our conversation with, the freedom and the opportunity that comes from being able to call your own shots and decide how you're going to spend your time is very, very powerful.

Yeah, absolutely. Matt, I've got a curveball and a fastball straight down the middle to wrap up our show today. But before we do that, tell people tell people how to get in touch with you and what to look for?

Yeah, if simply our website, Amped Success, AmpedSuccess.com, and on social media, YouTube, TikTok, we're on all of the channels. So you find us also, Matt Uehler.com will bring you to me as well, which is U-H-L-E-R.

Matt Uehler, Amped Success. This has been fantastic. I think people got a lot of tactical information about that.

It.

And hopefully some people will reach out to you and/or reach out to us at Homefront Brands to get the ball— if you don't have a business, reach out to us, we'll get the ball started. You build your business, we'll call Matt, Matt'll sell it for you.

Perfect.

How about that? We got the whole— we got the entire solution here. All right, here's the curveball for you, Matt, and this is going to be really interesting. Gun to your head, you have to start a new business in the next 30 days. It can't be something that you're currently doing. Mm-hmm. Where do you see the opportunity in the marketplace today?

Uh, the, the snag with that is that I, that I don't currently do because I'm involved in so many, but really service is where it's at. You know, there's a lot of concern about AI and what that's gonna mean with certain industries and so on and so forth. But what I am seeing is that service is lacking.

Hmm.

And I mean high quality service, right? The work ethic that you and I grew up with, Jeff, has changed. some, and if somebody's willing to demonstrate the work ethic and do what they say they're gonna do and do it well, I think there will always be, there will always be a need for that in the future.

Yeah.

So that I would dive into some service industry if I had to start all over. Yeah.

We're in a do-it-for-me world. And mm-hmm. I mean, there's, there's businesses that wash your trash can for you. They'll raise your kids, cut your hair, wash your car, cut your grass. I mean, just like we don't do anything anymore. I mean, I, I haven't moved off my couch in 7 years. I just, there's an app for that, you know?

You're right.

There's an app. All right.

Cool.

All right. Last question. Fastball straight down the middle, Matt. Here it comes. Load up and squish the bug. Hands inside the whole thing.

All right.

For all you baseball players out there, that was hitting instructions. But here it comes. If you had one sentence to speak into somebody's life, make an impact, what would that be?

Do what you say you're going to do and pay it forward to somebody else.

Perfectly said.

Thank you. All right. Great.

We'll end it right on that. Matt, thanks for being on.

Yeah, Jeff, thank you. It's been a great conversation. I appreciate you.

Yeah, it's been fun. All right. I'm Jeff Dudan here with Matt Euler, and we have been on the Unemployable Podcast. Thanks for listening.