The Art of the Deal: Navigating the Complex World of Buying and Selling a Business

Free Agent Podcast with Meg Schmitz – Guest: Mark Bailey, Owner and Business Broker at Transworld Business Advisors

Meg:
Well, good morning everybody and welcome to or. Welcome back to the Free Agent Podcast. My name is Meg, your lovely host.

If you’ve been here before, you know that this discussion is all about free agency, creating your own future and taking control. The mission of my show is to share inspiring conversations with real people who took the leap into self employment, business ownership, franchising and freedom.

From corporate refugees and executives tired of the desk job, to entrepreneurs and investors looking to share camaraderie and inspiration through their own business journey. My podcast aims to spotlight real people who stepped into the unknown to take control over their destiny and became their own boss.

Today I’m really excited to have Mark Bailey on.

Meg:
Mark and I have been in the same networking circles for quite some time now and really didn’t put the pieces together. The really vital importance in having you on the podcast — because as I was saying a little while ago, Mark — so many of the people who are coming my way these days want to buy revenue. They want to buy a going concern, that solid, reputable, good revenue, good profitability.

And that’s like buying a needle in the haystack, which you are very well aware of. So I’d love for you to not only talk about Transworld and the work that you do there, but take me back in time because you really are a free agent.

You’ve done everything that I was just reading about — you’ve owned your own business, you’ve then pivoted because of the pandemic. And so your own journey for me, just as I put the pieces together, is really a fascinating story to tell.

So welcome to the Free Agent today and let’s get going.

Mark:
Thanks, Meg. First of all, thank you so much for having me. I’m honored to be part of this podcast.

And yeah, I have been an owner of Transworld Business Advisors. We are a franchise. I’ve been in business for four years and, to your point, I had to pivot because I had been in the trade show convention industry for the majority of my career.

I had owned an imaging company that I ended up selling in 2013. Won’t get too deep into the weeds on that. And then was working for a large technology company in the corporate environment when COVID hit.

And obviously the live events industry pretty much vanished overnight. And all my contacts were in the same situation as I was — hey, can you help me? Help me, can you help me?

So the fact that I had sold my business through a broker — was not Transworld, by the way — and did not have a really, really good experience, got me to thinking: you know what, I love the model. I love the idea of being able to help business owners, you know.

And the fact that I was one and had 40 employees and had to make payroll, you know, every two weeks and weather the economic downturn of 2008–09, you know, as an entrepreneur, you’re the last one to get paid.

So there were many nights I sat in an office with my comptroller and said, let’s pay this person, let’s pay this person, let’s not pay that person. So I felt like, you know what, I have a lot of credibility.

And the nice thing about Transworld is it’s pretty much your own business and you can do as little or as much as you want in terms of bringing people aboard.

But Transworld is the largest business brokerage company in the world. We are a 44-year-old company, 250 offices, 700 business advisors.

Our mantra is: doing good deals for good people. If we can’t sell your business, nobody can. And we are industry-agnostic. We work across every imaginable industry.

We do a lot in Main Street — Main Street being auto repair, pet services, pizza restaurants — and then we also do some deals in the lower middle-market space, which are a little more involved, more multimillion dollar deals that tend to attract private equity investment groups, things of that nature.

Yeah, a lot of moving parts. Not easy by any means. Hard to get these deals to the finish line. But I’m sure we’ll talk about that a little bit later.

And again, just real excited to be here.

Meg:
Yeah, thank you so much for the background on that. The two sides of this are: you’ve got buyers and you’ve got sellers.

The two sides of it too are: there’s fact and best practices, and then there are misconceptions.

And so in that quadrant of buyer, seller, what’s real and what’s fake — you weave the story any way you want to. But you and I are both aware that just like somebody who builds a custom home, they want top dollar for it. They want all in, and now they want all out.

So let’s dive into this any place you want to, because you’re living it and hearing it every day what the pulse points are.

Mark:
One hundred percent. And the majority of what we do is sell-side representation.

Yeah, of course we work with the buyers, we vet them. You know, we make sure that they’re qualified to buy the business. But let’s stay on the sell side because that’s really the world that we live in.

And, you know, look, every business owner is going to eventually exit their business, and the best time to do it is when you don’t have to. You don’t want a forced exit vis-a-vis death, divorce, disability.

Because when you’re in that world, you know, you’re not dealing from strength and you’re often desperate. And, you know, desperate acts call for desperate measures.

So the reality is — I was talking to somebody yesterday that said, “Well, you know what? I think I want to sell my business in six months.” And you know, the misnomer on that — I said, “Well, if you want to sell your business in six months, then you should have started to sell it probably six to twelve months ago.”

You know, on average, Meg, 77% to 81% of businesses that go to market never get sold. There’s a lot of reasons behind that. But I guess the first thing I would say is, on average, it takes nine to twelve months to sell a business.

Now, look, I have sold businesses in three months. I’ve had businesses that I’m now on year two, year three, and haven’t been able to sell.

So, you know, if somebody says, “Well, I want to sell in six months,” then — as I said — there’s a process to prepare that we call it. And that means: do you have processes in place? Do you have people in place? Do you have systems in place?

You know, a lot of the smaller businesses — the owner is the business.
And the buyer comes along and says, “Well, if I’m buying your business and you’re not there, what am I buying?”
And that’s a legitimate concern.

And the seller thinks, well, I want to sell. Not only is maybe the price of the business too much, but the structure is all confused, screwed up. Because they may say, “Well, I want to sell it for a million dollars and I want all my money up front.”

Well, if you are the business, no buyer is going to give you all of that money and let you walk free and clear. More often than not, they might say, “Okay, we’ll give you a little bit of money upfront and then we’ll just pay you the rest on your own business over time.”

And that allows you an exit strategy.
Also, you know, in certain situations it could be seller financing. But in a situation in a small business where the owner is the business, you’re going to get an earn-out.

That is just rule of thumb on a business where the owner is the buyer.

So back to your point about businesses being overpriced. You know, at the end of the day, Meg, I could say to you, “I think your business is worth a million dollars.” And you could say to me, “Mark, I think my business is worth two million dollars.”

Well, yeah, it’s not rocket science. You could go to market at that two million dollar price point, but ultimately you’re going to have to justify why you’re asking for that extra million dollars.

And you know, one of the litmus tests in our world of selling a business is doing a valuation.

And you know, there are many ways of — and I don’t want to get too deep into the weeds on valuation — but there are different valuation methods. And the great thing about Transworld is we have access to great data, proprietary data on every imaginable industry.

And we can look at other businesses that sold. What were their sales? What were their SDE (seller discretionary earnings)? What was their gross profit? And what did the business ultimately sell for, and what was the valuation method?

So if you really want to sell your business, the first thing I would tell an owner is: it has to be priced fairly. It has to be priced to sell.

The other thing I would say is, as a business owner, you have to be open to seller financing.
You know, it’s very seldom these days where — maybe an SBA loan, if you’ve got a buyer who is qualified and the business is able to be set up for SBA — in that situation, then yeah, you’re probably going to get all of your money upfront.

And the great thing about that for a buyer is that the buyer will get some working capital. And we can talk about that in a little while on the buy side.

But on the sell side, you know, it’s important if you want to sell your business to have some seller financing, some skin in the game, so to speak.

And we always tell sellers: look, we would never tell you to take anything less than 75% to 80% upfront, with the rest of it as a note over the course of usually two to three years.

The nice thing is you get interest on it — usually it’s a 7% to 8% interest — and for the most part, you’re mitigating some of your capital gains.

Now, look, at the end of the day, if you don’t get paid and there’s no personal guarantee in there — which, mostly in small businesses, there’s not a personal guarantee — what happens if the business, if you don’t get paid? Owners don’t want to hear this, but: you get the business back.

Meg:
That’s right.

Mark:
So, yeah, it’s a little bit of a catch-22, and I understand that. But as I said, I haven’t really been in a situation, Meg, where there’s been seller financing involved where the owner didn’t get paid.

You know, that’s my job as a broker: to make sure that we’re vetting the right buyer. And the buyer that’s buying your business has the financial wherewithal and the business acumen to be able to run your business.

It’s not some Joe Blow off the street that, “Oh yeah, let’s just hope this guy can do it.”
No. You know, again, there’s never guarantees, but that’s our job as intermediaries: to find the right buyer.

Meg:
Yeah. This is such a complex topic. You touched a bit on tax benefits, the mitigating capital gains. It is such an important element for the seller to understand realistic pricing.

To your point, finding a real buyer who more than just can write the check to buy it — they want to buy a going concern. Some of these are not really healthy businesses. They have skeletons in the closet.

And so there are two sides to this: the money you want to make, but then there’s the transition to make sure that you’re not going to get it back. And that’s why finding the right broker — and I’ve been through this so many times in my own FranChoice career — being that I’m not a broker, but I am marrying the two sides together.

And I don’t know how many times they fall apart because of missed expectations, improper expectations. The seller wants more money, the buyer wants more benefit, and it’s frequently a chasm that we cannot bridge that gap to make the deal work.

Mark:
Such a good point, Meg. And once you get into due diligence, time kills all deals. So one of the biggest things that we try to adhere to is to keep the deal moving forward and putting a timeframe on due diligence.

Again, the bigger deals — due diligence is going to be a little bit more involved. There’s probably going to be some working capital discussion. But we want to say, “Okay, look, we have a buyer now. We agreed on the deal structure. We’re in due diligence. Tell us what you want to see and give it to us in one list.”

That’s not to say that you can’t add a few things here and there, but we want to know. And the challenge, as you said, with due diligence is: it is non-binding to a buyer. They could walk away at any time.

If they see something that they don’t like, then they’re not bound by it and then we’re back to square one. So we always say too, in our world, Meg, it’s never a good idea when the buyer’s talking directly to the seller. So we avoid that at all costs.

You know, that’s why they’re hiring us to keep the deal flow moving. And yeah, we may get them involved, you know, on a conference call together, but we’re always involved with it. We always — you know, it’s never a good idea when the buyer and the seller are talking.

But yeah, there’s a lot of moving parts to getting the deals done. And more often than not, there’s always contingencies built into due diligence.

So even if we get through due diligence, right — everything checks out. Well, is there a financing contingency? If there’s SBA or whatever involved and SBA says no, we’re not going to do the deal — well, then the deal doesn’t happen.

If there’s brick and mortar and you have to bring a landlord into the equation and the landlord doesn’t give the buyer a favorable lease, the buyer can walk away.

So yeah, there’s a lot of complexities to it. The other thing I wanted just to add before I forget is: most of the deals that we do are asset-based, which means that a buyer is buying the assets of the business.

They’re buying the name, they’re buying the employees, the goodwill, the equipment. They’re not incurring any of the liabilities. So when an owner says to me, “Oh, I have no liability,” well, that’s great for you as an owner. That means nothing to a buyer.

Any liabilities that a seller has have to be paid off before the deal is finalized.

The only way we ever really do a stock sale is if there’s contracts at play, and then it’s a little more involved. When I sold my company, I had a lot of contracts — big contracts — and some of those contracts were not transferable.

We ended up doing both an asset sale and also a stock sale to ensure that those contracts were transferable. Again, very complex.

Meg:
And this is why it just drives me crazy with the number of requests these days to buy a resale in the world of franchising.

In fact, most of my companies in my portfolio would rather find an internal buyer than someone external. And so I don’t know if you ever look at BizBuySell or some of the other websites that are out there — they draw you in with brand names, companies that you might recognize already.

“Oh, that’s a legacy business. They’ve got worldwide or nationwide presence.” Well, a lot of the time that isn’t a viable opportunity available on the website. It’s a way to draw a potential buyer in.

But getting them vetted — and you touched on something that is one of my first principles: where’s the money? Are you qualified? Where is it coming from? How liquid are you? What is the delay to getting that funding source to execute?

Because if you don’t have a plan up front, then we’re not diving deep into my portfolio. I’m not going to go chasing down deals where we don’t know if the buyer is actually financially qualified.

Mark:
Yeah. And you know, again, we do mirror each other in a lot of ways. And I would tell you that on the buy side — I mean, there’s a lot of tire kickers out there, let’s face it.

And you know, with us, we will make you complete a buyer profile first just to see if it makes sense. Obviously we always sign a nondisclosure agreement — confidentiality is the most important part of selling a business.

The minute somebody finds out your business is for sale, the value of the business usually drops about 50%. Employees head for the hills. Customers are like, “Oh boy, we better go elsewhere, this company is selling.” Vendors are like, “Oh, what’s going on?”

But one of the first things we ask buyers, especially if they’re looking to finance the deal through SBA, is: do you have a prequal letter?

“No, I don’t have that.” Well, you know, I can’t speak about other intermediaries, but I have some deals now where they’re SBA preapproved.

And if the buyer has not taken the time to get pre-screened — doesn’t mean that they’re going to get to the finish line — but they’re a serious buyer if they can show me they have a letter from a bank that says they have good credit, that they’ve been approved to buy a business up to $5 million.

I’m going to talk to that buyer much more openly than I am to a buyer that says, “No, I haven’t talked to a bank yet, but at some point I’ll do that.” No, no, no, no.

I got an IOI this morning from a business that I have. And first thing is, we went back to the buyer and said, “Thanks so much for the IOI. Show me your prequal letter.”

He said, “I don’t have a prequal letter.” Well, when you get a prequal letter, we’ll look at your IOI.

So yeah, when it comes to buyers — I know we need them and I like them — but I gotta tell you, and I’m sure you feel the same way. You know, I had an afro before I started dealing with a lot of these buyers.

So, you know.

Meg:
It takes its toll. 

Mark:
They wear you out, man.

Meg:
They do. I know there’s good buyers out there. You just have to, you know, go through the process and find them.

And I know

Meg:
I can think about it. Looking at my current database to your point — who’s ponying up with the information, the data points that are necessary.

And I talk to people about this — executives who have no entrepreneurial background. “I want to buy a business. I want to buy my exit so that I can create a timeline to leave my corporate position.”

Okay, you’ve never owned a business before. What are your skill sets that are transferable into buying and operating?

“Oh, I’m not going to operate the business.” 

Mark:
Yes. 

Meg:
Okay, then that’s another chasm that we’ve got to try to bridge — the gap between the reality of…

And the analogy that I use for those executives is: you’re going to be dropped into a boat that’s moving at a high speed on a lake. And do you know where your dock is? Do you know how to operate the boat? Do you know if it’s stuck with a full throttle? Do you know how to stop it?

Because that’s what it’s like when you’re buying a business that you know nothing about and you don’t have the experience to draw on. Do you have a mentor network? How are you going to make this truly a viable win-win situation?

Because who gets into business to lose money?

Some of the complexities of getting a buyer to be realistic about their skill sets and ability to jump onto a moving vehicle and get it safely back to the dock.

Mark:

I love that analogy. And that is so true in every respect.

I love the buyers who say, “I want to buy a business. I want to be an absentee owner. I want to work, you know, 10 to 15 hours a week, and I’d like to put a half a million or a million dollars in my pocket.”

And we always say, “Well, when you find it, will you let us know? Because we’re looking for the same thing on our end.”

And truth be told, most of the businesses that we do — if a buyer says that — private equity is different, because they usually slot their own person in. But if you’re a Main Street buyer and you’re trying to buy a business of ours that is owner-operated, and you’re saying you’re not going to own and operate the business, then you’re probably not somebody that we’re going to look at.

Now, look, if you say that, at the end of the day, you’ll own and operate it for a few months and you bring somebody in or you hire from within — that’s fine. But if you’re putting all this money into it and you’re going to quit your job and you’re not going to run that business and be there every day, that’s not a good situation for you.

And it’s certainly not a good situation for my seller, especially if my seller’s got some financing in place.

Meg:
Right, right. 

Mark:
Exactly. You’ve got to just weed your way through and decipher all of that information and really figure out: is this buyer somebody that you can present to your seller?

We always say: running a business is a full-time job. Selling a business is a full-time job. When I bring buyers to my sellers, they expect that those buyers have been vetted and there’s a reason I’m bringing them to them.

And the worst thing I can hear from my seller is: “Why’d you bring me that buyer?”

I mean, that puts a pit in my stomach when that happens. And it does happen on occasion. Somebody might represent themselves one way, and then you get on a call with them and then the questions they ask — you’re like, “Oh my god, that would not be a question.”

And you know right away — you’re like, “Wait a minute, I set this call up with you and you’re asking questions that are just so inconsequential.”

You just want to get the call over with because you know you’re going to hear it from the seller. But it does happen. And you explain it and you say, “Look, I’m sorry. It’s not a perfect world,” and you move on.

Meg:
Yeah. You and I have enough business experience to know how to coach these people properly into discussions.

And for me, with someone who’s buying a franchise from scratch, they’re talking to the franchise development person. They do have the opportunity to talk to existing owners.

Sometimes an existing owner will volunteer to my candidate that they’re looking for a buyer. Now the whole thing shifts and we go from objective to subjective. Now emotion starts to govern what should be a fact-based research project.

For anyone who’s listening, you can get the idea: Mark and I work really hard on these things, and they are not easy in order to get both buyer and seller to have reasonable expectations that are based on fact.

Just like when you were talking about how a business valuation is done — for anyone who’s ever bought or sold a house, you’re doing it based on real estate comps.

So an example that really came home to roost: my husband had built a home with his ex-wife and they spent $3.2 million building the home of her dreams. She left with the builder, and Pete moved into a house that was built for a life that had just suddenly blown away into the wind.

When he was finally ready to sell — in Western Springs, Illinois, affluent area — there were 32 homes over a million dollars on the market at the same time that we were looking to sell.

And there was no way for Pete to calm down his emotional investment on top of the financial investment in order to reach a satisfying conclusion. He was just pissed off and mad the entire time trying to sell that house.

But he knew emotionally he needed to get out of it in order to move on with life. But yeah, he took about a 50% hit between what he spent and what it was sold for.

So case in point: the original owner puts in a lot more time, money, and effort than a future buyer is. But that seller needs to sell at a reasonable price based on comps.

Mark:
And just to add to that — when you hear business owners, and I was one of them, that used to say, “Well, this is my baby. This is my baby.” Well, you know what? That’s nice that it’s your baby, but you need to treat it as an asset.

And truth be told, most businesses — again, I’m talking the Main Street world — 75% to 80% of that business is that retirement.

And so, again, yeah, there’s certainly an emotional component. Of course, somebody that’s run a business for 30, 35 years — the worst thing you can tell a business owner is, “I’m sorry, I can’t sell your business. It’s just not worth anything.”

And that’s a hard conversation to have. And that’s why we always try to look at financials first and say, “Okay, maybe if we do this, or maybe we can do that.”

One of the things that I do in my practice is what we call exit planning, where we basically say, “You know what? Your business is not sellable right now, but let’s get it in a position over the next 12 to 18 months where we can sell it.”

Let’s clean up your financials. Why are your cost of goods so high? Maybe we should look at some of your vendors — things of that nature.

So again, it’s part of the process to prepare and maybe you need to document all your processes. Maybe you need to bring in somebody in your business so that if you’re not there, someone knows what’s going on.

The best narrative on any business that we sell — I talked to an owner yesterday. His business was valued at $5 million. He’s never there.

I’m like, that’s the best narrative ever. Your business is worth $5 million and you’re never there. That’s what buyers want to hear.

So yeah, the process to prepare and making sure that when you do go to market you’ve crossed your T’s, dotted your I’s, and you’re realistic in terms of what you’re going to get, the deal structure, and the financing and the transition.

A lot of owners say, “I want to sell my business and I want to stay on for a year or two and I want to get paid $300,000.” Well, it doesn’t work like that.

Usually there’s a built-in amount of time based on the purchase price. And depending on the business there might be an independent contractor agreement that’s drawn up that says: we’d like to keep you on for X amount of hours a week at this pay, with an opt-out.

But it’s very seldom where you sell your business and you stay on at the same salary and the same responsibility. It just doesn’t work that way.

Meg:
That, and the buyer tends to want to put their own stamp on the business.

The old way of doing things — the way that “Fred has, we’ve always done it this way” — well… and this is probably a good insertion point for artificial intelligence and how quickly business is changing these days because of technology.

The seller might want to stay on for sentimental reasons — client and vendor relationships, and this kind of “let me wander into the sunset on my own.”

Well, you’re going to be sunsetted probably pretty quickly. Three months. I don’t know what kind of time frame you’re seeing right now, but I’m preaching the same thing.

How are you seeing the integration of artificial intelligence either in your business or in the businesses that you’re looking to sell so that they are more salable more quickly?

Mark:
Yeah, that’s a great question. I mean, it’s a slow integration in both my business and especially in Main Street businesses — again, where the owner is so wrapped up in the day-to-day that they can’t see the forest for the trees.

Now, in the bigger businesses, again, that’s a little bit different. But I can only really speak to my business.

We’re seeing it really more as it pertains to valuations. One area that we’re really seeing it is when it comes to underwriting — with some of the deals in underwriting where we are using banks and lenders.

With most of the lenders, it’s very black and white when it goes into underwriting. We’re starting to do our own underwriting, so to speak.

Now, granted, if there are some issues with our deals, we could go back to the lender and say, “You know what? We played with the same numbers that we think you’re playing with. Why did you come up with that when we came up with this?”

Now, look, ultimately it’s their decision. But I think it gives us a little bit more — “okay, we don’t live in your world, but we kind of understand where the numbers are coming from and what you’re looking at.”

So I think from that perspective — more from a financial aspect than anything else — that’s certainly how I’m doing it.

Look, at the end of the day when we’re putting together listings and SIM documents and whatever, there’s no getting around that.

If I take a SIM document — which is a confidential information memorandum, basically everything about the business that we give to the most qualified buyer — we could cut and paste it and put it into an AI platform and say, “Hey, make this sound better.” And it does.

Now, look, I don’t want the whole thing like, “Okay, make me a SIM document from scratch for a heating and air business.” We don’t do that.

But yeah, AI is the wave of the future. And anybody that’s not using it — you better get on board. And I’d love to know what you’re doing on your end, Meg, because it’s here.

Meg:
Yeah, it is here. The ways that I’m using AI, just for example in the Zoom platform — we’re recording, and it will provide a transcript summary.

I used to write up my own show notes. Well, AI is doing it better. ChatGPT is doing a better job of summarizing.

I use it also when I’m talking with a candidate — first, second, third conversations — where we’re painting the picture of what it is we’re looking for.

So it’s really helpful to have ChatGPT taking those notes again to summarize the bullet points accurately. I hear what I hear, I take notes on what I’m handwriting, but it’s easy to miss things.

But a real case in point — using AI: recently one of my businesses, a vandal in a drive-by car threw a rock or something at our huge plate glass window. Shattered ours, shattered the one down the way at Verizon.

In talking to the landlord, I thought because it’s exterior that that was their responsibility.

We took my lease document, dropped it into artificial intelligence with a couple of keywords: “plate glass window,” “liability,” “replacement.” Three seconds later — three seconds later — we had the answer.

So I didn’t have to pay a lawyer to go through it or take a whole lot of time myself. It was right there in black and white. Article 11 says this. Article 13 reinforces it is a tenant responsibility.

Suck it up, Meg. You’re replacing a plate glass window.

So it’s really interesting. My age is 62 and I am slow to adopt AI, but just to — for that example of knowing a contract and being able to put seller points, buyer requirements, and create a summary document for both sides — then it just takes no time at all.

And the people who say, “You can really tell when AI has written something…” If you start with your own document — I’m writing a chapter for a book. It’s all my own words because ChatGPT doesn’t know my life story, right?

So I’m writing my life story and ChatGPT is going to clean it up. Now, it’s an authentic voice and it’s better written than maybe what I can do.

So it’s kind of like saying, “Well, not everyone should take penicillin.” Well, penicillin doesn’t treat everything, but it is effective for what you really need it to do.

So that’s where I’m seeing AI or using it.

Mark:
And back to your point — when we get a new listing, we do a seller interview which helps us build all of the marketing collateral to go out to market with. Because nobody knows their business better than a business owner.

So we used to sit there and write questions out on a piece of paper. We’re doing the same thing — we’re recording it, and then we’re taking those answers to build the listing, the SIM document, the blind teaser and what have you.

But yeah, to your point — again, we don’t start from scratch to use it. But we’ll take existing documents and we’ll feed it through ChatGPT.

And you know, sometimes we’ll use it, sometimes we won’t. But it’s scary — Big Brother’s here. Again — here we go.

Meg:
Well, gosh, what else should we put into this episode?

We’ve talked buyer side, seller side, misconceptions.

For the listener: it is really hard to find a good existing business that is, number one, worth buying, and number two, worth your time to turn it around.

It’s not to say that starting from scratch is always easier or better. But I live in the world of franchising and that’s what I’ve done for 30-something years. And I’m a believer — maybe you can speak to this point too — when you bought your license with Transworld, based on your experience, you could have gone out and done it yourself.

Did you consider doing it on your own versus buying a license with Transworld?

Mark:
Again, Meg, great question. You know what? I honestly never thought I was going to buy a franchise.

I just — I’m like, “You know what, franchises are great. They help you get from point A to point B.” But I’ve owned a business and I’m entrepreneurial by nature.

And then I thought to myself, “You know what? I’m not a kid anymore and I kind of like the idea of buying into something where I didn’t have to do everything from scratch.”

And you know, I have all the documents that I need. I’ve got people. Transworld — again, we do so many deals — big deals, small deals. So I’m tapping into that expertise.

Having the name Transworld behind me is huge, because again, they have such a great reputation.

So I thought to myself — I didn’t think I’d want to buy a franchise. I’m really glad I did.

Transworld really stands behind its franchisees and is very supportive.

You know, again, I have the CRM, I have all the buyer documents. It’s dummy-proof, so to speak.

So yeah, I’m glad I did. And for people out there, it certainly makes the process simple and seamless, and you just know that the franchisor is there to help you anytime you need it.

And certainly Transworld has done that for me.

Meg:
Yeah, it’s a great company. And when we’re done, I’ve got a couple of questions for you — maybe not today, because I know you need to run here. But the bottom line is: the buck stops with you.

Every day, your successes are predicated on your time and effort. This is not easy stuff — what I do, what you do. This is dealing with a lot of human psychology, and you’ve got facts and figures in there, but you’re ultimately dealing with a human being — one who wants to buy and the other who wants to sell.

And so thank God for having processes, because I can’t think of how much more time, effort and agony it would take if I were doing it on my own. And FranChoice is not a franchise, but I’ve got a network of other people like me across the country where I can put a shout out and say, “I think I’m missing something here. What would you do in this situation?”

I’ve got 85 colleagues all across the country. Through the pandemic — “What are you doing? Are you afraid? Are you moving forward? Are people buying?”

That was so enlightening — to talk through people’s decision-making processes in the pandemic, because they were still spending money. The world was shut down. But they needed essentials, they needed… you know, Mother Nature.

Last night, the storms that came through — if you’ve got hail and roof damage, it really doesn’t matter what’s happening in a pandemic or an economic downturn.

So I’m always delighted to be aligned with a group of like-minded people who are looking for the same outcome. And yeah, we share our misery of, “Whoa, never saw that coming. That was a left hook. How do I recover from that?”

But that’s why you align with a group of people who are going to be your mentors.

Mark:
And we always say — and we have our annual conference coming up actually in two weeks in Orlando — and there’s going to be about 300 to 400 people there.

They have breakouts and general sessions, and things are changing so rapidly. So it’s such a great educational opportunity.

I don’t know where I was going with that, but I was going to say something and now I can’t remember what I was going to say. Oh yeah — I know what I was going to say.

The hardest thing is: you work on selling a business for a year. And we don’t charge hourly — we’re not accountants, we’re not lawyers. And our success fee is based on selling the business.

And if we’ve worked over 100 hours for a year and the business never gets sold, and the seller says, “You know what? I’m not renewing…” — I’ve just spent a year trying to sell the business and wasn’t able to do that.

And to your point — and you live it too — it’s very stressful. It’s very rewarding when you’re able to sell the business and get the owner what they want and allow them to move on to the next chapter in their life. It’s great, and that’s why we do it.

But it is not easy by any means. And we always — last thing I’ll say on sellers is: we will not work with a seller that says, “Well, if I can sell my business for the right price, I’ll sell.”

That’s not the business owner that we want to work with. We work with business owners that say, “I’m ready. I want to go lay on a beach. I want to spend time with my grandkids. I want to go play golf.”

Whatever it is, they’re ready for that next chapter. If you just say, “Well, if I could sell it for $10 million, let’s go…” — no. That’s not anybody we want to work with.

Meg:
Yeah. We’re looking for pain points and exit strategies — not just, “If you find the right guy, let me know.”

I’ve got one guy right now: “If you find the right thing, let me know.” Yeah. Time and effort, buddy — I’m not putting time and effort into something like that. I hear that all the time: “Oh yeah, if you come across anything else…”

Yeah. “I’ll get right back to you on that. Don’t be waiting by the phone.”

Mark:
Yeah.

Meg:
Well — and it really is great when you have success. My three words that I talk about: joy, fun, and yes.

If it’s not joy, fun, and yes, then it’s no. And that goes not only for the business opportunity — I get people who come back to me after they purchased a franchise: “I’m ready. Help me find a buyer.”

I will do that — if you can find me the right buyer at the right price. That’s not a pain point. That really isn’t a tipping point yet.

So you really have to listen for what is going to create a successful integration of your time and effort in making that marriage happen. Because it isn’t easy.

Mark:
It isn’t easy.

Meg:
Well, this has been great — to be able to connect with you in this format and really talk about the things that people want to know.

It isn’t pretty. It isn’t easy. It is possible. But you also need to be realistic — buyer, seller — about your timing, the money, and get yourself a good Mark, get yourself a good Meg, someone who’s going to talk turkey with you. Talk straight about whether these opportunities and your capabilities are really going to create the right outcome.

So thank you, Mark. This has been really a pleasure to have you on today.

Mark:
Meg, I can’t thank you enough. Again, working with you — I have the utmost respect for you and what you do.

And again, being part of the podcast — really, really enjoyed it and hope we can do it again.

Meg:
Absolutely. You’ve got your finger on the pulse. Yeah, we should probably do this again in a year when we’ve got a different economic situation and see if the story is still the same.

Mark:
Yeah. And I’m sure by then I won’t be laying on a beach in Tahiti saying, “I’m not doing this anymore, Meg.” So I’ll put that date in the calendar right now.

Meg:
Perfect. I think you and I are wired up the same way. I don’t know what retirement would look like. This is my retirement right now.

And that’s why I have my three words — joy, fun, and yes — so every day I can make that determination. “I’m out of my office, and I’m going to go for a walk because the answer is no.”

Mark:
Good for you.

Meg:
Good. Again, thanks so much for the time. Really enjoyed it, and I know our paths will cross again real soon.

Mark:
Absolutely.

Meg:
See you soon. 

Mark:
Thanks, Meg.