The Quiet Light Podcast Acquisition Entrepreneurship: 4 Models of Building Value
We welcome Walker Deibel as the latest member of the Quiet Light Brokerage team. He's joining us today to talk about startup failures and how what he calls "acquisition entrepreneurship" can help buyers learn to grow value in their business after they buy it. Walker has acquired 7 companies in the past 10 years, both on and offline. By his third acquisition, he found that he was looking for businesses that had the right infrastructure and management already in place. Walker is here giving his insights into buying versus building your next business.
From a stint in digital printing at the dawn of the digital age, a film production "hobby" that has him listed on IMDb, to a failed startup that seemed to have every ingredient for success, right up to his current successes buying established businesses, Walker truly has experience in every aspect of the business building and acquisition spectrum. Perhaps there is no right or wrong way to come into business, but there are advantages and disadvantages to each approach.
Episode Highlights:
- Not every business should be bought. If you have an idea that you think can fly go out and by all means get that VC to get it started.
- You can have the best idea, the best team, and all the hallmarks for success yet still fail if you miss the mark on one key aspect.
- Take an existing infrastructure, finance the purchase, and from there go to work. If you succeed you have a great chance for high ROI.
- Buyers need to find the right business for them based on their strength and weaknesses.
- Acquiring an established business means you are free to focus on the particular parts of the business that most need attention, aiding the growth of the enterprise as a whole.
- Walker discusses what he calls the 4 Models of Building Value once you buy.
- Owners can get themselves out of the operation side and really work as an investor.
- A lot more can be accomplished by working on your business rather than in your business.
- Everything in business up until now has been about hitting the home run. Sometimes growing businesses should just aim to hit some doubles and triples.
- The buyer and seller relationship is a key element in the acquisition process.
- There are good buyers and there are bad buyers. The relationship is beyond just the transaction. Try to communicate with to seller why you are the perfect fit for that business.
Mark: All right Hey Joe How are you? Oh you're not Joe; Walker. Walker, how are you?
Walker: I'm great Mark how are you?
Mark: Good, good. For anyone watching or anyone listening obviously we do not have Joe this week. Joe is off exploring the eternal city of Rome and I am sitting here just a pile of jealousy wishing that I could be there. So … but good for Joe he definitely deserves the break. He works really hard. I will never say this publicly with him on the podcast but I will say it here and trust that he's not going to listen to it so his head doesn't get too big. But I do have somebody here, Walker Deibel right?
Walker: Deibel.
Mark: Deibel, I've been pronouncing it Deibel for a while. Walker and I know each other from a past transaction he bought a listing from me, a business from me a few years ago but Walker is also going to be joining the Quiet Light Brokerage team here in about a month. Maybe less by the time that this episode airs and so he is somebody to get to know as well. From that regard we're going to have a good conversation today mainly because your background Walker is super extensive. Like a lot of the people that work with Quiet Light Brokerage, you have that direct experience in buying, building your own online businesses. So let's do this, let's go back and have you introduce yourself a little bit a little bit of your background.
Walker: Sure. Gosh where to start, I guess I think I've started a few companies and all of them tend not to do very well. And that's not something that I'm prideful about but I think that it's a common theme that you hear from entrepreneurs which is you know fail. Fail often; I've done that plenty and statistically that's what startups do. Conversely I've had tremendous success in actually buying existing companies and growing them and over the past 10 years I've been able to acquire seven companies in all. Some of them offline some of them online as you've discussed and I just want to take one moment and say that having looked at hundreds of offering memorandums I became a very early fan of Quiet Light Brokerage. I just think that what you've been able to build at Quiet Light is very special. You work with sellers, you list them at the right time, and you think about it in the same way that buyers would. So whenever I look at a listing from Quiet Light I'm just absolutely thrilled with the package and excited to be on with you now because of that.
Mark: And if anyone's wondering I do pay by the compliment so [inaudible 00:03:37.5]. So your background is in buying and you bought a number of companies you said … how many was it, 10?
Walker: Seven, I bought seven over 10 years yeah.
Mark: Okay over 10 years, I thought it was seven. And not everything has been online you own a couple of different offline businesses as well.
Walker: Sure.
Mark: And you're back and before that was publishing right?
Walker: It was printing so yeah we … I, my first company I bought pretty much because when I was in graduate school, when I took in my MBA our startup failed [inaudible 00:04:07.2] something we called Avatar, it came out with the real 3D and we had that real 3D technology in point of purchase advertising and had a great team and had some real interest and it all just kind of got hung up in legal. I guess the people in the technology decided that they would rather build Avatar after that startup kind of washed up and I actually went and bought a book printing company. And it was a time when print is dead was a common headline. You know Amazon was sort of moving in, the Kindle was coming out, the iPad was coming out, and bookstores are going out of business left and right. And what I saw Mark was opportunity, it was one of these things where the industry was fragmented there was a lot of players, a lot of let's just say legacy teams doing the wrong things in the industry at that time. And so I bought a book printing company, all of our customers were publishers and you know they too were fighting the same things that we were seeing. And so although the offset book printing industry was declining, the digital book printing industry was climbing at a rate of about 28 [inaudible 00:05:17.8] was pretty clear when it happened. But yeah trying to get that business online and produce those short run digital products for authors and companies trying to manage their inventory levels was the challenge ahead.
Mark: Awesome, lots of experience there. And then you also have a little bit of experience in movie making and documentary and production right?
Walker: That's right. Yeah I consider that more of a hobby than a profession. But yeah I've probably been involved with about 10 films over the last five years and most of them were lucky enough to premiere at Sundance, South Buy, Toronto's from the biggest festivals out there. Print the Legend was … we thought was going be the first Netflix Original it turned out to be the 2nd and now we just released Bill Nye: Science Guy as a documentary.
Mark: That's you?
Walker: Yeah I was involved.
Mark: That's right you told me about that I forgot about that I've seen that pop up on Netflix right?
Walker: Yeah yeah yeah yeah.
Mark: That's fantastic. And you know that I can't let this go but you are IMDB listed and I always joke about how you are just three handshakes away from Kevin Bacon. You know as you come on board with the Quiet Light team and head up to conferences[inaudible 00:06:32.6] you could be 4th in line to kind of-
Walker: [Laughter]
Mark: There is that and there's also a couple movies that you're in which if anybody wants to have a good time go ahead and read the reviews.
Walker: That right there is a great example of why you should buy instead of build from scratch okay. In other words when I get involved with movie production, I look for teams that are already assembled that really have all the variables that are critical to success. And what we did early on was basically pull together a bunch of people who wanted to be filmmakers. Very analogous to people who want to be running a successful company and what came out was let's just say that we got it, we got an exit, we got a … we sold the film but it was pennies on the dollar in terms of the budget. And all you need to do is read the reviews to figure out the outcome of that recipe. So a lot of what I do is look for teams with directors who have the … they've got the right resume to elevate to the next level. Someone on the team usually has an Academy Award and I come in and pull some money together either from myself or from other people and help finance the whole thing. So it's very similar to business acquisition.
Mark: So a lot of times we link to resources in the show notes. I will spare you linking to the IMDB movie reviews and have listeners look that up and if they really want to read it they can read it and do the work. All right let's actually get into the topic though.
Walker: Let's go.
Mark: Buying versus building because this is an ongoing discussion, obviously everybody who has bought from us in the past understands the value of buying a business. But I think there is often a question in a buyer's head especially when they're looking at an opportunity. So they come across a business that we have for sale and they see it and like this wouldn't be that hard to build versus buying it. So I want to explore that a little bit and go into your experience on both because you've had startups. You've had startups that have failed and you're also successful with buying some businesses as well. What are some of the key benefits of both in your opinion, and what is from the drawbacks of both, and why at the end of the day and this is a big question so I'm going to just logoff from much of the talk in the next half hour; why in the end of the day does buying in your opinion win out over building?
Walker: Okay great. So okay let's start just by saying that in my opinion not every business should be bought. And I don't mean that to say like the businesses aren't sellable, what I mean is just the opposite. If you've got an idea that you want to start up I think that most times it makes sense to buy an existing infrastructure and go from there as opposed to starting from scratch. But there are some ideas out there that absolutely that's not the path okay. And so if you have an idea that's right at the beginning of an adolescent market you shouldn't be buying. You need to go get VC capital and go. And have a very clear understanding that 75% VC back startups actually fail okay. So it's still not … you know you might be getting 40 million dollars but Jason Yelowitz I think was a perfect example of that; it then happened with him.
Mark: It did, yeah. So anyone that wants to read his book Bathrobe Millionaire he talks about how … he bad, he was worth lots of money on paper and it disappeared.
Walker: Right and so that's actually more common than the opposite which is the Uber and Facebook story that we all love. That buying businesses in most cases is a better avenue to start. Now let me just give you a quick example; we had a company that we fully funded okay. We had a majority investor was a former CEO of a Fortune 500 Company, and we had a proven dev team that was already building mobile software for the military and special forces. Proven we had it was a … it was a Share Point, A Mobile Share Point application. We had recruited and secured the head of Microsoft Share Point Services as our CEO. We had the CTO of another Fortune 500 Company working with us. We went through on the top 10 accelerator programs in the country. We had beta programs that big corporations right, like all the hallmarks and less than 12 months later we were out of cash. We had no paying customers and it basically we were able to sell it for again pennies on the dollar to a company that I think is going to do really well with it. But it's a perfect example of when everything's right you still got to get that product market fit before the time runs out. After that I had worked with a broker who was about 3 ½ hours away from me and he called and said hey how's that startup going? And I said actually it's a little rocky and he said good because I've got such a great business out here that I really want you to come take a look at. And I went out there and I looked at it and long story short I end up working with a partner on this project and we looked at it and what we saw was a true opportunity to take the customer base and basically upgrade the entire experience to an online ordering system. And so I bought the company, we used the cash flow of the business to create a proprietary e-commerce storefront and we then rolled it out to almost 20,000 users. So the company is doing from the minute we walk in the door it's doing seven figures in revenue which by the wae coin at Verne Harnish it's scale up is 4% of companies United States are selling seven figures in revenue. So you already are walking in the door and one of the most successful companies in United States all right. Funding does not take 24 months and running around and selling stock; you go to the bank. They finance the majority of the purchase and you come in with your own investment and go to work. Everything that we achieved by buying this company in sort of a second tier market in Missouri was everything that we were trying to do at this well-funded start up with an all-star cast. So it's just a perfect example of sometimes you seem to think differently about what it is you're trying to achieve and take the short cuts to get there. Isn't that what entrepreneurship is all about?
Mark: Absolutely. Well, I loved what you said about the offline businesses, Ryan Tanzim and I did a podcast episode several weeks ago and he talked about that. He talked about somebody that he knows locally, I think they were doing air conditioning and they are really bringing online but what they are doing is they're using online … they are using the SEO tactics and SEM tactics that you would usually apply to an online business and he's applying it locally. So he actually bought this air conditioning repair company with the idea that they were just going to actually crush it online. They're doing super super well; I think there's a ton of opportunities for buyers in that space.
Walker: Can I jump in right here like so-
Mark: Yeah, please.
Walker: So one of one of the things that I do, I've got kind of a model that I have put together to help people find the right business for them. And what you just said is a perfect example of that because the first question I get is do I have the right what it takes, do I have the right attitude to actually be an entrepreneur? I don't think that the listeners of this podcast need that, I mean that's not where they are. The next one is what are your strengths and weaknesses? What are the actions that you want to be doing every single day? And it sounds like this is an individual who says look I know online marketing, I know how to apply it and you look at the vast number of companies that are coming online to sell and actually not online businesses at all. You've got all the baby boomers retiring at 9,000 a day and they own more companies in any generation ever in history. And they haven't done much since the internet came out. So Internet marketing has clearly passed the point of adaption. I mean it's the way now but not everyone has caught up and you've got a huge amount of opportunity to do exactly this. Move and buy an offline business and basically apply online skills to grow it in a whole new way.
Mark: Let's talk a little bit about this because I know that you are in the process of writing a book on buying businesses. What was the book about specifically?
Walker: Yeah basically everything I've been talking about. It's called Buy Then Build, why entrepreneurs should buy existing companies rather than starting from scratch. And it's really everything that we've just been talking about. So the argument is that not only is buying businesses a better way to start, despite the popularity of entrepreneurship we haven't engineered a better way to make startups succeed. And I think that the answer to that question is to buy existing companies with existing cash flow. And if you look at buying a small business compared to just as an investment pretend you're not an entrepreneur that's going to move in and use your skill set to grow it [inaudible 00:15:31.2] buy it like a real estate investment or anything else. The returns that you can generate on something like that, the ROI is not really comparable to anything that I've seen. Especially if you want to maximize the ROI and use a lot of leverage that opportunity is there. I mean the SBA is lending … I don't want to over speak so I'm not sure an online business as without you know but you can quote as little as 10% out in these kind of instances. So I mean you can be up and running and off to the races very very quick. Are you seeing that in online businesses as well Mark?
Mark: I've seen what specifically?
Walker: Like 90% leverage on some of these deals.
Mark: It would … currently yes. I mean historically that's higher than what we've seen in the past and that's the rule change as of 2018 so-
Walker: Okay.
Mark: So in the past it was 80% though which is still … yeah 80 to 75% which is still crazy amounts of leverage.
Walker: Right we're right and you know 90% leverage. What I am saying is that if they choose to do that and if it succeeds they're going to have a great ROI.
Mark: Right.
Walker: Pretty much incomparable to anywhere else. But there's obviously inherent risk in doing something like that. So just understanding the model and being careful. However the odds of success are ridiculous compared to a startup of the same caliber.
Mark: So your book is called Buy Then Build which you know often when we think about build then sell obviously. But obviously a big part of what you're talking about here is also that act of building on top and I think in an area where a lot of buyers, especially first time buyers struggle is identifying how do I build on this; what do I look for? And so when I talk to buyers, especially first time buyers that are looking to get into this for the first time they start thinking about well I want something that already has a history of growth. Or maybe they're looking at the opposite side I want something that has a history of not [inaudible 00:17:21.7] you know because I don't want to lose on the business. How should in your opinion and maybe you specifically how have you attacked that build portion of the equation? You've obviously bought and I know it did the one business you're talking about you saw a way to be able to look the entire customer experience up. What are different ways that you think buyers can look at building after they buy?
Walker: Yeah. I've been calling this acquisition entrepreneurship. I mean it seems to make sense and so basically I think that there's four models of building value in a company after you buy it. Some people will say … I mean the market will very quickly jump to exactly the opposite and say like oh no I want a company that's a complete disaster. Like I want something that I can go in and put in lean operations and fix it up because then I can buy a cheap, create immediate value by improving all of the internal systems and then exit or run it or whatever. So that's the sort of turnaround kind of mentality and those are great in my opinion if you know what you're doing. I mean if you already are an operation … great at operational excellence that's going to be something that's good. Others will look at you know you get these sort of like there are these two models the guys over at Harvard wrote a book on how to buy a business and they buy what I believe they call internally profitable businesses. This is a bad example here but it's one that I always think of which is I always think of like snowplows or something like that. Like something where there's no obvious technological innovation that's going to get rid of the need for snow plows. And so it's going to be a slow growth but you know something you can hang your hat on. And I think that the way that they grow … they build value is really for the owner in that instance and just through equity build up. And so you're putting you know say 10% down and then over 10 years building up the rest of that value that way. The other model which I'm getting to the point sorry but the other model that scares me a little bit as you look at these high growth companies like the ones you're talking about and what maximizes a sale price are things like growth, revenue, earnings. I mean these are the things that people want. I mean it's a very marketable company but by doing that it's almost the opposite of the turnaround. The risk is a little separate like it needs to continue growing as fast in order to make sure you're getting the right deal. So that's something that in my opinion you have to know what you're doing to navigate that properly. Then you've got this sort of Platform Company and a platform is something where you take your skill set and apply it to the existing business in order to take it to the next level. Now it might be accelerating what's already happening or it could be simply diversifying. So in other words the first online business … so I bought a company from Quiet Light Brokerage and when I looked at it I really liked it because it was taking this sort of like old economy product and it had a kind of innovative twist to it. And so it was still on known in the US market and so as that awareness grows the company continues to grow. However what I acquired in this business was not only the cash flow, it was the infrastructure. It was all the people. I had an entire customer service team. I had a reliable PPC guy. I had SEO you know I've got … now I've got all the tools and all the things that I need to do this. And so what I've done is I've started building other sites as well. And so I'm not quite to the point where I've built a seven figure site from scratch that you can list for me. But I'm hoping to do that and I'm doing it the actual infrastructure that I acquired through Quiet Light.
Mark: That's fantastic. Of course you'd be able to sell that business on your own when that day comes. Because you'd be working with us and you'll just put it up for sale and it all will be like oh this is great, Walker owns this, I trust him completely.
Walker: Absolutely.
Mark: Well you know what you've done though recently in anticipation of coming on board I know that you have been working your way out of your companies as an operator and really working as an investor. And I know this you know talking to buyers one of our most popular episodes was with Shakil Prasla who has bought eight companies in two years and he does this all the time. He does not work in his businesses. What was that process like for you or what has it been like to get yourself out of the operations of the business, and how did you go about doing that?
Walker: Yeah it was kind of a slow evolution. Like in other words the first company that I bought I had a key man, woman actually that I worked alongside with very closely and she did … all of my time was spent on marketing sales and really strategy like taking the company to the next level. And you can do a lot more what do they say work on your business and serve in your business. And so I fell in love very quickly with the freedom that comes with having other people you can rely on in your company. As a result as I continue to move forward I always look for business opportunities and people that I know whose skill set matches up with the growth opportunity for that business. And so the 2nd company I bought it was more of a partnership and I learned the hard way that … how do I say this without being, I was messing the company up. It's one of these where he had his hands on everything that was going on, I would show up, you know I would drop in I was there about a day a week. I had relationships with major customers and walk in and just kind of I'd see something that I thought was wrong and I would fix it or give instruction or whatever else. No matter how minor it was it was still the left hand didn't know what the right hand was doing. The employees didn't know who was in charge. And so it was one of these I've got to remove him or remove me kind of situations. And so I've tried to put the emphasis where the skill is. And the other thing that comes out of that is by not operating in the business you can actually scale the number of businesses that you own. And that's what your other guest was doing if I recall correctly. He was actually interviewing and hiring managers. I typically do it with people that I know already so it's not … you know I network and find the people and then I wait for the opportunity as opposed to kind of trying to scale up that rapidly. It got to the point where the 3rdbusiness I acquired I was buying specifically because I had a manager to grow it. And it's working now because that's at a point where I think last year we grew 38% year over year so that's working. And I think the hard decision comes from entrepreneurs at every step of growth where they say okay I'm the one doing this and if I actually pay someone to do that then I make less money so I'm not sure I want to do it. But then the second they hire it out they have all this other money that you know whatever the difference is that's coming to them for essentially doing nothing or essentially moving to that four hour work week model. But if you have a four hour work week kind of company you can go buy 10 companies.
Mark: I do. How do you get over the ego part though? You know for example I am in my opinion the best content marketer in the world.
Walker: You are.
Mark: I'm not. I mean this is the reality but when I'm dealing one on one with people, when I'm dealing one on one with somebody who I've hired to do that I micromanage. I get too involved in what they're doing. How do you get the ego portion out of this so that when you go and visits … do you visit that company anymore? Do you do-
Walker: Absolutely. Oh, absolutely. No I'm very involved in everything. I think that … well I should speak carefully there, what I'm trying to say is just I'm not involved in the day to day. The truth is I'm probably more of like a chairman but I don't have enough gray hair so I don't call myself that. I have a baby face so … but it's you know I work more on a strategic level and looking at metrics and talking to the managers every week if not more often if something comes up. So the ego, I think Mark what I would say to that is there's certain things that okay it's twofold. There's certain things that you're not going to be able to let go of. And you feel like they have to be a very very precise thing. Those are not the things that you want to let go of. Especially to use your example like content marketing; content marketing is something that makes Quiet Light exceptional. It's something … you know Quiet Light both stands in with the best of the best but then they stand out by doing exceptional work. And that content marketing piece is so critical to what makes Quiet Light Quiet Light that that might be a driver that can't be outsourced. It's something that has to be precise. It's something that has to come from your mind or your advisors' minds and that piece might not be there. That said here's the answer your question, you're not going to like it, and I have a good answer for this. But here's the thing I have three children, they're seven, five, and three and they make mistakes. They made the same mistakes that I made when I was seven five and three and you have to stand there and watch them do it. And often with my managers I wanted to go over their mistake and then I realize it worked it just wasn't the way that I was going to do it. It's not a mistake at all. Or it's the other way and you've just got to end up paying for that mistake and so it's just that you've got to get that balance right. Partnerships are a good answer for it. Partnerships are like marriages and you just have to figure out how you work and how you communicate. And if there's something that you fear isn't going to work because it's not being rolled out the way you want to do it, I think that what I do is I just make that clear at the beginning and then we put metrics in place to make sure to watch it and measure it and then kill it if you know feel quick. If there's anything I have learned it's if you're going to fail do it really quickly because you save money.
Mark: Right.
Walker: So I think that's the way to do it.
Mark: Right fire quickly, hire slowly.
Walker: That's right.
Mark: Yeah Chuck recently was talking to me about that so and the need to be able to do that. Awesome well you've covered a lot of ground in this and I really like this discussion of should you buy, should you build, what's better and I think you're right. Absolutely a lot depends on the type of company that you do have and what are you trying to build. Some companies did not lend themselves to being bought or to going that route but if you're looking for that cash flow, if you're looking to get into entrepreneurship a faster way to return investment is going to be that buy-in route. It's a lot faster and a lot more sure than the VC route. I think I was talking to a VC, this was four or five years ago now and he was really coming around to this idea of buying online businesses. And one thing that he told me he said you know with my angel investing with the VC investing that I'm doing everything is about hitting the homerun, it's like … and with that we're hit … we're striking out a lot. We're taking big swings, we're not hitting the home run but when we do hit the home run it's really really good. He said but I'm starting to wonder now maybe if we should just aim to hit some singles and some doubles and some triples instead and just play station to station. And I think that's a huge difference here like if you have the money to be able to go in there and swing for the fences and go for it, sure okay you know what go ahead. If you have the time, the resources, the desire, or an idea that you think really can take off absolutely. If you're looking to hit a single or a double you know that … it's a risk profile; what is a risk profile look like in buying for as risky as buying an online business can be and people should be aware of that. It's certainly a lot more safer than trying to build something from scratch.
Walker: So in an early version of my book and I think I just cut it out actually it's … we're trying to get it done this summer but I actually call that entremetrics. Which is stop swinging for the fences and just get on base, based on that savermetrics, you know money ball right?
Mark: Yeah.
Walker: And that resonates with me completely. That's exactly the point. I think that you know VC again if it was a Harvard Business Review really sort of 75% of these companies are like going to zero. So being able to fast forward, you ask earlier hey I've got … I'm a potential buyer, I'm looking at this company I can build this. Like this isn't that hard, fine go build it. But like looking at it as an investor you've got that cash flow tomorrow. I mean it's you know and what's your time worth and what's the … what's it going to cost to build and you've got to put all those pieces together and yeah go build it and then bring it back to Quiet Light and we'll sell it because these are good investments. So yeah I think it's a simple way to get to the goal faster and to your point you're getting on base. You're engineering success right from the beginning so that you can move to second base on your own.
Mark: Yeah, awesome. So your book is coming out sometime this summer maybe in the early-
Walker: Hoping for late August.
Mark: Late August all right. And at that point you will hopefully be a part of our team fully and we will be able [crosstalk 00:30:13.1]-
Walker: I hope so.
Mark: The book so when we do pay attention that. I'm sure it's going to be just one step above that Harvard Business Review which I actually have that up my shelf. They sent me a copy and a good stuff; it's seriously good stuff though. And right now eventually people be able to reach out to Walker at a Quiet Light Brokerage email address. In the meantime if you want to reach out to Walker contact me mark@quietlightbrokerage.com and open to have contact with him. He's got a ton of real world experience both in as you said some failures but a lot of successes as well and always a good person to talk to. Any final parting thoughts?
Walker: You know there … one thing forgive me but there is one thing that I thought we would talk about and it just didn't come up and that's normal but I spent two and a half years trying to buy an acquisition target when I was at Corley. And we looked at 27 companies in depth talking with them. And what I learned along that path is that there are good buyers in there are bad buyers. And I just mean that from the perspective of the seller, and when you're trying to sell a business, how do I say this, the buyers it's almost like the first thing you want to do when you're just starting out is you want the seller to like come in with a slide deck like a startup and pitch you. Like here's what you're going to get and here's why you should buy my company and that's just not the mentality at all okay. I guess that somebody's built something and it's usually like yeah the timing is right I'm considering it but it's not like I'm trying to sell you something you don't need and so trying to go … I try to go out of my way to understand the business, understand the drivers, and really communicate to the seller why I would be the right buyer for that business. Because trying to get that emotional connection established at the beginning is so critically important. It's very emotional and everyone starts second guessing everything they're doing at one point or another and trying to build that bond at the beginning and getting on the same side of the table to acquire a common goal is just critical in the whole process. So it's something that I did learn that we can talk about I want to share.
Mark: Well I'm glad you brought that up because I've used you as an example in countless presentations, I think at this podcast as well.
Walker: That's right.
Mark: Many of you have heard me use this example before about a buyer who after we submitted an LOI, you submitted the LOI and we had our very first call in due diligence and you stopped. And at the very end you said I want to take a moment and thank you for agreeing to sell me your business. And I tell this story because it was … it had a seismic shift on the way that entire transaction went and it established this common working goal and understanding that I think a broker definitely needs to have. I think a buyer should have as well. The sellers work for years to build something valuable, something that you want to acquire and take in. Showing some basic appreciation for that and yes they're getting well compensated through money, there's appreciation in that as well. But showing that verbal communication of hey I really appreciate and respect what you've done up till now, even if it's a distressed sale but that makes a big difference at the end of the day. And it really helps get through some of the tough spots that will come up doing due diligence.
Walker: And they have a choice. As a seller they have a choice especially at Quiet Light. Quiet Light moves a lot of inventory really fast and I think we ended up closing on the 3rd deal I looked at and so there was a couple of deals that went to other sellers and I just didn't went out for whatever reason and they've got a choice. I agree, it's important.
Mark: Yeah Walker thanks so much for coming on, I really really appreciate it.
Walker: No, thank you Mark. I'm really looking forward to the next chapter.
Mark: Well, we're looking forward to have you on. So again if anyone wants to reach out to Walker feel free to contact me mark@quietlightbrokerage.com if you guys have ideas for guests please let me know. I'm always looking for new guests. So we'll talk to you next week.
Links and Resources:
Buy Then Build – Why Entrepreneurs Should Buy Existing Companies Rather Than Starting from Scratch. Walker's book is coming out this summer!