Acquisitions Anonymous - #1 for business buying, selling and operating - The $1.4M No-Code App Business That Needs Fine-Tuning

Episode Date: July 30, 2024

Today, we look at a $2.1M agency that's for sale but may not be quite ready to be sold. It brings in $500K a year and has a strong social media following, which sounds great. But there are issues, like no recurring revenue and it relies too much on its founder. We discuss what needs to change to make this business a solid buy. If you're interested in business deals and agency growth, this episode is for you!Listing: We found this deal on acquire.comThanks to this week's sponsor:Have you ever wished that your business's software better fits your needs?IvyWorks can help. They specialize in building custom solutions for SMB’s complex processes.Book a free discovery session, and we’ll make you an actionable project scope document that any software firm can execute—no strings attached.Visitivy.works to learn more.Get more deals like this every week. Subscribe to our NewsletterSubscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

The third point, though, under that growth, I think is actually, like, pretty cool and differentiating is they say they attract 5,000 new entrepreneurs monthly through free open house classes. So this isn't bad necessarily. It's just more of a monetization of this person's social media strategy, which is difficult to transact. No, no. I'm just telling you what I've heard. But I've also heard of bankers even going to that seminar just to network. To your point, maybe it's more about the network than anything. else like a lot of things.

Hey everyone, welcome back to another episode of Acquisitions Anonymous. This is the internet's number one podcast on buying, selling, and operating small businesses. I am one of your hosts, Bill Dallisandro, and today we actually have all four of the co-hosts on the pod, and we do an no-code app development agency business. The thing that's interesting about this one, though, is the founder stars in all the ads. They have this really sophisticated ad funnel. Business is growing well, really good business to own. But we talk a lot about how it needs to be positioned in order to actually transact and become less dependent on the founder.

We also have an interesting detour toward what it actually means to be a certified business exit planner, which is something that's been cropping up more and more in recent years, whether it's worth hiring one. We also have some hairbrained ideas about extensions for the pod at the end. So with that, I hope you enjoy this episode of Acquisitions Anonymous. Today's episode is brought to you by Ivyworks, a Boston-based software engineering firm dedicated to crafting tailored solutions for SMBs. Are you tired of off-the-shelf software that doesn't quite fit your needs? IvyWorks understands. Specializing in operations and client-facing software, they guide you from discovery to design, engineering, and beyond.

With the track record including projects like AI power drones for roof scanning and mobile apps for managing large-scale operations, IvyWorks is not your average firm. led by founders Callan and Sam, they prioritize transparency and personal attention, involving you in every step of the process. Act now and receive a free discovery session complete with systems, architecture, design, and feasibility study. And even if you don't choose IvyWorks, you'll walk away with a comprehensive project scope. Don't settle for generic software solutions, visit IvyWorks today and mention Acquisitions Anonymous for your free project discovery walkthrough. Let's build the software your business truly deserves. everybody got the whole gang here let's go our episode acquisitions anonymous whole house we got a we got a fun one today but everybody's uh dispersed bill's about to get on the road and go on a trip michael's on a

trip do you sense the dedication from the team here that's right that's not neither hell water will keep us from the podcast i have to i'm going to hawaii in a week so i guess i have to i got a I got to dial in from Hawaii then. You can't miss a recording, Heather. I can't. Okay. I'll be up early. Even if you're mid-flight, we want to have you.

That's right. Hawaii time. Sorry enough, we ask Heather to join at like 7 a.m. her time zone. Sometimes it'll be like 4 a.m. Hawaii time zone. Yeah, it'll be,

it'll be the middle of the night. Don't worry. It's okay. So Heather, like to us people in like fly over America, like Hawaii seems like this really foreign place because it's, you know, it's a four hour,

a four and a half hour flight from Southern California. And then we have to fly three hours or I think at Bill's case, how long does it take you to get to L.A., Bill? Three and a half hours? Like five hours to L.A. Five hours to L.A. So Bill's got like a nine hour. It's easier for Bill to go to Ireland than to go to,

literally, yeah, to Hawaii. It's too far. Yeah. So what does it feel like when Hawaii is just kind of like not that far? It doesn't feel that it doesn't feel that foreign to you guys? Yeah, I mean, we, we take, like the kids have been, my kids and been going every year since they were pretty young. And it's just kind of like a normal, easy vacation.

It's like a weekend getaway. You can't. I've done it over like a holiday weekend before, just spur of the moment. Like, let's just go. So yes, you can do that. But on the other side is like, we'd like to go to Europe too. But Europe, you know, is the opposite. It kind of kills us to get there.

And then the time zone change, you know, it's like we need two days to get over it. just to go to Europe. So we don't go there as often. But Hawaii, most Californians go quite a bit. Maybe it's the way Texans appreciate Cancun or Mexico City. Like we're just like, yeah, you just sit down there. It's an hour and 45 minute flight to Mexico City. Then what they don't tell you about Mexico City is the airport's such a mess

that you spend an hour and 45 minutes getting off your plane onto a little bus and then they drive into the terminal and you try to go through security. So anyway, sorry. That's my rant about the Mexico. City airport situation. I love it. And there's literally no segue into our deal.

Except that, where did you say you are right now, Michael? You're in Michigan. Michigan? Okay. Oh, this is Michigan. Here we go. Here's a segue. This is an agency startup located in Michigan. If you want me to read it? Yeah. Oh, yeah. You want to read it?

Yeah, since I speak, I speak Michigan or now. Yeah. Yeah. Upstate Michigan is really weird by the way. You guys should come up here. It's like, so we're staying with a friend and they have this thing

called Boyn Thunder. Have you ever heard of this? Okay. Like this whole place is like kind of how you imagine like West Virginia weird, but like just even differenter. Like more like we used to work at the Ford Factory kind of weird. So this thing called Boing Thunder

is evidently there's these people who go buy like the normal speedboats that you get on lakes, but they buy gigantic versions of them that have like 2,500 horsepower. And they see, they're like, they're cigarette boats, basically, but they're for the Great Lakes up here. And so Boing Thunder is basically their biggest event of the year up here in the Great Lakes. And they basically take these boats that have like 1,500, 2,500, 2,500, like, horsepower, go 80, 90 miles an hour.

Just like random people like you or I buys like a million dollar boat. And then they go, like, drink beer and run these things in a big pot of like 120 boats over the course of a day and have like what they call a poker run. And it's just like the most, like the most bizarre thing I've ever seen in my whole life. I don't know how to explain it. But every part of upstate Michigan has basically been this way. So tomorrow night we got invited. We're going to a, there's a lady here who's 90 years old. She's been here since she retired.

But she loves being a jazz singer. And she invites everybody over to her house twice a year. and she sings to them and has like a huge party. Like just the biggest, like, it's like, I don't know. It's like how I imagine Bill's house works. That Bill sings Jasper. All right, let me read to this deal. That was my rant about it.

So if you buy this business, this is what you have to look forward to. It's the Michigan life. Yeah, so this is owned by the lady this nine years old. Okay, so this is on Acquire.com and it is an agency startup located in Michigan. So good chance it's in Detroit area, but we shall see. The most influential no-code agency and education platform helping entrepreneurs launch app ideas. Asking prices, $2.1 million. They're selling for $4.9 times profit, 1.8 times revenue.

They have eight years of history that they say reduces your risk, 35% growth rate over eight years, trained team in place, large audience of 150,000 email subscribers, and 75,000 social followers you can sell to, proven paid marketing funnel in place, and the founder is willing to help you transition. Fairling 12 months revenue was $1.2 million. They made $439,000 in profits over the past year, and they did $88,000 last month's revenue

and made $27,000 in profit. The world's most influential, no-code agency and educational platform, it says, our hybrid offering combines education and done-for-you services creating a comprehensive ecosystem. Number one is a community or education or done for you. We attract 5,000 new entrepreneurs monthly through free open house classes,

our paid marketing channels a large audience drive profitable growth. Two is they will do education and done for you. For budget clients, they start with learning and can upgrade to app development. Done for you to education, most clients begin with app development and later on to make their own changes. We built a productized super agency developing apps for 200 to 5%. $500 and charging $8,000, allowing us to compete on price against the agencies charging $20,000. They were featured on Good Morning America and other large publications and they've educated over 100,000 entrepreneurs and generated over 10 million in sales since 2016.

They were founded in 2016. They have a team size of 2 and 20, I'm sorry, 2 to 20, and they build everything on Stripe, Bubble, HubSpot, Calum, Zambier, Glide, and Webinar Jam. bubble being the no-code platform that people use. And they have built their own AI-powered online education platform built on Bubble. And they are building an online app-scoping tool called Tabitha. They have a bunch of competitors that are different folks that are education or these kind of no-code agencies. And of course, they have a bunch of ways they want to grow the business that they haven't done yet.

So I'm totally there. and they are selling because they want to have a lifestyle change. The seller has been running the company for over eight years and is ready to move on to other ventures. However, she has built in time. She plans to help guide the transition into her timeline. And they have between 100 and 1,000 customers, no recurring revenue and have been growing 35% per year. All right. Do you guys want to buy for 4.9 times profit this $2.1 million asking price, no code agency located in Michigan?

So is an agent, I mean, let's just start at the very top level. Is an agency a good business model to acquire or not? I mean, I think it depends on who you are as a buyer. Yeah. Yeah. I mean, it scares the crap out of me because I feel like all of your assets walk out the door every night, you know, metaphorically, right? And there are so many agencies, it's such a big space.

I don't want to use the phrase dime a dozen, but like, holy cow, is it hard to differentiate as an agency? And as someone who has hired a lot of agencies, the typical life cycle is this. Brand owner or company owner hates their agency, decides to shop for a new one, right? Bids it out to a couple agencies, finally gets convinced by one of them that they are the answer to all of their problems, hires new agency. Great. Agency works on it for a year. Brand owner hates agency cycle repeats. So it's just like it doesn't feel very sticky just inherently.

And I don't, I just would feel very nervous buying this with debt. But at the same time, I also know people who have rolled up agencies and done phenomenally well. So what do you guys think? Okay, let me, let me throw a curveball. In the growth opportunities, if you expand it, there's this, they list. a couple different things. The top three things they're most excited about. Number two, though, says they want to diversify, quote, attractive character strategy in ads and webinars. And they explain that what they've been doing is they run ads with a particular person's face and name,

and then that person hosts the webinar. And they say, we've primarily used the CEO as this face, and she happens to be a black woman. Thus, our ads heavily attract customers who are also black women. They're saying the solution to this is run ads that attract more than black women, and they've done some experiments using different faces, and that's worked well. So maybe there is at least somewhat of a niche here. We've looked at some of these in the past that are doing like, you know, dental practices or vets or things like that that are hyper niche. This is slightly niche, but not hyper.

It's almost like there's an affinity issue there. Like an affinity is sort of happening organically, and they're saying you could expand that. Okay, so just to be clear, what is being proposed here is that a non-black woman by this business, hire a black female actor to pretend to continue to be the CEO, which will definitely not upset all of their existing businesses that selected them because the black woman was the CEO, and also will definitely not get you canceled at all. And then also hire other affinities that also are not compatible with your affinity as actors and attract people under the same terms. That's what's being proposed here.

Yeah. Kind of. I think what they're saying, though, Bill, is it's somewhat transferable, not the current affinity under a new owner, but you could explore different demographics and use that same strategy, that attractive character strategy. but to your point, are you going to cannibalize your existing customer base that pays you, you know, several million dollars a year? It would be one thing if the existing ads were already using an actor, but the existing ads are using the CEO. Yes, good point. Right. So you kind of necessarily have to either replace her in the ads with you. And if you are not a black woman, that's a risk because you attracted everybody based on that affinity.

Or you have to lie and hire an actor. Either way, this is pretty risky for the existing book of business. Yeah, I think that this is like a non-transferable kind of question, you know, and I'm glad you caught that Mills because I think it is the biggest issue here is that it is the actual CEO and it may not just be the affinity, but people may just really like her, you know, that could be her whole personality and the way she approaches the videos that she does and how are you going to sell a business which is so predicated on somebody's persona?

you know, the seller's persona. That's tough. And you're almost like chopping off and amputating all the like historical goodwill and like the long tail kind of trickle effect, right, of, you know, the goodwill that's been built. You hope that, hey, I buy the business and I'm going to continue to collect on that for many years and decades. And you're in this case saying, hey, this person calls and, you know, I'm obviously not, you know, this lady who has been the likeness of the business for so long. Yeah. Okay, so this is, even if it's a black woman buyer, I will say that. Even if it's a black woman buyer, you're still not her. So I think, you know, even that doesn't, doesn't make me feel any better about it as a

lender. The way I would look at it is I'd look at the, I'd go watch all these videos and kind of get a feel for why people are doing business with this company. And if it really feels like it's her as a person, then I'd have, I'd have a tough time thinking that this business is transferable. I think this is like one of the great catch-22s of modern marketing, which is that marketers have figured out that people buy from people, like people authentically buy from people. And every good marketing agency is pushing founders and CEOs to be in the ads, right? Because it's really authentic and people will buy from people. And it works.

So what happens is you appear in one ad, I'm sure, you know, this woman, she appears in one ad and it works. And they go, oh, make more ads. Right. So she appears in more ads. And it's really working. But at some point, you kind of pick your head up and go, oh, crap, this business is dependent on me. Right. Like, I'm the mascot. I'm the, like, suddenly, how did this get not transferable? You know, I'm the only one that can star on the ads and deliver the row ads that we are marketing the business on. You know, and so is this catch 22. Like, she's a victim of her own success in some ways. Well, and we did, you know, recently we did that. DEI, you know, African American higher ed kind of website, job platform, you know, news online news

site. And it was kind of the same thing. You know, you've niched down and you've used to your advantage and then all of a sudden it becomes a double edge sword. The third point, though, under that growth, I think is actually like pretty cool and differentiating is they say they attract 5,000 new entrepreneurs monthly through free open house classes. You guys have more experience with this than I do. But is that the typical customer acquisition funnel mechanism for no code and agency? Is this idea of, hey, we're going to give it to you kind of for free. We'll put tools in your hands, which might cost something or we'll do it all for you,

which costs the most. But people kind of work themselves through that progression on their own. I mean, most agencies, no code agencies that I know, they tend to get business. through referrals first and foremost, right? They've got their network and their friends and they become the guy in their town that everybody refers to or gal in that case as well.

Then there is a second group of people that have figured out how they do it by promoting themselves via social media and that sort of thing. This appears to be the second group. But, you know, it would not surprise me if the top of funnel for this is like, build your own app ads on Instagram

and entrepreneurs, sign, up, come to the master class, and then they get up sold to buy something from our agency, you know, as the bottom of funnel. But, yeah, I think this is one of the two ways I see people growing these businesses, but the more common one being just networking referrals. And Michael, what you framed out works super well. Like I can see, especially like if she's charismatic, right, she's in the ad, she's on the webinar and people feel like they get exposure to the person that they saw on the ad on the

webinar and that they're, they feel like they're hiring her to do the work, right? I mean, they know they're hiring her agency, but they feel like they're hiring her to do the work. And it works so well, as I mentioned, because of affinity marketing, because of the authenticity of it. But it basically also means as soon as she leaves, your entire marketing funnel is over. I agree. And 5,000 a month is a lot of people. And they're saying you could do more web, and get more than 5,000? I mean, that's a pretty big number already. I don't know really even with her how much more you could get.

It's a great sales funnel. I agree, but very, feels very dependent on her webinars. I'm sure she's the one delivering the webinar. Yeah, I think that's a tough. It's a good business and she's really smart. Like this whole funnel is really awesome.

But I don't see how a buyer steps into this and replaces her. It's interesting. we can kind of back into probably what they're how much they're spending on CAC here. So last month they did $88,000 in revenue and $27,000 in profit. And they said that they're basically spending about $500 for each $8,000 as cost of goods, right, in terms of what they're paying to have the app developed. So if they're doing $88,000 a month, that means typically at $8,000 on average per app.

that means they're doing 11 apps per month. So they're only spending about $5,000 on whatever offshore team they're using to build this stuff for them to build the no-code sites on Bumble. So that means she's probably dumping another 20 to 30 grand, assuming she has a lean team back into pay cap. Their conversion is incredibly low. Let's just say it's 11 paying customers a month on 5,000 per webinar. Yeah, that's what I would notice. That's what I thought when I saw 5,000. That's an awful lot of people that are just kicking the tires, I think,

showing up to these things. And, you know, I think there's a lot of work in sorting through the 5,000 to get to the 11. You know, so some of that may be paid marketing and some of it may just be a team sorting through the sales pipeline, interacting with clients. Yeah, they say, I mean,

this business has definitely grown from, infancy into some like like you said michael most people running agencies like this are just the person in their town they start small it snowballs very slowly it's all word of mouth she's built something here that is really impressive i mean she has not just kind of waited and been kind of a passive recipient of incoming leads she's going out there says they're only doing facebook and google she clearly knows how to catch people's eyeballs and convert them into a click right or a sign up for a webinar, but it's not yet to that point where it's tipped and become something much bigger. It's only $1.2 million, right, in revenue. I mean, this is a very small business still

to have as much kind of, I guess, muscle, so to speak, or at least the early stages of a robust process. Well, you know, there's one way to think about an agency business when you target this low end of the spectrum is, and by the spectrum, I mean the types of customers that you get in, like, what you'll see is these agencies all tend to stall out around $1.5 million in revenue. And that's because that becomes about the size at which the CEO can no longer maintain personal relationships with their customers, right? Like that's where everything kind of falls apart. And every agency that I know that targets these tiny small micro and micro kind of businesses they all end up kind of hitting this level of profitability and also this level of revenue and never growing past that

so it it's it's beautiful when they when they get there they just unfortunately have created themselves a job they can't really get out of did it say what the reason for sale was lifestyle change I think it might just be burnout. Seller has been running the company for every eight years and is ready to move on to other ventures. However she has built in time, however she has built in time she plans to help guide the transition into her timeline. Look, you make a lot of money. I mean, this lady is making $27,000 a month that's just shy of $350,000 a year. Nothing to poop on for somebody that's bootstrapped their place to this. Like, that's pretty freaking amazing, you know, in terms of, in terms of any accomplishment.

But, yeah, she's clearly, she has to hustle every day, hunt, eat to, you know, kill what you're going to eat. So, you know, I understand, I understand the desire to get out of the treadmill here. And I think we see this a lot. Like, this is a great business. Like, there's nothing wrong with being in a niche that makes a lot of people not your ideal customer or not your ideal lead, right? And she knows what she's doing and she's converting, I think, enough of it. This is just a very hard business for somebody else to own, you know, like we see so many like that. Like it's a great business to have found it. It's a really almost impossible business to

acquire and buy unless, right, and we've looked at something that are like this, unless you can be the protege and you can be mentored and you can transition the business very gradually. But then we, it always begs the question, why buy a business, like Bill, I think you started down this path earlier, why buy this business if you could just recreate it? Is there anything fundamentally that different about offering no code that this business does that nobody else can do? Not necessarily. They maybe just grab eyeballs differently. I think the, I think the no code stuff that this lady is doing is commoditized. And I guess the future of no code agencies, that's another question as well, right?

They're on bubble. Bubble is losing. Webflow is crushing everybody. That's the direction it's going. So that's another question about this business. But I think what she's doing with the no-code agency stuff is totally commoditized. What is interesting here is she has figured out how to tell the story of you want to be an entrepreneur, you should build this app.

This is a way, you know, as part of this African-American community to train. transform your life and take control of things. Like there is something going on there that she has figured out that is very special. And I think that's what's the transferable value here. But to your point, Mills, like getting somebody to pay up for that up front is tough. But man, if she could find somebody who wanted to be the apprentice and come in and she could teach all that to that person and they could earn their way in and she could migrate her way out over time, I think that's the path for her to get out of this business and to see some money from it.

Yeah, I think I see a pattern here that I see a lot, which is this woman is probably very charismatic. She's probably great on social media and she probably built a following. And then one of the ways to monetize a following is to build a turn the following into legion for a business built on the back of it, right? Like we've seen this on Twitter. The thing going on on Twitter right now is all the offshore hiring, right? where people have audiences and they're turning in an offshore staffing and placement agencies, and they're trying to use their social media as top of funnel. And it doesn't matter that the offshore hiring is commoditized because realistically,

you're not building enterprise value, but you are monetizing your following. And that's kind of what I see here. Like, yeah, the no code stuff might be commoditized, but like, that's okay. And she might have known that going in because maybe the idea never was to build enterprise value or, you know, people all the time convince themselves they are building enterprise value. But really, maybe it's okay. This is just a great way to create, you know, half a million dollars a year of cash flow by selling her audience stuff they want, which is a no-code app because her audience wants to be entrepreneurs and to be an entrepreneur, people think they need an app. And so

we're going to sell that to them, right? You got an audience and wants a thing, give it to them. So this isn't bad necessarily. It's just more of a monetization of this person's social media strategy, which is difficult to transact. Yeah. Well, it's also interesting now that we talk about it, when you frame it that way, Bill, like, why hasn't she figured out more ways to monetize that relationship? She has with all these customers. I mean, she has clearly 150,000 people who have signed up for the newsletter.

5,000 people show up to their open house classes. Like, there's a lot more than just no code app services that she could be selling to these people now that they have a level of trust. I mean, even basic stuff, like SEO, like, I don't understand why she's not selling ongoing SEO services to these folks who appear to build an app for them. Oh, yeah. I'm sure they want all kinds of stuff. And so, I mean, if I were her, this is, this doesn't feel like the time to sell this business. Like, what I would start doing right now is she's got her and has she wants to sell the business.

Okay, great. There's probably a one to two year time horizon where you've really got to do a couple things. thing one is start to sell in some recurring revenue, as Michael mentioned. Thing two is you got to do the thing you're trying to tell the buyers to do and diversify your marketing. You got to do it yourself and prove that you can bring in other affinities so that then when you go to sell it, you, the founder, look like just one of a stable of actors that appear in the ads and a relatively small, fraction, you know, one-fifth, one-fourth, one-third, whatever of the business is coming from your ads and you've de-risked it showing that you can have other people in the ads. And now you

are both simultaneously the founder, but also an actor, right? And then you can hopefully sell the business, step out of the founder role. The content that you've made maybe remains as actor. Maybe the new buyer can keep you on for two or three hours a month as actor, right, as part of a stable of actors. And then you can transact this business. but I think you have to do those things first to derrisk it so someone can buy it. So I, you know, look at this. This business has no recurring revenue right now. It's just building an app one time.

And then it even says that they learn to maintain that app themselves. And so it's all one and none, which is kind of impressive that it is the size that it is. Yeah. And whether it's financeable or not, I'd say, you know, mostly not. But I guess if it was the right person that came in, the SBA does a lot. allow rollover equity now. It's only been around for a year that the SBA has allowed it. So this is a situation where maybe somebody could put just two turns of EBITDA of debt, you know, a little less than a million dollars. So it's really, really a safe, low leverage. Let the seller roll over some

equity and maybe also carry back a note that's contingent on her continuing to, you know, basically create that apprenticeship. So it's a way of sort of giving her some, the seller, some cash now and some incentives to really, you know, bring this protege person in and transition. That's the most I would consider as far as a lender in terms of putting any debt on something like this. I think there's a win-win here for the right apprentice type buyer coming in and for the seller as well. And to your point, Bill, I think the right buyer apprentice could also be somebody that could be a partner in monetizing those other things. So I like that. I would blow this business wide open.

If you could cross-sell some other services that you know these folks already need and they're already asking the question, you just don't, you know, you're not listening to it. That could quadruple or quintuble the size of the business, I would think, relatively quickly and create some recurring revenue. Yeah, it's a good business. It's just not ready to transact right now. There's some stuff you got to do first.

And that's actually why I think some of the best intermediaries, like if you come to an intermediary with this business, the best intermediaries will not sign an engagement letter, write a book and say, let's go to market. The best intermediaries will play the long game, know that that process is going to break and everybody's going to spend a bunch of time and not get paid. And they will instead say, hey, here's the things you got to do for the next year. Come back to me. And then we'll sell your business for an even bigger number. Right. That's what I see exit planners do a good job of, really giving you a, a time. two-year plan that optimizes the size or, you know, the valuation that you might ultimately get.

But unfortunately, we do see a lot of brokers taking listings that, you know, they're destined to not close and they don't. Heather, can I pull in that thread a little bit? Because I keep hearing this title that is popping up more and more recently of exit planner, where people say, like, I'm not an investment banker. I'm not going to help run your transaction. I'm not a business consultant in that I'm going to come in and actually help improve your business, but I'm an exit planner.

And I never really heard this idea for the last year or two, right? Yeah, CEPA, C-E-P-A certified exit planning. Association, I think. Yeah, they have their own association. Of course. They're not that new. You know, they're not that new. They've been around a long time.

they do have a whole education process to become certified. And I've heard it's not that easy. It's quite a bit. I think it's more than even a business broker might do. And it is kind of like a cross between a business broker and a consultant because it's, you know, consultation focused on one very specific thing, your exit plan. And they get paid for the plan, you know, whether you ultimately executed or not, you know, their value, their business models a little bit different.

You're going to pay up front for that service. but the people that I've seen really go through it in a disciplined way, it's great. It works very, very well. It gives them a really sound plan that they can execute on. And I think they're a huge value add to the ecosystem. I know some people who have done this, know some people pretty closely have done it. And it is not as rigorous as like CFP, certified financial planner and is not anywhere are close to CFA, charter financial analysts. Those are very rigorous, multi-year processes.

They have the household name kind of recognition within the financial world. Then you have all these kind of lower tier like, you know, CFMA and all like all these different designations. But CEPA came along. And I think the guy who owns it wrote the book called the $10 trillion opportunity or something like that. I mean, he's in this world. And from what I saw of the folks who were signing up for it. And you can go on their, from what I remember, you can go on their website and look for, you know, CEPA people in your state. A lot of them work in like bank trust departments. So they have to be really careful about actually giving, you know, M&A advice. So this, their, their business model is kind of like fee only financial planning,

but not managing the assets, right, in the same way that they're going to give you advice about a plan, show you all the options. Here's ESOPs. Here's management buyouts. Here's seller financing. Here's selling to a third party. Here's transitioning to your next generation. We'll look at everything. It's not just, you know, man with the hammer, you have to sell to the highest bidder. But they don't, they don't typically, from my knowledge, they don't typically charge a success fee. So it is kind of just, you know, pay X amount of dollars for this plan. We'll evaluate your options. And it makes it easier for folks like in the insurance business or in bank trust departments to fee off of it because they're not giving, you know, they're not giving investment advice. They're not, you know, selling securities, things that start to get within kind of a compliance

black hole. So it's a, it's more of a project. So you pay them for a project. They do a whole bunch of learning and deliver you a report or recommendations and then you go do the thing, right? And then sell you with somebody else probably, you know, then you go, then you go hire the banker, you go hire the ESOP consultant or whatever. Well, is it usually then you go, then you go right to that or do you usually have a year between you learn what you got to do to get ready for exit you do all the stuff and then you hire the banker i think it just depends i think it depends on the situation but the you know some of the people who are getting into it are also brokers you know and are also sell side m&A advisors and they're like hey i'm just adding a credential you know

on my business card to be able to give you better advice uh the adoption i think like to your point heather it's been around for a while but the adoption has been kind of slow um but i think it's trying to do something from a credentialing standpoint in the no man's land of business brokerage, right, where they're really short of like the IBBA, which doesn't really offer any, you know, best practices or credentialing. It's just an association of business brokers. This, I think, tries to put at least kind of a baby step of, you know, credentialing around it. I heard, for what it's worth, I heard that the education component was a joke. and you basically pay to go for like a four day long seminar.

And as long as you pay to go to the seminar and you sit through the end of it, you get the thing. So can we, can we buy that business? That's the business I want to buy. Sorry, Heather. I'm not trying to argue with you. No,

no. I was being, you know, I'm just telling you what I, what I've heard, but I've also heard of bankers even going to that seminar just to network. So to your point, maybe it's more about the network than anything else.

like a lot of things. How do we pivot this podcast to certifying people to acquire a business? A certified acquisition anonymous planner. It turns out, Bill, all you have to do is sign up for our newsletter and you receive a certificate. And you are certified. Yeah, you are certified. We're not charging enough, Michael.

We need to re-evaluate that. We're not charging enough. Gustavo is cheering me on because this morning he was like, how do we get more people in the newsletter? I was like, We just need to talk about it more. We will immediately, but actually, all right, so this is a little stupid. But what if there was a certification that a buyer could get that basically said,

hey, I'm not a moron and I have definite funds, that you could give to a broker or a seller and go, hey, I'm not going to waste your time in diligence. Hey, you know, I have funds, blah, et cetera, sorry. I'm working on something like that. I am working on something like that where I'm trying to show that the buyer has done diligence and has the right background to be a good buyer and how many banks would lend. So we're in the works on something along those lines. It would mean a lot more than an SBA pre-qualified listing.

That's the idea, right? Which, by the way, I have a deal right now where the bank that pre-qualified it in the SIM declined it when we sent it to them. So just to prove my point that that happens regularly. and the bar was like, I don't understand how this could happen. I'm like, that's what happens a lot. It doesn't mean anything. How much do you think we can charge for this bill?

I don't know. $999? You got a course. You got a cert. We'll verify your financials. We'll teach you how to do diligence. And you got a $1,000 cert at the end that says, I'm not an idiot. I know how to buy a business and I won't waste your time.

And I've listened to at least 50% of the episodes. And I've subscribed to those news. On that's the similar. On that note, Mills, I think we've This is a good deal. We should vote on the deal, right?

We should vote on the deal. I'll go first. I'm thumbs up on this deal, but it needs to be the right person and the seller needs to get their mind around doing it as an apprentice, earn your way in type model. I don't think,

I don't think anybody in their right mind is paying up five years profits for this business. Yeah, I'm thumbs up on the business, but I'm thumbs down on the transaction. It's not ready yet. The seller needs to go back and make it transferable before anyone can buy it. It's not ready to be transferred. I'm ditto to Bill.

Yeah, I think you guys know. I think that's exactly the case here. It needs some more work. Yeah, it's just too dependent on the star, right? Which is always the problem with all small businesses. they get too dependent on the CEO who is the All-Star, typically. That was a good one. That was a good one.

Yes. So thanks to our friends at Acquire.com for showing it to us. And this is why I do my spiel about our website. If you all like this one and you're interested in agencies, say, for example, go on our new website, ACQU and on.com. And we have every episode we've already done, ever done, 350 of them, tagged by industry. So you can just look at agencies. And you can hear everything we think about all.

different agencies we've ever reviewed. Also, you can get on our email list, which Michael was saying as a joke. In addition to a certification, though, we will also send you, it is really good. We send it once a week because we record the pod more than once a week. We aggregate a couple deals into it, a couple interesting articles from across the web, some interesting things the hosts are working on. It's not just the same as subscribing to our podcast feed. There's additional content in the newsletter. So if you like the show, I know you'll like the newsletter. So you can do that all the website, acqueu anon.com. Thanks for listening and we'll see you guys next time.