Business Innovators Radio - Paul Spradling – Co-Founder – Brilliance Business

Episode Date: May 29, 2023

Paul SpradlingAs the co-founder of Pacifica Advisors, named one of the top 25 investment banks in 2022 by Axial, Paul is in charge of strategy and helping hundreds of businesses exit and get growth capital investors. A graduate from Cornell University, Paul’s business portfolio runs the gamut from raising over $350mm in capital before the age of 30 to working on transactions with the largest names – Blackstone, Goldman Sachs to name a few. Today, the majority of business Paul conducts is from direct relationships, utilizing a direct angle approach, only working with a handful of investors that tend to always execute.Instagram link: https://www.instagram.com/pacificaadvisors/Source: https://businessinnovatorsradio.com/paul-spradling-co-founder-brilliance-business

Welcome to Business Innovators Radio, featuring industry influencers and trendsetters, sharing proven strategies to help you build a better life right now. You are listening to The Brilliant Business Show, conversations with leading experts in business. I am your host, Mark Stephen Pula. We have a wonderful guest on the show today, All Straddling. Paul is co-founder of Pacifica advisors. Paul, welcome to Brilliant Business. Thank you for having me. It's a pleasure.

I'm really looking forward to a conversation with you today. Before I get started, I just want to make a legal disclaimer that Paul is not offering legal advice or legal assistance. So let's get started with the show. Paul, can you share with our listeners a little bit of to bet yourself in your business? Yes, of course. Yeah, first of all, I'm happy to be here.

I'm glad to be here and share a little bit about what we do. So, yeah, I'm a co-founder at Pacific Advisors. Pacific Advisors is a, we call it, a lower middle market, M&A firm. So what does that mean? We help smaller and medium-sized businesses exit. And at times we help them get growth equity, get investors, or most of the time, I would say 80% of our time is helping businesses sell. Whatever your business may be, we have close to 12 advisors now in different industries and, you know, healthcare, quick service restaurants, to manufacturing, to a little bit of everything.

So we will help you sell your business and we'll find you a buyer and we'll help you get prepared before the process. And who are your customers, Paul? What kind of clients do you look after? Yeah, our customers are pretty much all business owners that have a business with a positive Iveta, a positive cash flow and that they are within $1 million. in Iveda up to about $15 million in Iveda and across all industries really. There are certain industries that sell better and have better multiples, but those are our customers, people who are looking to retire or have a liquidity event or move on to something else in their life or simply or simply just want to take a break.

So, yep, our customers are all business owners really. Nice. And do you recall a specific ha-ha moment that led to the launch of the business for? Yeah, yeah. So my business partner and I worked on the side. We were working for a family that own a lot of real estate and they had large exposure into the real estate world. And they've done very well in real estate. And real estate takes a lot of capital and it's safer. but the cash flow is more limiting than buying a business or owning a business. So the founder said of this family, let's go and acquire a business because you can buy a business for a multiple, a fivit, much lower than a multiple or a cap rate like you would buy a piece of real estate.

So we went out and helped him and we were working for him and helped him go and acquire a business. and we didn't love the process. The more retail approach to selling a business, the more brokers. We came more from an institutional kind of mindset on buying this larger pieces of real estate. And these businesses were making the same amount of money as some of these bigger pieces of real estate, but they were treated not with the same level as complexity and the underwriting. So that was when we said on the buyer side, when we decided, I think this could be done better, why don't we create our own platform?

So we started looking at every platform and we grabbed the things we liked and then decided to grab all the best ideas and implement our own. And what really motivates you to jump out of bed every single day, Paul? Yeah, I guess I would say what really motivates me is every day, it's an amazing new day with an amazing new business and I could be working on a packaging business on a Monday night and I am talking packaging and we're talking this multiples and then Tuesday morning I wake up and I have a call and we're talking about a healthcare business and you know even though we don't are not experts in every everything we're experts on the financial side of things and we know how to value this

businesses and how to come up and squeeze the most money for our customers. So that really motivates me knowing that we're trying to get this guy the most amount of money he can in his retirement. That's what motivates me. And, you know, okay, how much is he going to net where his proceeds going to be? So that's what motivates me every morning helping people retire, I guess. Well, we all want a lot of money when we retire poor. So it's great work, what you're doing what sets your business apart and what unique need are you filling for your clients yeah i think that one of the big reasons one of the big things that sets our business apart uh from others and is we have a strong back-a-house financial team my business partner co-founder nick um he's a corporate

finance professor at university of San Diego, and he has a strong financial background. So I think one of the things that sets our business apart is we are very good at valuing this businesses and understanding the type of financials that the private equity firms or the buyers want to see. So I think that's a unique need we're filling. other brokers and other investment bankers in this size out there are not doing this, I think, to the level we are. We would like to believe that.

So, yeah, I think that's our main thing. And what is your service especially important in today's modern world? Well, I think one of the biggest things is people want to retire. they don't know how they need to start thinking about retirement about three years before they do retire because there's the process of selling the business and then there's the process that they need to stay on board and train the new CEO unless they already have a CEO in place, somebody around the business. And there's about 30 million small businesses in the United States currently. That accounts to almost like 50%, 47% of the workforce works for a small business.

And, you know, baby boomers, at least here in the United States, hold $53 trillion of the wealth. And that is passing on to the next generation. Not all of that is business owners, but a significant chunk of that is business owners. And that money is getting passed to the next generation. So I think our service is very important, especially in this day and age where the baby boomers are aging and getting ready for this next steps. And you just share a few more details of the kind of services and products you offer. Yeah, so we offer three major products, I guess.

Our largest, the most common, we probably do 60, 70% of this is, And we do exits. So mostly exits. And we are just sell your business. That's all we do. Then the other one is the process of growth equity when you are a need capital to expand your business. And then the final and last one is we do buy side assignments. So you want to go and buy a business.

consult you and will curate a process for you to go and buy a business. So those are the three big processes. Exit, growth equity, and a buy side. You hire us when you don't have a business and we can go help you find a business so you can buy. Nice. I like that, Paul. And I think you have a dog there that's waiting for you as well, Paul. Am I right? Yes. No, it's not my dog. I'm at the office, but there was just a dog that walked by. No, I know you have all sorts of client success stories. Can you just pick one that really stands out to you? Yes.

I guess one success story that I was thinking what story to share was a particular business we sold during COVID. We started the process of selling the business around one week, two weeks before the lockdown. This was a HR consulting business that they had consulting for a school districts. So it would help hire teachers and other employees for some of these school districts. So COVID, we did the entire transaction via Zoom. This guy sold his business without ever meaning the capital providers in person. So we did the whole transaction in the beginning, in the middle of lockdowns, and it ended up being structured as what they call an earn out. So he received some of the money up front, about 70% of the money, and then the other 30% over a period of three years.

And you would think COVID and everything going on and then not meeting each other in person. But we were able to manage that whole process very smoothly. and it's been now three years and the earn out has been fully earned. So it was quite a good success story. And they didn't even meet each other, the buyer and the seller, until like a year after. Nice. How do clients typically hear about you, Paul,

and are there certain life moments that usually lead to them seeking you out? Yeah, they typically hear about us. Direct marketing, I mean, we approach a lot of sellers. Some sellers approach us directly. We were voted by Axial, which is a large platform in the top 25 investment bankers in the last two years. We've been on this list. So we have a good reputation. And usually certain life moments are retirement, capital needs, burnout, that they start seeking us out.

And we also approach business owners early and tell them it's always early to, it's never too early to start planning. And we help you do the whole planning, you know, free. And we don't charge anything. We start helping you get your numbers ready. And we don't get paid until you get paid. So we work on a success fee basis when it comes to selling your business. So, yeah, they start, we want them to start looking for us early. a lot of times that's why we reach out directly.

Nice. I find you all worth fascinating, Paul. Is there anything we did not cover that you would like to share? Yeah, of course. Yeah, I think I find my work a little fascinating. It's always fun to learn about all the businesses. And one of the things that I guess we then cover is all the tremendous amount of creative ways people build wealth. So many businesses, so many ways to build wealth.

Some of these businesses, you wouldn't believe how much money they're making from dirt moving business, just simply moving dirt, making millions of dollars on that. Or creating one single component, one type of tool that goes inside refrigerators and getting a contract with WorkPol. or something on a marketing niche. You know, you just only do marketing for a specific type of company. Whatever it is, there's so many businesses out there and so many ways to make money. And everybody knows the big billion dollar companies, but there's a lot of these five to $50 million companies that do very unique niches. And a lot of the wealth is created in this small business.

I would encourage everyone out there if it sounds like Paul can support you to get to the next level, have a great retirement. I would encourage you to connect with Paul Scrabbling. Paul, how is it best for our audience to connect with you? Yeah, I think the best way is you can find us on our website, PacificAdvisors.com. You know, there's a lot of resources there. There's also a lot of articles that help you value your business. You can read a lot of information about us and our contact information is there. And either myself or a member of our team will get back to you as soon as we can.

Well, thank you so much for being my guest on Brilliant's Business. I've really enjoyed having a conversation with you. Thank you. Thank you. Thank you for having me. The pleasure's being all mine. Thank you, everyone for listening to Brilliant's Business. Until next time, by for next time. Thanks for listening to Business Innovators Radio.

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