Business Innovators Radio - Unlock the Secrets to a Successful Business Exit with Jeff Adam

Starting point is 00:00:02 Welcome to the Business Networking Influencers podcast, where connections become opportunities and relationships shaped success. Prepare to be inspired, informed, and empowered by the brightest minds in business networking. And now, your host, Tim Nifton. And welcome back to the Business Networking Influencers Podcast. I am your host today, Marco Salinas, and I am filling in for Mr. Tim Nifton, our usual show host. joining me today, I've got a special guest. His name is Mr. Jeff Adam. And Mr. Jeff here is president of Adam Noble Group, a mergers and acquisitions and business valuations, business based out of Arlington, Texas. Jeff didn't just start doing this yesterday. He's been around for a while.

Starting point is 00:00:56 He is a well-seasoned business professional. And he's got a whole lot of alphabet soup after his name. So you know he's a mover and shaker. And he's doing some really big things. he's also a published book author of multiple books on Amazon as well. So Jeff Adam, welcome to business networking influencers podcast, my friend. Thank you, Mark. I appreciate it and look forward to talking with your listeners. That's fantastic. And we're so happy to have you joining us here today on the B&I podcast.

Starting point is 00:01:26 One of the things that we like to do here, Jeff, is we highlight different business professionals, different movers and shakers, like I said, and talk a little bit about their journey and talk a little bit about what you've accomplished and where you've been and where you've started. And we also kind of like to highlight the fact that it's not always a perfect and rosy journey for the business owner. Sometimes, you know, businesses experience different types of, you know, setbacks and struggles. And then other times you have your big wins. So we're going to be talking a little bit about all of that today on this episode with you. And we have the real privilege of talking to somebody that's been in business, you know, for themselves for a long time. And so I

Starting point is 00:02:05 I think you're going to bring a whole lot of wisdom to the table here. And I'm really excited to hear about your journey. Now, that being said, Jeff, can we go back into time a little bit and learn about how you got started? What made you kind of go down this pathway? How did you end up in this world back in 1984 is what it says here on your, on your bio is when you got started? Sure. It really kind of probably actually goes back before that. So I grew up in Canada, started my first.

Starting point is 00:02:35 businesses when I was pretty young. And I've always kind of wanted to work for myself. I really never did work well for others, so to speak, in terms of having bosses and direct reports. But I've always enjoyed kind of creating a team.

Starting point is 00:02:52 I love hearing about problems. To me, that's magic. If you hear something in the marketplace that's not being done well, then there's an opportunity to go and do it better. And if you do it better, people will beat a path to your door and and bring you lots of money, bags of gold. If you help them achieve their goals, objectives, you know, make their life better,

Starting point is 00:03:11 take care of their family and put food on their table, whatever is important to them. And, you know, that really, my journey really was about that. It started from very, very small businesses that became bigger and bigger and bigger and bigger. And today we've got, we do stuff all across the United States. Sure. Yeah, that's great. Yeah, that's a big component, right? for for business owners and entrepreneurship is you know we kind of we like to march to the beat of

Starting point is 00:03:38 our own drum we don't do real well with people um you know looking over our shoulder telling us what to do and that kind of thing we'd rather just do it for ourselves so i think that's a that's a big component of entrepreneurship and and um being a business owner now my question is who do you primarily serve do you have a certain market that you kind of specialize in or is it more based on revenue um you know, what is your target client look like? Sure, great, great question. So, you know, basically the people that we help the most and have, you know, over more than 30 years, you know, decades of doing this, you know, our business owners very specifically.

Starting point is 00:04:17 So our market is people, partnerships, couples that own businesses. They're primarily in manufacturing, wholesale distribution, you know, machining. They might be in specialty markets like craft brewing as an example. and brew pubs. And we do stuff, again, all across the United States, but they're primarily going to be owners of businesses. And our focus really is, you know, a business owner that at some time in the future is going to, you know, is going to do a great job starting their business and perhaps

Starting point is 00:04:50 maybe acquiring a business, but starting a business, growing it. And then at some point it's going to make a decision that, you know, I don't necessarily have a family member or family members that want to take over the business. So I want to begin the process of preparing my business for exit. And exit isn't tomorrow. Exit is five, ten years from now. There are things that you can do that can change the value of your business, you know, where it'll sell for, let's say, two or three million dollars to,

Starting point is 00:05:16 you know, by putting these three things in place and doing it and not spending a lot of money necessarily, but just putting them in place, you know, five years later, the business will be worth five, ten, $15 million. So there's huge payback to, you know, putting these exit plans in place. Sure. Yeah, that makes a lot of sense. So really ultimately, the way you serve these businesses is you help them to prepare their companies for an exit. And there are certain things that you do as well to guide them so that they can, I guess, obviously get maximum dollar, maximum revenue when that time comes. Is that right? Yeah, that's exactly right. And, you know, Mark, you make an interesting comment when you talk about maximum dollar. So interestingly, the best exits are not necessarily the maximum dollar. That's not necessarily the best. buying company for it. It's really about I want to choose, if I'm the owner or if I'm a part of a partnership, I want to choose who I'm going to sell my business to because I want them to take

Starting point is 00:06:11 care of my lifelong customers, my lifelong employees. You know, I put blood, sweat, and tears into building this business, this concept. And I want to know that they're going to take it and build on the things that, you know, I've accomplished in my business as an entrepreneur. So interestingly, it's not always about money. I mean, money is important, no question about it. You know, It doesn't buy happiness, but it certainly gives you flexibility as an entrepreneur, and it allows you to make, you know, to change the stars for your family post exit. Yeah, absolutely. So if someone's watching this or listening to this, Jeff, and they're thinking, you know what,

Starting point is 00:06:47 I've been running my business. I started it 10 years ago. I've had this idea on my mind that maybe I want to sell it. Maybe it's time to move on to other things. Maybe I want to spend more time with the kids and I don't want to have to, you know, endure the daily grind any longer. Are there maybe two or three tips that you could share with this particular person, this particular listener that they could already maybe start thinking about?

Starting point is 00:07:13 Maybe they can start implementing, you know, two or three things that really stand out that they can do to begin that process of actually moving forward and getting a lot more serious about talking to somebody like yourself about an exit. Yeah. And again, great, great question. So, you know, probably the first place to start out is, I would call it a situational analysis. It's due a situational analysis on your business. Understand it's strengths, its opportunities for growth.

Starting point is 00:07:41 You know, some people would call a SWAT analysis. It's a lot more than that. But it's really looking at, you know, again, not necessarily with the focus of tomorrow, but for a focus of some time in the future, I'm going to want to exit this business, whether I sell it to family members, transfer it to partners, to partners, sell it to employees, you know, sell it to other folks in the market. Some of the basic things that you're going to do is that in that situation analysis, you're going to take a look at your financials.

Starting point is 00:08:09 You want to have by the time you get to market, you want to have clean books and records. You know, we go through a process called recasting the cash full in the business. You know, the IRS allows you to deduct certain expenses, which are, which sometimes really are more for the benefit of the business owner. There's also non-recurring type of income. non-recurring type expenses. So you've got to normalize that. If you've got a great accountant, they've typically done a great job to, you know, to reduce your taxes. But in so doing that, the books don't necessarily represent the actual values of, as an example, furniture, fixtures,

Starting point is 00:08:43 equipment, vehicle, inventory, accounts receivable, and so forth. So there's a process of cleaning that up and preparing that for, you know, for future. Some of the other things you take a look at is, you know, does the business have some concentration? So, you know, the simple example, is you may have this awesome customer that you started with, you know, 30 years ago. You know, maybe now they represent 40% of your business. Well, that's, you know, that's great. That means that you've grown with that customer and that customer is drawn with you. But from an acquirer's perspective, they're going to be worried about that customer concentration.

Starting point is 00:09:16 You know, what's the risk if they lose, you know, if they lose that one customer, it's 40%. So there's some simple things that can be done in terms of growth plans, you know, adding to the, the number of people within your firm that have relationships with the customers, that type of stuff. This process, I would really call working on your business versus working in your business. So it's making that transition from being an owner, operator, entrepreneur. And frankly, your business can already be $5, $10, $15, $20 million and you be that. But the reality is for it to really grow past these points, you're going to have to work on your business. And that's really what you'd start with.

Starting point is 00:09:55 Yeah, yeah. So kind of the Michael Gerber e-myth type strategy basically is, yeah, follow the McDonald's process, right? And systemize everything and build out those, all those operations that are needed to make sure that the thing can run without you having to be there 24-7, basically, right? Yeah, exactly correct. And you've got to adapt that model for every business because, you know, all businesses are different. You know, unlike real estate, businesses are living, breathing. organisms. You know, there's there's an owner or ownership team that has, you know, has an impact in the business on a daily basis. And there's things that you can do kind of as you're looking at,

Starting point is 00:10:37 you know, preparing it. And, you know, the McDonald's example is a great one. So where you truly have a franchisable model, maybe you do take something, franchise it, you know, as part of that exit plan. But the reality is that for the vast bulk of businesses, that's not going to really be in the cards. And so you take, you know, those type of, you know, Gerbers, you know, in an EMIF, you take those type of applications and look at, what does it mean for my actual business? What does it mean from my actual circumstances? What does it mean for my business team? And then what am I willing to do? What do I want to do? You know, what you parade all it. You mean, you know, the 80% of the improvements are going to come from focusing on 20% of the things.

Starting point is 00:11:14 So you don't need to do everything. You really can choose and prioritize and decide what do I want to do. And honestly, you try to work on the fun stuff that'll have impact. That's right. Yeah. That 80-20 principle, man, that's a game changer once you discover that, right? It gives you some, you know, kind of peace of mind to just say, hey, I don't have to be involved in every single solitary aspect of this business. And little doors, little hinges swing big doors, right? And so that's kind of this 80-20 principle in action.

Starting point is 00:11:45 And so that should give all business owners a big sigh of relief right there, knowing that that economy is actually in work within your business. if you will just actually put some effort and some time to focus on it. So thank you for bringing that up. I think that's a key component. Now, Jeff, I have a question for you, kind of a little bit of a shift change, going back to you and your story a little bit more. So you started this company in 1984.

Starting point is 00:12:12 A lot of the businesses that I interview on these podcasts nowadays, almost all of them started within like in the last five to 10 years. I think there was a big shift after COVID. A lot of people had to hit the reset button as well. they realized that that wasn't the right business for them. Some of their businesses just couldn't survive COVID. There wasn't a whole lot of support, you know, from the, from the powers that be for the small business owners.

Starting point is 00:12:36 That was a big revelation after COVID, you know. So there's been a lot of movement, a lot of things that have shifted. You've probably seen a lot in your journey in terms of the ebbs and the flows and the highs and the lows. What is your advice to overall to business owners as far as those, those, those, those market changes in those in those market swings and we're kind of in the midst of one right now. You know, I think a lot of businesses are filling the pinch. I know at least the ones that I speak to are what is your advice, you know, coming from all of your success and experience on something like that?

Starting point is 00:13:12 You know, it's an interesting perspective when you're, you know, when you're looking at, let's say, let's call it 100,000 foot level versus the 500 foot level. When you look out over a long period of time, some of these, you know, some of the history tends to repeat itself. It may come in different, you know, shapes and forms, but really is probably the same type of thing. So I think that the ability to understand that change is happening, you know, it's a little bit parochial to say it, but, you know, the one thing that isn't going to change is that change is going to occur. So having a mindset within your company, especially if you're the leader of the company or you're part of the leadership team that is, you know, I'm going to embrace it. You know, I'm going to listen for it. I'm going to listen for the changes.

Starting point is 00:13:55 I want to hear the complaints. I'm a big believer, and I actually want to hear the problems. I want to hear the complaints because that's where their opportunities are. If you can solve those complaints better than any other company, you're going to reap the rewards of it. And the rewards can be many things. It could certainly be financial. But frankly, for me, part of that is just the enjoyment in what I do.

Starting point is 00:14:18 I mean, we have six kids, and my kids all have been asking for many years. You know, dad, why aren't you retiring? And my comment has always been, what exactly are your mom and I got to do differently? We already travel several months of the year. You know, we play tennis, two, three, four times a week. You know, we do all the things we love to do. We get to spend time with our wonderful kids and their families and our grandkids. And we've got a great group of friends.

Starting point is 00:14:43 So, you know, what we get to do is we get to spend time the way we want to. And I think if you are fortunate enough to have a company and to own a business that, that lasts for many years for decades, you probably have some particular traits. And one of those sets of traits that you have is the resilience to embrace the change quickly with your team, understand how you do you position so that you can do better. And then capitalize on those trends. You know, if you can certainly try to do things the same way, you know, for the rest of your life or historically passed.

Starting point is 00:15:22 But your competitor is going to pass you by. your customers are not going to be happy about it. Your employees are not going to be happy about it. Honestly, your wife's not, your wife, your husband or wife is probably not going to be happy about it either. Right. You know, get on board and, you know, be the conductor. You know, I have an expression I use my kids,

Starting point is 00:15:40 which is you're the captain of your ship. You can decide where you want to sail, you know, what shores you want to visit, how you want to get there, the speed of your journey, the size of the boat. That's up to you. And then you don't have a plan in place to make it happen. So embrace it.

Starting point is 00:15:56 And when the winds start pushing a different direction, decide if that's where you want to go. And if not, tack. There you go. That is some great wisdom, my friend. And this, you kind of, I think you might have kind of answered some of this, but I just want you to maybe expand a little further on it.

Starting point is 00:16:11 But I was going to mention that, you know, your passion for business and for helping businesses very much comes through in your, in your story and everything that you're discussing. But what do you, I guess, what do you ultimately really like about what you do what is what is the thing that you like most is it the flexibility is it the freedom is it more helping the actual business owner like what really stands out to you the most about being a business owner and being an entrepreneur um

Starting point is 00:16:40 that they're marco they're really i wish there was one or two or three things but the reality is there's there's so much the flexibility that's absolutely important you know when i graduate from college. I'm interviewed by Procter & Gamble. Ron Chan, who's one of my mentors, you know, had asked, well, you know, where do you see yourself in five years? Those typical kind of questions and what's important to you? And I told him, I mean, even as a 21-year-old, you know, young adult, you know, just graduating from college or about to graduate from college, I told him said, the most important thing to me is flexibility. You know, I want to work for a great company. I want to learn great things. I want to be able to impact, you know, to be impactful in what I do

Starting point is 00:17:20 for the business I work with, for the customers I serve for my family, my friends. But at the same time, I want to have flexibility. I want to be able to do ultimately what I want when I want. And of course, it's kind of hard to start that when you're 21 years old because the first you've got to do is put food on the table and a roof on top of your head. I think that truthfully, the type of things that I've enjoyed the most and I enjoy the most and that drive me today have been the same things, which, is getting to know people, getting to know their stories, you know, in the merges and acquisitions

Starting point is 00:17:55 role, you know, and especially representing owners of businesses, quite frankly, they're telling me their secrets. They're telling me things that their accountants don't know, and sometimes their attorneys don't know, and sometimes their spouses don't know, and sometimes their partners don't know. It's a tremendous responsibility, and I think you get to that level of trust with individuals or an ownership team by building rapport and being someone that, you know, is candid with them, is willing to tell them, you know, the truth and as willing to tell them the things that they're not necessarily wanting to hear. And, you know, that's my reputation. That's my firm's reputation. You know, you can go on Google and you can go on our website.

Starting point is 00:18:37 You can go on trust advisor and trust pilot and all these places, LinkedIn. You're not going to see one or five or ten testimonials. You'll see hundreds and hundreds and hundreds and hundreds and hundreds of testimonials with actual business owners' names, you know, their experience, the name of their company, you know, and the interesting thing is that we get those testimonials written, you know, unsolicited, and we're very grateful and appreciative, you know, not just from the business owners and the business ownership team, but even the business buyers who we don't represent.

Starting point is 00:19:05 And then ironically, those same business buyers who then become a business owner, five, 10, 15, 20 years later, come back to us to sell the business. So that happened because we treated them right. We didn't misrepresent. You know, the business that they purchased was exactly as represented. You know, it doesn't mean that they, you know, that it didn't have improvement opportunities, but it did. And they've taken it and they typically have bought it at this level

Starting point is 00:19:31 and then grown it to this level, and I've done a great job with it. So, you know, when you can look back at your, you know, at your career and all the friendships and relationships and, you know, our clients really become friends. And again, if you read the testimonials, you'll see. see them off and make those kind of references that, you know, we started off thinking we were clients. And when we ended this process, you know, we were friends. We were friends with Jeff and the other trusted advisors that were involved in this process. So it's, it's something that is very

Starting point is 00:20:01 meaningful to me personally. Yeah, that's amazing. You have a really incredible journey. And it sounds like you've accomplished many, many things that most people could only dream of. And so I really appreciate you sharing a lot of that. We're getting close to winding down. Just a few questions left here for you, Jeff. But I did want to know this is something that I really like to ask people, especially if they've been around in the business world for a while. But what is maybe some of the best advice that you ever received throughout your journey,

Starting point is 00:20:35 whether it was early on or even something recent? Is there any advice that you were given that stands out to you that you could share with any listeners or viewers? Yes, absolutely. And one of the most impactful things that I learned was actually a neighbor of mine when I was 22 years old, owned a cabinetry company that was, we lived in a century house that was on shores Lake Ontario, was built in the late 1700s, so maybe a bicentary house, so to speak. And he actually owned the original farm that was behind it. and his name was Mike Russell. And I remember, you know, in getting to know Mike, and Mike was maybe 10 years older than me,

Starting point is 00:21:18 maybe a little bit more, maybe 15. And I was just starting an accounting tax preparation type business and was charging, let's say, $30 an hour at the time. Again, this is, you know, in the mid-80s, early 80s. And in Mike's case, he said that, look, Jeff, you need to understand that you need to change, charge what your service is worth, not what you think it's worth, but what it actually has worth to the thing. So I immediately changed my hourly rate to $100 an hour, and my business

Starting point is 00:21:53 grew. It grew, and it grew, and it grew, and it grew, and it grew, it was all referral-based. Well, it was just, it was just really interesting. If you, if you give things away for free, people and business owners will associate that the value is free. If they have to pay for it, they will associate a much higher value. So we learned a long time ago not to give things away for free. Now that's not true. We do pro bono work and we do charitable work. And I've been involved with Rotary National and other groups.

Starting point is 00:22:22 And those are all absolutely appropriate and worthwhile type things. And there have been times where I provided services and provided refunds, not because we failed to provide the service, but because that money was going to do better in the hands of that business owner after closing than it was in my hands. So that aside, understanding that if you charge for your services, value will be associated with it,

Starting point is 00:22:50 assuming that you're correctly providing those services. So that's been a great lesson. Yeah, no, that is extremely valuable information and extremely profound, actually, because that's one of the big things that I think a lot of business owners do. They're not aware truly of, of the value that their service or product is bringing to the marketplace.

Starting point is 00:23:13 And bringing that number too low or too short is really a big detriment to that business. And in some ways, even to their clients, because the clients actually have a better experience a lot of times when they spend more. They get more value out of it. And it's usually those bottom feeder type people that are the worst customers. They're always complaining. They leave you a one-star review, right? but the guy that pays you the top dollar is like man i really got my money's worth on that thing

Starting point is 00:23:42 yeah absolutely there's another comment i guess and you know a small kind of snippet that i would share is that uh you know early on someone you know talk you know kind of educated me on the concept of multiple channels multiple sales channels and um you know and frank i tex is one one example of that so 25 years ago wow it's been that long ago i think it's about 20 25 years ago i had a client, I had won a fast sign business. It was one of the original fast sign franchises. They were located in Dallas, just super, super guy. I had built an incredible business. The business operated without him. I mean, again, did all those right things work on his business, on his business. And he introduced me to iTex. And at that time, he had said,

Starting point is 00:24:29 that, look, could you, could we pay for your valuation fee, your exit planning phase one fee in ITX dollars. I'm saying, hey, I don't really know anything about ITX. So, introduced me to ITX, joined it. You know, in fact, actually was our first client in it. And we have, you know, enjoyed the relationship with ITX and actually have built a very significant, you know, sales channel through that, that was unexpected and was nothing that I knew about and was purely a serendipitous type conversation with, you know,

Starting point is 00:25:01 with someone whose company ultimately sold that got us into it. So, you know, I would, I would recommend your listeners if they're not, you know, currently in I-Tex to explore. You'll find out from, you know, your local I-Tex manner. I'm sure there's some great websites out there. And because it's great, it's a great platform to be able to add sales that you're not otherwise going to get. That's beautiful. Beautifully said. Thank you, Jeff.

Starting point is 00:25:26 I really appreciate you giving that shout out for ITX. And by the way, as far as your own business is concerned, can you give us just a quick idea of what you are offering for business owners on ITEX? Sure. Primarily it's business valuation. So we'll prepare business valuations for businesses up to maybe about 5 million size sales wise. You know, these large ones really is a different type of service. And then we also offer kind of a consulting and do-it-yourself type consulting if you want to sell your business yourself, you know, that you can basically pay a sum. And then for a period of time, we'll provide a particular group of hours where you you will get direct access to a highly experienced eminy advisor.

Starting point is 00:26:09 You know, as an example, in my case, actually, I don't know what the count as my office manager would tell you, but I've closed over 825 business transactions in my career. And that's pretty rare in this industry. Once you hit, you know, the sale of 100 companies, you're considered an old pro and probably look like a weathered old pro at that point with no disrespect to some of my peers. But, yeah, so that's what we offer through our tech's business. valuations and kind of do it yourself consulting if you want somebody on speed dial who's an expert. Yeah, absolutely. So if you're a business owner and you're wanting to know what is my business worth

Starting point is 00:26:47 right now, I may want to have an exit here sometime soon. And I have no clue really where I'm at. This is an opportunity to jump on that, to talk to a seasoned professional and not even have to come out of your own pocket for it. At least, you know, to get started with that valuation process. you can use your barter bucks. Can't really beat it, right? Not a bad deal. Jeff, is there anything else that you might want to share that maybe I, you know, forgot to or just didn't ask you that you want to kind of leave us off with?

Starting point is 00:27:20 And not really, but at the same time since you've extended, open the door, I think the other comments I meant is that our entire processes are confidential and discreet. So the, you know, the last thing in business, owner or ownership team partnership wants is for customers, employees, the general public, their competitors to find out that they're considering an exit, even though the exit might be 10 or 15 or 20 years from them. And our entire process is discrete and confidential. And again, if you go to the reviews, you know, again, not 1, 510, but hundreds and hundreds and hundreds of

Starting point is 00:27:56 reviews with the actual names of individuals, actual names of the ownership teams, actual names of partners, the national names of the companies, they will talk to you. You'll see, you know, discretion, confidentiality, integrity, you know, those type of words coming out. So we really appreciate, you know, them sharing their experience. So, you know, Mark, I certainly appreciate the opportunity to visit with you and, you know, hope some of what I've shared today has been helpful for your listeners. I think it's been extremely helpful, Jeff. And you've given us some real golden nuggets here, lots of wisdom. And again, it's, It's a real special treat when I get to talk to somebody that, you know, just didn't just start their business last year.

Starting point is 00:28:36 You know, so really appreciate all the, all the wisdom and everything that you brought to this episode today. So thank you again so much for joining us today here on the Business Networking Influencers podcast. I appreciate it, Marco. Take care. All right. Have a good one. That does it, guys, for another episode of the B&I podcast. We'll catch you here next time.

Starting point is 00:28:57 Thank you for tuning in to the Business Networking Influencers podcast. We hope you gained valuable insights and social. strategies to elevate your business and networking game. Don't forget to subscribe for more episodes filled with expert advice and inspiration. Until next time, keep connecting, keep growing, and keep influencing.

Business Innovators Radio - Unlock the Secrets to a Successful Business Exit with Jeff Adam

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