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This week on How2Exit:

E186: Matt Raad: Flipping Websites and Building Passive Online Businesses - Watch Here About the Guest(s):

About the Guest(s):

Matt Raad is a specialist in buying and selling websites and has extensive experience in the online business space. He is the co-founder of the Digital Investors Program and has helped numerous individuals transition from corporate careers to running successful web-based businesses. Matt has a passion for passive income and has built a portfolio of cashflow websites that generate income while he sleeps.

Episode Summary:

In this episode, Matt Raad discusses his journey into the world of buying and selling websites and shares his expertise in building passive income through online businesses. He emphasizes the importance of learning the basics of website development and due diligence, as well as the potential for success in niche markets. Matt also highlights the value of building a portfolio of websites and the opportunities for growth and profitability in the digital space.

Key Takeaways:

• Learning the basics of website development and website due diligence is crucial for success in the online business space.

• Niche markets, such as pet care, survivalist, and crafting, offer excellent opportunities for building profitable websites.

• Building a portfolio of websites can provide a steady stream of passive income and mitigate risks associated with individual sites.

• Monetization strategies, such as ad networks and affiliate marketing, can significantly increase website revenue.

• Private outreach and broker platforms, such as Flippa and Quiet Light, are both effective methods for finding and acquiring websites.

Notable Quotes:

• "Websites are like online real estate. They can generate passive income and provide long-term wealth." - Matt Raad

• "The key to success in website investing is understanding the basics of website development and conducting thorough due diligence." - Matt Raad

• "Buying and selling websites is like trading fine red wines. You sit on them for years and then someone offers you lots of money." - Matt Raad

• "Website assets are becoming more and more valuable and are viewed as online real estate. They are highly valuable for the future." - Matt Raad

• "Learning how to do good website due diligence should uncover those gems, those diamonds in the rough." - Matt Raad

Article: 

The Art of Buying and Flipping Websites: A Path to Passive Income

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Growth & Acquisition - News Newsletter

Attention Business Brokers, Advisors, Acquisition Entrepreneurs, and SMB Owners!

Do you want to stay ahead of the game in the SMB M&A market? The Hub is the solution you need! This curated newsletter brings you the best highlights from blogs, podcasts, YouTube, and news sources, all in one place. Growth & Acquisitions

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Thanks to Sweetview Partners, an Acquisitions company looking to buy Texas-based B2B companies in the $1MM - $30MM revenue range. Click on the logo to check them out.

E185: Mid-market M&A Advisory Services in a Changing Economic Landscape with Steve Conwell - Watch Here

About the Guest(s):

Steve Conwell is a co-founder of Final Ascent, a mid-market M&A advisory firm specializing in exit planning and succession strategies. With a background in audit and entrepreneurship, Steve brings a wealth of experience to his role as an advisor and coach for businesses preparing for sale. He has a deep understanding of the M&A market and helps clients navigate the complexities of the process to maximize their value and achieve a successful exit.

Episode Summary:

In this episode, Ronald Skelton interviews Steve Conwell, co-founder of Final Ascent, about the current state of the M&A market and what business owners need to know when preparing to sell their companies. Steve shares insights into the macro and microeconomic factors affecting mergers and acquisitions, including the impact of inflation, interest rates, and geopolitical events. He emphasizes the importance of being proactive in exit planning and building a valuable company that will attract multiple buyers. Steve also discusses the changing behavior of buyers in the mid-market space and the need for sellers to be cautious and well-prepared throughout the process.

Key Takeaways:

• The M&A market is influenced by various macro and microeconomic factors, including inflation, interest rates, and geopolitical events. Business owners should stay informed about these factors and be prepared for potential changes in the market.

• Buyers in the mid-market space are becoming more cautious and are looking for stable businesses with a strong competitive advantage. They are focused on the quantitative and qualitative aspects of a company's performance and its potential for growth.

• Sellers should start the exit planning process early and work with experienced advisors to maximize the value of their companies. It is important to understand the buyer's perspective and present the business in the best possible light.

• Building a valuation edge and saturation-proofing the business are key strategies for attracting buyers and maximizing value. Sellers should differentiate themselves from the competition and ensure their business is well-positioned for growth.

• Sellers should be cautious when making changes to the business before selling. Buyers prefer stability and may be hesitant to acquire a company that has undergone significant changes. It is important to maintain a positive rapport with employees and listen to their feedback during the transition.

Notable Quotes:

• "Good companies in any market will sell. When you're building a company, you want to very early in the process start to sell because you're going to transition at some point and at some stage." - Steve Conwell

• "Buyers like to buy businesses that are thriving, not surviving. You want to present yourself in the best light possible so that they go, 'Yes, I want to pick you.'" - Steve Conwell

Article: 

The Art of Selling a Business: Insights from M&A Advisor Steve Conwell

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FROM THE Editor:

Disclaimer: This newsletter is provided for informational & educational purposes only, and should not be relied upon as legal, business, investment, or tax advice. We are not attorneys, tax, or financial advisors and not qualified to give any such advice.  

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Deeper: I was recently interview on another podcast and was asked what were the top things I learned about Small Business M&A after interviewing over 200 experts. Here is the details.

Here is the Re-Cap.

1. It's a People Business: The importance of rapport is critical in the M&A process.

2. Legacy and Employee Protection: More important to the seller than the actual size of the check they receive.

3. Due Diligence is More Than Just Financials: It's absolutely critical and should never be skipped. Due Diligence always happens, either before the wire transfer or in the first 90 days you own it.

4. An Ant Can Climb a Mountain: With tenacity and drive, size or current position should not limit you.

5. It Takes Time: Acquiring wealth or success from acquisitions is not a quick process.

6. Zero Down is Not a Myth: But it's rarer than most people think and requires excellent negotiation skills.

7. Team Players Can Kill Deals: Ensure you have the right team because mismatches in understanding can jeopardize deals.

8. The Structure of the Deal Can Change Valuation: The way a deal is structured can significantly affect the business's valuation.

9. Selling a Business Takes Planning: It requires 3 to 5 years of great financials for a successful sale.

10. Arbitrage Opportunities: Understanding different valuations and multiples across business sizes can be advantageous.

In more detail:

1. It's a People Business

Ronald emphasizes the personal aspect of business acquisitions, highlighting the importance of rapport. He explains that successful transactions aren't just about the financials but about the connections and trust built with sellers, brokers, and team members. Building strong relationships is likened to a partnership, with the rapport being crucial from the initial negotiation to long after the deal has closed. Ronald shares stories illustrating how maintaining good relationships with previous owners can provide strategic advantages, such as post-sale support and advice, underscoring the idea that business is fundamentally about people.

2. Legacy and Employee Protection

Sellers often value the future of their employees and the legacy of their business more than the final sale price. Ronald discusses how understanding and respecting these priorities can make a buyer more appealing to sellers, facilitating smoother transactions. He suggests that buyers who demonstrate a commitment to preserving the business's legacy and protecting its employees can gain a competitive edge, as these aspects are crucial to sellers who have invested their lives in building their businesses.

3. Due Diligence is More Than Just Financials

Due diligence extends beyond financial audits to encompass legal, operational, and cultural investigations of the business. Ronald warns against the temptation to skimp on due diligence, sharing anecdotes where thorough due diligence uncovered hidden issues that could have significantly impacted the deal's value. He argues that understanding every aspect of the business—its market position, internal processes, and potential liabilities—is vital for making informed decisions and ensuring the long-term success of the acquisition.

4. An Ant Can Climb a Mountain

Highlighting the power of tenacity and drive, Ronald shares inspirational stories of individuals who, despite their humble beginnings or small scale, have successfully acquired businesses and scaled them significantly. He encourages aspiring entrepreneurs not to be deterred by their current size or resources but to be persistent in their efforts, emphasizing that with determination, even the smallest ant can climb a mountain.

5. It Takes Time

Ronald tempers expectations by reminding listeners that building wealth through business acquisitions is not a get-rich-quick scheme. He stresses the importance of patience and long-term planning, noting that most successful acquisitions result from careful strategy and execution over time. He advises listeners to be prepared for a marathon, not a sprint, in their entrepreneurial journey.

6. Zero Down is Not a Myth

While acknowledging that zero-down deals are possible, Ronald clarifies that they are the exception rather than the rule. He shares strategies for structuring deals creatively to minimize upfront investment but cautions that these arrangements require sophisticated negotiation skills and a deep understanding of financing mechanisms. He emphasizes that while zero-down deals can be attractive, they also demand a high level of expertise and due diligence.

7. Team Players Can Kill Deals

Ronald warns about the potential for team members who are not fully aligned or supportive of the deal to inadvertently sabotage it. He discusses the importance of assembling a team where each member understands the transaction's goals and is committed to its success. He shares experiences where deals were jeopardized by misaligned team members, highlighting the need for clear communication and shared objectives.

8. The Structure of the Deal Can Change Valuation

Exploring the nuances of deal structuring, Ronald explains how the terms and conditions of a transaction can significantly impact the overall valuation of a business. He discusses various structuring options and their implications, illustrating how creative arrangements can benefit both buyers and sellers when thoughtfully applied. He emphasizes the strategic importance of deal structure in achieving favorable outcomes.

9. Selling a Business Takes Planning

Ronald underscores that selling a business requires extensive preparation, often years in advance. He advises business owners to begin planning their exit strategy early, focusing on building strong financial records and operational efficiencies that will make the business more attractive to potential buyers. He shares insights into the common pitfalls that sellers encounter and how to avoid them through proactive planning.

10. Arbitrage Opportunities

Finally, Ronald discusses the concept of arbitrage in business acquisitions, explaining how disparities in valuation across different market segments can create opportunities for savvy investors. He illustrates how understanding these valuation gaps can allow buyers to purchase businesses at lower multiples and sell them at higher ones, generating significant returns. He encourages buyers to look for arbitrage opportunities as a way to maximize their investment's value.