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- A Top Lawyer, A Top Financial Modeler -DEEPER Top Lessons I've learned Interviewing 190+ pros
A Top Lawyer, A Top Financial Modeler -DEEPER Top Lessons I've learned Interviewing 190+ pros
A Top Lawyer, A Top Financial Modeler -DEEPER Top Lessons I've learned Interviewing 190+ pros
Ronald Skelton
December 26, 2023
!!! Happy Holidays !!!
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This week on How2Exit:
About The Guest(s):
Eric Pacifici is a founding member of SMB Law Group and an active member of the small and medium business community. He is passionate about small business entrepreneurship and has extensive experience in small business mergers and acquisitions. Eric is also the host of the podcast "Mundane Millionaires," where he interviews everyday entrepreneurs who are making a difference with their businesses.
Summary:
Eric Pacifici discusses the current state of the business buying market and the opportunities it presents for entrepreneurs. He shares that at the time of the recording, SMB Law Group is currently working on 60 transactions and personally assisting 25 clients in the business buying process. Eric emphasizes that the success of these deals is not solely due to the firm's expertise, but rather the economic climate and the incredible opportunities available. He highlights the journey of first-time business buyers and the significant financial gains they experience once they understand the process. Eric concludes by expressing his love for the small business community and his willingness to help anyone in their entrepreneurial endeavors.
Key Takeaways:
The business buying market is booming, with numerous opportunities for entrepreneurs.
SMB Law Group is currently involved in 60 transactions and assisting 25 clients in the business buying process.
First-time business buyers often experience significant financial gains once they understand the process.
Eric Pacifici is passionate about the small business community and is willing to help anyone in their entrepreneurial endeavors.
Article:
Secondary Sponsor:
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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
Founding Member Shout-Out (Still room here -$400 one time)
Shout out to our new founding member. With over 30 years in M&A, this company offers the lowest priced (way undervalued) course on helping you buy good businesses. Very underpriced - get it now before they finish upgrading the site and very likely up the pricing.
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.
E170: Financial Modeling and Analysis in Mergers and Acquisitions with Paul Barnhurst - Watch Here
About The Guest(s): Paul Barnhurst is a financial advisor and FP&A expert. He is the host of the Financial Modeler's Corner podcast and has extensive experience in financial planning and analysis.
Summary: In this episode, Ronald Skelton interviews Paul Barnhurst, a financial advisor and FP&A expert. They discuss the importance of financial modeling and analysis in the context of buying and selling businesses. Paul explains the role of FP&A in helping businesses make informed financial decisions and manage their cash flow. He emphasizes the need for regular financial review and the importance of understanding key financial metrics. Paul also shares insights on how to evaluate the financial health of a business during the due diligence process and highlights the value of accurate and transparent financial statements.
Key Takeaways:
Regularly reviewing financial statements is crucial for business success and decision-making.
Cash flow is the lifeblood of a business and should be closely monitored.
Financial modeling helps businesses make informed decisions and optimize their spending.
Understanding key financial metrics and industry benchmarks is essential for evaluating the financial health of a business.
It is important to have accurate and transparent financial statements when buying or selling a business.
Article:
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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: Top I’ve Learned Interviewing over 190 M&A Pros
Today will be a quick one: It’s Christmas night, 9 pm, and the kids are winding down after a long day of family and fun. I didn’t want to leave you without some good info this week, so here is a recap of what I’ve learned so far about small business M&A.
Top 5 Things I’ve learned from interviewing the best of the best top players in this business.
It’s More About The People and less about business, numbers and documents. Rapport with the owners is more important than almost any other factor.
The first story is never the story. - Sellers and buyers have been taught that this is a poker game. You have to put your game face on, bluff a bit. And they are totally wrong, it’s not poker, it’s a collaboration. Don’t be upset of confused as the story changes as the deal unfolds. Expect it.
All decisions are emotional and backed up / justified with logic; if they are not emotionally in alignment, the logic will be overruled more often than not.
Due Diligence Always Happens, either wisely before the transaction or in the first few months of owning the business.
Due diligence is more than financials. There are legal, IP, software, regulatory compliance, HR, cultural, etc.
It’s A Numbers Game: I'm not talking about financials but the number of deals you look at. If you want to get a great deal, you’ll need to look at 50, 75, or maybe 100. If you want a great deal, you may be looking at 1000, talking to 100, making offers to 10 to get 3 LOIs signed where maybe 1 passes due diligence … A numbers game.
The Wrong Team players kill as many or more deals than the MVPs
Owners and buyers are real MVP
Every other player, from the Lawyer to the accountant, will tell you they are the MVP.
If you’re not careful and pick the right team, any player can really mess up a deal.
Don’t Change Anything That You Don’t Have To For The First 60 to 90 days.
Observe, learn, build rapport with the employees, learn what they believe needs to change, and start there.
P.S. Bonus: Selling the business takes 3 to 5 years of planning and running to be sellable at the maximum price. - If you are flipping businesses, better pick ones that have 2-3 years of financials that are already great or that you have all the data and can clean up and make great.