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Investing in a Web-Based Business: Mistakes and Best Practices
Today we welcome Chuck (iii) Mullins, we are talking with him about his background, experience, his algorithm knowledge, ask him our rapid-fire questions, and pick his brain about the business.
Chuck built his first profitable website back in 1996 when he was an impressionable 18 years old. He studied computer software engineering in college, which taught him the skills to analyze search results and implement strategies. Throughout his career of developing, managing, consulting, and investing in internet-based companies, Chuck has developed a keen ability to spot opportunities and develop strategies that lead to growth and profitability.
- Chuck’s background, entrepreneurial experience, and success stories
- Web-based business ups-and-downs
- The difference in long-term cash flow from web-based businesses and get-rich-quick cash businesses
- Chuck’s favorite web niches
- Chuck’s favorite audience member (who is also a buyer)
- Websites that are more/less desirable
- The importance of knowing your Profit and Loss
- Biggest mistake buyers can make
- Best practices for buyers and sellers
- The importance of understanding the business and doing your research
- Quiet Light’s vision and how we can help you
Mark: Joe, one of my favorite things about working with team Quiet Light is some of the camaraderie that we have with each other. The fact that we get to tease each other a little bit, egg each other on, but also help each other out; talk about deals, collaborate on our transactions because everybody at Quiet Light has so much entrepreneurial experience that it’s like having this built in board of advisors for every single thing that we do. And one thing I think you and I need to do a better job of; I know we’ve had each of the advisors on Quiet Light at the Quiet Light Podcast. I think we need to bring them on a bit more so that others can enjoy some of the experience that they have. You had Chuck on recently and grilled him a little bit in this episode.
Joe: I did. I want people to get to know Chuck for the fun experienced entrepreneur that he is. And so I mixed it up a little bit. I had some fun with him we did some rapid-fire questions. I intentionally; just let me get this upfront and out there for the audience. I intentionally mispronounced somebody’s name. I butchered it intentionally. Again I did it seven or eight episodes ago and I got some email saying I think the person you’re trying to find is so and so. I did it again.
Mark: Same person?
Joe: Same person; yeah, if he’s listening.
Mark: He needs to start listening to the podcast especially my episodes because frankly, I’ve got a leg up on you.
Joe: You have overtaken me for the most popular episode on the Quiet Light Podcast. I will overcome that because I’ve got some great ones planned coming in here soon. Chuck is a fascinating individual. I’ve known Chuck for a long time and he’s really, really smart when it comes to his entrepreneurial acumen. It’s almost annoying to be honest because with a model that we have at Quiet Light Brokerage; we don’t have employees, right? No one’s an employee of Quiet Light Brokerage. We have a lot of entrepreneurs who work together in sort of a collective group. Well, one of the benefits to that is all the advice and feedback I’m able to get from people. And one of the most annoying things is all the feedback and advice I get from everyone. And sometimes; Chuck especially, Chuck is so thorough. What’s the term he gives to himself? Whatever it is he just hyper focuses on the most minute little detail and I fear asking questions sometimes because of the level of detail that he’s going to give to me in terms of what I have to fix and correct in a document that I’m creating.
Mark: But at the end of the day even though sometimes it can be overwhelming like come on you think I’m doing everything wrong evidently because I keep getting his feedback, it’s always on point. And I don’t think I’ve ever received feedback from them where I look at it and say this is not worth considering or looking at; so a smart, smart guy. I’m looking forward to it. What are some of the things that you discussed in this episode?
Joe: Well we talked about some of; he’s got almost three years brokering now and over 20 years as an entrepreneur now. And he talked about some of his experiences; the pros and cons of A. being an entrepreneur, some of the things that he’s found that certain buyers do better than anyone else, and how he wants new buyers to adopt that style, and then the biggest mistakes that someone’s selling their business can make as well. And it’s fascinating as I just said he’s got 20 plus years as an entrepreneur. I’m in the same boat. You’re in the same boat. So collectively the team at Quiet Light I’d say what 250 years of entrepreneurial experience that we share with our team with our clients and I think it’s fascinating. Chuck is just the tip of the iceberg here in terms of the experience. So it’s exciting to share this with him and we had a lot of fun. So that’s the key to this one.
Mark: Fantastic, well let’s get to it.
Joe: Hey folks it’s Joe Valley from Quiet Light Brokerage on the Quiet Light Podcast. And today we have the most special guest. His name is Chucky. Now that’s not what we call him. It’s Chuck. I use his personal email address. I’m not going to tell you at what you can all haul in the mail anyway. You know his e-mail address its [email protected] Chuck Mullins, welcome back to the Quiet Light Podcast.
Chuck: Thank you, sir. Thank you. For any that’s specific it’s actually Charles Clifford Mullins III. That’s my D-I-I-I.
Joe: You know I am from New England I can’t talk with a British accent; it’s something about us.
Chuck: Well I can’t either.
Joe: Alright. Well listen you know the routine. Normally on the podcast we ask people to give their own background; who they are, what they’re all about so that we’re not sounding like we’re reading from a script which we don’t. We wing these things. You know that. Our audience knows that. But before we get into that I want to ask you a series of rapid-fire questions; the first one so that people understand and establish your experience here at Quiet Light Brokerage, how long have you been brokering at Quiet Light Brokerage?
Chuck: About two and a half; almost three years.
Joe: Almost three years. Okay. So let’s start with…I’ve got a total of six questions. Number one; and you’ve got to give me a quick answer. Number one, who’s your favorite broker?
Chuck: Joe Valley.
Joe: Good, good, good. Alright, if you were stranded on an island with me, Brad Wayland, and Jason Yellowitz and a rash floated by and they would only carry three of us; there’s four altogether, who would you leave behind and why?
Chuck: Jason Yellowitz, because he would be able to burn his stacks of cash to stay warm.
Joe: And he carries it with him, is that what you’re saying?
Joe: Jason I know you all listen to the podcast so everybody make fun of Jason. That’s your job here. Alright, this is a really important question. Who is the better podcast me or Andy Youderainan; I mean in Andrew Youderian?
Chuck: I would have to go with Mark.
Joe: You are…
Chuck: Hello? Isn’t it you that people come up to the Booze and ask for or is it Mark that they come up and ask for?
Joe: That’s me. It’s me. Mark doesn’t go to Booze. Alright, sid you know Walker Diabel wrote a book; and a best seller book?
Chuck: Have you heard about the second book that he wrote?
Joe: No. He wrote a second book?
Chuck: Yes. If you go to WalkerDiebel.guru you can check out the second one that hasn’t been released yet.
Joe: Okay, Alright. So this is a tough question. This is not a trick question. I want to know if you can answer this one. What’s the name of Walker’s book?
Chuck: Buy Then Build.
Joe: You got it. Okay. Alright.
Chuck: How can you not get it? I’ve heard it at every conversation. Every conference I go to there’s these three books that are just floating around that conference and I’m like wait a second how did that get there?
Joe: And it’s the bottom of every one of his e-mail signatures. One of these days you’re going to dig way back into the archives when he was actually an actor and find a clip and we’re going to change his email signature line somehow some way. Alright, so as you know historically Quiet Light Brokerage does not recruit brokers. I have conversations three or four times a week these days with people who want to join the team. But we, for the most part, don’t recruit. We have as you know or Mark has as you know recruited a few starting with Amanda back in the day. She was the first. And I think Brad was also recruited. And yourself was also recruited. Of all of the brokers that Mark recruited; last question by the way, what was his best decision?
Chuck: Probably Brad. He’s been killing it man.
Joe: Man and give yourself some credit Chuck. Come on. Anybody but you would probably be the politically correct answer but essentially you just threw Amanda under the bus. But fortunately Amanda doesn’t really listen to our own podcast either. Alright, enough of this nonsense; let’s talk about you and your experience. I know all about you but for the audience members, Chuck has been on the podcast before Mark had him on when he first joined the team two and a half years ago, three years ago. And the focus of that podcast was a tiny little bit about Chuck but mostly about Chuck’s due diligence experience. And I think you had a list of was it 25 due diligence tools?
Chuck: Who can remember?
Joe: Yeah, a lot. And it’s all; if you Google Quiet Light Podcast, Chuck Mullins, due diligence you’ll find it. It’d be at the top of the Google search engine and it’s great stuff. And I learned a lot when I did it. But I would say I refer most people out for due diligence; buyers that is to our friend Chris Yates at Centurica. They do a great job. Well, let’s talk a little bit about who you are and your life experience and a little bit of your brokering experience now that you’re three years into Quiet Light. So who the heck are you? Tell us about your entrepreneurial experience. I know that you started way back when you were in college, right?
Chuck: Yeah. I graduated high school in ‘96 and I always wanted a computer but we couldn’t afford one. So finally for college I needed a computer so I got a computer and started a free website on it’s like Angel Fire or Tripod or one of these things way back in ’96. And I remember just putting up some content and that is an online library for college students. And I remember somebody offered me like 10 bucks at some point to put a link on my website. I’m like $10 awesome, I’m making money and then somebody offers me like a hundred bucks and I’m like what $100? So then I was; this is before I even had a domain so it was like AngelFire/blahblahblah. I started thinking about okay we’ll buy a domain and back then they were like thirty-five bucks. I was talking to my mom and I’m like mom I’d buy a domain and she’s like you’re crazy you shouldn’t buy you know like you’re just wasting your money and why are you spending all this time in front of the computer and then it just started growing and then somebody offered me a thousand bucks. And before you know it I was making about sixteen grand a month off of advertising back in the ‘90s.
Joe: In college, right?
Chuck: In college; yeah, and so I was just…
Joe: That’s a lot of Jägermeister.
Chuck: And the Internet bubble ended up bursting in like the 2000, 2001 and all that money like dried up overnight. So I was like okay now what? So I had to figure out how to pivot and myself and two other guys; we had different businesses. We all pooled together and started a membership site. The first month with our membership site we made like 60 grand. It was just like mind-blowing like oh my God we’re in college. I didn’t have keggers I had like full bottle; like full bar parties.
Joe: Everybody wanted to be your friend, right?
Chuck: It was fun and we’d stay at like the Ritz Carlton for Mardi Gras and like just do crazy things. We rented like a ski chalet; it was like a 15 bedroom house on the slopes and I forget where it was bit we then brought all of like; we had affiliates at the time, all our affiliates to come and ski with us and so we had a great time. And at some point, I was making a lot of money and I didn’t really know what to do with it all. I was definitely wasting my fair share of it. Actually kind of going back, my mom, the whole thing with her telling me I shouldn’t start the business and this and that in 2003 I think it was about my mom and sister cars for Christmas.
Joe: I wrote that down when you said it because I knew that. You told me the story about Christmas and your mom went outside and there was a big ribbon on a brand new car. I guess she’s happy you bought that domain name, after all, isn’t she?
Chuck: Yeah. Yeah for sure and I do not usually tell that story so maybe we’ll have to edit that out.
Joe: No. No editing. Tell the story.
Chuck: I made two giant boxes and I had my mom like a box of some keys and she sees them and it had Lincoln in it which I had a navigator at the time and she’s like oh it’s a scavenger hunt he put his keys in here and she walks outside and sees this giant box and just like; my mom doesn’t curse and she goes oh shit and she runs outside gets ready to tear into the box. And I said wait, mom, hold on hold on there’s a card on there you’ve taught me better; open the card. And so she opens it and it says to my sister and my mom is like inaudible[00:12:57.1] my mom’s like…well my sister is like to me? And again I wiggle the keys in front of my sister’s face and she’s like what?! So she runs and dives in and my mom looks at me like what this like WTF and I’m like you’re over there. Then she starts walking and then sees it like buried on the other side of the house in a big box and like runs over and dives in. We’re in Georgia at that time at a family house and it was cold and she didn’t have shoes on. It was a great time. I’ve got the video. One day I’ll have to share with somebody but I don’t know that I want to share it.
Joe: What a great experience and a great thing to do for your mother and your sister did. Did your mother get the nicer car or was it equal to both?
Chuck: I was actually going to buy them the exact same car and then I was talking to my sister trying to like make sure that it was the kind of she would want and I said well what do you think Mom would like? And she said well my favorite car is a Sequoia and I ended up; my mom a Lincoln Aviator and my mom’s Sequoia. They’re about the same price. I think my sister was a little more but I did get some grief about that. Also the night before or a couple of nights before we went to Walmart and I bought every single piece of cheesy add on part you could get and added it to the car. So I got like a fuzzy steering wheel cover, dice, a little light-up things that go on the rims, and just totally like made the car look as ridiculous as possible and told them in order to get it they’d have to drive it with that stuff on it.
Joe: That’s hilarious. So for anybody that’s listening instead of watching if you look at my chin and Chuck’s chin you’ll see some gray; there’re probably a little more on mine than his of course. His is more his cheek mine’s dead on center of my chin that’s because of age and life experience. So you had some amazing times Chuck out of college making more money in a month than most people in this country do in a year; all web-based business experience. It’s not always wonderful though.
Chuck: No, absolutely not. Yeah, entrepreneurship is ups and downs. We’ve gotten hit by Google so many times I couldn’t even tell you. And most of them were just algorithmic. But I have on one of my big businesses, we had about 12 that were all doing the same thing and one of my partners had used the same email address in our Webmaster Tools account and somebody from the spam team I guess noticed and went in and just manually penalized all of our businesses. I think except for two because those were the only two that didn’t have those email addresses. And just overnight it’s like poof gone and it’s just like oh it’s heartbreaking. At least when it’s the algorithmic type of penalties it’s easy to kind of; well maybe not easy but you’re going to recover from that. The manual penalties, we hired somebody who used to work in the spam team. They told us what to do. We did it. We just haven’t been able to recover from that on those other sites.
Joe: Yeah I know it’s always hard. Google algorithm updates I think are getting a little better, a little easier to handle and manage I think ultimately. I always used to say this actually if you do the right thing the way Google tells you to do it, ultimately it’s not going to hurt you; the algorithm updates. And I guarantee there are people out there shaking their head no right now because a good friend of mine, he built a great business, a great, great content site, and sold it and there was a an update recently. And the buyer, another great entrepreneur bought it and did have some negative impact. What they both know is that sometimes when Google casts a wide net some of the wrong sites get caught up in it and over time that does get corrected but it does sting initially, doesn’t it?
Chuck: Yeah. And I will say like the reason we got caught up in a lot of the updates wasn’t because we were doing the things that Google tells you to do. We were gaining the system and we deservedly got caught for doing those things and we would adjust our technique and then regain. So like one of our sites had like 100,000 pieces of unique content that we were in Google index for like 30 million pages.
Chuck: So like how does one do that?
Joe: How does one do that? Good Lord.
Joe: Well the grey in your chin has matured you to the point that I think you’re beyond the trickery because you look at the long term cash flow and benefits of owning an online business now it’s not just a quick cash anymore. At least that’s the way I look at it; you too?
Chuck: Yeah, absolutely. And you’re talking about like the algorithm updates and I feel like there’s been so many and that most of the really garbage sites have probably gotten taken out by now. I feel like, and maybe I’m wrong but now it’s more of like just tweaking the knobs a little bit. So unless you’re in one of these like fringe business models I tend to believe and I could be 100% wrong but I tend to believe that most of the major algorithm updates have been already done and then now they’re going after I guess like medical websites and things like that.
Joe: Yeah. The updates are far further I’m sure in between and in many cases not as severe. Alright so I’m going to throw a question at you. I don’t know if I told you this story or not or if you’ve heard it. Some of the audience members might have heard it so I’m going to just test your algorithm update knowledge. And if you answer within two seconds then I know you heard the story. So I bought a business, I sold my business in November 2010; yada, yada, yada. People have heard this a million times, or at least tens of hundreds of thousands of times if they’ve listened to every episode and keep downloading everything. No we haven’t done 100,000 episodes that’s totally inaccurate. I can’t do math by the way apparently. Alright so I bought a content site. I sold a great site. The content was amazing. And then I bought a piece of junk. I had 42 amazing days. I bought it March 1st, 2012. I had maybe 3 or 4 keywords on the first page of Google and then boom they fell to the bottom of page 1 and then page 2 and they were gone and I lost over a quarter-million dollars in the course of twelve months. What happened? What algorithm update was that? It was; again I bought it March 1st, 2012; I had forty-two amazing days.
Chuck: Panda. Penguin.
Joe: Penguin. Alright, you’re close. We’re going to have to throw that quiz out there. Everybody in the audience wouldn’t throw that quiz out there for a price. Chuck’s wearing a beautiful Quiet Like Brokerage…is that a polo shirt?
Joe: We need to get some of those packaged up and give away prizes for that kind of stuff. Alright let’s jump on to your Quiet Light Brokerage life; your entrepreneurial life, amazing ups and downs, a lot of great ups and you did some good things for family and friends. The downs, we learn from them and we try to take those lessons and make sure that we are really bringing great listings to market so the buyers are making good safe investments and the sellers of those investments can move on with peace of mind to their next adventures whether that’s another business or retirement. In your history of transactions here at Quiet Light, is there any particular niche that you gravitate towards and enjoy more than another because as you said a ton of content and affiliate experience, but I think some of your larger deals have been physical product e-commerce sites. But is there anything that stands out for you?
Chuck: Yeah I mean so my heart is in like membership sites. I love recurring revenue. I think everybody does and that’s why the multiples are higher because of that recurring revenue and the predictability. So I would say that that’s kind of where I’d like to be but my biggest sales have been around physical products inaudible[00:20:53.3] an outdoor sporting equipment one that was great. One that I really love that I sold like six months ago was a company that did custom-tailored suits. That thing it’s like awesome. Who doesn’t want to say they have a business that sells custom-tailored suits? Like it’s just; I think it’s got the cool factor.
Joe: That’s the amazing thing about what you do and what we do at Quiet Light is that we come to this role with a lifetime of experience that; I was talking with Walker and Brad about this recently that we didn’t know it but all of our entrepreneurial life was preparing us for this role. And now we get to experience so many cool different business models. You come to this role with a ton of membership experience but custom-tailored suits and you’re like that’s the coolest thing. Who doesn’t want to say they own a custom-tailored suit business? I need to buy a custom-tailored suit. I know who bought it and I can reach out to him. I know who he is too. Speaking of that I do want to ask a random question although its timing is not very random and you have to answer this. There’s only one answer to this. This buyer listens to the podcast and he comments and he tells us about us sometimes when he’s riding his bike. So do you have a favorite audience member that also happens to be a buyer? Yes or no? You have to say yes and you have to say his name now because he’s a…
Chuck: Sure. Mike Nuñez.
Joe: There you go; Mike Nuñez, this is just a shout out to you. Thanks for listening Mike.
Chuck: Well I’ll tell you it shouldn’t just be a shout out to him. If anybody wants to know how to be a good buyer and how to buy businesses they should talk to Mike Nuñez because he is 100% the absolute best buyer I have. And not like just in a sense of like the actual acquisition of the company. When he gets on a phone call and talks to the sellers he makes them feel like they are the only person in the world; the most important person like he’s just so smooth and he’s not doing it as like a ploy or a gimmick. He’s just a nice guy and he really appreciates these people and the businesses they’ve created. And it’s just he’s really good on a call.
Joe: It’s the unknown secret that we tell all the time to buyers. Look, when it’s a great business it’s a great opportunity. There are going to be multiple buyers. And it’s not always the most money or the most cash that gets the letter of intent. In some cases, it’s the buyer that the seller likes the most. And being likable on those conference calls is critically important. Mike does it very well.
Chuck: And one of my businesses; actually I think two of them that Mike purchased, the sellers actually said like I want to sell to him. Make him buy this. It doesn’t matter; I mean within reason, right? The price; but they were willing to take less than somebody else because they liked him so much.
Joe: Oh boy. Now if Mike’s listening and he paid full price now he’s going to be like inaudible[00:23:49.1].
Chuck: That is the problem because of course I did make him pay more than the other people but they were willing to take less. And what’s funny is one of my sellers told him as much oh like I would have taken less from you and I’m like don’t say that to him.
Joe: In his heart, he was willing to take less but his checkbook and his head was willing to take the highest bidder as long as it was Mike Nunez. That’s the key. In your experience both as an entrepreneur and as an adviser here at Quiet Light you’ve seen a lot of businesses that have come up for first they reach out to us for a valuation, they start thinking about an exit sometimes the day before they want to exit, sometimes months or a year or so in advance. What do you see being the biggest thing; most consistent thing that those particular entrepreneurs do wrong time and time again that there’s just if there’s one thing you could just like shout into the microphone right now to everyone listening even though some of them are doing it right, what are the majority of folks not doing that that you want them to do to bring more value to their business?
Chuck: Silence question.
Joe: Yeah it was a long one. I kept rambling on in my sentences because I could see you thinking.
Joe: Maybe I should have asked a little more.
Chuck: What’s weird about at Quiet Light is we actually get so many great businesses to sell. People bring us quality things. So what are some of the bad things people do?
Joe: Let me just get some stats behind that though; because it’s true what we bring to market, it’s great stuff. But the reality is Chuck if you look at my numbers I’ve closed 105, 106 transactions in seven years. People say well that’s not very many but in order to close those transactions; I’ve ballparked the math and I’ve talked to 2,500 entrepreneurs. That’s 2,500 valuation calls. Your stats are similar. What is that consistent theme that if you could speak to somebody that someday may sell their business what should they be doing?
Chuck: Sure. So when we talk about like specific like product-level things like when people are just selling random shots keys that aren’t unique in any way; those are really difficult to sell. When you have an actual unique product that’s got some sort of a brand to it that’s not easily knock off-able that there’s a moat around it like that makes it so much more desirable to people and so much more valuable. One of the things I also see probably is just P & L’s; having clean P & L’s. Oftentimes people’s profit and loss statements are just a complete mess. They’ll lump, they want to save; I was just thinking about a specific one, but you see people are just lumping things in because they know they had a cost but they don’t really know when it was or where it was and they just kind of guesstimate things and put them in the wrong ones. So then you’ll see like really lumpy P & L’s. And we always try to work with people to flatten those out and figure out where the real costs are. So that often takes a lot of time to just figure out what the true P & L is on a business. And for doing add backs; what’s a real add back? We fight with people a lot on what’s a real add back versus something they think they should be adding back.
Joe: Yeah I want to just step in and shout out that there’s no question I think that preparing your business for sale is the number one thing that people don’t do. They decide to sell as I say instead of planning to sell. That means they work their tail off. They launch this business. They work like crazy against all odds. They succeed. And it’s producing solid revenue and profit for them. And they just burn the candle at both ends and then the candle starts to burn out. And they’re emotionally tired, they’re frustrated, they’re exhausted, and they wake up one morning I’m just not into this. I’m going to sell. I didn’t know I could sell but it just occurred to me. I’m done. I’m calling Chuck Mullins. And at that point because they’re tired; because they’re emotionally worn out they need to sell because trends will go down. They won’t do the things that they need to do to keep the business growing and strong and in great shape for somebody else to take over. And so at that point you get those P & L’s and you’re like yeah Excel is not really accounting software. Ideally Quick Books and Xero or one of the other so that we can run a historical P & L and do year over year trend analysis and look at the metrics. All that is really hard and then there’s the commingling. So I’m going to just mention a podcast; not ours, somebody else’s. EcomCrewPodcast247. Chuck as you know I sold Mike Jackness’ business ColorIt last spring. And Mike is a bright guy. Mike knew exactly what to do as most people in this audience do. They know what to do. And the mindset that Mike had was simply I’ll get to it someday. What happens is you end up chasing too many rabbits and that someday comes when you get exhausted and in his case, he had four brands under one LLC and three of them were really not sellable at the time that we decide to list the business. So what does that do? You’ve got four brands all in one LLC, tax returns commingled, and you’re only selling one brand. What does that eliminate?
Chuck: SBA financing.
Joe: SBA financing; exactly. Is it required to get an SBA loan? No it’s not to sell a business; absolutely not. We sold multimillion-dollar businesses without an SBA loan. But what it does do is it casts a broader net; buyers. And even some of those buyers; I’ve had it. Have you had buyers that have more than enough money to stroke a check for a multi-million dollar business but they use SBA?
Chuck: Absolutely why not leverage if you can?
Joe: Yeah, so that’s I’d say number one. I’m in total agreement on the documentation. We always talk about that the risk, growth, transferability, and documentation; gets your numbers right, get those P & L’s in great shape and it’s going to help you learn about your business and set goals and then that passion may get reignited and you may do more in the business and grow it and have a bigger exit someday down the road. It’s not that I don’t love it when somebody calls me and says I’d like a valuation and part of that is okay, what’s your timeframe, when are you ready to sell, right now. Not that I don’t mind that; I love that if everything’s in great shape. It’s just tougher to sell it when it’s not. They get a lower value, right?
Chuck: Yup, absolutely. Having those four pillars and the clean books it makes a big difference.
Joe: It really does. I think I’m in total agreement. Buyers or sellers of businesses, get your documents in great shape. The best way to do that, just call, email [email protected], [email protected]. Reach out. It’s a service that we provide. I mean what do we do Chuck? We help, help, help, and then keep helping, right?
Chuck: Build value.
Joe: Build the value. It’s my; I’ve got a mentor that I talked to long and hard about all my business opportunities and in this particular one as we chatted about the model and what we do here at Quiet Light he’s like well it just sounds like you’re giving away all your knowledge for free in hopes that maybe they’ll work with you. And I’ like that’s exactly right. We help first and we’re entrepreneurs so there are times that we wish we got good advice and we were too young to listen or there was nobody around to talk to about it. And now we share that when it comes to business values and planning an exit. The number one thing you can do is just reach out to somebody. It’s free. Talk to Chuck, he’s got a ton of experience.
Chuck: I’ll tell you kind of in my entrepreneurial days if I wasn’t going to be an entrepreneur I always wanted to be a consultant and help other people. And I never had like the actual desire to go out and build a portfolio and charge people to help them grow their business. But like you said I’ve been do this since ’96. I’ve met so many businesses; a lot of focus on optimization and SEO and just so many things. And one of the things I actually like about is giving unsolicited advice. So when I’m on all these valuation calls I’m constantly asking people like oh have you tried this, have you thought about this? So even if they’re not ready to sell I’m often giving people advice on how to increase their business. And even when I do have listings like I think of one and particularly like I give him so many ideas and then he did those and the business just kept growing. That actually came to bite me because the business grew so much that we ended up pulling it off the market after getting multiple full-price offers because it just had grown so much and he wanted to just wait a little bit and we’re going to actually getting ready to relist that here soon.
Joe: It’s a good problem, right? I mean I’ve been in situations that you say it bit you but ultimately this is a long term play for us; it’s building relationships and that person respects and appreciates you obviously because he’s coming back for some of your entrepreneurial life experience and it’s benefited them financially. It’s going to grow the business and ultimately they’re going to get a bigger value and tell people about what you did. So that was a little bit more about the sellers and the things that they can do and then number one I think we both agree, plan that exit; call somebody, e-mail somebody, get a valuation. It’s not going to hurt. What about buyers; biggest mistakes that buyers can make?
Chuck: Disrespecting somebody’s business. So getting on a call and like; I’m trying to think of a of a PC term that I could use that’s not a profanity, just talking smack about somebody’s business, trying to negotiate them down in price, and like trash-talking the business. That doesn’t work. At least not at this size but maybe it works when you’re dealing with a couple hundred million dollar business or something. I don’t know. But at these levels, people care about their businesses at least the ones we sell. Inaudible[00:33:38.9] and when you talk smack like…
Joe: It’s personal even at the 15 to 20 million mark. Mark just closed one just under 15 million. It’s owned by an individual. When you’re talking about a hundred million, yes somebody is up there at the top like their shareholders and the CEOs and COOs and all that and big-time attorneys are in there negotiating. It’s not you’re talking to the guy across the table that actually built it and owns it for the most part, right? So he cares about it.
Chuck: He worries about it like he’s had the baby. I mean you wouldn’t believe how many people I’ve talked to; sellers that cry on the phone about their business like it happens a lot. People are deeply invested emotionally in their business. When somebody comes in and disrespects it for no reason other than they’re trying to negotiate, it doesn’t go well. You need to be nice. That’s what Mike does so well. And I want to keep talking about Mike. Well like…
Joe: Should we talk about Walker again?
Chuck: He’s about people and he’s nice.
Joe: Let’s talk about Walker again then. Actually you’re absolutely right. I remember being at the Rhodium Weekend Conference before you were a member of the team here at Quiet Light. Now he’s up presenting and talking and I could swear in that environment and I used the word that begins with an A and ends with an E; figure it out, folks. Everybody’s got one. And what’s the secret to being a great buyer? And I said don’t be one; as simple as that. I can see you out there in the audience shaking your head up and down. And that’s exactly right. Mike is very nice, very kind. When I sold my business I had people that were well I remember one, in particular, ripping my business to shreds on a conference call; initial call and I’m like why am I even talking to this guy. I’m not selling it to him even if he gives me an offer over asking. And then, strangely enough, the last call, the person that ended up buying my business first thing he said is thanks for creating such a great site. Your products have helped people exactly like me. By the way I took stuff like this and I ran the Boston Marathon actually the Chicago Marathon last month and it’s because of products like yours and I said cool. It was actually a really short call; 20-minute call. I didn’t ask any great questions I had going on. That was really nice but I don’t see he’s buying my business and he almost; he bought it almost full price offer.
Chuck: I’ll tell you what you just mentioned something that is often overlooked. When you get on these calls don’t just wing it; do some research, educate yourself before the call, and ask the right questions. It’s so important. So many times I get on a call and the seller or the buyer doesn’t ask any decent questions and the seller just writes them off and says let’s not take any more calls from that person. They weren’t serious. So make sure that you understand the business and you’re asking good questions that a good buyer would ask, right?
Joe: Yeah. They don’t have to be the most intelligent questions the seller has ever heard but that you’ve done your research and you care. I mean yeah Chuck you put there together a great package and all the great questions are in there. They just have to dig into them and digest it a little bit and ask the same question in their voice and see if you get the same or similar answer from the client on it. I think that’s great. I think you’re absolutely right. Too many times there has been a few buyers that they’re not prepared for. You can hear them walking down the street getting in the car and it just feels like a complete and utter waste of everyone’s time including the person who’s making the call and asking the questions. Okay, is there anything else; before we wrap up is there anything else you’d like to say about Walker Diebel?
Chuck: Visit WalkerDiebel.guru to check out his new book that’s coming out in a couple of months.
Joe: Let’s do this; actually everybody do is too. Go to IMDB and look up Walker Diebel the actor and watch some of the movies he’s been in. Add a review, let’s see if we can boost that one-star rating up to one and a half.
Chuck: Inaudible[00:37:37.6] tomatoes maybe.
Joe: Alright Chuck, you’re a good man. I appreciate you coming on. We’ll wrap it up here with time. Any last thoughts for anybody out there thinking about selling their business or buying one; any last pearls of wisdom and I know I didn’t prepare you but any last-minute pearls of wisdom?
Chuck: Yeah. I would just say that reach out early. We’re not here to be high pressure as far as trying to sign you to sell your business. We’re here to lead with value. We’re going to offer some hopefully some wisdom that’s going to help you sell that business in the future. So don’t think that like oh I don’t want to reach out because I’m not going to sell it for six months or a year. Talk to us now. Let us help you get the business in shape to sell it later.
Joe: Great advice. That’s Chuck Mullins folks. We will be back in the next podcast. See you soon. Thanks, Chuck.
Chuck: Bye-bye. Thanks.
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