Resources for Buying and Selling Online Businesses

Incredible Exit Series: Fishing Magnet 7-Figure Side Hustle

Apple
Spotify
Stitcher
Amazon

Clay Copeland

Clay Copeland is the President of Brute Magnetics and has always been an entrepreneur at heart. As a child, from baseball cards, golf balls, and lemonade stands, Clay always had the drive and spirit to create an enduring business. During a conversation with his father, an experienced magnet fisher since the 1960s, Clay got the idea for Brute Magnetics. He saw a gap in the market for a durable magnet. Together with his engineer father, Clay created a superior neodymium fishing magnet and grew his business from a garage to an enduring enterprise.

Here’s a glimpse of what you’ll learn:

  • [03:27] Clay Copeland talks about how he began magnet fishing and how he designed his product
  • [08:11] The importance of incorporating consumer feedback when scaling your brand
  • [13:03] Clay describes increasing revenue and consumer education
  • [18:06] Why platforms matter when launching a successful direct sale business
  • [30:22] The value of a relationship with the buyer for transitioning your brand
  • [36:28] Clay discusses his philosophy of honesty and most valuable piece of advice

In this episode…

Do you want to know the best secret for exiting with the most value? What are the steps to reach your entrepreneurial exit goals?

Building and growing a business takes work, and knowing when to sell can be challenging. For Clay Copeland, the secret to scaling and developing a brand is a foundation built on authenticity and honesty. He created his product to meet the needs of his consumers by using quality parts. Clay began his brand in his garage — and exited his company for seven figures. He knows how to make groundbreaking steps and is here to share his inspiring story.

In this episode of the Quiet Light Podcast, Joe Valley and Pat Yates sit down with Clay Copeland, President of Brute Magnetics, to discuss the key to achieving a seven-figure exit. Listen as Clay discusses the importance of consumer feedback, navigating platforms to find your brand’s niche, and why establishing a relationship with your buyer can lead to a more extraordinary exit. Stay tuned!

Resources mentioned in this episode:

Sponsor for this episode…

This episode is brought to you by Quiet Light, a brokerage firm that wants to help you successfully sell your online business.

There is no wrong reason for selling your business. However, there is a right time and a right way. The team of leading entrepreneurs at Quiet Light wants to help you discover the right time and strategy for selling your business. By providing trustworthy advice, effective strategies, and honest valuations, your Quiet Light advisor isn’t your every-day broker—they’re your partner and friend through every phase of the exit planning process.

If you’re new to the prospect of buying and selling, Quiet Light is here to support you. Their plethora of top-notch resources will provide everything you need to know about when and how to buy or sell an online business. Quiet Light offers high-quality videos, articles, podcasts, and guides to help you make the best decision for your online business.

Not sure what your business is really worth? No worries. Quiet Light offers a free valuation and marketplace-ready assessment on their website. That’s right—this quick, easy, and free valuation has no strings attached. Knowing the true value of your business has never been easier!

What are you waiting for? Quiet Light is offering the best experience, strategies, and advice to make your exit successful. To learn more, go to quietlight.com, email [email protected], or call 800.746.5034 today.

Episode Transcript

Intro  0:07

Hi folks. It’s the Quiet Light Podcast where we share relentlessly honest insights, actionable tips, and entrepreneurial stories that will help founders identify and reach their goals.

Joe Valley  0:29

Hey folks, Joe Valley here with my Co-host, Pat Yates for the Quiet Light Podcast. Pat, how are you?

Pat Yates  0:35

I am great, Joe. Thanks for having me on today.

Joe Valley  0:38

You were so energized just a minute ago and now you’re so chill and calm. What’s the deal?

Pat Yates  0:43

Yeah, it was slow getting that first one out. It’s awesome to be here though. I’m excited to talk to Clay.

Joe Valley  0:48

Clay. Clay Copeland is our guest folks. He’s a client of Quiet Light, he sold his business. Really amazing story, Pat worked with him. It was a side hustle, full time job, and a side hustle that he sold for multiple seven figures. And in a really unique industry we’re not gonna tell you the brand we’re not gonna tell you the exact dollar amount but we’re gonna dance around everything a little bit and just tell you his story so that you can learn from it and hopefully get inspired as well at you want to say a little bit more about Clay your your client will we bring him on?

Pat Yates  1:23

Absolutely it’s exciting to bring Clay and I have talked several times about Clay to other clients as I’ve been through this he’s just one of the more realistic and and humble entrepreneurs I’ve ever talked to much less sold something for it was such a great process. And the group that bought him just thrilled at what it was thrilled as him as a person, it just it couldn’t have gone better. And it’s just he’s a great guy to work with. So

Joe Valley  1:45

alright, Clay, welcome to the Quiet Light Podcast, you now officially have to send Pat a Christmas card.

Clay Copeland  1:51

All right, well, thank you for admin, glad to be here.

Joe Valley  1:54

It’s good to have you here. So a little bit of background on yourself, if you could tell the folks a little bit about what you do every day how you started this business, and we’re just going to go from there.

Clay Copeland  2:02

Sure. So, um, I’ve always kind of been entrepreneur at heart, you know, as a child, I sold different things, you know, if I had a baseball card collection or golf balls I found or, you know, a lemonade stand from a young age was really, you know, had an entrepreneurial spirit. And so it was always in the back of my mind that I wanted to start some kind of business, you know, had an interest in finance and just business. So I went to school for that, graduated, took a job, and had been in that sense. And, you know, during that process, I always wanted to start something a little more engaging than just my little side hustles and see if I can grow something into a legitimate business. So in a lot of conversations with my father, we kind of brainstorm some ideas. And there’s some things that interest me. And this particular venture that we embarked on was in the magnet and Magnet Fishing, fishing space. And it’s something that he had had experience in when he was a child in the 60s, my uncle used to build docks here and some local lakes and they would drop tools and different things. And my father would go and he had an old surplus magnet and that just got me thinking you know, another passion of mine as a child was mentally taxing treasure hunting that kind of thing. And so it’s got me thinking Hey, that sounds like something cool. You know, I’d like to do that and really didn’t think of it as a you know, business opportunity at first but when he told me that story, I borrowed a magnet from him that just didn’t work really it was it was a good magnet but it wasn’t made for Magnet Fishing wasn’t really something that function as that type of you know, search tool. So the first time I took it out, threw it out I got it hung on a rock and neatly purse I wasn’t prepared to go in for it. But I wasn’t willing to lose it either. Since it wasn’t my magnet so stripped down and jumped in this lake and swam out and got the magnet and that was the first and only experience with Magnet Fishing I had.

Joe Valley  4:03

Georgia too. So there there might have been some gators or poisonous snakes and those

Clay Copeland  4:07

fortunately were far enough north there’s no no gators, but some snakes Yeah, for sure. This particular place there’s a lot of them but didn’t see me that day. And I think even if I did, I would have gone in you know, when willing to go back to my my father and tell him that I’d lost it. But you know, that just got the wheels turning that hey, this is something interesting. It’s you know, kind of an emerging market that there really weren’t any big players in at the time and thought you know, we can do something better. My dad’s an engineer and he’s got you know, mechanical background. So we started talking to through and looking at ideas and what was available just wasn’t right and so we thought we can do this better and provide you something into the market that’s not really available. So that’s what got got started maybe five years ago now. And you just one thing led to another. I didn’t have that kind of cliche growing from you know, garage into the warehouse, but it is true story of how it grew like that. Well,

Joe Valley  5:04

I want to I want to go through all of that. So five years from from concept to exiting for multiple, seven figures, but I want to get into that and as I’m sure Pat does as well, but I want to know what you do for a day job and why the hell you still have a day job.

Clay Copeland  5:23

Um, I think I’m just a creature of habit, really. My day job is in institutional governmental type lending. So it’s, you know, finance related doing infrastructure loans, water and sewer type loans. It’s a great job. I like I mentioned, I started in college, and haven’t really known anything else. I will tell you now, Clay. I’m 35. Okay,

Joe Valley  5:45

I see a little gray spot on the chin there. I thought, yeah, no,

Clay Copeland  5:47

that’s I get razzed about that. To work with me. Yeah, it was the stress of dealing with Pat, I think that’s got

Joe Valley 5:54

the same gray spot on his chair. Look at that you guys. Like,

Clay Copeland  5:57

there you go. But yeah, it’s, um, the institutional and governmental type and lending. And, you know, I really liked that job. But, you know, didn’t, I grew the business kind of along with that, and fortunately had my parents to take a lot of that responsibility of the day to day stuff from me, because I didn’t have time, obviously, working a full time job. So this ended up being a partnership with your parents, basically, yeah, I fired them on us their space, they actually had kind of a warehouse space that we took over and eventually built a secondary warehouse on their property go and they just live a couple miles from us. So it was kind of a natural partnership. They were my mother was retired, my father was kind of right at retirement age. So it made sense for them to step in and do a lot of things that I couldn’t do. You know, staging, I’ve made a lot of long nights, you know, we’re working during the day and then picking up my side hustle in the evenings, but

Joe Valley  6:58

it was impressive. How did you it’s an original product, how did you source the the product or design the product? Like what did you do?

Clay Copeland  7:07

Yeah, so there, there was kind of a basic idea around, you know, this type of magnet, it’s all magnet, neodymium fishing magnet type product. And there were some standard shapes and designs available that worked and do okay, but didn’t, you know, Excel really at what they were doing. So what we did was come in and, you know, tested a variety of shapes, we did some of our own design. You know, my father was an engineer, he did some CAD files, we used actually, we used Alibaba going through the RFP process to try to narrow down some suppliers, these these are all manufactured overseas, unfortunately, there’s not any capability, domestic production capability. So dealt with overseas manufacturers and made trips over, you know, took our drawings, did did some designs, and we continue to make changes to customer feedback has been huge for incorporating design changes, you know, as people use it, and get, you know, dozens or hundreds of hours on it, they know it, you know, in and out, and so we take a lot of that feedback and incorporate it. And, you know, one thing we never wanted to do was cheapen our products, and you know, you kind of join in that race to the bottom. So that was something we refuse to do. And because of it, we have, you know, premium product that maybe a little bit higher price point, but you know, it’s it’s better. So, you know, we stand behind everything, we may think it’s tailored to what it’s made to do. And, you know, we continue to release some new, exciting products.

Pat Yates  8:40

That’s amazing Clay, you know, one of the things you know, we talked about current situation, the business future, we talked to people as we were on calls about where it could go. One interesting thing people would probably want to know is how much you invested to start this and you know, you I’m sure you have to rewind in your mind a lot, but maybe, you know, give them some insight on when you started a side hustle with a job what you had to do to make it get to market.

Clay Copeland  9:00

Yes. So it was a true bootstrap kind of business. Um, I took I think it was $4,000 that I had made selling junk on eBay, and invested that kind of in my initial purchase really had no clue what I was doing, or how well it was going to go and, you know, got that in and put it on eBay and Amazon and at that time, you know, there was very little competition, so it just sold like crazy and started expanding from there. Did not want to take any outside money, although I did take a loan of $10,000 from an aunt, so shout out to her for believing in me early on. And hey, what’s that?

Pat Yates  9:45

What’s her name?

Clay Copeland  9:46

It’s uh, Anita, Anita. Steven. So shout out to you and Anita, thank you for helping me get started. She, she she believed in it. loan me some money. I got that paid back and I think it was three or four months and I never really wanted to have that, where I was beholden to somebody, you know, or have that and you know, honestly, looking back that may have been a mistake early on probably could have grown faster with some outside capital. But, you know, I’m pretty risk averse. And that just wasn’t really something that I wanted to do. Now, hindsight is always 2020, there’s things I would have done differently, but I just reinvested the earnings because I had a day job, I wasn’t reliant on that income. So I never took a distribution. I never pulled anything out pretty much everything that we made went straight back into inventory and growth.

Joe Valley  10:33

And did you do that? Because you knew that you were going to exit to business or eventually quit your job to run it? Well, you know, if there was,

Clay Copeland  10:41

so the plan was that I didn’t have a plan. And I knew the whole time, I didn’t know what was going to happen. You know, I think in the back of my mind, it was either I need to quit my day job and focus on this or make an exit. And you know, I was really torn. I struggled with that question for a long time. Because I knew I wasn’t doing my side hustle, justice, right to make it into a legitimate business and treat it the way it needs to be done. I didn’t have the time. So that’s really what got me to the point of deciding to exit is that, you know, I still enjoy my day job. And I’m not I’m not, you know, doing my my business justice. So let’s pass it on to somebody that can take it and do what needs to be done.

Joe Valley  11:29

What kind of revenue did you do in the first? You said episode five years? So the first year or so? Yeah, revenue did you do.

Clay Copeland  11:36

Um, so I think the first year was around 70,000 or so. Okay, so not really exciting. But now Now it was I mean, for at the time, that was huge. And I was making $300 on eBay and thought that was a lot of money. So, you know, I knew we were onto something great. Early on, but it wasn’t it wasn’t life changing money or anything like that it

Joe Valley  11:58

was growing. And it was growing. Everything that you made was going right back into keeping up with inventory and advertising costs and things that exactly

Clay Copeland  12:06

everything was going back into it and never pulled anything out. You know, we just plowed right back into inventory mostly. And that’s what kind of led to outgrow the space in the house. And then we outgrew the garage, and then we outgrew the warehouse and my parents had and had to expand because we just kept plowing it back into it.

Joe Valley  12:27

I might be wrong. But I’m thinking that the the capital requirements for inventory would be fairly sizable in this niche, it was at a high cost of goods sold on this product. Yeah,

Clay Copeland  12:36

it is compared to a lot of things. You know, it wasn’t, it wasn’t unusual to bring in a container that might have been $80,000 or more goods. So it was pretty easy to you know, go burn through that cash.

Joe Valley  12:55

You never had to raise any capital or or use credit cards or HELOC or anything like that. Now to buy him a

Clay Copeland  13:03

down note we never did, it’s it certainly would have made things a little easier, you know, looking back on it, but just that wasn’t really within my level of risk tolerance. I took everything very slow, which, you know, if I was doing it over again, I wouldn’t do that. But no, never never used any, any kind of credit card or anything.

Joe Valley  13:24

By the time you exited the business five years later, what kind of revenue were you doing?

Clay Copeland  13:30

We were doing over 2 million.

Joe Valley  13:32

And you still had a side hustle. And it’s just your parents? Do you have it? Did you have vas, uh, who else to have on board?

Clay Copeland  13:40

It was me and my mom and dad, I was we we would occasionally bring in just some outside labor, you know, maybe 1015 hours a month just to do things, stocking shelves, or if we had a special project, we had a kit some things or something like that we’d bring in people but it was really just the three of us. And you know, without them it never worked.

Pat Yates  14:03

It’s like the one thing I found out when I was starting to talk to as many people were insurance business a whole lot more. I got one consistent question. Literally every time. Nobody had any idea what Magnet Fishing was was I’m sure you’re getting all the time. It’s like how, how the heck do you catch a fish with a magnet? So I’m sure you’ve heard that a lot. How did you educate customers? I’d really be interested to understand that there are people either people understand what it is or they don’t, there was nothing in between.

Clay Copeland  14:28

Right, right. You’re exactly right. And I still in fact today, I had a call from a customer that said I just heard about Magnet Fishing four days ago and I want to get into it. So you know, it’s something that it was an educational challenge for us. And really one of the biggest drivers of public awareness and perception of it was YouTube. You know, you can tell people, Hey, I throw magnon in the water and I look for stuff but you know, that just sounds weird. And until you’re watching somebody do it and seeing the kinds of things that they’re finding. It just doesn’t really make a lot of sense. So being able to see some of those guys on YouTube find guns or, you know, whatever it was that they’re finding that that motivates it gets people excited. And then there’s been some news stories um, actually a lot of news stories, people will find a weapon, you know, that they turn in and it was connected with crime or something. So that’s a great local news. And we’ve seen a lot of those over the years.

Joe Valley  15:23

What do they do this from a dock a bridge, where the tide the shore? All of it,

Clay Copeland  15:28

all of the above? Yeah, you docks, bridges. And then just off the riverbank are kind of the main locations bridges tend to be, you know, easily accessible, and a lot of junk gets thrown over bridges. Most of the weapons we see are off of, you know, kind of an out of the way bridge or, but yeah, docks, you know, we see a lot of sunglasses and fishing lures and little Leatherman and that kind of thing. So there’s some distinct areas that people look but docks and bridges are some of the most common,

Joe Valley 15:57

how heavy is this Meg that sounds like it would be.

Clay Copeland  16:00

So we have magnets that the actual weight of the magnet is anywhere from about half a pound up to 10 and a half pounds. So they get pretty hefty, and they will lift anywhere from 300 pounds up to our biggest will lift 3600 pounds is a combined double sided magnet. So you know more than a person could lift.

Pat Yates  16:22

You know, a Clay remember, we were talking in diligence, you had discussed packaging, which was one thing I had never thought about as these come over and containers you get there and they’re all be stuck together. In my mind. I’m thinking so that like, did that happen? Was that one of the things that was probably a challenge, because you think about supply chain, when people build products, yours obviously needed to be something that wasn’t going to have that kind of exposure. How did you deal with that, when you were first learning about the business, it’s,

Clay Copeland  16:47

it’s been a challenge, you know, reading up on the regulations, you’ve got the Iita rules on air transportation for magnets. And so learning and understanding those and knowing how to create the packaging to minimize the magnetic field outside of the box, you know, we shield some things, others, we just use enough of a buffer, it’s still an ongoing issue, you know, a lot of times we’re not quite sure, the amount of space, we need to, you know, meet the rules. So we’ll have to do a lot of testing. And, you know, it leads to requiring bigger boxes, then, you know, we would like obviously, it makes shipping a little more expensive. But for safety, you have to you know, we we’ve seen pictures of competitors will ship something and you know, the customer will get it and it’ll be you know, stick to their door stick to whatever battle surface they haven’t you know, that’s not okay, you know, you don’t want to receive something that’s sticking it inside of the UPS truck or, you know, pulls through the box when they try to pick it up. So we spend an inordinate amount of time making sure the package is proper.

Pat Yates  17:50

I know that, uh, you have a Shopify store, so it’s great. You sell on Amazon as well. Is that where you start? I mean, how did you start when you’re first doing this? It was on the same? Or did you look at different platforms? And I’m sure entrepreneurs out there would want to understand a successful business, what kind of area they would, you know, launch on for their direct side?

Clay Copeland  18:06

Yeah, we, um, so I didn’t honestly do a whole lot of evaluation, I looked at Shopify, and then WooCommerce, and some of the plugins and ultimately Shopify looked to be the easiest for what I wanted to do, I didn’t need something very robust, and a completely custom site. And for, you know, the limited number of SKUs we had or even still have, it was, it was fine. You know, it’s got its own quirks. And there’s things that don’t work well, but it’s easy, it’s not very expensive. You know, there’s a lot of apps and plugins that that make it a little more robust. So just kind of in our brief evaluation of which way we wanted to go on the direct to consumer side that Shopify ended up being, you know, perfect fit for what we wanted to do.

Joe Valley  18:53

Did you stick there did you expand to other platforms like Amazon?

Clay Copeland  18:57

So we we initially started with Amazon and eBay and didn’t have our DTC site that came a little bit later. You know, that was back I guess, in the good old days of Amazon when things were a little bit easier and you know, this a little more straightforward than it is now but the we started there, you know, that work and then always knew we were going to have our own website because didn’t want to be really reliant on another platform, you want to build out our own channel. So you know, eventually moved into that it was probably within the first year or so we built out the website, I actually did the initial Shopify site myself, it was terrible. I actually was blown away when somebody actually bought something, you know, looking back on it looked like the scammers website, you know, you can imagine, but we’re not hiring some professional developers, and they, you know, made it look nicer and more professional and have gone through a couple of design changes since then. But

Joe Valley  19:58

I’m curious. By the time you By the time you exited the business, what percentage of the revenue was from that Shopify store versus Amazon? Or eBay?

Clay Copeland  20:11

So we were running and

Joe Valley  20:12

Clay let me let me say, for all the folks listening, that are watching, your video has gone dark, we can’t see that handsome face anymore. There it’s back.

Clay Copeland  20:24

So it was it ended up being about 5050. Yeah, it, we made a very concerted effort to push traffic away from Amazon, I personally, I’m not an Amazon fan. You know, a lot of the policies weren’t, weren’t really friendly for what we were doing. There’s some special considerations with magnets and other things, it just made it difficult. So we did our best to pull traffic to our website. And so ended up about split.

Pat Yates  20:56

I remember, we had the discussion about Amazon, you had a certain amount of skews that you didn’t offer them all on Amazon, that was by choice, because you wanted to push some people into your site to be able to buy some of the accessories and other things. What was the philosophy around not listing everything on Amazon? Because I think any company would normally just want to push everything there.

Clay Copeland  21:13

Yeah. So it was a it was a little bit of that I didn’t have the time to make the listings and a little bit of yes, I want to offer some things on the website that are would be difficult to sell on Amazon, some of our accessories are pretty low priced, and it made it you know, a challenge, we can offer it from our warehouse on the website, much more cost effectively than we could with Amazon paying their fees. So there were some products that just made sense to keep off of Amazon. And then there were a few things that we wanted to have kind of as exclusive to us, like you say to help, hopefully bring people over to us. And then it was a little bit of, I just don’t have the time because I have the day job to make all these listings.

Joe Valley  22:00

That’s pretty amazing. And, and to be clear, your buyer, if I understand it, right, was an aggregator of Amazon businesses. Is that accurate?

Clay Copeland  22:10

Yes, that’s correct.

Joe Valley  22:12

Okay. So for folks listening, aggregators of Amazon businesses are buying businesses that are not 100% Amazon businesses, this 50% of your business was off of Amazon for the most part, right? That’s right. Curious about the growth. If I looked at the growth chart on each channel, which one was growing the rap the rapidest is that a word rapid as Pat helped me out

Pat Yates  22:32

which one was growing rapid, most rapid? We don’t we’re not good with English.

Clay Copeland  22:39

That’s right, it was definitely the the direct to consumer site, the Shopify site, you know, with effort we made and then honestly, some of it was just that I wasn’t paying attention to Amazon as much. And you know, making the changes and trying to do what we need to do to stay competitive. You know, there’s that the typical race to the bottom on on Amazon. And a lot of a lot of platforms really, in, you know, I mentioned earlier, there’s just not something I wanted to participate in, I didn’t want to cheapen the products. And I never really wanted to compete on price, we wanted to have the best customer service, which my mom said, you know, thank goodness for her, she handled all of that. And, you know, it was so quickly moved to to the website kind of being where most of the growth is occurring.

Pat Yates  23:30

Various things we talked about, you know, when you’re trying to build your advertise, I think one thing that people out there would want to know, is the anatomy of an accident. Exactly. Because I talk to people all the time, like I’m scared to death to get into diligence and be able to talk about my business, I don’t know exactly how people are going to feel about it. You went the opposite direction, you’re probably the most genuine entrepreneur I’ve ever seen. What was it that would be apprehensive in that process? And how did you approach it when you were going through that? Obviously, you know, you don’t have tell specifics, but how did you handle that? I mean, I know you’re such a calm and smooth guy, was it a departure? How did you feel about the whole process?

Clay Copeland  24:04

So it was um, I was very apprehensive you know, to go through and I knew early on when I decided to make that exit that I was not going to make any effort to do it without a broker, you know, and I did a lot of research and Quiet Light kept popping up and then that’s how I reached out to you guys and kind of went through that interview process discussed and I felt a lot more comfortable with the process. Because you know, honestly, having a day job a lot of things that should have been done especially with the books were fallen to the wayside. You know, I did not have current up to the second books and there was a lot of question early on of you know, even what some of our net profit was or how to calculate the exciting I didn’t know you know, I wasn’t sitting down keeping this up, which I knew was going to be a hindrance but you you you put us in contact with some some people to get kind of the the books done going back in time and That was a pretty painless process. You know, I was worried how long that would take. And maybe it just took me maybe six weeks or so we had all the ketchup done. And we had some clean stuff, you know, that was accurate. And, you know, got all the questions answered. So I was apprehensive. But, you know, I would tell anybody out there and the entrepreneur, this looking at making an exit, it didn’t matter, in my case that I did not have everything in order, we just kind of dove in, and it worked out quickly. So you know, if that’s keep holding me back, don’t worry about it.

Pat Yates  25:30

Well, it’s interesting, because that’s a great lesson for anyone to learn. You know, we, when you and I have talked, you thought that your business was going to be barely seven figures that you thought you would sell for, and then we got your financials straight, we looked at it, we understood the accrual versus the cash, and we ended up selling it for well, more than what you were thinking you were going to sell it for, which was incredible. That was a great thing. So you’d put in that time. And that’s what paid off.

Clay Copeland  25:51

Right? Yeah, absolutely. You know, in dense, it’s looking back on it’s kind of crazy process. But you’re right, I had no clue what the business was worth. And I think even if I had done my own books, I still wouldn’t have even known but, you know, I was kind of blown away, in the end how it all shook out. But it was it was 100% worth the effort, you know, of using us broker and going through that process of making sure all the books were right. You know, in the end, it made a massive difference to, you know, from where I thought we might be to where we actually ended up.

Joe Valley  26:26

That’s pretty exciting to hear that. How long of a time period was it so people understand from that initial contact of Quiet Light and Pat, to you decided to pull the trigger, and go ahead and officially list your business for sale.

Clay Copeland  26:42

It was pretty quick. I mean, Pat and I met, and we I think we had maybe one or two conversations, and I was ready. Um, you know, we signed some some contracts real early on. And then he started his process of putting the stuff together and got us in touch with the bookkeepers. And that that all started pretty much right away. And, Pat, correct me if I’m wrong. But you know, that was a matter of I don’t remember when the actual listing went out. But it was maybe a couple months after our initial contact, or maybe two and a half months after initial contact from you know, when I picked up the phone till when it was going out, you know, as an official listing.

Joe Valley  27:21

Were you in a situation? Do you recall actually how long it took from the time that the business was listed for sale? To initial contact or phone calls with potential buyers?

Clay Copeland  27:33

I think, Pat, did we have three in the first seven days or so?

Pat Yates  27:38

Yeah, we had three or four really quickly, right in the first few days. And they all continue to came back. I’m trying to pull that information up right now. Hang on.

Joe Valley  27:45

Do you recall how many offers you had Clay?

Clay Copeland  27:48

There? Were there were three offers? Yeah, very different offers. But there were three widely

Clay Copeland  27:53

varying offers one, it was wild. Yeah, we had three offers on it. But I mean, from the time of launch decks to get an LOI was less than three weeks. But building it up, it took us four or five weeks to get everything to market, we took a lot of time to make sure everything was correct.

Joe Valley  28:10

That’s generally actually for those listening kind of quick, right? You know, I was on a podcast, before starting to record this one. And the host asked me how long we like to chat with clients before they list the business for sale. And I said well, is the longer the better. Right? If we could start you know, 12 months prior, so that you know, you’re really prepared and marching toward your exit goal, the ultimate result is Clay your situation, you probably would have made more money, if you had, you know, reverse that process back 12 months and started working towards it a little bit more because you get excited about the potential and the goal and a target number that you’re reaching for. And you can pull certain levers in the business to increase the value, hopefully not push the lever and have it plummet. But the longer the better. So this is this is pretty quick. And it’s interesting. It Pat, you said is three weeks to go under a letter of intent and that you had three offers Clay, you said the average year to date, actually, I’m sorry, like the average in the last 12 months is 3.84 offers on every listing play. So you were less than average there. But I think if you waited, you might have had more offers. How long was the period from that letter of intent? And by the way, folks, the letter of intents are generally non binding fully contingent on due diligence and a further detailed asset purchase agreement. I’m curious Clay Pat, how long did it take to go from LOI to closing? Um,

Clay Copeland  29:39

Pat might have to help me out here.

Pat Yates  29:41

LOI date was June 14.

Clay Copeland  29:45

Okay, and I believe we closed sometime in the first week of August. So about six weeks or so right in there. It was I think the LOI was maybe 30 days but we extended it a bit. There was some additional due diligence and some questions but

Pat Yates  29:59

it They ended up obviously working on a consulting agreement, a lot of things really benefited close, some of that went a little slower in that situation. So,

Joe Valley  30:06

yeah, touch on that a little bit. Like, because you said something early on, you said something about, you know, we in customer service and what you’re doing now, as if you’re still involved in the business, so you didn’t sell it and fully exit they stay on as a consultant.

Clay Copeland  30:22

Yeah, so it was, it was interesting, in some of the offers, it was, a lot of it was, you know, how involved do you want to be. And my initial thinking was that I really don’t want to be involved at all, you know, I want to be done with this and move on, you know, do whatever’s next. But what we did, because we still have all the inventory here and have everything in the warehouses we, we agreed on kind of transitional service agreement, where we will continue to more or less do what we have been doing for the last five years for them, you know, for a period of time until things get completely settled out, you know, it’s bought them some time to figure things out. And, you know, it gives us the still the control and visibility and everything, we’re handling customer service still. So you know, we know there’s that high level as we get new people trained up. So it’s, it’s been an interesting journey, you know, the sale happened, but I’m actually more involved in the day to day of the business than I have been in a long time.

Joe Valley  31:22

So this is this is, I think, a big exception to the to the rule. Most of the times when it’s an aggregator buying the business, you’re taking it over, kicking you to the curb, if that’s what you want. But the reason for this is because you’ve you’re shipping, you’re doing the pick pack and shipping the storing all yourself, you don’t have a three PL, so it’s natural that they need to figure out how to transfer, control that and take control of it.

Clay Copeland  31:49

Right, we we are still acting as a three PL on a for them, and I never wanted it to be burden. So it was always we have an agreement in place, but it’s always been open ended, like hey, if you want to leave it here longer, that’s fine. You know, we don’t want to get to a point and say, Hey, this stuff has got to be out of here and kind of leave them in a bind, you know, it’s, it’s in everyone’s best interest to make it as easy to transition as possible. So, you know, that’s what we’ve been doing. And it’s been working well.

Joe Valley  32:18

A lot of a lot of people sell in their business fear, you know, who their buyers gonna be, and the relationship with them, and so on and so forth. Your sounds like you’re still working with them, and you’re enjoying it. How has that relationship grown from that initial call and your first impression of them, to to working with them today?

Clay Copeland  32:38

I’ve been actually really excited and blown away about the prospects, you know, at their growth and the the staff that they have, you know, all the things that I wanted to do for the business, but couldn’t, the expertise and skills that I lacked or didn’t have the time to do you know, they have staff that is experienced in that have come from, you know, other big companies and, you know, so I felt good, especially going through the process, you know, as we talked through it and met some more of the staff, you know, I got more comfortable with the future of the company, and that it would be in the right hands. And so, you know, it’s been a great transition. And really, every time we meet and something happens, and I see the slide decks that they put together, you know, I’m impressed. And so I think it’s best decision, honestly, for the business and future to get it in the hands of somebody that can that can handle it do the things that I couldn’t do.

Joe Valley  33:34

Do you Do you wish you wrote some equity? What’s that? You wish you still owned a piece of the company that they bought it from you and yeah, 10% or so?

Clay Copeland  33:44

I’m not honestly not really, you know, I was we negotiated back and forth a lot on the agreement got where I think everyone was satisfied. And, and I was okay with it. You know, there’s some some components of it of, you know, maybe some potential future earnings. So, you know, motivates me again, to stay involved and kind of help see things through. But really, I don’t, I don’t really wish I had maintained a piece of it. Now I’m satisfied.

Pat Yates  34:11

I think it’s really amazing. I mean, the one thing if people could watch and if they’re listening, thinking about selling Clay was the most realistic entrepreneur. I mean, he said he would sit on calls, and a lot of people be scared to do exactly what he did. They would talk about advertising. And I remember this, so I’m going to try to quote as best I can, but I’m going to butcher Clay he he explained his advertising philosophy, which he only advertise like two or 3% a year, which is incredible to do the numbers and have the growth that he had. But he said well, I ran some ads and some of them worked and I ran some other ads and they didn’t work so I just didn’t run those and then I made some new ones and we ran those ads. That was his explanation and he said it straight out that he wasn’t good at marketing. He throws himself on the sword and that trust is when it up building that confidence, I think with the buyer, and that’s why they were all in with him and after talking with them several times they are thrilled that the business that they have now

Joe Valley  35:00

Yeah, I think that I think being a likable seller is kind of the secret to getting the best deal structure and maximum value. You just honest, sincere. And, and what you did Clay was you didn’t, you said it early on and I was gonna interrupt you. But I You were saying such important stuff I didn’t want to and you talked about, you didn’t want to have a race to the bottom, you wanted to build a really high quality product that was going to be really satisfying for the customer. And so what you did without even knowing or consciously doing it was you, you were building a great company, for a great buyer to take over at a great value. Right, it’s great value for you and a great value for them. It wasn’t I’m in it for clay, I’m gonna make as much money as possible and then get out, you were just doing something out of a passion and an interest in a side hustle. And just building something really great. You know, and you took good care of it, even though your financials apparently were a mess, but you took good care of the brand. You know, and and the financials got fixed. But the brand was really cool, and you cared for it, and you you made it the best it could be. And that’s what brought you the the multiple offers. And most people don’t do that. I shouldn’t say most people, less experienced folks are just in it for the money. That’s all they care about. They’re there, they’re not thinking about building a great business, which it sounds like you you kind of did all along.

Clay Copeland  36:28

It was never about the money. You know, it was like you say we want to provide an awesome product, it’s something that I’m passionate about, we want to be the best that there is on the market, we want to provide the best customer service. And our philosophy was if we do that, that the customers will show up. And they did. And you know, there certainly there’s a lot of things we could have done differently to cheapen the product or try to boost margins, but he not didn’t care about that it was just grow the company. And then when it did come time to make the exit like Pat said it was 100% honesty and transparency, and I never wanted to misrepresent myself, or come across as something or someone that I wasn’t. So you know, if a question was asked, I was honest about it, you know, and to talk about marketing. I’m terrible at marketing, I was awful at that we sent in the history of the company, we sent one email per hour to our customer lists. So you know, we had 10,000 emails on our marketing list, and we sent one email, and it you know, it kind of worked. And so I didn’t do it again. And you know, I was honest about that. And hopefully that came across maybe as an opportunity, because you’ve got this user base that we just never did anything with. So yeah, I mean, certainly honesty, you know, honesty is the best policy right? And I think it helped in this situation.

Joe Valley  37:47

Is there anything looking back at you, as you were made the decision to exit the business that you had? wish you had done differently?

Clay Copeland  37:59

No, honestly, not really, you know, I did what I thought was right. I mean, certainly there’s decisions I could have made that were different. I don’t look at any one thing and think that was a mistake to do any particular, you know, action and you but, you know, no, I don’t really have any regrets. The process was simple, you know, building the company was great. And it was honestly more about the challenge of building a company than it was about building something to eventually exit. It was just being able to see if I could do it. Now I remember, in college, in business school, we had to operate the shoe company. And it was it was this model built on Excel and you played against people from other colleges. And that was the most interesting thing we did in my four years at the university was operate a shoe company and honestly a lot of the same principles from that carried over into real life business. So it was kind of an extension of my my university game of operating that shoe company and I treat it as such and it you know, worked out,

Joe Valley  39:04

where’d you go to school,

Clay Copeland  39:05

I went to the University of Tennessee at Chattanooga

Joe Valley  39:08

You need to go back and look at that professor and get get in front of his students and tell them your story. Because it worked. Right? I mean, look at what you’ve accomplished.

Clay Copeland  39:19

No, and it’s funny, there’s a little story I’ll tell you with that I I took an Import Export Management class, I think my junior year and it was an elective I didn’t have to do it was it sounded interesting, you know, part of the the course was to actually import and try to sell a product and in about six weeks into it, I had a full load I think I had maybe 15 or 18 other hours that semester and it got to be too much and so you know what’s gonna get cut well, two elective that I don’t need. So I went and dropped the Import Export Management class. And I remember that professor he was actually kind of rude about he singled me out in class and said something to the effect of you know, you You know, not being able to cut it or whatever. So, you know, if I can ever find out who that professor was, I’m gonna go back to him and say, you know, your import export management class really didn’t make any difference anything does look at this. So I still remember that, you know, I guess sometimes somebody’s taken a poke at you kind of motivate you to do well. But yeah, I think about that often how he gave me a hard time for dropping that class, but didn’t matter. I guess.

Pat Yates  40:27

That’s how I can look at your records and call him out.

Clay Copeland  40:29

Yeah, I need to, I think I will

Joe Valley  40:30

Keep us posted. I want to I want to know about

Clay Copeland  40:33

I know what you’re making now. I’m gonna look them up today.

Joe Valley  40:37

Any advice that you’d give to entrepreneurs in the making here that are listening to the podcast, or people that may eventually exit their business? Any advice that you want to impart?

Clay Copeland  40:47

Um, you know, I’m not one really for advice, I guess. But like I mentioned earlier, focus on what you’re good at, know what you’re not good at, and be willing to be transparent about that. If it’s something you can’t handle, outsource it to someone that can, things will fall into place, just focus on building the best product and providing the best customer experience and everything else will fall into place. If you’re thinking about exiting, don’t be scared, I was terrified. It ended up not being a big deal at all is actually really interesting ride into getting into the negotiation of contracts was a little nerve wracking. But it Pat was a great guy through that process. So thank you, Pat. And you know, just don’t Don’t be scared. If it’s if you think it’s time to exit start exploring that and like you said, Start early things will work out better if you kind of have a longer time horizon don’t have to rush it. So I think that’s not I guess that’s one little advice I have to offer. Fantastic, Pat, any last words? Yeah. I mean, I,

Pat Yates  41:49

it’s an entrepreneur, you know, obviously, you know, the sponsor. So long give the shameless plug, everything that we did is in the book that we read, and it’s the philosophy of a quiet light, Clay executed it in the best way he could have. He was a humble entrepreneur that came in and said what he was good at, threw himself on the sword when he wasn’t good told his story was very genuine. And everything works out from that point. It was an incredible ride, we had so much fun on the calls, trying to get everything switched over in the group is super happy. I’ve talked to him recently, they’re looking at another deal, and they just talk. You know, they just rave about you. And it’s exciting. And I’m just, I’m happy for you. It’s awesome.

Joe Valley  42:25

Well, congratulations on your success. It’s a heck of a story. Keep us posted on what happens with the good and bad professors at the University of Tennessee, and hopefully, we’ll have you back on and learn about your next eventual exit someday. Hopefully, though, it’s not a side hustle anymore. I’d like to see what you can do really fully focused on something.

Clay Copeland  42:48

Yeah, yeah, I’m in that position. Now I’ve spent the last few weeks kind of brainstorm and deciding what I’m going to do next. So there’s a lot of opportunity out here just have to settle on what it is great

Pat Yates  42:59

to know you’re such a humble and easy guy. What’s first thing you bought.

Clay Copeland  43:06

So I decided I really wasn’t going to buy anything, but I kind of broke that. And I bought a a projector TV and 100 inch screen, our basement kind of set up a surround sound. And that’s actually the only thing that I bought. Go. That’s awesome.

Joe Valley  43:24

You deserve it. Have fun with that. And be sure to invite mom and dad over. Yeah, because they deserve a little treat.

Clay Copeland  43:31

We’ve had him over watch some movies already.

Joe Valley  43:34

Awesome. Clay, thanks for coming on and sharing your story. I appreciate it. Absolutely. Thank you. All right, folks. Well, that is a wrap of this incredible exit episode of the Quiet Light Podcast. Pat, good experience there with clay, happy to have you on board and Co-hosting the podcast with me.

Pat Yates  43:55

Now appreciate you having me here. I mean, Clay was an incredible guy to work with. I think what you know, was one of those deals that he made it so easy on me. And the people that were the buyers tried to make it easy on him. It was like a perfect example of when you take the time and you spend the time to work through it. And he spent an exhaustive amount of time on his financials and making sure his business was in the right place. He did all the right things. And it was an incredible thing for him. And it was just an exciting time for both of us. We were so happy when he got the wire we talked we were on Zoom. It’s just fun.

Joe Valley  44:25

Yeah, it’s it’s quite a story, quite a success story. The only thing I think if you know if he could do it all over again, he said he wouldn’t change a thing. But what I would do is have him hire that e-commerce bookkeeper. At the beginning, not at the end, because he might have gotten more excited about the business and jumped into a full time or grown it more larger than he thought he could that two to 3% on advertising. You know he’s spending nothing on advertising and still growing it. He’s doing most of his growth on Shopify, where most people are, you know, growing on Amazon it’s it’s pretty incredible all around, especially that it was a side hustle. He still has it, he still has his day job. He got multiple millions in his bank account and he doesn’t quit his job. So he told me

Pat Yates  45:13

that he reversed his bank account like nine times the first night. So he admitted that he me such a such a good guy. And the funny thing was, we asked him, you know, how did you build your customer service? Do you? SOPs, he went? Well, my mom talks to everybody. And she’s really nice. That’s just kind of where it was. And, you know, he’s just a great guy. And it’s a great business. I was lucky to have him in.

Joe Valley  45:33

I didn’t want to put them on the spot. But I was gonna ask if mom and dad got a piece of the pie of the sale, in case they didn’t. And he was sharing this podcast with them later. Plus, I didn’t want to have to edit anything out because I don’t want to have to do that. Anyway. Thanks for Thanks for Co-hosting with me, man. Appreciate it. It was fun. You’re gonna come back and do it again with me our percent anytime? Let me know. Awesome, man. I’ll do Thanks, folks, for listening to the Quiet Light Podcast. Please reach out if you have any questions. If you got a business you want to get a valuation on, reach out just hit the valuation forum at quietlight.com We’re here to help no matter when you’re going to sell your business. Talk to you next week, folks.

Outro  46:12

Today’s podcast was produced by Rise25 And the Quiet Light content team. If you have a suggestion for a future podcast, subject or guest, email us at [email protected] Be sure to follow us on YouTube, Facebook, LinkedIn, Twitter and Instagram and subscribe to the show wherever you get your podcasts. Thanks for listening. We’ll see you next week.

Thinking of Selling Now or Later?

Get your free valuation & marketplace-readiness assessment. We’ll never push you to sell. And we’ll always be honest about whether or not selling is the right choice for you.

Icon
Icon
[523.251,659.255,783.991]
[523.251,659.255,783.991]