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Shark Tank Alumni Joins the Quiet Light Team
Pat Yates is a Business Broker at Quiet Light, where he educates and aids entrepreneurs in selling their brands. He is also the President and Owner of Happy Feet Slippers, a multimillion-dollar e-commerce business featuring slippers for everyone in the family. His brand received a celebrity endorsement from Nicole “Snooki” Polizzi and television appearances on Late Night with Jimmy Fallon, The Tonight Show with Jay Leno, The Late Show with David Letterman, The Wendy Williams Show, Good Morning America, The Today Show, and Jersey Shore. In 2014, Pat struck a deal with Robert Herjavec on the Emmy Award-winning show Shark Tank, which helped him take Happy Feet Slippers to the next level.
Here’s a glimpse of what you’ll learn:
- [05:10] Pat Yates talks about his entrepreneurial beginning and building a franchise
- [09:29] How great instinct and a reality TV star helped Pat scale his brand overnight
- [12:49] Pat describes the process of appearing on Shark Tank with Happy Feet Slippers
- [19:29] The value of building a relationship between a broker and a business owner
- [24:43] How the Quiet Light team helps businesses achieve greater exits
- [28:56] Will the e-commerce industry continue to grow in the aftermath of the pandemic?
In this episode…
What goes into selling your business? How do you build and grow a quality brand that is attractive to potential buyers?
Pat Yates grew Happy Feet Slippers, a company based in mall kiosks, into a multimillion-dollar e-commerce business. His brand received a viral celebrity endorsement, several television appearances, and the opportunity to appear on Shark Tank. Now, Pat is an advisor for Quiet Light and helps create value for entrepreneurs looking to exit their brands — and he’s here to share his inspiring journey with you.
In this episode of the Quiet Light Podcast, Joe Valley is joined by Pat Yates, President and Owner of Happy Feet Slippers and Business Broker at Quiet Light, to talk about understanding your business’ value to achieve your most incredible exit. Pat discusses his innovative approach to scaling a brand, the tools you need for a successful exit, and the value of working with a dedicated team of brokers.
Resources mentioned in this episode:
- Pat Yates
- Pat Yates on LinkedIn
- Happy Feet Slippers
- Quiet Light
- Quiet Light on YouTube
- Joe Valley
- Mark Daoust
- Quiet Light Podcast email: [email protected]
- The EXITpreneur’s Playbook: How to Sell Your Online Business for Top Dollar by Reverse Engineering Your Pathway to Success by Joe Valley
- Crimson Cup Coffee
- Nicole Polizzi (@snooki) on Twitter
- Happy Feet Pitch (Shark Tank Season 5 Episode 23)
- Jason Yelowitz
- Ethan Alexander
- Elaine Eason
- Walker Deibel
- Paul Andersen
- Brad Wayland
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.
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. Thanks for joining us for another Quiet Light Podcast do not fast forward to the beginning, because I have a special announcement, this is something that I’ve never done on the podcast. And you know, I haven’t scripted it. But I’m doing it. Now, when you do it, this one and perhaps on the next podcast that you hear as well. 2021 has been a banner year for Quit Light. And honestly all years before that were banner years we’ve grown consistently, year over year, but from 2020 to 2021 was quite the growth. And Mark and I are going to do a dedicated podcast the year end podcast about that. So tune in to that when you get a chance. But this special announcement here is that we are Yeah, I’m gonna say it we’re hiring two new advisors, and q1 of 2022. Historically, we’ve never put the word out that we’re hiring, we just let it come to us. We now have 15 advisors all of them have built bought or sold their own online business and that gets them uniquely qualified if you don’t, if you don’t have all three of those things or there’s an order in there, right built bought or sold gym done those things, then we can’t hire you. You’re not qualified. But if you’ve done those things, and you’ve talked to guys on the team, girls on the team, men, women, whatever we’re gonna call them these days, adult humans on the team that are helping other entrepreneurs achieve their dreams by having their own incredible exit and enjoying a lifestyle. That’s not too bad. We’ll talk about that with Pat, just a minute. Reach out to me directly. Hit me up with an email [email protected] share that you have built, bought or sold your own online business and share your LinkedIn profile. And you want to chat about possibly joining the team in 2022. Okay, now on to the show. Oh, you know what, let me just say that if you don’t give me those things, I’m not gonna respond to your email. So give me the details that I just asked for. All right, onto Pat. Mr. Pat Yates. How are you today?
Pat Yates 2:25
I am great. How you doing? Joe?
Joe Valley 2:26
You just heard my first funny announcement that I’ve ever made like that before. So that’s exactly
Pat Yates 2:30
right. That’s surprising. I didn’t know that was coming up, man. That’s exciting for somebody to be able to just email it and be able to say I want to be a part of it. Yeah. It’s, it’s,
Joe Valley 2:39
you know, we’ve, we’ve always we’ve always let it come to us, as you know, right. And, you know, we say no to 99% of the candidates. And that’s why we have had slow growth over the years. But we’re gonna go from 15 to 17 and 2022. But we’ve we’ve I think we had maybe two or three, I can’t even, let’s say you were in 2020. So we
Pat Yates 3:02
walked out of there would have been five,
Joe Valley 3:05
Paul Andersen, Ryan Conde, Ethan Alexander, and Elaine Eason, for
Pat Yates 3:10
thanks. Oh, in John five,
Joe Valley 3:13
five, I guess technically filed in 2021. Yeah, so there you go. But you, you know, you joined October of 2020. And we didn’t do a podcast with you. I want to say I do it with everyone. But obviously I don’t. And I don’t think I’ve done it with a couple of others as well. But this is about your journey after 12 months of being on the team. But also we’ll touch on your journey before joining the team because you you come in uniquely qualified you’ve got, you know, a certain level of experience that nobody has at this point. That’s that, you know, every time I introduce somebody to you, I’m always like, he’s a shark tank alumni. He’s got to deal with Robert tune into that one, yada, yada, yada. But why don’t you give us a little bit of background on your entrepreneurial journey. To the point you You joined Quiet Light.
Pat Yates 4:00
That’s great. I appreciate that, Joe, and I appreciate you having me here today and everyone that’s listening in to learn about Quiet Light. I think this would be a great introduction to that. I think that, you know, my story, you know, jumps around quite a bit, I actually was able to meet Mark, probably about half a dozen years ago back in early 2015. And we had discussed his business and at the time, I was sort of just investigating whether or not I would you know, what I would need to do to be able to sell my company I was just thinking about I was just kicking around, I wasn’t really that super interested in it. But we struck up just a fantastic relationship. And then we stayed in touch and we had talked a little bit in 2019 or 2018. And then again in 2019, it just wasn’t the right time for you all and it may have probably not been the right time for me at that time too. And then I spent some time with Brad Whalen on the team and was able to meet with you obviously and spoke with some others and then the timing just sort of made sense. I was ready after 20 years of running my econ business that I still own that I was ready for the next challenge and the next challenge really wasn’t gonna be starting a company it just became the opportunity to work with you all which is is one of the greatest things that obviously, maybe the greatest thing I’ve ever been involved in. It’s just such an incredible group. So it’s it’s been a fantastic ride for that year. But rewinding to my entire story, my first business that I owned was in 1990. I actually started in office and restaurant Coffee Company as a franchise with one other. There was a group here in Louisville, Kentucky, or a regional coffee company that was selling their territories in Columbus into independent operated locations, a downtown or if you could imagine a circle around a city, divided into four areas. There were two of us. One guy was my age. He had just graduated from Harvard, believe it or not, still owns a company up there called Crimson cup. And we both started our own OCS companies where we just went in and clean coffee pots and pitch people on coffee service at our office. That’s what I did all day. And we feel vending machines, and I did everything I kid I got up at six o’clock, and I finished at five o’clock and I drove my truck and I made my own deliveries now was my first company. And how old were you at that time? I was 22. I was right out of college three months. And my wife and I had just got married this true story. I went came home and said, Honey, we’re moving to Columbus. Truth is she’d never even been there. She didn’t know what it was. But it was just an opportunity. It was a guy that I knew and I was I believed in and he said, Hey, if you want to move four hours up the road, you can buy this franchise, we’ll help you get the equipment and long story short, I built it up into a really solid business well, I had my first shot in 1992. And then there was some issues between the the owners on their ownership. So I executed my bias my buyout and that was the first company I sold two years after I was out of college and I had a 200 I think a $220 non compete so I went 220 plus miles away move to Nashville, Tennessee, where my was actually from at one point, and my mom lived there and I started the same kind of company there and then sold it two years ago. So as I started two different service coffee companies there. During that time I got into the kiosk business selling golf guests, which is legitimately the worst location in the worst mall in Nashville, Tennessee. It was a joke was terrible. But then I found the better mall did merchandising better and started in kiosk and then without getting too long winded which you know I do. That’s where I started into the to the seasonal kiosk business, which led into internet which led into me being involved with the international conferences, shopping centers and everything else that I’ve done retail and E commerce sense. And I’ve been doing that really since 1993. And own Happy Feet Slippers the Ecom companies since 2001 20 years at this point, that’s amazing.
Joe Valley 7:26
20 years. As far as the kiosks go, how many? What was the most that you owned? And what how many do you have now?
Pat Yates 7:34
Yeah, it’s funny because that’s a great study in idiocy kind of Honestly, my father and his wife, when they first started, I bought it from them because I helped them get into the business and they source that one product. I bought the company from them at the time, they were about 25 kiosk and you had to buy either four or 8000 pair. It was that regimented yet about 20 foot container, a 40 foot container because he was not going to stock and distributed and want to warehouse he didn’t want to deal with these
Joe Valley 7:59
companies. He was selling slippers as well as by Happy Feet.
Pat Yates 8:03
Yeah, so he would sell like if you wanted to do it in North Carolina, you’d had about 4000 and a 20 foot container, which is roughly 100 grand worth of sales, but it’s still risk. And there was no flexibility in how you do it. So I bought it and we started stocking distributing went from 35 to I think the last year in 2012 that I was doing significant chaos. We had 300 in all 50 states and pretty well. We’ve been in every state at some point and multiple most of the time. And we had a location in Mall of America that was open for three years all year round. So we did a lot of retail but that obviously you know where that business has gone. It’s a completely toxic now. So we eliminated it to concentrate on the.com. And that’s kind of what built the funnel of my econ was that we put the name on the back of the slipper. We had 300 locations people would buy on those people shut them down and then they had nowhere else to buy. So the it wasn’t my intention, but it was definitely a byproduct of doing those kiosks.
Joe Valley 8:54
When did you start putting the name on the back of the slipper and start to grow the E commerce side?
Pat Yates 8:59
They will Yeah, I knew I knew that if they had the name on the back of it. We actually transitioned and put it on the bottom some. And then we started really doing some submit I mean, they are .com it by HappyFeet.com was legitimately a zero startup. It started at $0 in a basement. And you know it does seven figures just on the direct site, not including an Amazon presence as well still to this day. So it’s really good. So
Joe Valley 9:23
I’ve known you for a little over a year. Now, we chatted a couple of times in previous years, but I didn’t really get to know you and you are the quintessential entrepreneur, you get an idea in your head and you just go for it. You don’t necessarily think out all of the details and plan it out. You just know you can do it. You go for it. And you told me a story once about a cookie from the Jersey Shore Snooki, Snooki, sorry. And who you know, as you say is an incredibly sweet, kind, generous, nice person. But can you can you recount that story for the audience just to understand a little bit more of what it takes to be a true entrepreneur to break through and get things done the way that Pat Yates got done that day.
Pat Yates 10:05
Yeah, what’s really ironic Joe is I kind of talked about this when I stepped in and spoke for you, which you really don’t know about in Austin, a billion dollar seller Summit. I was speaking to some people about how anymore there’s so many metrics, you can get the helium 10s, which great company, I’m not typing anyone. There’s so many things out there. They’ll get you as many metrics as you want. And everything’s digits, you’re running in your head trying to make decisions. I believe that back then mochi, the best thing I had was my gut instinct. If I trusted myself, when I made my decision, then it worked out if I didn’t, and I hemmed and hawed it was always a tragedy. So I guess to rewind to what you’re talking about, I was at home, this was 2008, or nine out of going at the exact date. And my oldest son who is now 29, was 12. So he’s like, 16, or something. And he’s comes running in my bedroom in our house, and he said, Dad, he said, Snookie is wearing your slippers on Jersey Shore. And I went, I only have two questions, who Snooki and what is Jersey Shore. And I’ve said this many times. He just honestly had no idea. So I went and I looked in there, she was bending down, wiping something up, and she had on our picket line slippers. And obviously, I didn’t know anything about the show. But the very next morning, we had hundreds of emails, and we sold out every single pink white pair we had that like that. Because people found it. We were the only people making that slipper. So What year was this? This was 2008 properties, like
Joe Valley 11:26
pre I mean, the word influencer didn’t even exist back then. But that’s what she knows. You picked up
Pat Yates 11:31
800 She had 820,000 Twitter followers. So I called my partner at that time who I’m still close with, he still does our warehousing distribution. I said, Listen, I’m going to talk to this to Snooki’s agent and see if we can do a license whether he went, you’re out of your mind. No way you should do that. What if she does something crazy on TV, which she did. And I said, I don’t really care. I said, I think that the value of the lead and the value of her is bigger. So I went and drove to Chicago three days later met with our agent, we signed a deal for six figures, within three days of her airing on a television show. We made five or six designs around her, we let her tweet out about him. Now she has 8 million Twitter followers. In the leper that we made for her as our number one selling item all time, it’s not even close. And she is she’s been to a show in Vegas with us. We’ve been out to dinner with her there, she sat with my wife one night, she didn’t even drink we were up in a in a casino and free bottle service everywhere. She’s just such a nice girl. And she was huge for me, because then I realized that we could go out and do some things that we think are a little speculative, put our name out there. And I think one time when I talked with another gentleman was involved in the business, I think we always just try to keep news around our business, something new that people would have come in to be able to look at it. Some been great. Some have been failures, but I don’t look at those as failures because they framed everything I made decisions on from that point.
Joe Valley 12:49
At what point did you decide, hey, you know what I’m going to, I’m going to try the next level of exposure and do the Shark Tank thing that you had in your head business up and running. You didn’t necessarily need Shark Tank. But you made that decision. You’re laughing now. So give us that story a little bit.
Pat Yates 13:05
It’s kind of so weird, though. Because as soon as Snooki came on, if people go to our press page to buyhappyfeet.com, and I’m not it’s not a shameless plug for for anything.
Joe Valley 13:14
Yes, it is buyhappyfeet.com Get the most comfortable slippers in the world. My wife and kids still wear them every day.
Pat Yates 13:21
They’re awesome. And and the cool thing was is that she took us to like David Letterman Show. I was at Jimmy Fallon when we taped slipper golf, which was unbelievably fun. We did so much press around Snooki she was worth her weight 50 times what we paid her. And then Shark Tank took notice we put in an application in season three, and we got turned down. And I just dropped it because first of all, people don’t realize shark tanks like a 50 page written application. You can’t type it. It’s all written. It’s all handwritten. It’s all detail. If you can imagine going through diligence to sell a company it’s extremely similar, because they have to vet you and make sure that they’re not going to find out that you you’re an axe murderer on TV or something of that sort. So we had to go through all that and I just didn’t want to do it. Well, I was actually playing in a golf tournament. And I my phone rang and they said Look, we’ve been looking at old applications for season five this shows blowing up or adding on 15 or 20 episodes, we’d love for you to reapply. So we reapplied I went through the process for three or four months we did four or five videos came down to the first week of September in 2013. They said here’s the deal we can’t make decisions on the final ones We’ll fly you out. We’ll let you pitch the producers in the seats they like you they’ll keep you if they don’t fly you home. Like Alright, so I flew out and it was ironic because Snooki was actually on Dancing with the Stars but that time so I went pitch the producers and that very night I went watched her on on Dancing with the Stars which is hilarious story to begin with because I was huge and they had me in the opening and they made me move so I didn’t look like this this huge like dinosaur in the middle of all these little shorter anyway. But so we taped it the next day with The people and then obviously the rest is history, which is a crazy process because you’re in there an hour. I think I was in there an hour and 15 minutes and they cut it to eight. Yeah. But it’s it wasn’t going well for a long time. And I was afraid how it looked on TV and and the one thing people don’t realize about Shark Tank, you can’t see it till it airs. You’re not allowed to watch it. So I had to watch it live as people watched on television.
Joe Valley 15:22
Yes, he had no idea what they’re gonna say. How would people Google your episode of Shark Tank right
Pat Yates 15:28
now? Yeah, I think that ABC has it on there. I always stumble over which episode number it is. I think it’s season five, Episode 23. But I think they have to find it on YouTube, or they have to buy it like on Amazon. I know Amazon has all the episodes.
Joe Valley 15:43
I watched it. I watched it without buy. While I do have a subscription to Amazon Prime. So maybe I watched it there. But I found it. I think it just they could do what you just said season five, Episode 23. Or happy shark tanks, that kind of stuff. The cool thing about the episode that the whopping eight minutes that you were on, was that Robert was completely out. He was done. He passed he said, you know, the it’s a no for me. And you reeled him back in unintentionally. What did you how did that feel when he jumped back in? Well,
Pat Yates 16:19
I mean, I think that people have to understand it was a building process over an hour and 15 minutes, it was only about 20 minutes. And before Barbara didn’t like me, which most women don’t like me when they maybe asked my wife, but lightly and she went out, you know, fairly quickly with, you know, a long dissertation. And then Robert said he just didn’t think he can help it. And then Lorien and Kevin got together on a licensing deal, which I was never going to do a royalty deal. And I was really upset. Laurie went with him to be honest, because I had no interest in Kevin. And then I figured since I had two people out and that deal is crap. I figured Mark wouldn’t be interested. I kind of thought since we had NBA that he may not be able to. But I decided instead of asking him his opinion, I want
Joe Valley 17:00
to add NBA licensing. You had NBA licensed slippers? Yes,
Pat Yates 17:04
we have Mavericks. And I don’t know if you can get him. But anyway, I wasn’t 100% Sure the enhanced site. I’m sure that probably wasn’t it. But I decided instead because I’d researched him to give him a speech about you know how I would continue to grow this business because one of the biggest thing was, Barbara said that we have peaked in 2014, which was nowhere close to that. And I think what I had to tell Mark was that I was going to try to work as hard as I could to continue to grow a business. I mean, people look at me when I sell slippers, they feel like they have to hand me money on the street. Like I can’t make any money. I don’t, I never understood how it was viewed. So I wanted to make sure he understood I was going to continue to build this very narrow business into something really big. And I think that impassioned plea, he ended up saying you’re the real deal in it. And I think that’s what piqued you know, the the interest in Robert. And I think what they realized in that situation is a lot like anything else. I’m a Ford motion guy. I really am. I have lots of problems. But I put that part behind and I say how does it get fixed? That’s it. So I always try to forge forward and I use that in Quiet Light every day even though I make a ton of mistakes. It’s it’s something that I want to be able to go and make sure that I challenged myself to get better every single day. And I think that showed there. And then the whole atmosphere changed in the end of it was obviously really great. What is it that you
Joe Valley 18:15
like about Quiet Light more than any other aspect of it aside from working with me? Because I’m sure that’s the highlight of your lifetime.
Pat Yates 18:23
actually working with us great. folks out there, if you have to work with Joe, if you come in, he’s gonna motivate she’s gonna challenge you. Like nobody else. I was a coach in high school, I was a basketball coach, I was an athlete, you and I’ve talked about this. Yeah, I love to be challenged. And I think that anytime you look at a business, I just get excited about like today I did a buyer call with a new business that has nothing but recurring revenue, one item and it was fascinating to listen to. And I got to listening to it and understanding how to put my hands around
Joe Valley 18:52
a seller tell them how to buy a car. They were they were gonna evaluate. Okay,
Pat Yates 18:55
I did a buyer call after I’m losing my mind on that one. Anyway, so this seller had one item recurring revenue doing 60,000 a month and our most recent month with one item recurring revenue. Astounding, we don’t see why like you don’t see that in many businesses. So I think for me that the challenge of looking at a company put my hands around it and figuring out how it can be marketable to someone else that’s going to be a buyers really a challenge because I like diving into the details and understanding what they do well. Plus, it’s like taking a master’s degree in econ every single day. Because you get to see so many things and it’s super exciting. And I think the biggest thing is that you get to really work with some people that become lifelong friends. I every single person I’ve sold a company from I’m in touch with every three to four weeks regardless, so those relationships have been fantastic. I love that part of that too.
Joe Valley 19:43
I love that part of it too. And it’s it’s it’s so unique, I think with what we do, which is building those relationships, in many cases long before the transaction even begins, you know, in terms of a sign engagement letter, and then long afterwards as well. You know, I’ve been doing this for a decade now. You’ve been doing it for just over a year. and you’ve got those relationships. You know, I often, you know, said, The best time to start thinking about selling your businesses now. And I don’t mean the day you start your business really 12 months in anyway, because you get us trying to keep the wheels on the bus, keep the lights on for the first 12 months. And so really, there’s like a 12 month window to the kind of the youngest that we want to touch, which is 24 months. And we don’t want to touch that. Because younger than that, folks, the buyers are going to seek a discount on the multiple. So 24 months seems to be that comfortable number. I’ve sold one as young as 16. Have you sold one younger than 24 months yet? One that was 1818 months, a little bit of a discount compared to regular multiples or something that would have been 2430. Much? Lower multiple, multiple, that’s what I mean. Yeah. And you’ve only been around for, you know, little over 12 months now. So you’ve just begun to build your pipeline of relationships. It’s been let’s call 12 months, right started October, but you’re just getting your feet wet, didn’t have your first one on one conversations for a few weeks. How many businesses by in the calendar year? I know we got two weeks left? And you’ve got some things under loi and the calendar year 2021. How many transactions Do you think you’ll end up closing?
Pat Yates 21:12
I think there’s a chance to get one in under the gun here late in the year, which I mean 13 businesses in 2021, which is way more than I expected when you and I first talked but I was lucky enough to get some really good buyers and some really good sellers. I think that if I had to great myself on how I’ve done from a production standpoint, it’d be really high. If I have to gauge myself on what I feel I’ve done to be able to gain that it’d be much lower, it probably be, you know, a six or seven because I hold myself at a really high regard. And I think that the thing that I’ve had challenging some of the challenging things that I’ve had with relation to how you go through diligence and how you worked with both parties, slow down some of it so I could have done more maybe, but it was still a really, really productive year. I felt.
Joe Valley 21:55
Yeah, I think you know, 13 is a lot. It may not sound like much, folks, but you know, you’re not just focused on those 13 transactions. Because if we were able to pull up the data real quickly, Pat, on how many conversations you’ve had in the last 12 months? It’s not 13? It’s probably 130 1300. I mean, how many one on how many calls? Do you have a week, you know, helping people understand the value of their business?
Pat Yates 22:23
Well, I think there was as an example of some people, I think that when anyone understands that, most times this can be a 6075 90 day process. I mean, it’s just kind of how it goes in terms
Joe Valley 22:33
of from engagement letter to the transaction closing,
Pat Yates 22:38
you have 12 companies, you got to envision all those going that period concurrently. And I at one point, I had five that were working together closing at the same time, and it was a nightmare. So we had to move to less listings. But I think what Quiet Light does is unique because I hear a lot of people say well, why don’t you just let someone else do the diligence process? Well, that’s because we’re entrepreneurs centric, because we want to make sure the entrepreneur starts and finishes in the way that we would want to do it if we were selling our own company. So I feel very comfortable that that part is good. But I would tend to think that if you’re having good lead times, you’re probably going to tenor maybe six or eight a week, maybe new calls, if I’m estimating. And if I have three or four under offer, like I have now you might have two or three diligence calls as well. But then your new stuff your buyer calls on the stuff you had listed could add up to it as well. So I think what’s weird about this business is we gone through some ebbs and flows of being super, super busy, and then just being dead, because you got things that are loi, so we just try to work as hard as we can. And, and truthfully, I’m so deep into working with the entrepreneurs, I’m not worried about how many listings I have, I worry about executing it as well as I can on the ones that I currently have.
Joe Valley 23:48
And it’s funny on the dead times for the first couple of years, when you are real quiet in terms of activity, you know, you’ve got listening to this close, you’ve got one or two listings now. But you know, you don’t have a whole lot in the pipeline, you’re feeling like, you know, there’s gonna be a giant gap and the world is ending in terms of what we do. But the after the first couple of years, all those conversations, those 600 conversations that you had in year one and year two, will keep coming back around because you’ve been genuinely focused on helping first helping those people understand the value of what they have, and reverse engineering a path to their own incredible exits. And you do it from your own experience and from all the tools and resources that we have at Quiet Light so it’s it’s it’s never just sell we’re not salespeople, do you consider yourself Self a salesperson or an advisor?
Pat Yates 24:43
No, I said it this morning when I was talking to someone I said, I guess the way that we talk about it if someone’s out there thinking about listing their business, we’re in no hurry. And believe it or not, the leadership is Quiet Light, including you Joe always says I’d rather someone wait if they think they can improve the business over three to six My period some people don’t take that mentality that want to get, they’ll either, you know, mine for a commission or try to get someone listen, that’s not what Quiet Light does. So like, in a normal time, I have, I don’t know, eight or nine businesses here, they’re on deck and loi are live right now. But I have 100 in my pipeline. So people start thinking about the maintenance of, of continuing communication with those 100 that you could have in the next year or two, is something that is hard work along with the nine that you have listed. But I think the thing that I’ve learned is balancing my time between all those and being prepared and scheduling out as well is not something I’ve did a lot when I was in my econ business. So for the first few months, I really had to pick that skill back up, it sounds odd, but I sort of worked in ebbs and flows of what needed in common this site could be really structured. And that’s been a little bit of a bit. Yeah, if we think harder,
Joe Valley 25:45
you know, you’ve been at it for a year. Walker has been at it five, Jason’s been at it. 10 and I might be stretching Walker a little bit is I don’t think he’s been at it for four or five. But, you know, you’ve been scrambling working like crazy, lots of time, lots of hours, right? That happens in the first year. Walker, he blocks all of his mornings for calls time with his kids for projects, things of that nature. And he works on phone calls and diligence calls and buyer seller calls in the afternoon, Jason, who this calendar year, believe it or not, I mean, Jason’s been pretty quiet. I know you’re on small meetings held 14 calls with him. Jason’s making more money this year than he’s ever made advise with Quiet Light. And by the way, Jason never needs to make another nickel in his life. He’s, he’s helping. And he is he is paid more on an hourly basis than any human that I know. Because he’s so efficient, so efficient and effective with his time and is able to help people because of that experience. And and work with them in a way that is just gives them such a return on investment. And it benefits obviously him as well. So we’re helping first. And it’s a strange thing. You’ve got some grand you got some grand my team when we were younger, it might have been hustle, work hard, see how much money we can make, make some more and make some more makes more makes more. Now it’s how many people can I help the more people that I help, the more that comes back around to that thing that we wanted when we were younger, which is earning a healthier income that lasts for a longer period of time when you agree?
Pat Yates 27:18
I would 100% agree with that. And I think people these days, especially in the climate and the way the world is right now everybody wants instant gratification. Some people especially in the sales business, can’t have the patience they need because of goals or things that they’ve set for themselves. I think it Quiet Light. What’s beautiful about what we do is we have to analyze the business from a standpoint of when is it ready to go and sometimes we have to actually hold entrepreneurs back. It’s really counterproductive at some salesy type of way, because we’re not out there looking to do it. I’ve turned more people away for three or four months than I have that have come in and listed right away. So I think we do a good job of educating people on when the right time as far as Walker and Jason. You know, I think people what they have no idea about his how astoundingly smart our team really is. And I don’t necessarily even include myself, because if I had to list them, I’d be put down here. As far as
Joe Valley 28:08
I feel the same way put myself at the bottom of that list. Because I’m
Pat Yates 28:11
a sponge, we got into one day on one meeting and I listened to him talk about crypto and different investments. And Jason was talking circles around every single person that plays it. It’s astounding the amount of resources that people have if they work with someone at Quiet Light. And I think that’s what’s amazing is some of the things I learned from my first two or three deals I applied. And number six, seven, and eight. And some of those people that bought applied things that I saw work after the transaction. So what Quiet Light is really lucky to be able to do every day is maybe make people’s dreams on each side country, which you talk to me about, we make an entrepreneur get life changing exit money, as well as someone that buys it and has a brand new outlook on something that can be great. And those people still come back and eventually sell again, it’s very hard to find holes in what’s great about what we do. What do
Joe Valley 28:56
you think’s gonna happen in 2022 in the E commerce world, we think it’s a slowdown, you think it’s gonna double the size again, we’ll have
Pat Yates 29:05
nowhere to go but up. I think the more that people get conditioned being home, you know, unfortunately, everybody’s on each side of this COVID thing. So I’m not really going to get into whether people do but the more people are at home, the more I think they’re predetermined to trying to work, you know, from home and not go out as much. I was recently just in a mall on a Saturday night this past week, and I was astounded. I thought that it would be much better traffic this year that things will be back to normal a little bit. I think ecommerce is gonna continue to grow. Do I think it’ll grow at the rate that it has in the past? Maybe? Maybe not. I think now there’s a little pushback on Amazon. I think some people may slow down their Amazon presences a little bit, which I think is a mistake. But I do believe that it’s going to be a strong market. Will there be as many big businesses like we saw this year that go to market, maybe not because you’ve got a lot activity this year. But I do think for people that have been patient, there’s going to be a real need for deal flow as we get into the First couple of quarters of 2022. It’d be interesting to see how those multiples work against the previous COVID Bob’s everyone was talking about, could they maintain this holiday and where were those numbers sit in the first quarter in q1 and q2 be exciting to see
Joe Valley 30:14
going to be interesting in terms of maintaining the numbers if their inventory stuck on a ship off the coast of California, like some of yours is. As far as economy inflation, you know, supply chain issues. If, if the economy tanks, what’s your outlook? What do you think’s going to happen to the online m&a world? Do you think that available listings for buyers will dry up? Or do you think that people will be emotionally tired and worn out and just say, I got to get out? Let me list the business for sale, or something else? What do you think’s gonna happen?
Pat Yates 30:52
Let’s look at it two ways. Number one, inflation, the last thing we really want our interest rates to rise because that’s gonna affect money and capital markets and things that people be able to access my as first thing, but I think the biggest thing is going to be the capital gains thing of whether or not people decide to list if capital gains goes up so significantly, and then you add your state into it in some areas. And, you know, I’ve seen numbers as high as 45, or 46. In some areas projected if the secondary package goes through, I think that’s going to be the big widget of whether people you know, tax wise, it’s going to be beneficial to sell or whether they hold on to it for a couple of years. I mean, you’ve got the midterms coming. So that’s, that’s going to be looming. I think that, you know, again, I’m not talking politics, I just think it’s gonna be hard to get the votes to do the second one. But we’ll have to see what that is. I mean, honestly, if I talk to five people, I hear five different answers. I’ll be curious to know what yours is, as well, but I think it’ll still be good. I think it probably was much a little bit slower than 2021, in my opinion.
Joe Valley 31:45
Alright, so my prediction is, it’s going to continue to climb, continue to get crazy. If inflation causes a downturn in the market downturn in the economy in a recession, I think people are going to find online business owners are going to find that their, their, their straps, they’re tight, and that’s causing them stress and anxiety. And they’re gonna just get emotionally tired and worn out and not have it in them, some of them to live and fight through this, right? And say, what are my options, you know, pare back costs, things of that nature and write it out that way, or fight through it and try to grow more, or consider an exit. And I think the last part of it is going to be there’s going to be a good chunk of people. And again, like you just said, you talk to five different people, there’s going to be five different opinions. Mine is that in a downturn in the economy, when we may see more people coming to market, then even in 2021, which to me would just be kind of crazy. For those folks who haven’t heard me say it before, year to date, we’ve had we’d have have an average of about four and a half offers on every single listing that we’ve had, and what 60 What are the stats on the deal flow chart 62% have gone at or over asking price. And the median transaction size is going to settle in at about 2 million, which is up about a half a million dollars from the previous year. So it’s all up in 2021, there’s going to be a lot of things shaking around in 2022. I don’t know what the real outcome will be Pat, but I appreciate you sharing your thoughts on that appreciate you sharing your past entrepreneurial experience and what it’s been like for you here a Quiet Light, I’m excited to see what you do over the next decade. And and in other words, you can’t leave you’re here for a decade, please.
Pat Yates 33:33
Don’t really have anywhere to go. But um, you know, just the people out there listening, whether you’re selling your business looking this or your other m&a people, we’re all extremely lucky, I think Quiet Light is the quality of people is what you’re going to find out. I mean, it’s it’s truly relationship based, we all really care about it. Because we understand how much value there is in building a company. I mean, having done this multiple times, I understand everything that the person is going through mentally, it’s not easy. And it’s not meant to be anything like this isn’t meant to be easy. So we’re here to help you navigate. We’re very, very fortunate to have a great team started by you and Mark clearly.
Joe Valley 34:06
And we’re going to have another podcast coming up where as you know, Pat, he said it himself and I’ve said it before and his wife tells him as well. He’s got the gift of gab. So Pat’s gonna host the next podcast with me. Next week when we’re going to be interviewing Elaine Eason, who joined the team this year, Elaine built a aerial yoga business. Yeah, look that up, figure out what it is on a Shopify site didn’t ever sell on FBA. So she built a business from the ground up an e commerce Store and ended up selling it for seven figures. Jason was the advisor. He was mine back in the day, and he’s still around and Elaine’s gonna join us next because She then took some time off I think was probably three or four months. We’ll get into that a little bit with her path, but then she joined the team in I think it was August of 2021. And I’m excited to see what’s gonna what’s gonna happen for her over the next 12 months. Tough
Pat Yates 35:01
love to be able to talk to Elaine when she was first coming in. I was one of the people she she does sort of pseudo interviewed with. She is a super smart lady. That’s just an exciting person to have involved.
Joe Valley 35:11
We’ll learn more about that in next week’s episode. So tune in folks Pat and I will be interviewing Elaine Eason Pat, thank you again for joining the team sharing your wisdom and experience and looking forward to the next decade with you.
Pat Yates 35:22
Appreciate that Joe, appreciate you having me.
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 podcast at quietlightbrokerage.com 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.