How to Sell Your Online Business for Eight Figures

In this AMA, aspiring sellers bought their questions for Brad Wayland, who discussed eight-figure deals and how they differ from smaller ones. Brad has sold more eight-figure listings than anyone at Quiet Light, and his expertise and insights are invaluable to those wanting to plan for a life-altering exit.

Some of the topics of discussion during this webinar are:

• How eight-figure deals differ from smaller ones
• The importance of clean and organized financials
• The elements private equity firms will most scrutinize
• How to create airtight documentation
• Legal requirements you’ll need to know
• The truth about multiple expansion in larger deals

TRANSCRIPT

**Chris:** All right. Well, thanks to those of you who are dropping some questions into the Q&A box.

We had some that came to us via email before we even started. There were some people who sent their regrets that they couldn’t join the AMA today, but they sent on a couple of questions, so we’re going to get to those.

We just want to thank you all for joining us. This is a really special and interesting topic for us.

When Quiet Light started, we were doing a lot of deals in the $20,000 to $100,000 range. And I remember, Brad—I don’t know if you were with us at the time—but I remember very specifically being at a conference a few years back, and Joe and Mark and I were having a conversation like, “Do you think we can get a million-dollar listing? Is that realistic?”

The landscape has changed quite a bit now, to the point where we’re doing a lot of listings, and Brad is dealing exclusively for us in eight-figure listings. He knows a lot of what you need to know to sell to those—a lot of private equity, I imagine, Brad—but he knows a lot of the tricks that you need to know to sell to those companies.

So, our topic today is how to sell your online business for eight figures.

This webinar is presented by Quiet Light. We help entrepreneurs build, buy, and sell their online businesses for six, seven, or eight figures.

A big part of what we do is educational. We speak at a lot of conferences. We do podcasts. We do guest posts. We’ve been doing a lot more educational stuff as the pandemic has gone on, and that’s been a really fun pivot for us.

We miss conferences, of course. We love going to conferences and meeting people in person, but this has been a really nice way for us to connect with people through monthly webinars. So, we’re really excited to have you along with us.

We really want to work to help founders plan for a successful exit, not just be there when they’re ready to end it. We want to help them plan to do that.

We were founded in 2006. We’re entrepreneur-led and entrepreneur-focused. We just welcomed our, I think, 14th advisor on board this week, so we’re growing and really happy with where the marketplace is at.

A lot of that has been driven by the renewed interest in these FBA businesses and aggregators, things of that nature.

Everyone on the Quiet Light team is themselves an entrepreneur. Most of them have built, bought, and sold their own substantial online businesses.

Our guest today is no different. He’s Brad Wayland.

You started off as an accountant, is that right? You studied accounting, or you studied financial planning?

**Brad:** Yeah, I had a finance degree, but couldn’t get the job I wanted in the town I wanted, so I went down the accounting track for a short period of time before realizing I would never make it there.

**Chris:** Got it.

Brad also got his e-commerce start at a custom T-shirt company. After six months there, he started getting interested in SEO and really learned how to—I don’t like the term “hack”—but he learned how to hack content and really profit off of marketing on content sites, affiliate marketing, that sort of thing.

He’s a genius at monetizing content. He went on himself to build, buy, and sell over 30 online properties, many of them content-oriented.

He’s listed more eight-figure businesses for Quiet Light than any other advisor. He’s our highest performer the last couple of years.

As some of you early joiners learned, he’s a Chiefs fan, and we love him anyway.

He’s also the nicest guy you’ll ever meet and one of the most honest. So, we’re really, really lucky to have him on the Quiet Light team.

Brad, welcome to the AMA.

**Brad:** If you weren’t sure that he was lying, you finally got the real dose there towards the end.

*[Laughter]*

Thank you for bringing me on today.

**Chris:** So, today we’re going to talk about selling your online business for eight figures.

Again, if you have questions, feel free to drop them into the Q&A. We’re going to get to those in order.

We’re going to start off with a couple of questions that came to us early on.

The first is, given that the title of this AMA is *How to Sell Your Online Business for Eight Figures*, are the rules, Brad, different when you sell your business for eight figures than six or seven? And what might some of those differences be?

**Brad:** Yeah. I think that is one of the important differentiations that we need to make when we start talking about eight-figure transactions.

In our space, the M&A world is not super favorable toward transactions of $10 million or $25 million. Most of your M&A firms are wanting to swim in a little bit bigger pond in terms of revenue and EBITDA.

So, this gap that we see of, like, $7 million to $50 million has been kind of a black hole of the M&A space, and it’s been that way for a long time.

What we’ve seen as the internet has grown up over the last 20 years is we’re starting to have a lot more businesses that can justify that kind of price point than we used to have.

I think earlier on the call, before some of you jumped on, Chris said that he remembers the time when Quiet Light used to dream of possibly selling a business for a million dollars.

I will tell you, I’ve been doing this three and a half years with Quiet Light, and it’s really interesting because I didn’t even hear of an eight-figure listing until about 30 months ago.

I had been working at it for close to a year before I even heard of the idea.

If you fast-forward to today, I pretty much exclusively only work on eight-figure deals now.

For some of you, like Barbara Milligan is on the session today and she said hi to me, she knows that I have worked on some that are smaller than that, where she’s a former client of ours—or current client.

So, it’s not so cut-and-dry. I do have some seven-figure things going on, but I do think the rules are different.

I’ll try to summarize it as fast as I can.

In terms of getting started, one is that usually when we’re doing a six-figure or seven-figure transaction, many times the seller is going to sell, and they’re going to be out. They’re done. They’re going to move on with their life.

The process for selling is going to be, from start to finish, maybe 100 days or something like that. That’s just very typical of how we do it.

Those multiples are really easy to boil down. You can give me your specs for your business, and I can be like, “Oh yeah, that’ll probably sell at a 3.2-times multiple plus inventory,” or something like that.

But when we start to look at the eight-figure deals, the complication factor goes up.

The complication factor goes up on several levels.

One is the buyers are not crazy about the sellers leaving in many cases. So, we start getting into this situation where we start talking about equity roll.

When we talk about equity roll, we’re just talking about you retaining some of your company. You lose control, but when you do the deal, you might get a $10 million valuation, but you’re going to roll 25%.

So, your cash at close is going to be something less than $7.5 million once you include earnouts and seller financing, things like that.

But you’re going to roll. You’re going to invest in your company with this private equity firm.

So, equity roll becomes a very important topic.

Financials are held to much higher standards. Most eight-figure deals are going to have what’s called a quality of earnings.

We can get into what quality of earnings is, but it’s a very intense way of figuring out: Are your earnings what you say they are?

You say you made a million dollars last year. We’re going to run it through a quality-of-earnings report. We’re going to find out: Did you really make a million, or when we include all your liabilities and other things that might be held against you in this sale, are you really making $800,000?

So, that’s a very common kind of thing.

And then the time frame on private equity exits is longer.

Now, we’re going to have to differentiate today because of the rise of the aggregators. We need to at least acknowledge their presence.

Amazon businesses are selling very frequently now to these companies that are backed by private equity that are operating on the front end, and they are facilitating really fast transactions and mostly not requiring equity rolls.

So, you’ll hear me talk today about a traditional private equity exit. That’s one where you’re going to go through the quality of earnings, it’s going to be a longer process, you’re going to roll equity, and you’re going to do all those things.

Then there’s the aggregator.

The aggregator is a little bit more like those transactions we were talking about in six and seven figures. They’re going to be a little more transactional that way.

But that’s just a really hot topic right now, so we need to point out both of those schools.

**Chris:** Great. Excellent. Good way to start.

Brad, maybe we can talk a little bit more. We had a question come in that was about strategic buyers, but also just talking about that buyer landscape.

Aside from private equity, who is buying businesses, and at what ranges do you see that activity the most?

**Brad:** It’s all over the map.

When someone says, “Hey, I want to find a strategic buyer,” I’m usually the first person to say, “Hey, I’m probably not the best person to help you with that.”

I’m pretty strongly opinionated that, for most sellers, a strategic acquisition is best facilitated by themselves.

When I was operating in the T-shirt industry, we built an eight-figure T-shirt business, and I didn’t need a broker to help us figure out who we would sell to.

I actually knew my competitors better than just about anyone, and they knew us.

So, if you want a strategic acquisition, I will tell you that the chances of them going through are very low.

Here’s the problem with it: When you call your strategic acquirer—your biggest competitor or whoever it is—and you say, “Hey, would you like to look under the hood of my business and see what we do, and see if you might want to buy us?” they’re going to say yes pretty much 100% of the time.

Strategic acquisitions become very frustrating for sellers because the time frames almost never line up, and the multiples usually are not as good as advertised.

I think you hear these stories about Facebook buying Instagram for a billion dollars when they really just had some users and not a lot of revenue or anything, and so people think, “Oh, I want a strategic exit.”

But I would argue that, in most cases, you probably don’t want a strategic exit.

And if you do, you probably don’t need Quiet Light to help you facilitate it.

**Chris:** In terms of the multiples—was that the question? In terms of what the ranges are here or who the buyers are?

Well, yeah. I think, does the type of buyer impact deal structure and purchase price?

**Brad:** Yeah. I think the type of buyer is the biggest issue.

Whenever I say, “Hey, I’m working exclusively on eight-figure deals now,” that’s actually not a statement of, “Oh, hey, you guys work on the small stuff so that I can work on the big stuff.”

It’s really not that kind of a statement.

The actual statement is: I think the process is different.

I think when you’re going to work on six- and seven-figure deals, there’s a process that’s worked really well for Quiet Light.

What I’ve been doing in the eight-figure space to date is focusing on a different process.

You’re reaching out to fewer buyers because we’re going really deep.

Just as an example, a deal I closed in December was a $25 million deal.

When we brought a buyer in for that, I traveled to the location three times to meet with the buyers—one time for two days, one time for one day. These were 10-, 12-hour days plus dinners.

We’re going very, very deep just to even think about getting to an LOI.

Whereas, for some of you who have sold with us before, or if you’re thinking about buying or selling, that’s not common.

If you’ve got a business that’s worth, like, $5 million and you hire Walker Deibel to go sell it for you, Walker is going to bring you a handful of buyers. You’re going to do calls with those folks, and after you do those calls, you’re likely going to get an LOI after a single call.

You’re going to have to make a decision to sell your business to someone after pretty much spending an hour on the phone with them and then reading a deck about it.

And it actually works really well.

So, in terms of who the buyers are, it’s a tough question for me to answer. It’s all over the map.

We’ve got wealthy individuals. We’ve got small portfolio operators. We’ve got people who are quasi-strategic. We’ve got private-equity-backed operators, like the aggregators we’ve been talking about.

And then we’ve got just full-blown private equity that’s looking for really good returns for their money.

**Chris:** Great. Terrific. Thanks.

Again, guys, if you want to ask a question, it’s best to put it in the Q&A box, but you certainly can put them in the chat window. There’s a lot coming in both places, so I’m going to get to as many of those as we can.

Some great, great questions coming in here already.

Okay, so are you seeing a lot of multiple expansion in the eight-figure range? Are there trends that people need to be looking at?

Of course, at Quiet Light, we always talk about how we don’t really love the idea of multiples as much, but I think it’s something that sellers are looking at.

So, are we seeing multiple expansion? Broadly speaking, of course, every business is different, but are there factors that can drive that up or down substantially based on the marketplace or the buyer at that range?

**Brad:** I think we’re definitely seeing multiple expansion.

But again, when you start differentiating between a seven- and eight-figure deal, you run into some differences there.

Clearly, if you guys just want to talk very broadly about whether we’re seeing multiple expansion, we’ve definitely seen it.

If you go back two years, a good Amazon business that was 100% Amazon was selling at, like, a 2.5 to 2.7 multiple when I was doing it.

Fast-forward to today, I think we are routinely selling those for over three times—many times 3.5. You can even get up into the fours, and then with performance, you can get higher than that depending on what the business is.

So, broadly, there is some multiple expansion that has gone on. It is actually happening.

But when we talk about eight-figure deals, we had an email that went across to the team at Quiet Light yesterday, and someone was asking, “Hey, do you think I could get this multiple on a business?”

The problem with private equity is that private equity is not that sensitive to multiple.

If you’re just looking for a sticker price for your business and you’re like, “Hey, I’ve got to have a 6X on my business,” well, in a private equity deal, we might be able to get you a 6X for your business, but it might be worse than a deal that would be 4X.

Because when you do a private equity deal, you’ve got to deal with equity roll. How much are you willing to keep invested in the company?

Do you think your company—are you selling because you think your company is not going to last much longer? Are you selling because you think the future doesn’t look that bright? Are you just bored?

Some of those reasons why people sell affect whether they want to do an equity roll.

The other thing is, I’ve gone to private equity and said, “Hey, I’ve got this business. I want to sell it at a 6X.”

I did this last year and had a really good run with it. I said, “Hey, we want to sell this for 6X.”

The private equity firm came back and said, “Okay, fine. We’ll give you a term sheet for 6X.”

So, I look at it and you’re like, “Okay, we asked for 6X. They gave us 6X. I guess maybe we’ve not done our client any favors there.”

But the reality was that the business was worth about 5X.

The cash at close plus seller financing equaled out to 5X. The earnout for performance was what took it up to the 6X.

So, dealing with that, my seller is like, “Okay, so I’ve got to deal with an earnout. What are the parameters of the earnout?”

Well, because we were asking 6X and it was worth 5X, the parameters were pretty easy. It was like, “Hey, if we can just keep the EBITDA flat for a year, then we can pay the 6X. After one year, we’ll pay you out your earnout.”

But think about what’s happening there.

They’re only paying 5X. The extra 1X is being paid with the seller’s money. It’s being paid with money that the business generates over the next year.

They’re saying, “Hey, if the EBITDA is flat, we’ll pay you the 6X.”

Well, really, they’re just saying, “We’re going to pay you with your own money,” basically.

One other differentiator there that we didn’t talk about earlier on the private equity deals—and this makes it hard to talk about seven-figure deals versus eight-figure deals—is that private equity firms don’t want to hear about, “Pay me for my inventory separately.”

I actually had a couple of guys get offended at me one time for bringing it up.

I was like, “Hey, so you’re going to pay for inventory on top of that?”

They’re like, “No. Why would I do that? I’m going to buy the business. I need working capital, and I need inventory. I need all the things that the business has to have to survive, Brad. I can’t go pay for the inventory separately. I’m offering you a 4.5 multiple for it.”

So, when you deal with private equity, there are some principles that run a little differently than a typical brokerage deal.

One of them is things like working capital and your inventory.

When you’re talking about a private equity multiple, you’re including the entire business. What is this business worth, including the inventory, including the necessary working capital to sell it?

**Chris:** I’m muted. Oh, no.

This is terrific. We’re getting some great, great questions, so thanks, everyone, for dropping these in.

Okay, so let’s shift over because right now it seems like there’s a lot of activity in the FBA market, in the Amazon FBA market, especially in some of these larger deals with these aggregators and roll-up companies operating.

Let’s talk specifically Amazon. What are some of the things—maybe the top three to five—that Amazon buyers specifically are looking for in a company, especially when they get into that range?

**Brad:** Yeah. So, I’m going to zoom out just a little bit. I’m going to paint some broad strokes about what I’m seeing with Amazon.

I think that the most important piece on Amazon is gross margin.

There are a lot of Amazon businesses out there. I know Amazon seems like a cheap place to sell, but when you start adding up all the fees, they really eat into your margin.

I have found that businesses that end up with, like, a 10% net are not very attractive to buyers.

One of the things that I’ve learned, both in the Shopify space—which you’re probably thinking, “Is there a Shopify space?” but there kind of is; Shopify plus Facebook is a real corner of this market now because they just go hand in hand together—and the Amazon space, is that high gross margins usually equal a business that’s going to be really interesting to buyers.

What’s the rule of thumb there?

On Shopify, we usually say we really like to see 75% gross margins. That gives you enough money to go out and really hammer the Facebook and Instagram advertising with the pixel and charge things up.

On Amazon, it doesn’t need to be that high. I think if you’re sitting at, like, 60% gross margins, you’re looking really good.

But I would say, as you’re thinking about buying things or building things, be thinking about gross margin as one of the first parameters.

The second thing is SKU count.

I have found that buyers of FBA businesses do not like to see an unruly number of SKUs. They would really prefer for you to focus hard on having, like, 10 or 15 really good SKUs than having 300 SKUs.

It seems like when we see a business that has a bunch of SKUs, it’s not very interesting to buyers in general. They become pretty difficult to sell.

Another one that came up this week that’s going to sound kind of bad is, I really think that for Amazon FBA, it’s best to be based in the U.S.

That’s a tough one if you’re listening from the UK right now. The UK is really tough to sell. It doesn’t matter who you hire to do it because most of the UK entrepreneurs need to sell it as a stock sale, which is kind of a tricky thing for us as a brokerage.

That’s mainly so that they can tap into Entrepreneurs’ Relief in the UK, which allows them to pay a 10% income tax instead of 40%.

However, let’s ignore the UK for now.

When you start talking about other countries—and I’m not saying, like, Australia—but I sold a deal last year from a guy who was in the Philippines. It was an Amazon business, and that was a very tough sell.

We had to end up doing a bunch of seller financing. There were a lot of contingencies on it.

So, people are a little leery of Amazon FBA businesses that are outside of the U.S.

My basic tips would be high gross margins, trying to do something that’s not located outside of the U.S. if possible, if you can get it in the U.S., and try to keep your SKU counts down and focus on having really high-quality products rather than having lots and lots of products.

**Chris:** Great.

Kind of a follow-up to that, Brad. We’re talking in that question specifically about Amazon FBA, but is there a difference between different private equity firms or roll-up companies that are looking at a concentration of Amazon—all Amazon, 100% Amazon—or do they like a spread of Shopify and Amazon and Walmart or other third-party sites?

What are you seeing in terms of the marketplace for this year?

**Brad:** Yeah. If you zoom out a little bit on that one, historically, if I go back two years, whenever someone would bring me an Amazon business, it was looked at as a positive to have a Shopify presence.

If somebody was, like, 70% Amazon and 30% Shopify, then I would take their multiple up a little bit because people liked the diversification.

I think one of the signs that we are in a pretty frothy market is the fact that people reach out to me all the time and say, “Hey, I don’t want this to have so much diversification. Is there any way you can find me something that’s just Amazon?”

I think that’s probably a little bit problematic. It probably shows that we’re a little frothy right now.

But at the same time, I do think that there is some preference right now, by at least the aggregators, for Amazon-only.

There’s so much competition in the aggregator space that some of the aggregators want to differentiate on other factors.

I’ve talked to several that say, “Hey, we don’t really care about buying profitable Amazon businesses. We want to buy really good brands—people who have really focused on building an actual brand, a brand that can be taken into retail at some point, a brand that can transcend just beyond the Amazon page.”

So, that’s one factor.

Other factors—I’ve already talked about low SKU counts—but they’ll focus on saying, “We don’t want to just have Amazon. We’re really good with the Shopify element, so we want to find brands that are only Amazon and we want to grow them with our aggregator money. We want to grow them by going into Shopify because we have a skill set in that area.”

I’ve seen that the aggregators are competing against each other to figure out where they’re all going to fit in.

But I would say, as a blanket statement, that the aggregators are definitely, at the moment, leaning toward FBA-only.

That’s what they prefer to buy. They want to see a good brand, low SKU count, high gross margin, and lots of concentration on Amazon.

That’s plug-and-play. They can throw that into the meat grinder, spit it out, and they’re ready to go.

**Chris:** Is there a marketplace for well-spread-out businesses, though? I mean, for multiple-platform businesses?

**Brad:** Oh, definitely.

I still think that’s the smarter move.

If you’ve got a business right now that you’re trying to diversify, I was trying to say that this is a sign that we might be in a frothy market on the Amazon side. Amazon is getting a lot of props right now.

But no, I think that if you’ve got the ability, what I’ve seen personally and through some friends and clients is that those who can find an angle that works really well with the Facebook pixel on Shopify actually have more scalability than these Amazon businesses by a mile, if you get the right mix there.

It’s turned into kind of an AI-driven marketing situation, and I think people are really benefiting from that when they have it.

I still think it’s better.

Personally, if I was going to go back and operate right now, I wouldn’t build a 100% Amazon business myself.

I would want to build something that I thought could run to my own URL as well and do it that way, because I think that’s probably a better long-term view.

And that’s probably more attractive to a traditional private equity exit, which is where you’re going to get your biggest return.

**Chris:** Great. Excellent.

A couple of follow-up questions here. You’re giving us lots of detail, so we have a lot of follow-up questions. I’m just going to throw a few of them out here to you.

In terms of the location of an Amazon site, being out of the country, is Canada inside the U.S. realm?

**Brad:** Quick answer: It’s not.

But in Canada, we get a mixed bag on what people expect in a sale.

Some Canadians are happy with an asset sale, and so that makes it look very U.S.-like when we do the transfer.

Some Canadians want to flip it to stock, and it gets into that same kind of gray area that we find ourselves in with the UK, where sometimes buyers don’t want to do that or deal with the international aspect.

So, Canada is a mixed bag.

If your accountant says you can sell via an asset sale, then Canada can be pretty equal to the U.S. in terms of how the sale works.

**Chris:** And by “based in,” do you mean where it’s incorporated?

**Brad:** Yeah.

A lot of times, even if it’s incorporated in Canada, they get most of their sales from the U.S. marketplace.

I’m not trying to make the argument that—you live where you live. So, if you’ve built a massive Amazon business that’s in some other country but it sells primarily in the U.S., it is something we can navigate.

I’m just letting you know that it’s not always as easy as it is with the U.S.-based businesses.

**Chris:** Great.

Can we break down the 60% gross margin? What is included in that calculation? Is it your COGS, all that fun jazz?

**Brad:** Yeah. I would only personally include—and that’s a very good question, whoever asked that.

There are a couple of people asking.

I get lots of people who send me Amazon businesses where they’re including all sorts of Amazon fees as part of their COGS.

I’m not really here to debate that. I just want you to know that, from a traditional finance point of view, when we’re talking about COGS, we just want to know what the landed cost of goods sold is.

I don’t want to know about anything besides what was the raw cost to get the stuff purchased and get it into your warehouses or into Amazon warehouses.

I don’t need to know any of Amazon’s extra fees on top of that.

That’s a great question.

When you’re doing it, I’ve seen—I bet I’ve seen a dozen financials in the last six months where someone gave me their COGS.

I was like, “Hey, what’s your COGS?”

And they say, “Oh, my COGS are 35%.”

I’m like, “Oh man, 35%? How are we going to be able to sell this thing?”

Then when I go into it, I’m like, “Oh no. This is your COGS plus a bunch of expenses.”

They say, “Well, my accountant says this is the way to do it.”

That’s fine. Your accountant may be right.

But when we’re talking about gross margins, we’re talking about just a basic income statement: revenue minus cost of goods sold equals gross profit.

So, just think: If I was telling someone how to do a simple income statement, what did my good actually cost to get landed into the warehouse?

**Chris:** Great.

Okay, lots more coming in here, so I’m trying to scroll through and find some earlier ones.

Let’s talk for a second about close time on eight-figure deals. Does that differ greatly from six- or seven-figure deals?

**Brad:** Yeah.

Let’s call it traditional private equity.

When we’re talking about the aggregators, I’ll just tell everyone: If you’ve got an Amazon FBA business and you’re looking to sell it, and you wanted to hire one of us to take you through that process, that process is moving at extremely fast paces.

I don’t know if they’ll stick as soon as the honeymoon is over.

When I say “the honeymoon,” just so everyone knows, right now I always tell everyone that we’re in the honeymoon phase.

What we have right now is tons of aggregators that have raised millions and billions of dollars. They’re out buying Amazon businesses, but we’re not hearing about the failure yet.

There are going to be some people who do it and fail, and they fail in very glamorous ways. When they do that, that’s when we’re going to start to figure out what this market is really going to look like.

But right now, we’re in the honeymoon.

So, let’s differentiate from that.

When you’re talking about traditional private equity, it’s not going to be 35 days. That’s not realistic.

Here’s what I do: I try to figure out what’s important to my seller.

I’ll give you an example.

I had a seller—a deal I referenced earlier that closed at the end of the year. He had been through a strategic on his own and hired me during the process to advise him.

He was having some complications with the deal. I advised him, and then, when the deal fell through—he actually backed out of that one—we brought him a single buyer for the business.

When COVID hit, their footprint in China was shut down. This private equity firm owned a huge footprint in China of actual factories, and around February, China got hit with COVID. They backed out of all deals.

So, we were kind of left holding the bag.

He was exhausted. He had been through 90 days of quality of earnings and diligence, only to find out that because of some crazy pandemic, the deal wasn’t going to go through.

I was worried that I hadn’t done my job to bring him a good buyer and take him through the process.

So, we waited six months. Once COVID calmed down some, we went back out.

Again, I handpicked three buyers that I felt like would be good fits for him.

The one that we went with, I told them, “This guy is exhausted. He’s tired of the process. We need to close in 60 days.”

They said, “We can close in 60 days if he is on top of it.”

They closed in 60 days.

Now, is that normal? I don’t think it is.

I think the normal process would look something like this: We probably can find you a buyer relatively fast if it’s a private equity deal that we want to take on, where that means we probably feel like we can align you with someone.

So, we align you pretty fast.

Let’s say we get you under LOI within a month. They’re immediately going to go into quality of earnings.

They’re going to tell you that it’s not going to take that long. They’re going to tell you it’s going to take two weeks.

It’s going to take four.

Once we get through quality of earnings, at that point they’re still going to be running multiple fields of due diligence.

I think you’re really looking at 90 to 150 days on a private equity deal.

But again, if someone on here is thinking about talking to me after this about their business, I need to know what’s important to you.

Some sellers I talk to, all they care about is the dollars: “Just give me the most money. I’ll go through every kind of hoop you want me to jump through.”

I wasn’t that kind of seller.

When I sold some of my businesses, my approach was, “Hey, I’d rather get a fair value and not be miserable. I really value not being miserable.”

I find that some people love being miserable as long as they’re maximizing the dollars in their pocket.

I would tell you that I think the best solution is for people to consider the whole transaction and look at: How do I get the most money, but also a reasonable time frame to get from A to Z?

It’s not one-size-fits-all.

But if I had to paint really broad strokes, I think you’re looking at 60 to 120 days for a traditional private equity deal. If it gets delayed, you’re probably in the 150-day range.

If it’s important to you not to go through that, that’s something we can try to manage on the front end.

That’s one of the things I’ve started doing a lot.

I find that internet entrepreneurs are not super patient with the sales process, so we’re having to mold ourselves to what’s important to our clients.

When I find out that they just can’t really handle being in it longer than 90 days, or don’t want to, then I have to try to cater the process to make that work for them.

**Chris:** Great.

Are there any U.S. Amazon FBA deals in the seven- or eight-figure range that are sold as stock sales, or stock plus asset? Why do we prefer an asset purchase agreement structure?

**Brad:** Technically, if you’re not an SEC-licensed stockbroker, then you can’t be facilitating stock offerings.

So, in order to protect ourselves legally, we have to market every deal as an asset sale. We have no option. We have to do it.

Now, if we’re under LOI and someone decides that they need to switch it to a stock sale, we have accounted for that legally. At that point, we transition into a different role.

Our engagement letter accounts for it. It doesn’t allow us to lead the deal as much.

But I think the most important thing that we do is matchmaking—to get you the best buyer. That’s the most important thing that we do.

I think second to that, the guidance that we provide is the next thing.

So, we do facilitate stock sales, but not because we are out there offering stock offerings. We’re actually only offering asset sales, no matter what. That’s what we offer.

If the buyer and seller decide to flip it to stock, then we have to take a little bit different role to facilitate that because it doesn’t make a whole lot of sense for us.

We’re not in the securities business. We’re not launching companies public on Wall Street. That’s not what we do.

We’re selling small businesses, and because of some nuance in the codes that our country has, it doesn’t allow for us to do stock offerings.

**Chris:** Great.

Let’s talk a little bit about the split between online and brick-and-mortar.

Someone asked about running a 70% Amazon e-commerce and 30% brick-and-mortar business. I know aggregators don’t really appreciate those.

Are there buyers for businesses with that split, and what would you recommend to someone who’s got that kind of business?

**Brad:** I’d have to know more specifics.

Whoever that is, [email protected]. You can email me. I’ll get more personal with you, or schedule a call, or whatever we need to do.

But brick-and-mortar—different advisors are going to say different things about it.

Here’s what I say about it: I don’t do it.

I focus on 100% online businesses. I think most of the folks at Quiet Light would say the same thing.

There’s some gray area to that.

My recommendation, just as a quick answer, would be: If there is a way to separate these businesses and have an online component that stands alone and have a brick-and-mortar component that stands alone, I would highly recommend doing that.

I don’t think that it’s going to be easy.

It kind of feels to me like, in most cases, buyers either want to be in brick-and-mortar or they want to be online.

I haven’t even had very many buyers approach me and say, “Hey, we’re looking to buy something that’s half brick-and-mortar and half e-commerce.”

It seems like they usually want one or the other.

They come to me and say, “I want brick-and-mortar.” I say, “You’re in the wrong place.”

If they come and say, “Hey, we want all online,” I say, “Oh, great. That’s what we do. We do all online.”

So, I generally just tell people we’re very specialized. We specialize in selling 100% online businesses.

I think someone mentioned, “Do you sell SaaS?” Yes, we do.

We sell SaaS. We sell lead gen. We sell affiliate. We sell Amazon FBA. We sell Shopify. We sell content.

We sell many of the parameters.

What do we not sell?

We don’t sell porn. We don’t sell gambling. We don’t sell illegal drugs. There are things where we draw the line.

But in terms of what we participate in, anything that’s online-based that’s got good trends.

I think if you want to boil down what Quiet Light wants to represent, we want to sell good businesses.

**Chris:** Guns, to Paul’s comment?

**Brad:** I know we’ve sold gun accessories.

**Chris:** Yeah, we’ve done gun accessories.

**Brad:** We’ve done a couple of things—gun safes, gun skins, things like that.

We haven’t sold weapons themselves, and weapons are tough.

We’ve even had knife sellers come through, and that’s really tough with Google Ads and things like that because Google is very restrictive.

**Chris:** Yeah.

Okay. Boy, there are so many great questions in here. It’s hard to parse through all of them.

Paul asks—he’s looking to do a roll-up portfolio strategy with some Amazon FBA and then sell the entire portfolio.

What advice would you give him, and how can he build that portfolio to be most attractive to a potential buyer?

**Brad:** Paul, I see your chat here. I’d kind of like to know if you’re looking to do a money raise for that or if you’re going to bootstrap it.

I think that’s an important piece to this because it’ll tell me a little bit more about the speed.

So, if you can drop that in somewhere, I’d appreciate it.

Bootstrap. Okay.

If you’re going to bootstrap it, then I would really focus on products.

Don’t get caught up in the idea of, “I’m just going to buy, rinse, repeat; buy, rinse, repeat.”

I don’t think that’s going to give you a super-attractive portfolio.

If you stay focused on some guiding principles around products, what I’ve found—I’ve sold close to a dozen deals into aggregators in the last 18 months, and one of the things I’ve found from getting close to some of these guys is they value high-quality products pretty much over anything.

If you want to know the real way to sell these businesses, it really doesn’t have anything to do with the words that I’m putting in the email or that I’m saying over the phone.

I have a seller right now that’s under LOI for a deal that’s going to be worth more than $10 million to them. It’s 100% Amazon FBA.

They got so many compliments when we were going through the process, and we ended up getting 10 offers from the aggregators.

One of the things I said to them—they were patting me on the back for how fantastic of a job I did bringing them these buyers—and one of the things I had to say to them was, “Look, honestly, I have a few personal contacts here, and I’ve got some reputation, and I’ve been through several deals, so I do have some secret sauce in this. But honestly, the reason these people are falling all over themselves for this business is because of you guys.”

“You’re so detail-oriented. Your products are so amazing. They’re in love with your business. I didn’t have to do anything. I just brought them the business and got on the phone with them. You sold it by building a great product.”

So, Paul, my recommendation would be to find some guiding principles about what you’re going to buy.

If I were doing it and I was bootstrapping it, I would personally focus on really strong products, however you want to define that.

Either patented or really protected categories, high-margin categories, 20,000 five-star reviews—whatever you think makes a great Amazon FBA business.

I think one of the things that could be a slippery slope for you is, when I was building my content portfolio, I got stuck in the space of “more is more.”

“More is more” is a really bad spot to live in.

“More is more” is what leads you to the private equity guys coming knocking and you’re like, “Yeah, I would love to have a conversation with you guys because I’m miserable.”

So, I think you should have some guiding principles that you are not willing to stray from in what you’re going to buy, and stick to those so that when you go to sell it, they can see that theme running all the way through it.

“Hey, Paul’s bought these businesses. He’s got 100 SKUs over these five businesses that he built into a portfolio. But one of the things we found about these five businesses is they’re all heroes.”

Or, “One of the things we found about these five businesses is they’re all best in their category,” or they’ve got a moat around them because of their trademark or because of their patent.

Something about them makes them really defensible.

So, I would definitely keep that in mind and not get into the “more is more” category, especially if you’re bootstrapping.

Some of the guys who are getting a lot of capital, you start to have requirements like, “Hey, we hired five people.”

Sometimes that changes what you’re going to buy.

I’ve dealt with some of the aggregators where they turn me down for a deal, and then three weeks later I get an email from them. It’s like, “Hey, I need to look at that deal again.”

I’m like, “Well, I still have your email from last week where you told me you would never want this business.”

But they’re like, “Yeah, we’ve got 50 people that we’ve got to keep busy here now, and there’s a little bit of a lack of supply right now, so we kind of need to lower our criteria a little bit.”

If you’re raising money, there are some other factors that start to play in.

**Chris:** Okay.

Real quickly then, Brad. You didn’t do anything on that deal you were talking about, so why can’t people just sell directly to an aggregator?

I’m teasing a little bit because we’ve got a podcast with you coming out next week on the Quiet Light Podcast talking a little bit about this.

But why use a broker at all if they can sell directly to these aggregators?

**Brad:** Don’t use a broker at all if you can sell directly to the aggregator. If that’s what you want to do, I’m totally happy with it.

I’ll tell you, I think there are a couple of risks with that.

We’ve had these conversations about, “How does Quiet Light compete with the aggregators?”

I personally don’t think we need to compete with them.

What we do is we hold people’s hands to get them through the sales process. There’s a lot to it, and you can get walked all over, and you can get put in a spot where you’re miserable pretty quickly.

But here are a couple of points that I think are really tough for the aggregators to compete with.

Number one is, when people go direct, they usually don’t have a packet that presents the way that our materials present.

We’re going to give them something that really makes the business look attractive, something that’s going to make them really want it.

And sometimes I don’t even build those, so I don’t want to act like I always build them up, because I don’t.

Sometimes, if I have a business that’s so good, what I do is I start focusing on scarcity.

“Hey, I’m only emailing you 10 people. Are you interested in taking a look at this? Because I’m going to go public with it, but if you guys are willing to pay a premium multiple now, then we can save our seller some time here.”

But our materials, and things like an add-back schedule—we’re going to help you build an add-back schedule that makes sense, that can actually pass the test where they’re not going to come back and say, “Hey, you said you made a million last year, but after we looked at that add-back where you added back $70,000 you spent on a failed marketing experiment, we actually think you made $930,000 because we’re not going to let you add that back.”

We’re going to help give you some materials and some confidence in your EBITDA that I don’t think you’re going to have on your own.

The second thing we’re going to do is introduce competition.

I’m sure if you’re running an Amazon business, you’ve had two or three or four or five or 10 of these aggregators reach out and say, “Hey, we’re looking to buy your business.”

That’s fine. If you want to sell direct to them, you can.

I think the benefit of us is we have them all coming to us.

We’ve had close to 50 of them now fill out our materials on our own turf that says: This is what we’re looking for. This is how we pay. These are the categories. This is how quickly we can close. This is how much money we’ve raised. This is our proof.

So, we’re able to lean on that.

That deal I was just talking about, we went to 20 buyers. That was handpicked. I had a list of 50. I handpicked 20 of them.

I reached out to them. I sent them an email. I gave them the packet. I said, “Hey, you guys want to take a look at this? Let me know.”

I had, like, 17 of them respond. Three of them wanted to wait a week or two, which I knew was not going to fly because we were going to have so much interest.

We ended up getting 10 offers.

In that process, I can guarantee you we did better than what you could do on your own because we were able to listen to what you had that was a benefit, present that to multiple buyers, and then once an offer came in, I could say, “Hey, that offer is not going to work. We’ve got an offer coming in, so we’re going to need your best and final. We’re going to need you to give us something to let us know.”

I really feel like, on the topic of the aggregators and whether you should go direct, I’m fine with you going direct.

If you want to go direct, go direct.

I believe that if you go with us, in most cases you’re probably going to end up making more money on the deal, and you’re going to feel better about it because when you’re upset, you get to call and yell at me, and then I have this magical ability to calm you down.

Or I see Walker is in the chat here. Walker’s going to talk you off the ledge and sing you a little tune or something to keep you feeling good about the deal.

**Chris:** Great.

Okay, so Brad, how do buyers look at products made in the USA? Is there any additional benefit to them? Is there more interest in that, or less interest in manufacturing and production in the U.S.?

**Brad:** Yeah, I think so.

Of course, your eight-figure buyers are going to be very well-versed at getting stuff overseas, and if that’s going to save money, they’re going to be willing to do that.

I think there are a couple of things on the USA-made stuff.

One is, at least in the era of Trump, we’ve got tariffs to deal with, and a lot of those are still in place. They may go away, but we don’t know for sure.

But I do think that when you’re USA-made, you have a little bit more control over your supply chain. So, that’s always nice to have.

Then there are buyers who specifically want to buy stuff that’s made in the USA.

That’s one of those things—Paul, you were talking about how we can do a roll-up strategy. I don’t know if it would be easy to do, but if you did a roll-up strategy of only products that were made in the USA, that’s an interesting angle.

“Hey, I’ve got a portfolio, and it’s all stuff that’s made here in the U.S.”

There would be certain types of strategic buyers that might want that because they say, “Man, we love the control we have with the supply chain, and I can just jump on a plane to the suburbs of Chicago and look at the warehouse. I don’t have to deal with having proof that I’ve had a vaccine or whatever is coming down the pike with international travel.”

So, I do think there’s some advantage there.

I don’t know if it changes the multiples or not.

I think it’s going to end up being the same kind of thing where, if it’s a great business, it’s going to sell for a great multiple.

**Chris:** Great. Excellent.

Are there buyers open to buying two entities—an S corp and a C corp, for example—if that’s how it’s structured for an Amazon business?

**Brad:** For sure.

That’s a great question because this is where the aggregators don’t trip up easily, but where individual buyers would.

If we go to our list—and we’ve got a large list—we shoot your business out to the list, and it’s an Amazon business, let’s say. They come back and say, “Hey, I’ve got a C corp and I’ve got an S corp.”

To some buyers, that could get confusing, and deals can fall apart relatively easily if you start to get into complicated structures.

I have found with the aggregators that they’re so used to every kind of complication that they’re just buying anyway.

This deal I’ve talked about that’s under LOI right now is going to end up being an eight-figure deal for the sellers.

In that deal, they’ve really watched their SKU count. They’ve done few SKUs, but they’ve gone super broad. So, they’ve got them in, like, 40 countries on Amazon, and they’ve gone through all the paperwork and all the trouble and all this stuff.

One of the things I looked at, and why we didn’t end up going to our list, was I started feeling like if we go to our list and an individual buyer wants to buy this, some of the setups in these countries took them, like, 90 days to get set up.

I didn’t even know how we would facilitate a transaction.

Whereas, when we went to the aggregators, they already had a presence in all these countries, and they were like, “Oh, it’s plug-and-play for us. It’s no problem. We’ll just roll right over.”

So, I think the structure can be a hang-up for some.

**Chris:** Great.

Maybe we’ll end with this one here in a moment because I really like it for an ending question. So, maybe I’ll jump on to another one.

Here’s a question about the impact on multiples with just a few factors: IP, distribution channels, contracts, staff, processes and systems, and the brand.

I’m sure all of those things have an upward or downward pressure on multiple. When you’re putting together a deal, how do you weigh all those things?

**Brad:** Well, I want to look at whether there’s risk.

I’m not necessarily focusing on every single one of those, but I’m trying to listen to see if I hear a risk. Is there a particular issue that could come up?

I’ll give an example.

I had this seller who had a jewelry business. The margins were 90%. Jewelry is really small, so I was very excited about the listing.

We got it under LOI, and the issue that we ran into was the supplier was a single supplier.

We didn’t ask on the front end if the supplier was willing for it to be transferred.

I think they would have been willing for it to be transferred. Unfortunately, the buyer said, “Hey, we want to have a three-year contract with the supplier that they won’t raise the price of the goods.”

My seller went back to the supplier and said, “Hey, I’ve got a buyer. They want to buy it. We need to have this agreement signed that says that you won’t raise the price of the goods for three years.”

The factory that was producing it said, “We have never raised prices on you in five years. So, how about this? We’re not willing to work with your new buyer at all, and we’re going to raise your prices.”

Killed the deal on the spot.

So, to your question—and Barbara, I know you’ve been through some of this already—I think we’re really looking for red flags on this stuff.

Are there red flags with the IP? Are there red flags with the contracts? Are there red flags with the staff?

I would build the business—if you plan on building it to sell it, then build it to sell it.

Go through from the very beginning and think about: What do I need to set up to make sure that the business is not relying on me? Make sure all these kinds of things are taken care of.

When we start talking about an eight-figure deal, that’s one of the big problems: key-man risk.

I never talked about key-man risk at all when I was doing six- and seven-figure deals. Key-man risk is not even a topic.

When I do a private equity deal and there’s equity roll, and the seller wants to get a 6X for their business, key-man risk is one of the biggest factors.

In fact, my seller for my last deal that was private equity had to have a key-man life insurance policy. They came out, drew his blood, all this stuff. They’ve got to get enough money to cover what it would take to replace him.

He also had to sign up for two-year employment where, if he left for any reason in two years, they would discount the value of his shares off of the value paid at closing.

So, that 25%, instead of him rolling it—

One of the goals of private equity—we haven’t really talked about it today—the reason you roll is because private equity firms are looking to turn their $1 investment into your business into $3 to $5 within three to five years.

That’s what they want to do.

So, when you roll 25%—let’s say you had a business that you sold for $10 million. You roll $2.5 million, 25%.

They’re going to take that $2.5 million and they’re going to turn it into three to five times in three to five years, most of the time.

This is not like venture capital. This is not like angel investing.

We’re talking about the best operators in the world. These private equity firms are absolutely legit.

They all seem like the same people to me. They’re fantastic operators. They all seem like they come from the same firm because what they’re doing is a commodity.

Running operations on a private equity side is not an art form. It’s a commodity. It’s a skill set that can be taught, that can be learned.

What can’t be taught is having the best greeting cards on Amazon, Barbara. That can’t be taught.

You went out and built the best greeting cards that were available.

So, you’re able to connect with people. Private equity needs entrepreneurs because private equity firms are not creative at all.

They are trading a commodity. The commodity is: We are fantastic at logistics. We are fantastic at accounting, at protecting the downside of the business, at knowing how to build a business up to support a larger business.

That’s the goal of private equity to begin with.

I feel like that’s an important thing to keep in mind.

Why are we doing a private equity deal?

We’re doing a private equity deal because we’re hoping to get a bigger multiple.

If I take the instance I just gave you, you sold the business for $10 million, but you rolled $2.5 million of that. Then they’re going to go turn it into four times that, and you’re going to get $10 million for your next sale.

The reason entrepreneurs stay in to do that is because it’s the max payout.

If everything goes the way that it’s supposed to go, you get your max payout by doing a traditional private equity deal.

But today we’ve mostly talked about aggregators.

So, I want to just say, in the form of the aggregators, the aggregators are going to look at all these factors. They’re going to see through very quickly the staff, the contracts, the brand, the distribution channels, the IP.

They’re going to see all that stuff, and they’re going to sniff out the red flags very quickly.

So, just build it all very legitimately. Build it for transferability. Don’t hide anything.

If you run into a problem, tackle it the right way.

Just be good businesspeople, and a lot of that stuff is going to work itself out.

**Chris:** Right.

If a company is incorporated in Florida, what should that person take into consideration in terms of brokerage fees and tax? And are there things that someone could be doing, if they’re planning for an eight-figure exit, to legally mitigate their tax bill when they bounce?

**Brad:** Okay, these are pretty tough for me to answer. I’m not an accountant.

Florida—good news, I spent some time in Florida. In Florida, you don’t have any income tax for the state, so that’s one benefit.

In terms of the fees that we charge, we do what’s called a Modern Lehman formula.

A Modern Lehman takes into account the enterprise value of the transaction, and we take 10% of the first million, 9% of the second, 8% of the third, 7% of the fourth. That goes all the way down until we get to 3%, and then it’s 3%, 3%, 3%, 3%, 3%.

Basically, in the M&A world, investment banks and brokerages and advisors like us are wanting to get somewhere in the neighborhood of about 5% on, like, a $50 million deal.

Since we swim in this smaller pond of the internet space, we start at 10% and we work our way down toward that number.

So, it gets down to as low as four-point-something percent if the transaction gets large enough. But that’s how our fees are going to look.

Our fees are paid at closing.

For the most part, if the enterprise value of the deal is $10 million, you’re going to pay us whatever our fee is on that $10 million close.

Mark’s been very clear that Quiet Light played the money-chasing game for a few years, but it’s really difficult.

I don’t really want to reach out to my past sellers to ask them for money. It’s not really what we do. We want to spend our time advising.

But in terms of setting up for taxes, what’s Shannon’s last name?

**Chris:** Shannon Stewart.

**Brad:** Yeah, Shannon Stewart.

**Chris:** We have some content with her as well that people can check out on QuietLight.com.

**Brad:** Yeah.

If you Google Quiet Light and Shannon Stewart, you will see a strategy that she has implemented that’s supposed to be pretty nice for saving on taxes.

I have a strategic accounting firm that I’ve worked with for a decade. I don’t think they’re taking on any clients, but if you find a strategic accounting firm—like, I have one out of Louisville, Kentucky, named ARGI—that firm, especially when I was operating in the manufacturing space, saved me a great deal on taxes using totally legitimate strategies that are available to people who are willing to pay to get them implemented.

My structure was complicated. I had seven businesses representing me at this one business, but it saved me a lot of money on taxes and did it in an aboveboard way that was protecting my downside, my liability, but also mitigating some tax burden.

So, I would tell you: Go to your accountants. Go to your legal experts for things like that.

But the brokerage fees, if you’ve got any questions about that, shoot me an email and I can help you walk through it.

**Chris:** Terrific.

A couple of small ones here. We’re at time, but I want to do a couple of small ones just to wrap this up.

Any changes to the multiple versus smaller deals for monthly subscribers of the brand’s physical products?

**Brad:** Okay, I see that there, Tim.

Here’s the issue with subscription.

SaaS and subscription-based businesses are awesome. They are really great if you can figure out a formula that allows you to continue to grow them.

One of the problems that we run into with subscription-based businesses is: What are the trends doing?

I would say that a lot of times what people do is they launch their subscription business, it takes off, and it’s like, “Oh, I’ve got 20 subscribers. Then I’ve got 100 subscribers. Then I’ve got 200 subscribers.”

By the time you hit 200 subscribers, you’re like, “Man, we’re doing great. We’re making lots of money. We’re doing all this stuff, and everything looks good.”

Then you start to change your calculus to, “Hey, are we still growing?”

So, it’s like, “Hey, you went from 200 to 225, and then you went from 225 to 230.”

What you’re not realizing is your growth rate month over month is dropping off a cliff.

A lot of times, in the SaaS and subscription membership model, we see that growth curve go up and peak. When it starts going the other way, that is when we start to run into real problems where people cannot figure out how to turn it back around.

So, if you’re focusing on the subscription space, it’s very hot. People love SaaS. People love membership.

I’ve got a keto brand right now that we’re considering going to market with that’s got subscription revenue, and it’s great if you’ve got predictable growth.

If you have any sign that your growth is slowing, I think the multiples get really tough.

Now, the multiples are higher, Tim.

Just as a general rule, a good subscription-based business probably trades at a minimum of four times if things are growing, and then it goes up from there.

I’m getting ready to market one to private equity at probably a pretty high multiple, somewhere around seven times or something around that number.

So, I think they can be great.

But if I were running a subscriber business today, I would track my monthly growth rate like a hawk, and I would make sure that I’m keeping those numbers consistent.

When you go to sell, you don’t want them to see a decrease in monthly growth. You want them to see increases.

And not only when they see it, but all the way through the sales process.

If you’re at 1,000 subscribers when you go to market, you’re like, “Hey, we’re doing great. We had 100% year-over-year growth.”

Well, we need to keep that trend all the way through the process because that’s what’s going to get the thing across the finish line.

We can’t let that trend peak out at 1,000, and three months from now, when they’re ready to close, you’re like, “Yeah, we’re at 940. Things look great.”

They’re going to be like, “No, it doesn’t. We’re down several percentage points. How are we going to be able to stop this bleeding?”

They’re not going to want it anymore.

So, that’s the troubling thing about subscription-based businesses.

**Chris:** Great.

So, I guess the final question for you, Brad, is—and Shuki framed it as a crystal ball question—two years from now, what do you think the multiples will be? Do you think they’ll be lower, higher, or the same?

And I’m going to tack on a second part of that question: How do sellers know it’s the right time to sell? How do entrepreneurs know it’s the right time to sell their business?

**Brad:** Crystal ball first.

I’m struggling with that one, Shuki. I’ll tell you why.

One is, I started online in 2003. I considered myself, back then, a pioneer of the internet.

Today, in 2021, I consider all of you pioneers of the internet.

I think that our crash course with institutional money is happening before our very eyes right now, but we are still on this climb up. Our space is arriving, and this pandemic has pushed the fast-forward button on everything electronic commerce.

I feel like we just jumped five years in hyperspeed.

So, will the multiples be higher?

Well, if we’re not overly frothy right now and this is just a paradigm shift, then I don’t think the multiples are too high right now.

I think that the internet is becoming a more predictable place, not a less predictable place. When I was starting out 15 years ago, it was way less predictable than it is today.

So, I would say that as my first crystal-ball thought. I think the multiples are probably going to hold up because I think our industry is rising.

I wish I could remember the second part of that question.

**Chris:** How does someone know it’s the right time to sell?

**Brad:** Yeah.

So, this is where I don’t do myself any favors.

If you like running your business, I tell every single person who gets on the phone with me, “Hey, if you like running it, and you feel like your prospects for growth are good, and you’re enjoying yourself, and you’re making good money, I would never sell.”

If any of those things are not true, I think it can become pretty risky pretty quickly.

I think that if you are not enjoying yourself and you wait until you’re completely burned out to call me and say, “It’s time to sell,” that’s problematic because it’s a process.

Usually, if you’re burned out, then you’ve already started sacrificing some of the things you need to do with the business to take the best care of it.

That can be a bad place. It can lead to some really bad outcomes, in my opinion.

So, I think you kind of have to anticipate where you are as a person and how much you’re enjoying yourself.

If you enjoy doing it, there is no time to sell. Just keep raising the bar, keep knocking down the milestones, and keep going.

If you get to a point where you realize there is a shelf life, or it’s like, “Hey, I have other things going on in my life.”

For me, I’ve got five kids. That changes my life.

The fact that I have five children makes for a different life than if I was going to sit in this office until whatever time I wanted to every night.

I could probably generate twice the amount of fees for Quiet Light if I didn’t have the responsibility that I have, but it’s just the reality of where I’m at.

So, I think you kind of have to assess your own situation and see where you’re at.

Make sure that you don’t wait until you’re burned out, but get to the point of doing it at the right time.

Thanks, Barbara.

But real quick—hey, Matt, because I can tell that Chris is trying to cut me off.

**Chris:** Oh, no. You’re good. I’m just keeping my eye on the timeline.

**Brad:** Matt, I saw your question there.

So, great point: Subscribe & Save.

I would look at Subscribe & Save very similarly to a membership-based business, and it is a very great help to your valuation.

I think that on Subscribe & Save, you are trading at a higher multiple.

The blended amount that we’re seeing there is—I’ve seen a lot of Subscribe & Save businesses starting around four times, which probably means that Subscribe & Save is probably selling at, like, a five, and your non-Subscribe & Save is probably selling at, like, a three.

I’ve seen a lot of that.

I’m getting ready to potentially list one. We’ll probably start it out at a 4.75. It’s a larger business. It’s got lots of Subscribe & Save, and it’s in a really hot area with really strong reviews.

Very strong business, five-year trends. Everything is just lining up perfectly.

We’ll probably start it at, like, a 4.75.

If they didn’t have that Subscribe & Save, I’d probably be starting at a 3.75.

So, that gives you an idea of how important that Subscribe & Save is there.

**Chris:** Great.

Well, Brad, is there anything that I’ve failed to ask you or anything that you think is a real essential thing to leave people with?

It’s fine if there’s not. This has been a really good session.

So, if you’ve got any more parting thoughts, I’d appreciate it.

**Brad:** Yeah.

I think that one of the points that we might want to make in a session that’s about selling for eight figures is figuring out what kind of entrepreneur you are.

If you’re an entrepreneur who really likes to move from project to project, then I would suggest not necessarily trying to build an eight-figure business.

Maybe try to take two or three years, build a really good seven-figure business, and then go sell it.

Right now, you can go sell it to the aggregators. We can facilitate a transaction with them very easily.

If you have a good business, it can be a really nice process. Then you can just sell and move on to the next thing.

But once you get into this eight-figure deal, I’ll tell a quick story.

My seller on the $25 million deal I referenced in December called me in November, and he said, “Hey, as we get ready to sign this LOI, I just have had second thoughts, and I don’t want to work in the business. I just want you to go sell it. Just go sell it. If I have to sacrifice a little bit on the multiple, then we’ll just have to take that.”

I hate to say that this is what I did, but I called him and said, “Hey, really, you can’t do that. That’s the most expensive decision that you’re making.”

One of the problems with growing your business to eight-figure size is it becomes much more difficult to move, and your responsibility to yourself becomes much greater.

In his case, I said, “You don’t have the option. This is like saying, ‘Should I go sell it for $25 million or $12 million?’ You are an important part of this. We can’t go do that.”

And here’s what will happen: I can get you someone in no time who will buy it for $12 million, and before that deal closes, you’ll walk away because you will realize, “Wait a second. Why would I sell for $12 million? All I’ve got to do is grind it out here for another year and a half, and I’m going to make up that.”

So, I basically said, “You can’t do that.”

What you have to do is you’re going to have to roll equity. You’re going to have to gear up for a couple more years. You’re going to have to go through quality of earnings again.

And what I’m going to do is I’m going to find you a buyer that’s going to close in 60 days. That’s what I’ll do.

I’ll find the buyer that realizes where you are in the process, but you’ve got to agree to gear up because we can’t let you make an eight-figure mistake because you’re tired.

You’re going to have to gear up, and you’re going to have to do it. It’s going to be hard.

But this is kind of the burden that you bear when you run an eight-figure business.

Honestly, that’s why I say: Figure out who you are.

Do you want to be at that size?

There are a lot of benefits that come from that size. You’re rich. You have an awesome business. You have influence. You’ve got all kinds of opportunities coming at you. Everything’s great.

But you work all the time.

There’s no time for five kids. It’s not there.

I know all of you are probably thinking, “None of us want five kids.”

But there’s no time for five kids.

Those are decisions.

If you wonder, “Why is Brad sitting in this office? He used to operate.” There are reasons why I don’t operate now.

I had to make decisions about my life and figure out: How do I fit in all the things that I want to do with my situation?

For me, that led me to doing some investing. I do a little bit of VC investing and angel investing. I do some personal investing, and then I still have a small portfolio but have employees who kind of run that for me.

But I basically do deals, and I can do those from anywhere in the world with an internet connection.

During the pandemic, while we were all sitting at home, I was sitting in Maggie Valley, North Carolina, in a log cabin for a month with my family.

Every day I got up, and I went in and worked on Quiet Light all day long. They hung out and did school out in the living room.

Then, when I got done with work, we’d go out for a hike, and we’d go pick up some food in Asheville, North Carolina, bring it home, and eat it at the place.

That’s the life I want to live.

So, I think you’ve got to decide: Who am I as an entrepreneur? Who do I want to be?

If you don’t want to have that kind of responsibility, then go build these seven-figure businesses and flip them, and do it over and over again.

You can do it. We’ve got lots of people doing it.

**Chris:** Thank you, Barbara. You are terrific.

Well, on that note, I’d just like to thank everyone for your excellent questions and for joining us here today for this webinar.

We’re going to be doing a lot more content like this, and as events kind of ramp up—some in person, some online—we’re going to be participating in a lot more of those.

So, we invite you to keep checking us out on the website and on our YouTube page.

We’re going to be trying to engage with you as much as possible.

This is going to continue to be a hot marketplace for eight-figure deals. I’m sure we’ll be putting out more content on this.

We’ve got some guides and some podcasts, as I said, coming out specifically on these deals.

So, just keep tuned to QuietLight.com and our Learn section, which you can find at the top of the page. You’ll be able to find some really good information on that.

Brad, if people want to reach out to you—you’ve mentioned it a couple of times—how do they get in touch with you?

**Brad:** [email protected].

That’s probably the easiest, just [email protected].

Or you can call me. I think there are lead forms that connect to me on the site. I don’t know. There are probably lots of ways to get to me.

But [email protected] is the way that most people reach out.

So, if you have any questions, we give out advice for free. And then, if it leads to a sale at some point, we’re happy to do that.

That’s kind of how we approach it.

**Chris:** Right. Great.

I know I was having a couple of side conversations with one or two of you. If you want to finish those up, please feel free to reach me as well.

My email is [email protected], spelled in the traditional way, not with any K’s or F’s.

So, [email protected].

I’d be happy to continue those conversations with you offline and then hand you along.

We’ve got, obviously, 14 advisors now, with a lot of different areas of expertise and interest.

So, even if it’s a question that I don’t feel like I can answer for you, I can certainly introduce you to someone who’s going to be among the best in the business at answering those questions.

Thanks, everyone, again for joining us, and we’ll see you next month for another great AMA.

Have a great day.