#375 – Crafting Your Money-Making Exit with Nate Lind
Nate Lind, seasoned entrepreneur and business broker, joins me on an eye-opening journey through the thickets of e-commerce and the artful dance of business exits. Together, we peel back the layers of what it takes to thrive and survive in the competitive world of selling on Amazon, from the volatile whims of affiliate programs to the calculated strategies behind selling unique supplement brands. My own tale weaves through this narrative, sharing lessons learned from bootstrapping a business with credit card-funded inventory to finding success in niche markets like anti-aging and specialized hair care.
The conversation takes a turn to reveal the underbelly of missed opportunities and the adrenaline-fueled world of online business brokerage. As we swap stories, he unveils the evolution of Website Closers and the thriving market for digital marketing agencies, and Nate also shares his invaluable insights on the importance of timing and preparation for those looking to make their exit. The trade secrets from his book “Maximum Exit” come to life as we discuss the nuts and bolts of preparing for a business sale, including a due diligence checklist that’s essential for any seller’s arsenal.
As we wrap up, the Four Burners Theory comes into play, challenging listeners to consider the balance of health, work, family, and friends in the quest for entrepreneurial success. We explore the complex decision-making behind selling a business, whether it’s for personal growth, health, or a new adventure. We talk about candid reflections on the post-exit paths for entrepreneurs, and how, after the dust of a sale settles, the drive to conquer new challenges often ignites anew. Join us for a deep dive into the labyrinth of online business, where strategy, timing, and intuition are your best guides to a successful exit.
In episode 375 of the AM/PM Podcast, Kevin and Nate discuss:
- 04:52 – Control of Money Flow in E-Commerce
- 09:34 – The Impact of Online Billing Scams
- 13:08 – Success in Selling Unique Supplement Brands
- 23:12 – Website Closers and M&A Marketplace Introduction
- 26:42 – Mastermind and Competitors in Affiliate Marketing
- 31:35 – Current Trends in Selling Businesses
- 33:00 – Market for Digital Marketing Agencies
- 35:26 – Digital Marketing’s Role in Selling on Amazon
- 43:14 – Success in Black Hat Affiliate Marketing
- 46:38 – Navigating Challenges in International Business Transactions
- 48:48 – Preparing for a Business Sale
- 55:33 – Four Burners Theory for Selling Businesses
- 1:01:01 – Selling Business Strategies and Tips
- 1:04:30 – Words Of Wisdom Of The Week From Kevin
Transcript
Kevin King:
Happy holidays everybody and welcome to episode 375 of the AM/PM Podcast. This week, my guest is Nate Lind. Nate is an entrepreneur by trade and a business broker by profession now, and in this awesome episode we talk about everything around selling your business, around entrepreneurship and affiliate programs and a whole bunch of other really cool and interesting stuff. I think you’re gonna really get a lot from this and really enjoy this episode. Nate how you doing man?
Nate:
I’m doing awesome. Just enjoyed some great travel and I’m kind of hunkered down now for a while grinding some stuff out, and thanks for having me on.
Kevin King:
I’m glad to have you here Now. We, I think, first I think we’ve known of each other for a while, but we first, I think, met at the last Billion Dollar Seller, some in Puerto Rico back in June of earlier this year.
Nate:
That’s right. Yeah, I heard you were coming to town. I had like not a whole lot of notice. I just found out about it maybe a month in advance and reached out to you and figured it would be would definitely be worth me getting together with you guys and hanging out for a little bit. I was able to get into your guys’ what’s that group after I bought some tickets and was telling people you know, here’s some activities, you can go snorkel over here and go do some of that. So I’ve been in Puerto Rico for two years now and you know it’s my home.
Kevin King:
Yeah, you were like the tour guide. Everybody was like so where should we go to see the? What’s the? What’s the, the water that lights up at night? And you’re like no don’t go to the biolescent bionescence bay or whatever.
Nate:
Bioluminescence yeah, don’t do that on the full moon. You won’t see anything and it’s too far away anyway, Just like stick to stick to San Juan.
Kevin King:
Yeah, you were telling everybody where the cool places would go, where the cool places to eat or drink or whatever was that was. That was a lot of cool. So how? How was it? You don’t get too many events that come in the e-com space that come to Puerto Rico, do you?
Nate:
No, there, Ezra was going to do one the year before and he canceled it because there was some leftover like craziness kind of still going on with COVID. I’ve done events in Puerto Rico before for kind of my entourage, but yeah, not too often does someone come, you know, come through, but which is a pity because island is beautiful and it’s, you know, it is a US territory, so you don’t need passports or anything. You just like fly in there like you would, you know, from Texas to Oklahoma. So, yeah, it was. It was really cool. It’s an interesting experience because for me, I was an e-commerce entrepreneur for a decade before I became a business broker, but more direct to my own website, amazon.
Nate:
I think I made like between three and 10% of micro sales on Amazon. Most of it was all on my own website. So to see all these other entrepreneurs where more of their focus was Amazon In fact, many of them don’t even have their own websites, it’s all just Amazon it was kind of a unique twist, because there’s definitely some nuances with Amazon that people were having to deal with that I didn’t have to deal with, and then stuff that I had to deal with that they didn’t have to deal with. So there was some disconnect on like what were challenges or frustrations as e-commerce owners. We were all operating, but it was neat because there’s always challenges, there’s always bottlenecks or issues or or other obstructions to our end goal, and it tends to be this goliath company that, with one algorithm change, can squash everything, whether it be Amazon or a merchant account or Facebook ads or Instagram or Google or Shopify. Somebody else has the power to shut down these e-commerce entrepreneurs at a moment’s notice.
Kevin King:
Yeah, I remember, even before the Amazon days there was some big Google update. Was it Pinkwin or? I forget it’s some animal name and they overnight, literally it wiped out billions of dollars of revenue overnight because people are. Some of it needed to be done in honesty, because people were hacking the ranking system and doing some things. But yeah, it’s, it’s. It’s nice when they these these huge platforms have all this massive traffic, but it’s also a little bit scary when you don’t control it. And even people say, diversify off Amazon and we’ll talk about some of that in a little bit and how it may affect your valuations and stuff but going to Shopify, but you still. You have a little, you have more control, but you’re still depending it. Unless you have your own audience and own method of generating that traffic, you’re still dependent on, on algorithms and things.
Nate:
Yeah, and even, and even, a second layer of that. If there’s anybody involved in the flow of money between your consumer and you, they’ve got some control, and that’s always the case, unless you own an acquiring bank and you’re processing your own credit cards. You know your own credit cards, which none of no one’s doing. So yeah, it’s, it’s interesting.
Kevin King:
Amazon’s doing it. Amazon has an owner. Well, that’s the thing.
Nate:
So Amazon’s controlling traffic and controlling the money, but us as third party sellers on Amazon’s platform. That’s two things that Amazon can shut off for you. Shopify is tending to do a lot of the payments themselves as well, because they they disincentivize you to use your own merchant accounts. They actually surcharge you.
Kevin King:
So, like everyone’s like trying to get a grip on the most important things in that whole ecosystem and traffic and the money flow those are two critical components that other people tend to have control over, not us, as the entrepreneur and the money flows, the traffic one can be overcome with the right, right strategy and the right marketing to a degree, but the money flow is difficult. I remember I’ve had problems with the before the billion dollar seller summit. We did Manny and Guillermo at helium 10. That started helium 10 and I did an event called the Illuminati mastermind and it was kind of the precursor to the billion dollar seller summit, and we did two of them. We did one in Cancun in 2017 and a one in Hawaii in 2018 and the one in 2017 in Cancun. This was an eight or $9,000 ticket event and we decided at that time that we had a stripe account processing credit cards and then we people were asking for PayPal. So we added PayPal and we did I don’t know 150 grand or something like that in sales through PayPal nice little chunk. Paypal held that money for six months and they made us prove with pictures that there was people at this event. Show them where they signed up, show them all this kind of stuff. And we’re like come on, guys, you know that was basically all of our profit and then some of the event, and I’ve had that happen in one of my other businesses.
Kevin King:
About 15, 20 years ago, PayPal held money for a long time. I refuse to use PayPal to this day. If someone’s like pay me about PayPal, no, and PayPal owns Venmo, and so if I’m selling something on Facebook marketplace and someone’s I’ll just Venmo, yeah it’s like. No, you won’t. I won’t use anything to do with PayPal If I can avoid it. Now there’s a few affiliates sites that that’s the only way they will pay you, so I put in some account and that money comes out immediately. But I’ve had merchant accounts where I get had stuff hundreds of thousands of dollars held for no reason. You know it wasn’t like I was doing drop shipping and one of these crazy you know things where there’s a lot of fraud or return rates. It’s. It’s one of the frustrating things about being in businesses. There’s a lot of times you have no control.
Nate:
Yeah, absolutely Well, I’ve had millions held in international merchant accounts where there’s consumer fraud. So consumers would be defrauding the merchant processing entities and the and the merchant of record by just, instead of calling for a refund or sending a return, it would simply just do a charge back and keep the product. So to get their money back and to keep the product, which, yeah, that’s, that’s a brutal combination. So there’s a. There is a group of very, very savvy consumers out there that, yeah, they’re merciless. They’ll just take your stuff and then take back their money and then cause you all sorts of problems.
Kevin King:
Yeah, I mean with chargebacks. I mean sometimes, a lot of times, they’re not even worth fighting. If it’s a big amount and someone just paid you for a $5,000 ticket or something, you probably want to try to fight that. But a lot of times on a little 10, $15, $20 subscription or product, it’s not worth the time and effort to even fight it, unless it’s just going to kill you on your return rate, because then they don’t like it to go over about 0.05% or maybe sometimes it’s 1% if you’re high risk. But yeah, that’s a whole animal there.
Nate:
There’s a crazy industry there. I was in affiliate marketing, selling a lot of supplements and vitamins using performance marketing and direct to consumer affiliate marketing, and that is also fraught with fraud. You have affiliates who are kind of like your independent salesman, though they’re out there promoting your products and in some cases they will promote consumers to sign up for a free trial or sign up for some type of product with you and then charge it back or refund it. Or here’s how you go back getting your money and so they’re getting compensated to drive verified sales to you, and then they’re telling the consumer this is how you get away with getting the product and getting your money back after they’ve gotten their sales fee. The internet’s a wild west. You really have to know your business and you have to look over your back. You have to have wingmen that’s covering your six at all times, because people will steal money from you coming and going if you’re not careful.
Kevin King:
Well, you remember there was a time in the 90s, in early 2000s, where a lot of sites in the adult industry and the supplements industry they were doing free trials, either like a 30-day free trial for subscription site or get a free bottle and you’d have to enter your credit card information or maybe you’d have to pay. It’s a free plus shipping, pay seven bucks shipping or something. But what they didn’t tell you is that they’re going to charge you if you didn’t cancel. It’s very not clear, not there at all, or it was like so tiny Nobody ever saw. It was on the third page of the Terms of Service or something like that, and there was a huge problem with that for a while and a lot of merchant accounts and PayPal started just banning people left and right If they smelled anything like that.
Nate:
Yeah, there was some notable people in the mid 2000s, I think Jeremy Johnson and a couple other guys that yeah, they made a killing doing that and they didn’t even send out products. They were just literally like taking people’s credit cards and charging them over and over and over again and even bother fulfilling anything. Then after that, a whole host of people who would at least send out a product but, yeah, not disclose the full nature of the billing terms. I know that area really well. That’s definitely fraught in the affiliate marketing space and, yeah, it’s given a lot of consumers a lot of distrust and being able to purchase products online. Then the FTC they rolled out a new law called Rosca. It’s like restore online consumers something faith Basically trying to restore online consumers faith in internet purchases and they made it illegal for companies to do that, to be showing one thing and then doing something else. And it started prosecuting people and going after them, taking back all their money, giving them prison sentences or deferring prison sentences for multi-million dollar judgments, people having to give over their houses and cars and that kind of stuff. And yeah, it’s real.
Nate:
I think for us as entrepreneurs, that makes me feel really good these days to be able to offer service to somebody who then, at the end of it, gives me a 15, 20 minute video of just how much I’ve affected them in such a positive way. And that’s exactly why I’ve pivoted over the years and combined real estate experience in the 2000s, e-commerce experience in the 2010s to become a business broker now and combine those two. I’ve never met another broker that’s done over $100 million worth of e-commerce sales like myself and also had over $100 million worth of transactional experience, such as myself.
Nate:
So I feel like I’m kind of a unique broker in that I’ve done what most of my clients have done, and then I’ve also done all of the behind the scenes stuff that goes on with the transactions and making sure that I’m aware of what’s going on before we start bumping into things and stepping in potholes, because little things like negotiating networking capital up front or later can cause a $10 million transaction to only be an $8 million transaction or a $2 million transaction to only be one and a half, and little things like that you don’t pick up unless you’ve been doing it for a while and you just have to have experience going through it. So I love to be able to provide those sorts of services to my clients and then at the end, like they tell me that now they’ve got retirement money or they’re on their way because they just had the biggest liquidation event of their life, and that just makes my heart sing. I love that.
Kevin King:
So that’s an important point there. There’s a lot of people out there that help you sell or organize a sell business that maybe they came from the corporate world they came from and they may be good at math, good at accounting, good at those kinds of maybe they’re good at law, but they’ve never had to wear out Peter to pay Paul to make payroll. They’ve never had to to game the system on floating a check to make sure. You know. I know there’s a three-day window here before it’s going to hit the bank or whatever it may be. And, having that experience, I think it’s crucial when you’re out there looking for someone to help you if you’re going to be planning on an exit or trying to grow the business and those little things like you said, that you have. You’ve been there, done that, sold $100 million plus on your own is a huge difference.
Nate:
Also funded. I didn’t come from wealth, I didn’t have millions of dollars. I put most of our investment capital on my credit cards. We’re buying inventory with credit cards, just buying traffic with credit cards and paying them off and definitely robbing Peter to pay Paul and then negotiating terms. So I was able to. That was the key thing. Once I was able to negotiate credit terms with my traffic source and my product, the manufacturer, then, man, that really blew the lid off. I was able to go from a million dollars of sales to $10 million worth of sales just doing that and then keep that rolling for years and who has all these grades?
Kevin King:
What businesses were these in? Was it supplements? This is my supplement companies.
Nate:
Yeah, so I launched over 21 supplement brands over the course of about nine years and nine of those sold for over a million dollars worth of revenue. It’s not like exit value. I exited a software technology, not actually my supplement brands, and I could talk more about that and when there’s the right timing to sell, but anyways, I one of the couple of the brands sold over $10 million in gross sales, and a lot of it was. I started out with dietary supplements and then moved on to anti-aging skin creams and that kind of stuff. And then I started to develop some more customized formulations and we started getting into hair oils, beard oils, stuff for skin and nails. Like, we sold this really, really potent biotin vitamin for a while it was three times as strong as what you could get in the stores and then complimented that with argan oils and jojoba oils and different things. And then in 2016, we kind of rode the beard fad and I had this massive beard. If you google Nate Land, you’ll see some of me at the World Beard and Mustache Competition in Austin.
Nate:
Actually, I had this like two foot long beard and we’re selling all these beard oils and stuff. It was like super trendy 2016, 2017. And then that kind of died out and so that that brand kind of you know, kind of petered out over time. But then we switched over to selling women’s hair oils and having I found this Persian chemist that developed a process and had patented this process to ozonate oil, and so he would. He would force inject oxygen into these oils and it changed the molecular compound of the oils to the point where you could.
Nate:
You could smear this oil on your hands and just rubbing your hands together, it would completely sink in and evaporate, unlike most oils you get now, which leaves this like gross sheen and like makes you like slippery. And then we added some essential oils. We was all natural. We had no alcohol, no formaldehyde, which people don’t know. A lot of formaldehyde gets put into some of these fragrances and I always sold a bunch of that and it was a fact. I wish we still had some. I have to go back to the manufacturer, just order small batches, because it’s like you can’t find it anymore. But that was kind of our key to success was we started generic and we just had a small market share of like diet supplements and then we moved into more unique things and kind of really like cornered the market there for you, these unique brands.
Kevin King:
You’re speaking of that. You just reminded me of a couple things. I missed a couple of big opportunities in that space. In 2010, I was in Israel and I went out to the Dead Sea and the little souvenir shops were selling Dead Sea mud masks and Dead Sea products and at that time it wasn’t the hot thing that it became. I was like I looked at it, I bought some back, I was like this is pretty cool, but for whatever reason it didn’t trigger on me to actually try to sell that and blow that up. And right before that, you mentioned Argon oil. In 2009, I was in Morocco, just as a tourist, and they took me to a place where there’s this little shack, basically on the side of the road, and these women were sitting around, all sitting around the floor, little baskets, just pounding on these nuts, and these nuts came off of a tree. These goats would like go up on the special tree and eat these nuts and then they would poop them out. And someone would then go on the ground and pick up the pooped out because they’re kind of peeled, in a way, after the process to the animal and bang it out. And it was Argon oil and they were using it like this is great for your hair. This is why all the Moroccan women are so beautiful.
Nate:
And I was like. I told my business partner at the time. I was like dude, we need to get into this, we need to start doing infomercials or something on this. So we went back to Morocco, tried to get distribution, tried to get supply, and nobody could tell us they could give us enough supply. They’re like we need this much because if we were on an infomercial, it’s going to be this much, We’ll sell this much, and then we can’t. We can only give you I forgot the numbers but X number of gallons or X number of whatever, and it just wasn’t enough. So we ended up backing off of it. But then shortly after that, it starts appearing everywhere and, like every freaking cosmetic that there is, I was like man. That’s another one I missed the boat on.
Nate:
Yeah, we didn’t start doing ours until 2015. So about five years between there and between your experience and ours and I’m sure there was other stuff going on there before us but my key experience was there was a math equation I had to figure out. So I needed to know how much to sell the product for, to reverse engineer, how much to pay for marketing. And once I figured that out, then I knew how much I could, I could, how much I could pay affiliates and affiliate networks to promote my products. And then the other piece that we got really, really good at my team did and I can’t take any credit my team did it is we created the most effective and frictionless sales funnels and so someone could purchase something and then you know innovations around one click up sales so they could then add something to their order and add another you know thing to their order and then like make it recurring and that just like blew the lid off of our profitability.
Kevin King:
And then you’re doing this before. Click funnels, then existed pretty much.
Nate:
I don’t remember when Russell started that I never really 2014, 2015, somewhere around in there. Yeah, so that. So I was doing this in 2012, late 2011, 2012. So, yeah, I guess that I didn’t even know about Russell until later. I met him at an event later on and I’ve tried using the system a couple of times. Did not work for how I needed it, so we just never bothered with it. We always just customized, coded our coded and customized our own funnels.
Kevin King:
So are you driving? It was, it was a combination, was it social, some social traffic, or was it mostly just depending on affiliates, primarily?
Nate:
Mostly all Facebook. So Facebook was especially pre IPO. Facebook was an advertising behemoth. Once they went public, things started to like their. Then, of course, their compliance started kicking in and you know they started making more and more demands around truth, and truth and advertising and other like anything that was like that was high risk started become a bigger, bigger deal and Facebook took it. At one point they took a policy. They didn’t want supplement anything no supplements whatsoever. So then there’s a cat and mouse game between affiliates that are cloaking pages and doing it anyways against Facebook’s terms and conditions, and then you know, getting caught getting those shut down and then starting to transition over to Instagram or other places. But most of it’s all paid, was paid media, direct through social, not like SEO, not just trying to get like backlinks and add pages and that kind of stuff going through it.
Kevin King:
Yeah, Facebook, I mean, has some pretty tight rules nowadays on. Yeah, if you’re trying to do supplements and say, hey, this helps you lose weight, you can’t do that because it’s a body and anything around body image. Or just make sure your hair glow, and you can’t do that because it might offend somebody, yeah, or what. It’s super, super detailed on what they will allow and what they won’t allow.
Nate:
Yeah, google too now like it’s changed a lot, you know so it’s in the last couple of years. They’ve made it much, much, you know, more difficult. I, I want I think I wound down my last brand in 2019. Yeah, it’s just. Yeah, it’s just too much. You know, it’s too much oversight, too much compliance Wasn’t fun for me anymore. At that point. I had been doing it for six or seven years. I couldn’t imagine doing anything for six or seven years now. It’s what I love being a broker. It’s six or seven months is long for me. I want to get the deal done and out the door and on to the next one.
Kevin King:
So as a broker, I mean. So you with what website closers? And so, for those that don’t know, it’s one of the oldest brokerages in the space. Can you tell us a little bit about what website closers is? A lot of people may have they may have heard of some of the others out there, but maybe they haven’t heard of that one.
Nate:
Yeah, well it’s. We’re the largest brokerage and marketplace for $1 million to $150 million online businesses. Jason and Ron started the company a little over 13 years ago.
Kevin King:
It’s online right?
Nate:
It’s not we own, we’re boutique. We only do online businesses, online digital businesses, technology businesses, saas and then the services that surround that. We saw a lot of digital marketing agencies. We saw a lot of like technology and services related to you know internet businesses as well, but we don’t know brick and mortar businesses. We don’t do any restaurants, no retail, like none of none of that. So all the like the 98% of what you see on Bizbuysell we don’t touch. We only do the 2% that it has an online presence and that was that’s been their focus from the beginning.
Nate:
I met the founders at actually, somebody was a speaker at one of my events said they sold their business with website closers and I’d never heard it. I’m like website closers. That’s weird. What is that? So I went to their website. I asked for an introduction. I never got one, so I ended up just going to the website, filling out in an introduction form, explained who I was. I’m like like you, I’ve done a bunch of trade shows and masterminds and events specific for affiliate marketing and supplement companies and that sort of thing, and I just filled out an intake form. I was on the phone with Jason Iran within like four hours and invited them to come to actually a Puerto Rico mastermind. I did. I invited them to come to Puerto Rico, held it at the Marriott down there in Ashford and they came to the event and kind of explained you know, the the M&A marketplace for supplement businesses and other internet businesses, and I was just blown away by how many buyers they said are looking at these types of businesses.
Nate:
Now this was late 2019, I heard I had already wound down my supplement businesses and I had had an exit by selling some technology I built that helped support my supplement companies. So I sold something to a shopping cart, some software to a shopping cart and and had wound down my supplement companies. And then hearing what they were saying about the marketplace, of how many buyers they have, honestly I didn’t believe them. But I kept running into other people over the course of the next year that had sold their business website closers and I added them to another mastermind of Fort Worth and I took the guys to dinner. I talk about this in my book when I’ll give your audience a copy of it to. A digital copy of it is. I had dinner with them at Bob’s steakhouse at the Omni in Fort Worth and they spent. I spent about three hours with them and they continue to reiterate how many thousands of buyers are looking at these types of businesses and at this point, I had a pretty large network of entrepreneurs that were coming to my events and I was thinking to myself like this might be like a nice little side hustle. Let me, let me look into this. I talked with them about becoming a broker and I ended up joining them in June, January 2020. And the first deal I brought to the company was a $25 million sale from somebody that had been within my mastermind prior to that and basically it’s a marketplace. It’s like the MLS of these online businesses. So website closures is the largest marketplace been around for 13 years. We’ve sold over 3000 businesses. There’s 50 brokers. It was like Keller Williams. It’s massive and the volume is massive.
Nate:
I own a franchise in Puerto Rico, so I’m one of the largest franchisees. I’ve got two associate brokers that work that work in my franchise one on the buy side, one that helps me on sale side and we just list businesses that are, you know, amazon businesses, Shopify stores. You know anyone that has their own, their own store if they’re selling physical products, and the people who sell information and e learning and marketplaces. I’ve sold marketplaces that bring buyers and sellers again. There was a voiceover marketplace that I sold in 2020, that brings together voice actors and voice producers and publishers and stuff. So really kind of anything with kind of a digital and tech and sort of SaaS or spin to it or products been to it is what we focus on and now we have accumulated because of so many listings. It’s like every time you do a new listing you get new buyers. We’ve just accumulated the largest buyer pool of any of the brokerages, just because of size and volume and time. Just that you know that we’ve got such a hit a runway against our competitors there’s. It would take them years to catch up, but we’re also still shaking and baking, so they’ll just never catch up to us.
Kevin King:
So what was this mastermind that that set you down this path of where these guys came out to it and also gave you some of your first lease? What, what kind of mastermind was this?
Nate:
This was specific to mostly the entrepreneurs that were my competitors and colleagues in supplements and affiliate in the affiliate marketing space. So the big trade show at the time was called affiliate summit, but that was focusing on the affiliates, the ones who are who are controlling the traffic and doing the sales. And I started this event called advertiser summit and the nomenclature it’s kind of janky, but the nomenclature for that performance marketing is the advertisers, the person who owns the brand. It’s like I’ve got this coffee cup over here is called Reduce, or Reduce is that is the name of the brand. This would be the advertiser who’s trying to sell these, these mugs online. So there was an event for the seller that the, the salesman, the affiliates who were doing they’re actually putting Facebook ads out and they’re like do you know, manipulating algorithms and that kind of stuff to try to get sales, to try to get paid by the brand owners. So because that was going on for a while, I didn’t really. I was like kind of cool talking to the affiliates, but I want to talk with more advertisers, I want to talk to more people who were the brand owners, like me. So I started doing these, these events, basically like once I get introduced to other people.
Nate:
I actually created a Skype group first until it all started. So I had a Skype group and we were all just like talking and chatting and once that grew to like 100 people, then I proposed like, hey, let’s all get together and have like a weekend kind of retreat. So I invited everyone at the time I lived in Albuquerque to the Hyatt Tamiya and the beautiful resort north of Albuquerque and I had about 35 people from around the world fly in. I didn’t charge anything for it. I just said that you got to pay for your own cost and pay for the food and beverage like 750 bucks. And I did this. Like room was like a big U was like just one big mastermind, like a big boardroom, and we sat around for three days talking about credit card processing challenges, traffic challenges, compliance issues, and we created this, what I called the continuity council, which we were all continuity a subscription based advertisers, so all of our products had like subscriptions associated to it and with that comes a whole host of challenges with credit card processing and fulfillment and projecting and inventory and all that sort of stuff. And I started in May of 2015 and I kept doing events and I started to lump them onto before the bigger trade show affiliate summit. So people would fly in the day before and we’d meet at a hotel or whatever for four or five hours and then everyone would go to the trade show and get sloppy and then, like you know, go home and be done and is that different than the one that what’s an affiliate world?
Kevin King:
it’s like in Dubai, Thailand, Spain or something like that.
Nate:
Yeah, affiliate summit is the big boy in America. They’ve got they’ve got an event in Las Vegas, in New York City, during usually spring and fall, and then affiliate world popped up a little later in, usually like in Barcelona and then Thailand. I think they may have moved them around since then, but, yeah, those were. Those are some pretty big like affiliate marketing type events that were going on out there. And then, yeah, I just continued to create my, my events and I got to the point where I did a advertiser summit. The first one was standalone event in Aspen, colorado, in December 2016 and had 350 people come to it. I had 100 sponsors, we had our own trade room floor. We had, you know, booths and banners and speakers and stage you know stuff all going on in a separate room. And then I had a lot of entertainment and I had a hired a burlesque troop to come and do like a burlesque show in the in the evening at in the hotel Jerome, and it was really, it was really cool. People still comment that first add some was was incredible and that’s why I love asked. I did just did a honeymoon in Aspen. We just, my wife and I, just finished our honeymoon and we are sitting in Texas now, but aspen I go back to a couple times a year, if I can.
Kevin King:
Yeah, I like Aspen. I was there there last year’s, first time I’d ever been there. I’ve been everywhere else around the world. I was like I’ve never been asked to keep hearing these good things, so it’s awesome. It was as a drove actually from Texas up there and went through that. Was that one mountain where you go up to like a peak of 10,000 feet or something and independent fast. Yeah, it’s all these little windy, windy little mountain on the side of a mountain that you do. Yeah, it was the. There’s one way to come in by freeway, you know, from the north side, but we came in from the south side, I guess, or east or whatever it was.
Nate:
Yeah, we got some fun drive.
Kevin King:
If you’re sure to hide straight of heights, it might not be for you.
Nate:
Well, the land and the mountain is so broad you’re not going to fall off anything, you’re just way up there. But yeah, my wife and I we got our photos done after we eloped in Puerto Rico and then we got our photos done in Aspen and yeah, it’s beautiful up there. Independence Pass is such a special place.
Kevin King:
It is. So when it comes to selling business, I mean, you see a lot, what, what is what’s hot right now? I mean, for a while there was Amazon stuff. Every aggregator couldn’t get enough of them and we’re paying just crazy multiples and that’s kind of died down. You can still. There’s still a great opportunity to sell. But a lot of people think, oh, now’s not a good time to sell business. There might be a recession or interest rates are high. It could be a little bit more challenging now, but I think it’s still a good time. Yeah, it’s definitely still a good time.
Nate:
I’ve got seven listings. Three of them are under contract. Another one I’ve got an over asking price and it’s a big one. We’re asking $24 million. We’ve got an offer for $25 million and we’re negotiating the networking capital on it right now. So we’re still closing deals, we’re still selling deals, we’re still listing deals. The market hasn’t stopped. The one caveat is it’s in some ways it’s good because there’s less earnouts and less performance-based payments being negotiated right now. So more of our deals are structured with 50 to 80% cash at closing, lump sum at closing, and then the remaining tends to be a seller’s note. So it’s guaranteed by the business and the cash flow of the business, as opposed to oh, the business has to grow to this and then you’ll get an extra million bucks, or if the business grows to that, the next level up, you’ll get a million and a half, which it’s really tough to sustain that type of growth when there’s so many factors that are outside of your control. And most of my clients, they don’t want to be bound to the business continuing to have to grow, especially when someone else is running it. They don’t know who that, they don’t know how well that person’s going to perform as an operator.
Nate:
So it’s, and the buyers are always thinking well, we want you to be invested in the long-term growth of this business. It’s like, bro, if I wanted to be invested in the long-term success of this business, I would keep it and run it. I want to sell it because I’d like to take a step back or I want out of it completely. So that’s where I, as the broker, I have to thoroughly understand my clients’ wishes, because some of my clients they’re looking for partners and they do want to be a long-term involved aspect of the business, and others are like man, I am done. I’ve got this other project I want to work on, or I want to go do real estate. I want to do something else, and as long as I know what that is, then I can match the right buyer up to it and we can skip all that nonsense.
Kevin King:
So in our space, I’ve primarily focused on the Amazon space. That’s what most of the listeners are. What’s the difference is really, if you’re, a lot of failed Amazon sellers become agencies, and so that’s where a lot of failed Amazon sellers end up is running agencies or software companies. What’s the market like out there now for agencies and software companies in the Ecom space?
Nate:
Yeah, and I didn’t even answer your last question. What’s hot right now? Actually, it’s agencies. So I saw a lot of digital marketing agencies because they do really well. They’re getting pretty good multiples. There’s a lot of desire for marketing in of itself has changed so much in the last 10, 20 years, and internet marketing digital marketing it’s constantly in demand and it’s the pandemic helped in so many ways to bring exposure to e-commerce as a salve for any world issues of supply chain, and so people weren’t able to go to stores, they were having to buy stuff. So Amazon like things just went nuts for Amazon and Shopify and all those platforms. And since then, a lot of older school brands, older school companies, more institutional and legacy companies have started to really take a look at what did they need to do to get their act together when it comes to creating funnels for specific products and, like L’Oreal for instance, like imagining them creating funnels for all of their best sellers and putting them up on their websites. They’re still not there yet, but they’re starting to figure this out and as one dinosaur retires or quits and a young, you know, Tron level internet marketer shows up and starts, you know, flashing some lights around and starts getting some attention.
Nate:
People are seeing how important that is and digital marketing agencies are really at the forefront of that. It’s funny that you joke that like the failed entrepreneur turns into an agency. I definitely seen plenty of that. But I have also seen some incredible experts in digital marketing put together some really impressive businesses and those are some of the funnest ones that I have because I was the consumer of the digital marketing companies and the affiliate networks selling my products, so I spent millions of dollars with them selling my supplements and I know them from that angle and I’ve gotten to know over the transactions I’ve done more and more the intricacies of what goes on in those digital marketing agencies.
Nate:
But Amazon stores still sell very well. I’ve got an $8 million transaction right now. That’s about a about a four x multiple. I think they’re right about $2 million and shareling 12 months EBITDA. So we’re at a four x multiple on a transaction there and it’s a sexy supplement Amazon store and it’s, you know, some part of its private label, some of its custom manufactured, and I listed that and it was under contract and multiple offers, but it was under contract in less than two weeks from the time that it was listed.
Kevin King:
Wow, do you see a lot of people that end up buying, crash and burn them? I’ve heard horror stories from people that have sold like a supplement business for 20 million bucks Someone you probably actually know that lives in Puerto Rico and then a year later they’re begging them to come back because they’ve just tanked it. Do you see that happen? A lot.
Nate:
I think the buyers are reluctant to share that with me because I almost never hear that. I am for sure, I’m conjecturing that it’s absolutely happening, but I don’t ever hear that. Like a buyer doesn’t come back to me and say, oh my God, this thing blew up. And I’ve never had anyone come back to me and say like you’ve defrauded us or this was misrepresented. Because I am Mr transparency over here. I, as soon as I hear feel like smell anything from my sales client like our the sales side client, I’ll talk with them about. We need, you know, there are certain things that need to be disclosed at a certain proper time and we have to make sure that this is all done in such a way that that is fully transparent to the buyer. So I’ve never had an issue that people have come back with like lawsuits and stuff that this didn’t work out the way that we imagined. I have definitely heard a ton of horror stories from the aggregators blowing up. You know Thrasio is a huge example of putting everything on pause in May of last year and I don’t know if they’re. They haven’t acquired on any of them. They would have, but they haven’t acquired on any of my companies this year either. So in fact we’ve hired Gwen from Thrasio, joined the team. She’s on Tom’s team. So we and there’s other people that have gotten, you know, laid off from aggregators that have inquired to come be become a business broker because we’re still we’re still doing deals and the aggregators, remember, was only about 180, maybe 200 aggregators at its peak or maybe like 10 or 15 of them now, but that is a tiny fraction of our buyers, where most of them are private equity and our individual investors. They’ll use the SBA to buy deals that are under $5 million, over $5 million deals.
Nate:
We have private equity funds, private equity sponsors, family we have a lot of family office activity going on. Now We’ve got some really cool search search fund groups out of Europe where they’re they’re working with MBA grads and not just like MBA grads but like seasoned CEOs who have MBAs as well to be the acquisition entrepreneur. So they’ll be the sponsor, but then they’ll provide all the funding. So they’ve got like this really cool vetting process where they’ll have hundreds of of you know, for you know 30, 40, 50 year old CEOs that are looking for a large business to to work with that they don’t have the funding for it, but they’ve got the operational skill set and they’re out hunting deals and then they’ve got this massive investment group behind them that it’s not like it’s not that crazy SPAC stuff or they got to go public and go raise the money.
Nate:
Like. This is like wealthy family offices that have all aggregated a ton of wealth in Switzerland and then use that to go buy businesses and putting in the operational seat a seasoned CEO from other ventures and businesses, which I think is brilliant, because half the time I’ll get a great buyer. That’s a private equity fund, but they don’t have any operational experience. So they’re basically they’re just money and they need to have an operator. But the problem is my client doesn’t want to be the operator anymore, so they want to sell and they want to like walk away, so we have to. Then I’m in the position where I’m like God. I need to start like a recruitment company and find CEOs and other MBAs and like people that are operators to fill the ranks. I’ve got all of these buyers with money, but not as many that have operational experience, and so this one particular search fund has done, I think, a really smart thing to solve that problem and go take down a bunch of deals.
Kevin King:
That’s awesome. You’re speaking about transparency there with your sellers. There’s a lot of people in the in the e-com space that kind of skirt, that line, whether it be Amazon and they’re doing search fund buyer a little bit of black cat, or some of the internet marketers and affiliate marketers and they’ve grown a good business by kind of writing that gray and, if not, sometimes black line. How do you deal with that? When it’s time they say, hey, we want to exit, but you know they may have a little bit of a egg on their face from the past, how is that a dealt with?
Nate:
We need we actually need to disclose it early, and often we have buyers that will take those risks and they will take that, take that business methodology and they’ll run with it. And then we’ve got some that are like, uh-uh, absolutely no. So I would much rather just like shine a light on it early and and because we can still sell those deals, we’ve sold some like, in my opinion, I think, like some particularly hairy or black hat. You know deals and there’s some buyers that you know it has to be legal. So that number one it must be legal. But remember, amazon is not the law. Amazon has its terms and services and you could be going against Amazon’s terms and services doesn’t make you’re doing something illegal, but it does mean that you have the risk of being shut down by Amazon if they catch you. So we communicate that very clearly to our buyers and some buyers are more aggressive than others and they’re okay with taking on that risk, because the buyer is assessing the business based on a variety of factors, the number one most being what’s the risk? What’s the risk that, after they purchase this, that the cash flow that was shown to them is going to dry up? I personally think that’s a pretty high risk if you’ve got something that you’re doing that’s against the terms and conditions of one of your like larger vendors, amazon, which is controlling your traffic and your money.
Nate:
But for other entrepreneurs, like the affiliate marketing, usually they have their own website or maybe they’re running like a combination of like Shopify in the front end and they’ve got like checkout champ or something like that on the back end. That’s that just processing the funds, so you don’t have to worry about checkout champ or someone shutting you down, but you do have to worry about your credit card processing shutting you down if you’re over a certain number of chargebacks. So what I do is all cute, oh, I, I know what rocks to look under. There’s not much that you can get past this old dog when it comes to affiliate marketing and Amazon. Like we understand about review Manipulation like that sort of stuff. So I know the questions to ask to figure out, like how to start tiptoeing around that to get the discovery going on my end, just between me and them, how it, how it looks, and often the seller will come to me with a concern or they may even stop themselves from deciding to list because they think they’re unsellable. But I’ll tell you, man, we have sold some black cat businesses before and the buyers have been happy as hell.
Nate:
One example is on the affiliate marketing side of things. Like it’ll be, a supplement company or a manufacturer bought them Because they’re gonna manufacture all of the products as well and they only need to run this black hat entity for a year or two to make back all of their, their cash on the acquisition. So they’re they’re kind of rolling the the craps dice you know the role in the dice like they’re at Vegas to see how long this thing’s gonna run. But if they get a year out of it, they paid themselves back. If they get two years out of it, they’ve made an insane amount of money. Because the volumes of some of these and you just never know what buyers are out there and whose risk is less than the next guy Some people’s risk is gonna just be way too high. But for other buyers are like, okay, I’ll accept that risk, I’m not gonna pay you for X, but I’ll pay you two and a half or three X.
Kevin King:
What about? There’s a lot of listeners here that aren’t don’t live in the US. They may have a US business or they may not have a US business. You know, do you sell a lot of stuff internationally for you know Chinese sellers or European based sellers or East Africa, or is it really the focus is primary the US and that gives you a big look up? Or can you talk a little bit about the pros and cons and vanishes and what, see, people might need to think about there?
Nate:
The big pro for being a US company and selling to a US buyer is there’s more financing opportunities for them than any other country. Like, yeah, yeah, SBA for anything under five million dollars. I want to try to get it SBA pre-approved. If it’s over five million dollars, then the SBA only goes up to five million and it’s kind of like it is what it is. But you can get a lot of private. You can get a lot of private lenders or capital market lenders to come in and finance businesses Over ten million. So I’ve got kind of a dry spot between five and ten that Requires some creative financing to get to it. Usually it’s some SBA and then it’s like a seller note or it’s or some combination of some other financing in there and then once it gets over ten million dollars, then that opens up the floodgates for the private equity you know, and private equity and family offices to start to take interest because they just don’t do smaller deals. It’s not worth their time that to spend as much due diligence and cost on a smaller deals. They do a bigger deal and then the payoff, the juice, isn’t worth the squeeze. So, and the US is definitely the top dog when it comes to M&A. It’s been that way for years. It’ll continue to be that way for a while.
Nate:
The next one is Europe? We don’t have as many financing options in Europe, but we’re starting to see some SBA banks being willing to try a US buyer of a European entity or Other foreign entities. So there’s some. I haven’t gotten one across the finish line yet, but we’re working on a couple right now that we’re watching because it would be really helpful if that would, if that would show up when you start to get into the big, big deals like once you’re over ten million dollars, we can find lending partners all around the world. So that part doesn’t really matter and it and it. There are some that only focus on certain parts of the world as well. So then you have kind of an advantage, like we’ve got some European buyers or European lenders In Germany that like German businesses. So you know it’s. The pool of buyers is so big. I’ve got a hundred and sixty, some a thousand buyers on our email list, so we just have such a huge reach.
Nate:
China is a can be a bit tricky and typically it’s the language barrier. Typically it’s the time. You know it’s a time zone difference. There’s other like just nuances of doing a deal. You have to be friendly, you have to be available and you have to be like a willing contributor and and willing to To compromise to get these transactions done. And if you approach these deals that you’re not available, you’re not particularly friendly or you’re hard to understand, like that creates friction, typically between the buy side and the sell side and as a broker, I do everything I can to try to like reduce that friction. But yeah, Chinese companies don’t tend to do particularly well with US buyers. Right now it’s getting better because they.
Nate:
There’s definitely some really cool companies and we’ve got several transactions that we’ve gotten done and we can do them, but they are a little bit more work. It’s really more work for me than it is for the seller. So I don’t we don’t mind doing it, but it does create a little bit extra Work to get through. But every business from any country is still sellable as long as it needs to be at least two years old and needs to be profitable. Like we have a cash flow based buyer base. Like they are looking for businesses that are producing cash flow.
Nate:
I had a call with somebody the other day that they’re you know they’re in growth mode, so they’re reinvesting all of their money back into the business and they have no EBITDA, they’ve been no profit. And I told them like I just don’t have a market for you, like we. I’d like to look at your books and Confirm that, because sometimes you may be calculating it differently than I calculated, but if that is indeed the case, you don’t have any profit and you’re for growth, you know, for a longer term play. Then, when you get to a point when you’re spinning out so much cash flow that then you’re profitable, that’s the time to sell. Not, we don’t want to sell pre-profit.
Kevin King:
So, I hear a lot of stories from friends and stuff that have sold that say the due diligence process. It’s like having a second job when you’re going through that. Can you talk about a little bit of what someone should expect? If I’m sitting here, a couple points. If I’m sitting here saying, hey, I think I want to sell my business, how much of a runway do I need to give myself to prepare to do that Really, to do it right and maximize it and then second, what should I expect once those LLI start coming in? I gotta do all this due diligence with these buyers.
Nate:
I’ll summarize it, but I do want to plug my my website where you can get my book, because I’ve also got a list of due. I’ve got several sample due diligence checklists in it as well. So if you, if you go to Nate Lynn comm forward slash gift and fill in your name and email, I’ll send you a link to where you can get a digital copy of maximum exit my book, and then also within it is all the resources that I that I am referencing in the book, and one of them happens to be exactly what you said. It’s a due diligence checklist.
Kevin King:
It’s Nate in ATE LIND comm. Just for those of you in ATE LIND comm forward slash. What was the gift? Gi F, yeah, okay.
Nate:
Yep, all right, cool, if you go to that, you can get all of it. But just in summary, you’ve got to upload All of your financial documents, so your profit and loss statements, your balance sheets, you know, for as far back as you can go, usually three to five years, if you’ve been around that long. You have to upload all your corporate hygiene, so your formation documents, your meet meeting minutes. And if you don’t have them, don’t worry about it. Like most of these businesses are independent owners or maybe it’s a husband wife, you just upload your articles of incorporation or formation or whatever it. Whatever your entity is, so you have to visit. There’s usually be a folder for all the corporate documents, a folder for all the financial documents. Then you’ll have a folder for all of your sales Management documents. So your seller central, all that stuff you download and the the buyer will give you specific reports to poll and literally it’s going to be in seller central. Click on this, then go here and then change your date to this and this and this and then change the headings here. So you download and do all that and it can definitely be a second job for a week or two.
Nate:
I find that the more Organized my sellers are. The less work it is for them. The less organized they are, the more work it is for them. But after the after the sales reporting materials, then there’ll be usually some additional stuff around like your processes and your operations, and Sometimes people have to like write that out or they have to like record videos or they have to schedule a call. Most of the time it’s like it’s a call and it’ll be like a zoom like this or something we’re.
Nate:
That’s a recording of you going through like your daily activities and showing what you’re doing. And then frequently There’ll be like a bunch of inventory related materials. So you’ll have to upload your inventory reports and cash flow analysis and cash flow reports around ordering, and you know your that. You know time it takes. You’re all and all of your contracts. Every contract You’ve got with any other entity, you’ve got to upload that. If you’ve got any Obligations or employment agreements, stuff like that You’ve got to, you’ve got to upload all that too. So it kind of give you a sampler of all that.
Kevin King:
That’s, and what how long of a time frame should be before you if you want to sell. Should you be working on this? Start organizing and trying to get things in order. Six months in advance, two months in advance, so you have a class that don’t prepare for any of that.
Nate:
They just do it after they get an LOI and they can still get it done in a week. So I don’t think it’s. I would not stop the process because you’re concerned about trying to gather up all that material. I find that it’s really motivating when you’ve got a sexy offer on the table that you’ve just signed and they’ve sent you a list of stuff they need to be able to pay you the money they just said they would pay you. That most of my clients like yes, that second job is probably more like a flight, like two full-time jobs at the same time, where they’re uploading everything over the course of like a week or so and you know there. But then again too, I’ve had some clients that they take some two days, they upload everything in two days, and maybe they were the super organized ones. But I would not I would definitely not delay a sale, and I hate it when people delay sales because they’re waiting for something. I’ve seen more deals crash and burn because they waited too long then because they got started too early.
Kevin King:
How do you know when to sell? I mean, I mean, obviously if you’re burnt out, that’s one. But how do you know you? How do you know when to sell? You like man, if I just stay with this another year I could I could break it, raise the sales. I know on the trajectory on I could make an extra two million dollars at exit. Should I hang on or should I exit now? I mean, how do you know when is that time to actually exit? Stage left.
Nate:
It’s really intuitive and I think us is a lot of very brainy and heady entrepreneurs. This is the hardest part, because we have to. We have to like the feeling has to be in our gut. We have to feel that it’s that it’s time to start thinking about selling. And usually it comes because of maybe the family obligations are Demanding more and more time of you, or not demanding, maybe the family would like to spend more time with daddy or with mommy.
Nate:
And For me it came because my youngest was wanted to spend more time doing outdoor activities and we were out hiking and outside Albuquerque and it was a Sunday evening and he said, like dad, why do we have to go back so early? I told, well, you know I need to get back home and like, rest and relax, recuperate before the work week. It’s like why? Why do you work so much? It’s like we’ll have to pay for all of this stuff. And I read Rich Dad Port ad and as soon as I said that, it kicked me right in the gut because I had not created the type of passive, passive income portfolio for myself to be able to pull back out of the day-to-day work of my business and that’s that set me on a trajectory of wait a second. I got into being an entrepreneur because I wanted I wanted more money.
Nate:
Then I grew up with, and I wanted more time with my family than I got as a child. I’ve got the more money, but I don’t have the more time, so I need to free up my time and Usually the best way to do it for entrepreneurs like us is you’ve created a business. That is the biggest asset that you’ve got. If you liquidate that business, you can then diversify your portfolio into passive income to get yourself the time and the stability that you wouldn’t have gotten from a business. Because, let’s be honest, the reality is most of us start businesses and we don’t delegate very well. We don’t create a team or we don’t build a business big enough to support financially an executive team that can run it without us.
Nate:
We bump along in these businesses, which are still super profitable and also like it’s a great kudos to us to get to, you know, two, three, four, five, even six, seven, eight, nine, ten million dollar businesses, which may or may not be retirement money for some of us, depending on our lifestyle, but it’s going to be a massive War chest of money that you can use to put into I shoot. Look at bonds right now, if you can get. You can get bonds at incredible interest rates that you can have for 10, 15, 20, 30 years, paying out for four and a half percent interest rates that we couldn’t get until Like half a year ago. So just that by itself you can put a million bucks in it and get a really nice passive income from that. And you know, not to mention real estate and and other investments that you can put out there.
Kevin King:
So you I think it’s really like you talking about there on the. It’s the four burners theory. You familiar with the four burners theory? No, or you have. You have a stove and you have four burners on the stove and one of those is health, one of those is work, one of those is family and one of those is friends. And the rationale goes is you can do two of those really well, you can do three of those, two of those really well, but if you have three of them now you’re really well, you’re into just doing them all good, and if you have all four trying to do all four, you basically they’re all gonna suffer, yeah, and so that’s that’s. You guys just decide what you those four Are you gonna be good at. Is it gonna be family first and friends first, or is it gonna be work first and health first or Whatever? And it’s a. It’s a pretty good little theory. It’s I think James clear Talks about that and it’s a. It’s a pretty good thing for entrepreneurs to look at, to say like, where is my focus? I Love, just like you said, the rich, the rich guy. I’m rich. Rich dad, poor dad is also a really, with the four quadrants is another really good one.
Nate:
Yep, no, I love that. And yeah, for me it was I, it was the family that I wanted to spend more and more time with and you know, yeah, it’s just like that’s what it was for me. I’m a gentleman of the day called me and he’s having some health issues and so for him it’s itself like he wants to sell the business. You know he can take care of his health and jump back into it later. For others it’s, you know, it’s kind of like accomplishment. You know, like they’ve, they’ve grown a business but they’ve never had an exit and they want, like that, that check mark lock on their professional, it kind of on their CV. Like they want to have you know on their CV that they’ve done you know it M&A transaction and Like it’s also like on the entrepreneurial journey.
Nate:
If you think about it as a ladder, you eventually are going to bump into M&A. So you’re either going to merge or you’re going to acquire something or gonna, you know, sell something, because you, we are all driven and motivated and ambitious individuals. That’s why we got into being an entrepreneur instead of working a nine to five. Eventually, you’re gonna figure out well, the real money is in selling the business and then starting to look at acquiring businesses, and it’s so much easier to start buying Businesses if you sell something and you’ve got a nest egg that you can then go work with, and then you know the process from the sales side and you can start acquiring other businesses. The reason why Most of the public companies and larger private companies grow through acquisitions is it’s faster and more profitable to grow through Acquisition than it is through innovation. Innovation takes forever and, like the pioneers you’re getting, you’re getting, you know, arrows in your back. Innovating, versus coming along a little bit later and acquiring the settlements that have been laid out before you.
Kevin King:
Yeah, yeah. What about on Diversity? I mean, a lot of people say that it’s it’s better if you have your diverse revenue streams when you’re going to sell, versus depending on one Marketplace. So do you see that as to be true or is it just a buyer dependent? Really doesn’t matter.
Nate:
It’s really buyer dependent. It doesn’t matter. I sell businesses that are one trick ponies all the time. It could be an Amazon supplement company. It’s a private label, you know, contract manufactured company, nothing custom about it, they just make good cash flow. I will sell that thing in a heartbeat. It could be that then, on the flip side, could be a company she supplements again, because that’s my background. They’re selling through affiliates and Amazon and they’re also selling, you know, with joint ventures and email blasts and like they’ve got like very diverse and maybe they’re also doing direct mail and maybe let’s just go ahead and throw in telesales or infomercials. I don’t see too many of those. Honestly. Most entrepreneurs are good at or can be great. Maybe this is the four burners Methodology. They’re great at one channel, they might be good at two channels, usually not good at three channels and I almost never see someone with four channels. But I’ve got buyers that will do all of that and they’ll pay handsomely for all of them.
Kevin King:
I’m notice another thing too, with people that exit is. A lot of times they’re like okay, I’m done with this, I’m tired, I want to go travel, I’ll go sit on the beach, I want to go paint and sit in my house and just paint artwork all day or play video games or whatever it is. But a lot of times they they started getting antsy after six months or a year of that. The these, these entrepreneurs who have generational wealth and are like all right, I’m bored now. Now, what do you see that happen? Yeah, quite a bit. And they started getting back in. They go back to they to work in 80 hours a week and for a while and stuff.
Nate:
Yeah, I see there’s I think there’s a variety of paths I see people go on. Two common ones that come up for me is they either go back into entrepreneurship and start up mode Um, actually it’s free kind of mind, so what. They’ll go back into starting, like because they just love the start of it. Others will graduate to acquiring or they will team up with lending partners and they’ll start to acquire businesses and then, third, they’ll go be life coaches. They’ll go through a spiritual awakening and, um, I’ve done a combination of that because I definitely have found myself, you know, going through more of the spiritual awakening and personal growth path and stuff after I sold my business and then also, like, still have a balance and that’s where I feel like I’ve got two burners. You know going pretty well that I’m good at both Um and I like it, that, you know, like to keep it that way.
Kevin King:
So, Nate, do you wrote a book that that documents some of your, your past history and some of, uh, some strategies and tips on if you’re thinking about selling your business and what? What do you remind everybody again the name of that book and how they can get a copy of it?
Nate:
Yep, it’s called Maxima Exit. Um, if you go to natelind.com Forge slash gift you can get a free digital copy of it. It can also be bought on uh amazon for kindle and on audible for audio. Um, yeah, it’s a story basically of my first exit and then that of uh, like five different entrepreneurs who I’ve exited. One had a 25 million dollar transaction, uh, then in the middle range of some you know, five and six million dollar transactions, and then on the lower end, like two, three million dollar transactions, and I share a variety of things that buyers are looking at.
Kevin King:
Talk about who the buyers are.
Nate:
Uh, you know how they need things to look in order to finance the transaction. Um, I talk about I get into some specifics around how you need to set up your books and your accounting and your and your chart of accounts, some things you can think about Whether it’s too late now for your entity or for the next entity. On how you can structure your business. You can still kind of use it like a cash, like an ATM machine, like for your personal business expenses, like meals and entertainment and travel, but then also get the full value for your business when you sell it by having some uh, some thought put into your corporate structure, using a holding company and then an operating company. So I’ll get into some specifics around that and then I showcase some examples of other businesses that I’ve that uh that we’ve listed, and the type of like attention they’ve gotten and why and how, and then uh in those free resources as well. I show some examples of uh businesses with the financials set up in such a way that they sold, and some that were set up in such a way that Couldn’t sell them, and so you can see the difference between what works and what doesn’t work.
Kevin King:
And someone’s interested in selling their businesses and wants to. Uh, maybe, uh see, if website closes a fit, what’s the best way to reach you or to get a hold of?
Nate:
best way to reach me is go to natelind.com, click on the contact button and you can fill out the form. It’ll send an email straight to me, promise you, I’ll respond to you Straight away and we’ll schedule a free consultation. I always offer, uh, free business valuation and a sales plan and that uh in that consultation, so you’ll know at least what your business is worth, what the trading range of it will be, and then the likely method, uh that you know the channels that I would go out to To solicit those buyers. So you know it takes about 45 minutes for me to do it. And, uh, you know, even for those of you who don’t have a business or it doesn’t make sense for you, like right now, we do pay a 10 percent referral fee for anyone who prefers somebody to me. Once again, you can go to the contact page on natelind.com. Like you know, a buddy or so and so was talking about selling, I’ll pay 10 percent of my commission and on a two million dollar deal I tend to charge 10 percent. So that’s 200 000 to the firm, which means 20 000 as a referral and that adds up.
Kevin King:
Always affiliate marketing.
Nate:
That’s it.
Kevin King:
Well, Nate, I really appreciate you coming on today. We could keep talking for a while, but, uh, I appreciate your time and all your insights.
Nate:
It’s been great. Thanks for having me on, Kevin.
Kevin King:
All of us entrepreneurs have a common bond, as Nate and I’s discussion shows, and one of the best Opportunities you can have to change your life and, uh, to make it what you want it to be is to actually build a business and exit it, and then maybe repeat the process and do it over and over again, or take your money and run and go sit on the beach. But it’s great being an entrepreneur. It’s great having all these opportunities to just drastically change your life, and I hope you got a lot of good stuff out of this episode. We’ll be back again next week with another awesome episode, but just remember, it’s not what you get that makes you happy, it’s who you become. That does. It’s not what you get that makes you happy. It’s who you become. That does. Have a great week, happy holidays and we’ll see you again soon.
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