About the Host

Ryan is an entrepreneur, podcast host of the show Life After Business and the co-owner of Solidity Financial. Having personally experienced the hazards of selling a business, he joined up with his friend Brandon Wood to educate others on the process. Through their business (Solidity Financial), they provide a platform for entrepreneurs called Growth and Exit Planning that helps in exit planning, value building and financial management.

About the Guest

Brandon Hall, the owner of BGH Valuation Services, LLC, resides in Monticello, MN, with his wife, Gloria, and four children Piper, Rowan, London and Leo. Brandon worked for various small construction companies growing up and has always possessed an entrepreneurial spirit.

Brandon received his Bachelor of Science in Accounting at Saint Cloud State University. Brandon started his accounting career in public accounting, where he worked for two firms over the span of 3 years providing tax and auditing services.

Brandon then continued his career working for Polaris Industries, Inc. In his time there Polaris acquired 4 companies and Brandon had the opportunity to be involved with different aspects of the acquisitions. Brandon also worked at Best Buy Corporate where he provided accounting support for the Information Technology division.

Brandon has obtained his Certified Valuation Analyst® Designation and is a proud member of the National Association of Certified Valuators and Analysts (NACVA). Brandon has also obtained his Certified Machinery & Equipment Appraiser Designation with Nebb Institute. Brandon also is a Certified Business Mentor with Score Mentors. Brandon continues to enhance his status, credentials, and esteem in the field of business valuations, financial forensics, and other related advisory services.

If you listen, you will learn:

  • The other guests I will be including in my 3 part series.
  • Brandon’s beginnings in accounting and the beginning of BGH.
  • Why people come to Brandon and his team.
  • What is a certified valuation?
  • How technology has changed valuations.
  • Common misconceptions about the process.
  • Why people need valuations.
  • How valuations are like investments.
  • The role EBITDA plays in a valuation.
  • The two things owners need to consider during an evaluation.
  • How the income method works.
  • What to look at when comparing markets.
  • The importance of defined end goals.

Full Transcript

Announcer: Welcome to Life After Business, the podcast where your host Ryan Tansom brings you all the information you need to exit your company and explore what life can be like on the other side.

Ryan Tansom: Hey, thanks for coming back to the show. This is episode 114 of the Life After Business podcast and today's guest's name is Brandon Hall. He owns a company called BGH Valuation services and he's kicking off a three part series that I'm doing here about evaluating your company with the next episode is going to be Ryan Turbes, who is a CPA in the M&A space talking about net proceeds and how to calculate how much you get and why. And then the next episode is going to be John Warrillow discussing the value driver system and how to increase the value your company. So the reason that I wanted to do this because I really want you, the listener to understand how to tie your company's valuation into your ultimate exit. Understanding how you're going to get paid, when you're going to get paid, and then how to strategically increased the value of your company in light of where you want to go, and so Brandon today on the show as an awesome background that gives them a really unique perspective on business valuations.

Ryan Tansom: He describes to us all the different ways you determine your free cash flow, understanding what EBITDA is, understanding how to determine what the risk is with your business compared to others and other investments and how to really understand the value of your company and what that means to someone else and a potential buyer. It's all about free cash flow and transferability. It's a great way to launch into really determining what are the things that matter to you now and where you want to go. A couple of actionable items that you have from this episode is one is you can go onto the show notes onto the GEXP website and you can get a value builder system report understanding where you are at in the eight key drivers. We also subscribe to a software called Biz Equity where you can go get a free business valuation and that is not the certified valuation that Brandon does.

Ryan Tansom: This is just something that is giving you a baseline and there's only, I believe, a room for 10 or 15 free evaluations and then once you do it, we will then send you the full report and then also reach out to Brandon Hall because he's giving a $500 discount on a certified valuation if that's the route you need to go because of where you're at in the lifecycle of your business. So I really hope you learn and take a lot out of this episode. We really go into a lot of different things with Juke and Jive, but then we always circle back to finalize our thoughts and we really are tying your exit, the valuation, where you're going and how to do certain things today to get a better outcome. So really hope you enjoy this episode with Brandon Hall.

Announcer: This episode of Life After Business is sponsored by GEXP Collaborative. Their proven process gives you clarity on all of your exit options and how those options impact your financial success, timing and future happiness. Sell your company on your timeframe to the buyer of your choice at the price you want.

Ryan Tansom: Morning, Brandon. What's going on?

Brandon Hall: Not too much. How you doing, Ryan?

Ryan Tansom: Doing good. Uh, so super excited to have you on the show. You and I have gotten to know each other pretty well over the last handful of months and absolutely love what you're doing and I think you and I went from a totally strangers on linkedin and then...

Brandon Hall: To having weekly meetings, you know?

Ryan Tansom: Right! So for the, for the listeners who have had no idea what the heck we've been talking about, can you give them a little bit of your background and you know, don't, don't spare any details because I think you know, your, your journey into what you're doing right now. It gives you a pretty cool, pretty cool perspective.

Brandon Hall: Yeah. Yeah. No. Um, so let's see how far I want to go back, but kind of everything kind of leads up to usually for anyone and everything kind of leads up to what you're doing today. So I, um, I guess I'll start off. I have an accounting degree, undergrad. I went to St. Cloud state and I mean at some point through high school, through the years after I didn't, I didn't go to school quite - college right after high school and did some traveling and trying to figure out where do you want to go with your career and numbers kind of, you know, numbers and analytics and um, stuff like that kind of always been my interest. So...

Ryan Tansom: You were doing construction before you went?

Brandon Hall: I didn't know how far back you wanted me to go. So yes, no, I started out blue collar, so I did a, it was, it was an awesome experience. I was able to work with great people. I seen um, you know, uh, on a high level look at how small companies run a work ethic. You know, you learn, you learn to work long hours in conditions that are not ideal. So summer, winter, I mean I've had, which is interesting, the amount of different jobs that I had before I went to the, uh, I guess you'd say the white collar type business. I did roughing, painting, finished carpentry, all these little things that, which ended up figuring out that's not what I wanted to do for, for, for a career, but good experience nonetheless. So from there, yep, I ended up going into accounting, got my accounting degree, kind of what the typical route, but went public accounting at a, a big company, a regional company and Minnesota here at Baker Tilly.

Brandon Hall: Uh, I got the little tax work, got into auditing, so auditing financial statements from companies that are ranging from 1 million, couple million to a billion. So a wide range of companies. You're diving into their financial statements, looking at strains, looking at risk. And then, uh, did a short, well three, four years there. And then I decided, uh, public accounting wasn't for me. Good experience. So then I went into the private industry, uh, landed a job at Claris Industries at their corporate office. That was, that was exciting. They were, at that time they were very active and they still might be in the mergers and acquisition space. So what they were doing there was buying, they're buying a bunch of smaller companies and then inputting them in their distribution channel. Essentially getting a return on their investment. And so that was Kinda my first Kinda lead into what I'm going to get to is my valuation where I'm at now.

Brandon Hall: That was kind of my first insight of not only, you know, learning the, the, the base of a company the financial accounting, but valuation, you know, why is a company buying or why an individual would buy a company for x price when there's kind of this word called and intangibles, goodwill, included in it, you know, customer lists. So that was kind of my first like, hey this is interesting. And then from there I kind of continued my career with Claris than I did a stint at a Best Buy corporate. So kind of seeing a bigger type company, their, their atmosphere, they're a $40 million company. I had some experience there. And then from there that's. That was kind of my deciding point that I want to do strictly valuations. I wanted to dive into it. So I just went headfirst, just started, started a company, uh, you know, I went to the proper channels, got certified and just essentially just said bring it on as much information as I can take in a steep learning curve. So that was, uh, that was, uh, three years ago and now here I am today.

Ryan Tansom: And that's why your background, Brandon, is why I find it so intriguing when you, when you and I sat down and we were talking about all the problems that we both have seen because of my experience in our family business and all the clients I work with and your diverse background and you've done a 135 valuations or something like that. Right? And that you, you see a lot of stuff and it's a lot of these up and down the street, normal entrepreneurs that are trying to figure out what are my options, what's going on? What's my company worth? When we started, just you and I see the world very similar. And I think it was because of your, all the experience that you've got and I can't believe that you went from literally shoveling to like tearing through spreadsheets. You don't hear a lot of people that go through that. Um, but you know, what, you know, out of 134 plus valuations that you've done, you know, what, what are some of the things that you start to see that or why are people getting valuations? How do they end up coming to you and you know, what's Kinda following my, my, my thought process because you're, you're getting these clients for a reason and what is the interaction you're having with them? What are they looking for and what are the questions that they usually have?

Brandon Hall: Sure. Yeah, I guess so. Can I give you a little background, here. When I started, you know, I probably, I was thinking and we were thinking a lot of the same things as you know, we're getting pretty business owners. There's, there's issues. They're trying to figure out what, what they should do. A lot of these businesses are owner-operators, so maybe under $5 million or they're in the business. It's most likely their biggest asset. It's their investments, their retirement, and um, unfortunately a lot of them are when it comes to what they should sell their business for, what it, what kind of value do I have in this? They're left looking for answers and I have a lot of questions on that, right? [Ryan interjects: They feel trapped, right?] Yes, yes, exactly. They feel trapped. They feel so tied into the business and, and lot of these things go, they go unnoticed or they just don't start thinking about these things sooner and where they get to a point where they get to that point where they're whatever age and they're like, hey, I want to get out now. And it's almost like from that point on there, they're being so reactive, they're being reactive to just try and get out of the business. And there's a lot of things that they haven't thought about that they could have done better if maybe they had more exposure or...

Ryan Tansom: Baseline, which is kind of what you're providing them. Right. And you know, maybe go for a little bit of context too for the listeners too, when you say $5 million ish you referring to like the value of the company. [Brandon interjects: Yep, yes.] I wanted to note that is because so many people, which I think we're going to get into as you described the inner workings valuations and how they work and things to look out for, which we're going to get into the meat of it. But you know, there's a $10,000,000 revenue business that could be worth only 5 million bucks, which is what we're going to get into. Right. So I mean there's, you know, there's a huge range of revenues. It's not just the small up and down the street companies are. And this is like main street, you know, businesses that we're talking about, right?

Brandon Hall: Yes. Yes. And that's the, that's the interesting about valuation, you know, because when you look at it as, as an investment or if someone's looking to purchase it, you know, they're, they're looking for a return on their investment, but you know, as you know, there's so much things that are unique with a business, it's not as you can take this, you know, owner-operator, this unique business that has all these intangibles which we can talk about, kinda get into the later and compare it to another comparable investment. So there's a lot of things that vary and that you got to look into where it's not, where you could say, for example, you know exactly what you just mentioned. You could have a, let's say a 10 million dollar company in sales that can be worth the same or similar to a company that's doing 5 million or you know, or you know, depending on what type of cash flow that they're getting, you know, getting a return on their company.

Ryan Tansom: Well, and that's what we're going to get into all of this. For the listeners, we're going to divinb really far into, you know, the inner workings of how Brandon and certified valuations are happening and you know, you know, before we do that, maybe can you kind of give us, give us a lay of the land, Brandon, on you know, what is a certified valuation, what are the different valuation methods that are out there because I think a lot of people, but what's my business worth? And you know, again, there's so much ambiguity around there. Uh, so what, and what are the challenges that you see because you've been exposed to a lot of different parts of even your industry and on the other side.

Brandon Hall: Good question. Good question. So, and that's, and that's the, you know, trying to bridge that gap. So when we talk about certified valuations, when I got into this, I what I looked out and I see you got this huge group of business owners that, you know, potentially are looking to exit the market and they just are looking for some sort of advice or information or, or some starting point of value of where there company's at, so, and they were intimidated by going to, you know, there's, there's the big bigger firms that do certified valuations and there was kind of a stigma about how expensive they were. So, and then now you've got technology improving. So there's a, you know, there's this boom of technology that are making things easier. Information, you know, the big key words, big data. So you're able to utilize technology to get information that before you weren't able to do.

Brandon Hall: So, you know, to kind of tell you where I'm going with this is she got maybe these, you know, software type, you know calculators are these things where they can help with the value or these rule of thumbs. So, you know, so my point is, is you got this, you know, where it helped on a base level, you know, to kind of assist to help you where you, where you start and then you got these certified valuators where um, there's a stigma how they're really expensive. So to try to bridge that gap where you can kind of bring a lot of expertise and help into this equation. Being that businesses are so unique, there's so much different things, moving parts that can be missed that, you know, if there's something that's. And then we can get into a couple of scenarios why and how that, you know, how that can impact your value. But essentially let's try bridge that gap where I can do a certified valuation or I could look at some of the things your businesses are doing and how it impacts your value.

Ryan Tansom: And we're going to get into this is a good, a good bridge into like the actual ways that you do a business valuation, right? Because then you know, here's, and you're going to be able to give me some pushback on this and, and some technical reasons and I know that we're going to dive into it is so your business is worth what someone's willing to pay for it, which is what I always say, right? So you know, you got CPAs or wealth managers or bankers or the estate attorneys, all of these different professionals have a different reason to give your business a valuation, but like we're going to be tying this back back together at the end of it, but like who buys it and why depends on what they're going to pay and how they're going to pay it. So my partner Jim always says valuation's an art, not a science. So to go in there and crunch these numbers, do a by the way, this is what it's worth. And that's why I always joked around were like, you know, these, you're to pay 20 grand for one of the big four to come in, look at some BS comps that are, you know, who bought it, why? it's all total like mystical, like faerie dust, unless there was an actual transaction that went down. So. And I know, I know you got some technical ways to describe how you're doing this. How would you explain that to listeners of word? They're not technically going for a transaction right now? Or like you know, there's, there's other written you're on, there's reasons that you're going to do a valuation, but you know, what are the ways to, what are the ways in, what are the things that you're measuring to get to have that baseline? Because you do need a baseline regardless. So just because I said it's an art and you have to wait for the transaction, doesn't mean you have, you have to. I mean you have to find out a baseline at some point.

Brandon Hall: Right, right. Yeah. And that's. And that's where I think you can, you know, depending on, I guess for one, depending on what you're planning on using this valuation for what's your purpose? Um, so ...

Ryan Tansom: Why would that, why would that matter?

Brandon Hall: Well, I guess I guess to your different reasons why you would want or need a valuation. So, and I think you kind of asked this early on, I might not know the answer as far as you know, the different reasons why I would somebody to come to me and ask for valuation. So kind of answered that. So let's say someone's going through a divorce and they need a split split up their marital assets. So that instance you, um, you might be looking for a more certified valuation that can hold up in a court setting. So when you're negotiating this value and who's getting what that you're going to lean towards having a more detailed report based off just the, the, the reason why you need it. I'm not saying that's saying that's going to be more accurate value or not what you're, you're doing a lot more due diligence, I guess I should say to provide support for [Ryan interjects: Two people playing tug of war over the cash flow.] And that's a whole different story in my opinion. My opinions on when it gets into that kind of type of battle and maybe it's starting to get away from what's actual common sense and what this is actually worth in more of a, you know, who could get more or pay less for this business. So that's, I guess that's an instance for, you know, a certified valuation. Uh, there's buy-sell agreements. There's SBA financing, which a big part of what I do is mergers and acquisitions, a small business loan that, you know, someone's buying a business and they're using a small business loan.

Brandon Hall: You know there, there's regulations in place, there's things in place to make sure the buyer, that price is justified. You know, it's, you, you did your part, [Ryan interjects: Especially with the government's backing.] and governance, guaranteeing a, you know, a good percentage of it. So there's some things in place that kind of like, okay, we did our due diligence Max and I guess to your point when you mentioned you know, your business is worth what somebody's willing to pay for it, which, which is true. I mean you could say on paper my business is worth x amount, but if no one's willing to pay that price, well it's not going to be worth that much. But on the flip side, just to kind of play devil's advocate, potentially you could be in a situation where the buyer may not be, you know, well-educated and all, all the things that you know, may make this business worth x amount or not. So it's almost saying the buyer could be getting into a situation where it might not be getting the best return on that investment or what they're perceiving it to be. So, you know, to their point is that's why it's sometimes it's helpful to get some insight from a valuation expert or someone that has knowledge that can point out things that the buyer might have missed. So that's where kind of SBA financing kind of comes into play.

Ryan Tansom: Well, I think let's, let's dive into, for the listeners, like how is a business valued because you know, there's a lot of the common stuff that's out there is a multiple of EBITDA. Oh, my industry is three to five or like, you know, I heard my friend got 11 times, right? There's all these different things that are thrown out, but regardless, let's, you know, let's take it from... You're just trying to value a company that, let's take the buyers or the different exit options out of the picture. For right now, I think Brandon, because we can tie it back in and how that might affect the value one way or another. But you know, there's a very technical way to look at that, return on investment, right? And to look at all the risks that are associated with it. And I think that's what you do a very good job of diving in and understanding that. So regardless of what direction you want it to go, you know, there's 90 percent of it that should be the same and there's all these outlying variables that will impact it. But you know what, let's Kinda dive into like what are some of the things that you're doing and that people do in order to understand what the true value of a company is.

Brandon Hall: Good question. So, and that's the beauty with valuation is you can make it as complicated as you want or you can make it, you know, on a higher level as simple as you want. So there's a lot of different variables into valuing a business. So now I'll try kind of taken on a more of a higher level level approach because there's people in my industry that you can, you can negotiate and argue over it, just one little aspect of evaluation. So, so get to a point on multiple of EBITDA. That's probably the most common are a lot of people hear that. Am I getting three x, four x, five x, what's my EBITDA. So to kind of walk you through that where there could be some issues with that in how I, you know, in battling a company is, is where you got your, your cash flow. So you got an equation, essentially you got your equation on the top, you've got your, what type of cash flow does this business produce, and then the bottom of your equation is your, you could be, you know, a multiple capitalization rate discount rate. Essentially that is what is my risk of this cash flow continuing in the future? So what is my return? So all of these things, those are the two really every valuation of a business. Those are the two things that are going into it. So...

Ryan Tansom: Can I pause for a second though to Brandon? Because I think, you know, you had mentioned it earlier where, so when you said whether it's discounted cash flow cap rate or the multiple, I mean what you're referring to, you mentioned earlier, it's the asset and the risk associated with an asset because it's technically an investment, right? So everybody in real estate knows the cap rate and everybody in stocks, knows their rate of return or a or a PE ratio. So there's, there's you putting money in and you're getting money back and that's essentially what you're trying to determine. What is this, what's the value of that and what's the risk with it, right?

Brandon Hall: Yeah. So, so to kind of further explain that, the bottom of that equation, that cap rate or that multiple, I mean it's essentially like any other investment, you know, if you look at, you know, talking about real estate, everybody, you know, most of the people that actually understand that cap rate, you know, it's, it's gonna be a lower, you know, six to eight, four to eight percent being that that's a more lower risk investment or it's a more easier way to calculate what kind of return I'm getting on this asset. So same thing with the business is, you're, you're, you're going through that, these processes, looking at everything inside the business that comes to what is your rate of return, what's your, what's your risk? Um, what's, uh, you know, if I'm, if I'm investing x amount into the business, I want to have some sort of return back on that investment. So, so that's, you know, on a high level, that's what this is all about and how to get that is you go through these different methods as, as a valuator and we can kind of get into that. Where you're looking at it.

Ryan Tansom: Yeah, let's, why don't you dive into maybe just for the people that, you know, I find it 50/50 of people that understand even and some people that don't, call it free cash flow, seller's discretionary earnings, all these different things, but like you know, how do you find that top of the equation because there's a lot of games that get played on mitigating taxes and like, you know, all the different things, but like maybe kind of how do you find that? How do you actually find the true number there?

Brandon Hall: So again, that's a really good part where it comes to the art of, of a valuation because you can, you can have, I mean if there's one part of the equation that's not actually capturing what's going on, your value is going to be off. So when you want to talk about EBITDA, earnings before income, taxes, depreciation and amortization. There's businesses that are going to have a, I guess incentive to have that as low as possible for tax reasons. So you know, there's, there's different methods to try to keep that low or you know, you're looking at. So when I look at, it kind of talked us through, so when I look at a business, what we're trying to figure out is what is the economic benefit of that business? What is the, what is the normalized cash income that that business is going to receive on a, on a yearly basis. So that being said, what we got to look at is to get to that, I guess normalized EBITDA or get to some sort of, you know, free cash flow.

Ryan Tansom: What money's coming in the door and what money going out.

Brandon Hall: Yup. Yup. And so you look at it, you go through them. This is where, when I'm talking through the different business owners where they don't quite understand is, you know, when we bring up things like personal expenses, you know, it's like this is, this is a point where it's very important to look at your financials historically and be able to quantify and identify expenses that are not related to the business, you know, and that's something where some of the benefits of being a business owner and it happens all the time where there's certain expenses that are vehicle expenses or gas or certain, you know, personal expenses that are getting run through the business. You gotta you gotta identify those and pull the, you know, and add those back or use some sort of approach to, to, to capture those.

Ryan Tansom: I, uh, I gave a presentation to this group of business owners. The funniest quote I ever heard was there's not one of us in here that know how much tires cost. It's just an expense. I've never bought them.

Brandon Hall: And I've never, never bought them. They're expenses. And that's. And that's the thing is um, and it's funny when, you know, when I'm talking to a certain business owners, it can become kind of a touchy subject where it's like, wait a minute, what? I mean, I'm not, I don't want to just let you know what type of expenses I'm running through the business and fair enough, fair enough. You don't necessarily know. That's essentially the valuation, the more information that we have, the more I guess accurately that we can capture, you know, what the value is. So.

Ryan Tansom: Well let's, let's dive into why that matters too, because I want to make sure that we also touch on is we're talking about is normalized EBITDA, Brandon, I think is so important because. Yeah. So like if you think about the flip of that is... okay, so if I have like my insurance, my car, my truck, my tires, my gas, I mean like random trips because it's quote unquote a business trip client trip by the way we stayed an extra three days in Florida and all those kind of things, you know, let's say it's like even just your car, let's say it's 20 grand a year, right? So then you got that 20 grand and I'm curious on how you add, like as you're going through this and you're applying it to the equation, but at 20 grand a year if your multiple, and I want to make sure that I want you to describe and your terms of like what that multiple means, but that multiple is applied to that EBITDA so if it's 20 grand a year and it's times five. I mean that's 100 grand that you are not getting because your EBITDA was 20 grand less because you didn't want to talk about that truck.

Brandon Hall: Exactly. That's where I think it's important kind of lay that out so they understand on their end where you know, you know, on a multiple sites. So that's, it's an equation that we're talking about earlier. You know on the, on the top end you've got the cash flow. So if you're not capturing 20,000 that this business actually produces, you know by taking out the personal expenses that are not relating to the operating company, then on that bottom end is like whatever. So, you know, when we go through calculating our, you know, when I look at a valuation that I do a multiple of methods to get to, yeah, at the end of the day you can look at it as a, as a multiple look at it as you know, whatever that, whatever that is. So it kind of... to describe that a little bit is when I do a certain income method, I'll look at a capitalization rate we talked about where you can look at that. It's. So let's say if I ended up with a 20 percent cap rate on, on this business...

Ryan Tansom: You want to explain it just a little bit because I think people might understand in real estate, but just, you know, just give a little explanation.

Brandon Hall: Yup. Yup. So I guess I'll, I'll, I'll talk a little bit about. And there's many different methods and that's the beauty of evaluation. There's a lot of opinions since it's kind of an art and you know, there's not just one way to do things. So. But I'll talk. I'll talk about living the most common, probably the easiest way to kind of understand a cap rate or a rate of return method that we look at is called the build up method. So essentially what it does is it starts, you know, we're trying to take this business and what that rate of return would be on a similar investment, right? So the buildup method is, is it builds up from starting point which is going to be a risk-free rate, which you know, usually is a 20 year treasury bond rate, which I think right now it's three percent. So. So you start with that and you add on to that at the end of the day you're getting to your capitalization rate which best reflects this business. So from there you got your risk-free rate of three percent add on the risk of an equity investment, which the equity risk premium. And usually that's through. We looked at, you know, not to get too detail, but we got a lot of information dating back to 1926 through now, you know, gathering data, what is equity risk premium.

Brandon Hall: Just to Kinda give you a little bit of a, that's usually anywhere between, you know, depending on what method you use in five to seven percent, let's say, and then from there, the next layer you're adding on is just being a small company. There's a small company risks, there's a size premium that we were adding on to capture this, this company being that there's certain things that just being a owner operator or a company that's smaller than, than some of these companies we see as a public company. There are certain challenges, certain risks that you're taking on in a small company. So we add no another layer, which again, just simple, simple calculation. Anywhere between five and six percent. That's through, that's through a lot of research and data that we, uh, that we use and study. From there, we got industry risk premium.

Brandon Hall: So again, this is things that I, this is kind of good to talk about. So when we're talking about multiples, when someone just says three to five, well, well look guys, there's differences between which industry you're in. Let's say for an example, let's say if you own a liquor store, you're not, the owner of that doesn't have to be tied to that business, you know, if you're going into a liquor store. How well do you need to know that owner? Right? So you can be hands off, you can be less tied to your business and you're still having people coming in and buying your product. So that would be. So looking at it as an industry, that's a less risky industry. So that's going to help your multiple. Where another industry where it can be, let's say a service industry. It's actually funny, I just appraised an appraisal company, so I praised appraisal company. Yes, exactly. So that was always, that's, that's, that was fun. A commercial real estate appraisal company. One of the things I was talking with the, with the owner, um, management team was kind of how hard it is to find such as a niche business. It's specialized, it's all dependent on knowledge of the appraiser. So it's a lot harder business, you know, your market, your industry there's things that are riskier. It's harder to sell. So that being said, that's going to have a little bit of a lower, I guess it'd be a higher risk, lower multiple if you kind of understand the inverse relationship of that.

Ryan Tansom: Well and as you know, just to kind of even tie the multiple and the cap rate together in the multiple. And you might have a better way of articulating this, but the, the multiple is how many years they're willing to pay up front for that cash flow, right? I mean, so it's a directly related. So a three, I want a three year return on the investment. Yes. Is there a better way to say that?

Brandon Hall: No, I think that's my, my problem is I might try to explain it in some other way and we end up confusing. So that's a good way. That's a good way. It's just as simple. We'll keep, we'll keep with that.

Ryan Tansom: Well and then the cap rate is the interest rates for the cash flow, right? So that 20 percent cash on cash or 10 percent or you know, that's more correlated to that. And then that's a lot, a lot in real estate, right?

Brandon Hall: Yeah. Real estate is, is an easy way to, I guess you understand the cap rate, um, but yeah, I mean at the end of the day you're looking at, you know, your risk, your rate of return on, you know, on your investment.

Ryan Tansom: So Brandon, you know, there's a, um, a lot of people out there and listeners have a different varying degree of exposure to value building or Built to Sell. John Warrillow is going to be on the show again for the second time here coming up pretty soon. So he's got his eight key drivers of value. And then there's Ken Sanginario of what the VOP system or you know, all these investment bankers or private equity firms, like a huge list of value drivers. And the way I've always described it is it's like the opposite. It's the same coin. So you got value drivers that are the business owner, they want to drive value. And then the opposite side is a buyer's looking for risks. So it's the same stuff, but it's just opposite sides of the same coin. And so those are risk factors that are going into the equation that you're talking about, you know, what are some of the, you know, as you mentioned something about the industry and the size, what are some other ways when you're looking at, you're looking at that EBITDA and then you're applying these risks. What are some of the big things that owners should be thinking about? And you know, to just have like an eye opening like, okay my, this is serious stuff that'll impact my value.

Brandon Hall: Yes. No, and that, that's a great way to lead into this. That next step when I was talking about that cap rate is when you get into this specific company risk where you're looking at this company, what makes it less or more riskier or you know, especially coming from a buyer's perspective where essentially is going to increase your value. So some of the big ones were so out of this podcast, the biggest thing I have to get one point away from this, they're getting something out of this is a business when you look at value is the transferability of your cash flow. So you got your business that produces some sort of cash flow, how that transfers to a, to a buyer, to someone else that's kind of your, that's rule number one.

Brandon Hall: That's one point that you got to think about as because the easier that is able to transfer, the greater the value, the greater someone's willing to pay for that business. So, that being said, now you got to look at all the little things that make up that transferability. So when you look at these key drivers, these things that owners can think about. For one, I think the one biggest one that I think a lot of small business owners may not think about where, let's say you start a business, you have all this, all this time you spent into this, this sweat, blood and tears and you've got some, uh, some ownership of it. You feel good. But the problem is, let's say you're really, the business is really reliant on the owner. You have all the relationships, you have everything working through you. You're in the business day-to-day.

Brandon Hall: That's good because you're able to, you know, at some point that's what you have to start and that's how you grow your business. You have some sort of skillset, but there's a point where you gotta figure out how to start scaling back. You've got to find people to put in place processes to put in place where the business can run without you, where there's not so much reliance on a key personnel or on an owner, so that is one area that you're going to look at when we're going to valuation. That makes sense. A couple other areas, client concentration. So we look at, so again, these are things that are not so straightforward where I valued a business where they were, let's say I think they were doing about 4 million in sales. They landed a huge client, a huge client that drove their revenues from 4 million to 12 million in three years. So good. You definitely, you don't want to service that client and that client made you get to x, x size and revenue, but here's the risk. That client is 90 percent of their revenue. Ninety percent is coming from that client. That client, you know, someone looking to buy it and saying, okay, yeah, you're getting x amount of revenue and cash, but on the flip side of the equation, you're 90 percent concentrated on this one customer where let's say some when you're trying to transfer this business, a relationship gets broken, something happens. That client goes away, go to someone else, boom, there goes to 90 percent of your revenue. So in the end there's a big list of things, but I'm guessing when you have...

Ryan Tansom: To make it super basic. So if you think and the listeners that are in this situation, they know it is is if you're exhausted because you're working your butt off, that's because everything's relying on you and why would someone else want to pay money to be in that situation? And then you know, the same stomach ache that you go to bed with. God, I hope target doesn't fire. Why would someone else want to pay for that stomach ache and pay a premium for it? So it's like. Exactly. You know what I mean? This is really just the feelings and the energy and the emotions that the owners have, like you know, building a machine and a transferable cash flow is good for everybody. It's a better business to be in, but it's also more worth more money because people why wouldn't know if you could, if you could pay some money and you got something that kicked off a bunch of cash why wouldn't you want that?

Brandon Hall: Exactly, and I mean of course it's easier said than done, but that's why these are good conversations to have and these are good things to for business owner to start thinking about where at a certain point in their life when they're trying to figure out their exit option, they're trying to figure out what do they want out of this business? What do they want out of life? What are they? How do they want to exit? What do they want to do in their older years? You start thinking about this sooner than later and figuring out is there a way, is there a way? Is there a way I can start scaling back on this business where I could get things in place to run without me? Because not only is in here's a few things, not only life going to be maybe more manageable, more of a balance. Your, your investment or your, your, your business that you're building is going to be worth more. So I mean there's, there's so many positives that are coming from this. And again, I know it's easier said than done, but I mean nowadays with the amount of information out there and we could, you can kind of talk and do you know what, what your company is doing, which I'm really excited about, by the way, is how do you help these business owners figure out what, you know, how much money they want their business, you know, how they're going to exit. And then kind of reverse engineer that and say, okay, you know, if you want to get to here, here are the things that you can do or work on inside your business and essentially is going to make your business worth more.

Ryan Tansom: So I want to go back to that. But before I want to expand on that because I think you know some of those things and you're kind of getting into the value building because there's a reason. I know you're doing that, but before we, before we go down that road and I don't know, I just want to dive one more layer deeper into honestly for more of my curiosity. I know our listeners are probably thinking that too. Okay. So I want to go back to the mechanics of that valuation. And this is where I think, you know, there's a certain point where you, the, the, the, the owner or any listeners that gets a valuation, they have to be somewhat comfortable that this is kind of a baseline or a benchmark, but it's not finite because there has been no transaction. So let's say going back to like you've got all the different layers of risk that you're putting on it and then you got into the business risks. Like let's say we had a million dollars in EBITDA and like how are you actually applying mechanics and calculations to the risk of the owner and high in concentration such versus just kind of arbitrary like, you know like shooting a dart against the board. I mean is there like specific things that, you know, if you took like the value builder system and we can link to that in the audit, you know, determine your eight key drivers are what you have some sort of base. How are they, like, how does that actually correlate to the value and how are you actually applying the risk adjusted rate of return on that?

Brandon Hall: Okay. So make sure I could understand this right. So what I. So what I'm looking at a value of the company.

Ryan Tansom: How does that all kind of just come together, how you apply these factors in the calculator that you're, that you're doing, right? I mean like how were you like applying the fact that there's 50 percent of the million dollars coming from one person? I mean is there like database, like how are you actually coming up with how that impacts the cap rates or the multiple or like following them saying like there's mechanical ways that you have to figure that out other than saying, hey, you know, what, we already work with targets so that we're not going to discount me because again, the buyers make a huge difference on this, but you know, for them to look and say, you know, when Brandon Hall gives him a report that explains all this stuff and it's $4,000,000, like, okay, you know, like how do I believe those numbers other than the industry expectations?

Brandon Hall: Good question. Now, okay. So to kind of go back on when we're looking at when you're looking at a valuation or if you get a certified valuation, some of the things kind of how it's... That's why, you know, that's why even for me, I'm continuing to try and prove my, my report based off the reason. So if that business owner is, is wanting a certified valuation or a calculation of some baseline even to, you know, that's my client. So I want to, you know, within the standards I want to develop report that's very user friendly that they can point to and say, Oh yeah, this is how it's impacting my value. So when I go through and I look at, I'll look at, and I apologize if we didn't really necessarily get into it into these methods, but. So for one, we talking about the income method, you know, that's one that's widely used where we got the cash flow, EBITDA, then we got the rate of return. So there's things that we're, we're capturing on the, on the, on the, on the top end of the equation, normalizing the cash flow, taking the account if there's, let's say random big earnings or a big, unusual expenses, one, time expenses, personal expenses. One thing that we look at, you know that maybe we haven't really touched on is the compensation.

Brandon Hall: So owner owner that's running his business, he can pay himself a salary, whatever you want, you know, reasonable, reasonable, range, but you know, he could be working 60 hours a week and his salary saying I'm paying myself 20,000. So you're looking at EBITDA if you're looking at EBITDA, but uh, those numbers can be very misleading I guess you'd say. So one thing that we're gonna look at is we're gonna, we're gonna, look at the owner's compensation we're going to look at the owner and we're going to say if this owner want, needed someone to come in to replace what he is doing on a day-to-day basis, a non-owner, I guess you would say, what is the fair market value? How much would that cost the business, you know, let's say let's say if you bring it into someone else and say, well, that it's going to cost 100,000 for that employee to come in and do the things that you're doing. And again, I know this is, there's gray area and a business owner wears many hats. So that's why it's very important to list and understanding on a day to day at what the business owners doing so well in the gray area.

Ryan Tansom: I think it's a good point there, Brandon, is the gray area is where you negotiate with your future buyer.

Brandon Hall: Exactly. And um, so that being said, so then we look at the income method, we'll look at an, a market method, so comparisons, one of the, one of the methods is, and that means we as, as appraisers, we have access to multiple databases that hold actual transactions sales. So that, that process would be, is we would look at, you know, we get a range of comparables ideally the most, you know, most closest related to that business. I mean we've got to start with a wider net and figure out okay, what's out there? And then kind of scaled down to something that closely relates to that business. And then we have different like I guess you can say different percentiles.

Ryan Tansom: So I think, you know, going back to even like my old industry, like in, you know, so for the listeners that are curious or what that means, I mean you're looking at like debt to equity ratios, right? Like how much debt do they have? Right? So you're, yeah, you're, yeah, your sales or 12 million. But like yeah, everybody, everybody else in your industry's got two. So like what are the things that you're looking at? Is it like actual P&Ls of other people's and okay, well this is sales cost, this is what is, what are the actual things you're comparing?

Brandon Hall: So yeah, good point. So on the, on the market side, we're looking at transactions we're going to look at, we're looking at, you know, and they don't provide all the details but they're going to provide you, you know, this business was doing x amount of revenue and x amount EBITDA and had x amount and seller discretionary earnings. It had this amount included in the sale. So had this amount of inventory, this amount of fixed assets in which then depending on on how much they're buying it for the differences between the hard assets and I don't want to. This could be a whole different conversation. Difference between the hard assets and the enterprise value is you know, the intangible, the goodwill. They're paying x amount for all the things that are happening in the business that provide, that produce x amount of cash flow, you know, above and beyond the return, above and beyond just what would you know, just what you're worth of your tangible assets, fixed assets. That makes sense.

Ryan Tansom: It does, and I don't know if we want to go down just a little bit because you and I were just talking. I just read this book called Capitalism Without Capital and for the listeners that was an amazing book and it talks all about how the balance sheet, whereas these days are changing dramatically because we have less stuff and processes and procedures and all that, which are you value those things and yet the people and the culture, everybody says culture eats strategy for breakfast. Well Great. Well how do you value that? Right? And so you know, the goodwill and stuff like that how... and then intangibles. Maybe explain how do you, how are you taking integration?

Brandon Hall: So that's a good point where I think it's now more important than ever to really start, you know, understanding these, you know, the valuation and the things that go into it because right. You kind of a society in general is kind of moving, you know, for sure in certain industries is moving away from the industrial where it's really capital intensive. There's really, you know, there's a lot of assets, a lot of stuff that you have on your balance sheet that you're using to produce income for your business, where now you're getting into, well we have these lot of these different processes, this technology where you're, you're using a service based business where it's just people that are generating income for your business. So to your point, you know, as far as valuation to kind of simplify, it all goes back to the equation where, okay, your business, it has this rate of return, it's has this amount of cash that producing, um, it doesn't necessarily matter how much assets you have, the cash that you're producing, this is what are the income method is very important.

Brandon Hall: So let's say for instance, you know, just to simplify it, your normalized cash flow normalized EBITDA is say 300,000 a year. You might only have, if it's a service business, you might only have $50,000 of assets on your balance sheet, maybe even less, just your equipment, your computer. Um, maybe some software I mean just very little asset tangible assets you have, but your business is, you know, making a small businesses making $300,000 a year of, of cash cash flow EBITDA, and that's when we look at the flip side, there's your rate of return, how likely is that going to continue, what someone's going to pay for that business, what kind of risks? So boom, from there, and let's say you have a multiple five that um, that business, let's say a multiple five and you have 300,000 for simple point, that's 1.5 million in value.

Brandon Hall: So you look and see, okay, someone's willing to pay that amount, you get one point 5 million in value, your assets, your tangible assets on your balance sheet is 50,000. Well that, you know, kind of to make it simple, well you got 1.45 million in goodwill, intangibles and, and so they're kind of to kind of tie that back, so that intangible value is everything that's related into that. So it's your relationships with your customers, it's your client list, it's your employees, you know, the employees that you have that are out there servicing your, um, your customers, it's your procedures, it's your operation. So I mean your documents you have, if you have things that are, everything's documented out, you have your processes, everything's running smoothly, well that's going to go into your value, your intangible value, all these things that make up your business that people, you know, it's hard to kind of understand what, what, what, what does goodwill, blue sky, all these, you know, things, what is it worth? These are all the things that essentially at the end of the day, people what they're buying a business for is how much cash they know, what kind of return and they're going to get at it.

Ryan Tansom: You brought up a lot of really good points. So Brandon and I think to expand on that is transferrable. It is, right? So let's say, because you don't have, you know, Warren Buffet always used to, he used to look at the balance sheets before there was internet and it was like, okay, well, you know, worst case scenario is this thing, you know, I liquidate everything in the balance sheet is worth more than the enterprise value that it's on, on the stock market right now. Right. We can't really do that anymore. So when you're looking at that 300 grand, what is, what is my confidence level that, that will continue in the future? And you alluded to a lot of that, which is systems, right? And do you have a project management system? Are you showing like, you know how people are allocating their time, are you not engaging with the customers, but you have an employee that's doing that, right? So you, you nailed it. It's like the transferability of that cash flow. I actually, you and I both know Jon Thwing and he from a SBA guy and he, when he does some of the financing, I'm sure you've done some valuations for him, but he says, yeah, he does a lot of, uh, digital, uh, online companies, ecommerce. He goes, sometimes there's just a domain and a flash drive at closing that for some $5,000,000 company.

Brandon Hall: It can seem crazy like you're paying $5 million in, at, at closing. It's like, here, here's your flash drive, here's the, here's my, here's my number of my business by phone number in my domain name. There you go. Good luck. But that's the thing, isn't it? I think it's very important that we're having these conversations. We're digging into it and we're getting into the details to kind of show how that's all coming into play to, to, to get these values, and then now you can apply that to any business, any business you can apply that to where you can say, okay, now I can figure it out. How to work on getting people in place where it's not so reliant. The cash flow is not so reliant on me. I can diversify, to a certain extent, some of my clients too. That way if I'm buying some, someone's buying my business and let's say one client, you know, based off the relationship that I had decided to end it and go somewhere somewhere else. That's not a huge risk. It's not a huge impact on, on your cash flow.

Ryan Tansom: It's a diversified portfolio.

Brandon Hall: That's right, and we could spend all day talking about all the little things that go into just running a business and you know, what things that you can focus on and that's why I think the importance of it were in a Kinda want to touch based on, you know, a valuation. Of course it's good to talk about a valuation report is, is helpful, you know, depending on what the business owner is doing with it and what they're getting out of it, but from there... so that, that's what I was getting to. So that is exactly why I'm kind of hoping to get more into it. That's why when we connected on Linkedin and we ended up having a conversation and coffee and talking when I got really excited because unfortunately I think a lot of people, a business owner or someone who will order a valuation and say, okay, this is something that I have to do, you know, start this process.

Brandon Hall: They go through. I go through my process, I do my due diligence. I, at the end of the day, I'm providing my opinion on the value of this company. At the end of the day, they get a stack stack of papers, a report. They take that, they look at the number, then they put it on the shelf and put it somewhere and they don't look at it and they don't touch it until they're ready to sell. So that is my... So that's what I'm excited with. What you're doing is okay, you get your value, dive into it and understand what are the key drivers, what are the things that are helping that value or not that value. Okay, now you've got that starting point. Let's say if you want to exit in three to five years, here's all the things that you can be doing, working on, you know, on a daily basis or a monthly basis to approve that value where the second time around, especially let's say, okay, I don't want to go off on a tangent here, but especially let's say if you got your initial value in, you identified some things, you started working on improving those, getting things in place, processes, employees, um, you're scaling back from being a so tied in the business.

Brandon Hall: And then three to five years from now you have all this support, all this stuff that you've been documenting, working with, you know, professionals or individuals to help you get to x value or x exit point. Now when you go present to a buyer and you're trying to, you're ready to list or, you know, in that some of the stuff that you can maybe talk about, you know, maybe not in this podcast, but now you have everything in place and saying, here's why I believe this is why I'm selling my company for x price. Instead of saying, oh, my EBITDA is x amount, and I just picked three...

Ryan Tansom: Or like, what do you think is working? I literally just got an from one of my friends. He's going to know if he's listening is yeah, we're just waiting to have the buyer just shoot us what they think and I'm like, that's the worst idea ever. Why would you let, why would you leave it up to someone else?

Brandon Hall: This is a chance where you could do your. You can do your homework, do your due diligence because you know your business more than than the buyer. So this is a where you could show like, here I have all these things in place over the last three to five years, I, I've done all these things to make sure this cash flow isn't the most transferable to any buyer. Everything you know, that's all this stuff that you're going to do is gonna help your value. So that's why you know, when me and you go back and forth and we have such good conversations because you know, you can understand it on, on your end, you know, going through that process, you know, early on with your family business, seeing how that played out, you know, going through and connecting all the dots. I'm Ian when I'm diving into the valuation and looking at these specific drivers and things that are increasing in decreasing your value, how, you know, we can figure out how to tie that together.

Ryan Tansom: Get things through to an eventual exit, right? Because anything, you know, I just, I can't imagine that of 130, 134 valuations. How many times does was like, well see, it's like you're all the things. And I think a note for the listeners is, you know, let's say, okay, well you know, I'm making 300, you know, so I'm maybe net and I got a salary of 125 and I've got a cash flow of 300 or 500 million. Whatever the heck it is is if I have to hire a cfo at 125 grand, that's going to eat out of my personal cash flow now. I mean I can't buy my boat or my cabin or whatever the hell it might be. First of all, it should give you more free time, but also that $125,000 could potentially return you 500 to a million on the value of your company. So there's a direct. If you think about the final goal, your investments, it's not just eating out of your pocket book, which I think so many people play games and they're like, well great, great. I'm going. It's all about the annual. When they don't realize they're screwing themselves on the back end.

Brandon Hall: That's an awesome point that you brought up and kind of tie this all together is exactly. You know, you're, you're, you're making that initial investment, but you're going to get so much more return on the back end once you have that, that management, that key executive in place, you know, running everything and getting up to speed. Then on that back end, you're going to get that return far more than you trying to save 100,000 yourself and and doing everything and working 60, 70 hours a week and who wants to do that anyways? [Ryan interjects: It was not a good sales presentation.] Right? It's like, here, here's my business. I work 80 or 70 hours a week. I'm over, I'm over buried. I'm stressed here. Please take it and buy it for me.

Ryan Tansom: Oh, doesn't that sound intriguing? Yeah. You're giving me a million dollars for that and I think, you know, just to Kinda start to finalize the conversation here is I think even in light of your exit option, which you and I have talked about a lot of, okay, so you know all of these different things in your value. That gray area depends on who is buying it. I think what, you know, what you've been talking about, Brandon, is there's ways to do all this and at the worst case scenario you have another financial buyer that can buy your cash flow because they're an investor, right? But the best case scenarios, you're driving towards a specific outcome. Whether it's a family transition and ESOP or a third party strategic buyer and you're doing strategic things so that way they'll want you in the worst case scenario, you've made a transferable business and then you can sell to any financial buyers. So I think there's just so many ways to tie what you're doing and then have it as a... you've given them a peer into the looking glass. Right? I mean like otherwise they're just running blind.

Brandon Hall: Exactly. And that's the nice thing about having a business owner take some time to go through these things to kind of understand them and to, you know, not to organically grow and make the business worth more. Right. So it's not like I'm not saying because some people, I think they get so focused on, on, on the EBITDA or are their P&L. So what they're doing is in. I had this experience just recently where a buyer, you know, this is his mindset was okay, I'm selling my business in a couple of years and it was a landscaping company. So he said, I'm going to stop updating my equipment, I'm going to stop maintenance because it's saving me money. Right. Well, and that's one of the thing as a valuator, what I look at. So I said, okay, okay. Yeah, there's less cash going out the last two years, but that hurts your value because when I look at your business and say, okay, here's let's say in, this is where I think, and I don't, I don't want to go off too much because we want to wrap this up and we can talk about this for, for, for all day, but the issues with just taking it straight EBITDA calculation times by three, you have a business, you know, a business that relies on certain assets, equipment, you know, lawnmowers, all that stuff. He has old assets. He hasn't been performing maintenance or replacing them. You have another business, has the same EBITDA, but all his assets are new, well, I'm gonna look at them and say, well that business had be worth more because I know when I'm projecting out the cash flow, he's going to have less capital expenditures going forward. Where the old business is going to have to have all these replacements to kind of catch up after the new buyer. So that's going to hurt his cash flow. So I, you know, I, that's one of my jobs is looking at that and capturing that. So...

Ryan Tansom: And just to even to expand on that Brandon and then I guess I know we could go all day but do, do, do it's intelligent, right? Don't play the games like that. But if you, if you have a plan in place, so let's say you're due for example, I mean personal experience is we still do a third party competitor, right? Yep. And I was due for about 150-200 grand worth of expenditures for my servers year. All this stuff, right? I mean like all the, like it was a ton of stuff but we literally didn't need them and it wasn't an EBITDA at the sale because there were strategic synergies. So like be be intelligent, don't. Right. Yeah. So you need to do. But that's why if you tie into the end goal, you don't have to. I mean, what we did do, that was stupid as we spent about 400 grand over the course of the 18 months prior rebranding. That was dumb. I shouldn't have done that, but it have been really good for any like financial buyer, but we didn't get the return at all. So I think it's a good point. That's exactly what you're talking about it. But then tying it to being smart in the game.

Brandon Hall: Yep. What's your ultimate game. And that's whether each business could have a different. Each business owner could have a different exit option or what they want are their business or who they want to sell it to. So again, going back to your point, figuring out your exit option, figuring out what you want, then going back and reverse engineering, what are the things that you can do today?

Ryan Tansom: So the things you could do today is figuring out what your company's worth if you don't know it and that's what you do. So for the listeners that are wanting to get a look into their fortune cookie, what is the best way to get in touch with you?

Brandon Hall: Yes. Um, so you can give me a call, give me a call anytime. Uh, seven, six, three, seven, seven, seven, seven, one, four, zero. So, you know, it'll go to my, my number and otherwise email, contact me, email Brandon dot Hall at the g, H valuation Dot Com. [Ryan interjects: And then all this information will be in the show notes as well.] Otherwise you get late from my website. You can hop on there because he lived it. Uh, what, you know, what I do and the services I provide, I'm going to order, get in contact with me for a valuation then. So yeah.

Ryan Tansom: Well, Brandon, I had a blast man. Thank you so much for coming on the show.

Brandon Hall: I love it. Thanks. That was it. That was awesome.

Takeaways

Ryan Tansom: Well, I hope that wasn't too much for you and there's a lot of takeaways there. There is so much to do with business valuations and understanding what your company's worth, but the reality is don't overcomplicate it. Figure out where you're at right now. Start learning and start educating herself of what is your company's real value to someone else. Look at your business from a buyer's perspective. Best way to do that is to go onto the website, get your value builder report on the eight key drivers, get a business valuation using our Biz Equity software, or call Brandon. Figure out where you're at right now before you call and you want to dump your company tomorrow. I mean, honestly, we, I had five people that reached out this last week that says, Hey, I want to sell my company within the next three to four months. It's way too late.

You can't do anything. You can't fix it. There's so many things you need to do ahead of time and go and get what you deserve. You. You spent so much time and effort and risk building this business, so please just go on and get some baseline, do some education, reach out to me, give me a call, reach out to Brandon. So I really hope you enjoy this episode and he got some big takeaways. I will look forward to seeing you next week when we're diving into net proceeds and how to determine actually how much money you make because a valuation is just the top line and not how much money you take home.