It seems that with certain Quiet Light Brokerage listings, there is just a mad rush of activity as soon as they come out. Most of the listings that we put out will receive at least 100 inquiries right away, but what does it look like when we put out a “hot listing” that garners two times that much interest?
Today we are discussing the type of business that gets 9 offers. We go over how many inquiries those types of listings get, how much discussion and conference calls happen around these potential transactions in a short time frame, and just what it takes to get these listings under contract. We hope you enjoy this little case study of how to set up for a successful sale from the seller side and tips for how to act from the buyer side. Being thoroughly prepared and running a real, viable business are keys to success.
Episode Highlights:
- The main characteristics that made this business so attractive.
- How the pricing decision played into the transaction.
- The process of selecting the 15 buyers we entertained.
- The conference call screening process between the seller and potential buyers, facilitated by the broker.
- How to choose a buyer and deal with disappointing those who lost out.
- The 4 pillars of success and how this business checked them all.
- The one intangible thing that took the business to the next level and attracted the buyers.
- How the packages that Quiet Light puts together tell a story about the listing and the journey of the brand and its seller.
Transcription:
Mark: It seems that with some Quiet Light Brokerage listings as soon as when they hit the marketplace there is just an absolute mad rush of buying activity towards those listings. Now to be clear most of the listings that we put out at Quiet Light Brokerage, the vast majority, in fact, it could be an exception to the rule is going to receive at least 100 inquiries from buyers and calls right away. So what does it look like when it we come across a "hot listing"? Well, it looks like a lot of conference calls scheduled very, very shortly and just a mad rush of inquiries probably upwards of 200 and 250 within the first 24 hours in some cases. What's the difference between a listing that is not as hot like that that gets on a 100, 150, which is still a lot and something that doubles that? Joe, I know you launched a listing 3 or 4 weeks ago from the time that we're recording this episode that we would definitely throw in that hot category. What were the top line statistics on that?
Joe: It was a let's call it a 95 to 98% Amazon business. It was 30 months old. It was in the category of America's fastest growing recreational sports. It was run by a single owner operator that was a stay at home dad that was a CPA by training yet outsourced the bookkeeping to an e-commerce bookkeeper. $440,000 in discretionary earnings and we went out on a 3.3 which is lower than my recommendation. But in this case, the conservative CPA said no I don't want it to be listed for too long. I really like to get it sold let's … can we go out at a three. I suggested a 3.5. Rarely does somebody come back and say can you sell it for less and he did in this case and we ended up [inaudible 00:02:50.9].
Mark: The guy sounds like one of these unbelievably likable guys. How many inquiries did you get within that first 24 hours?
Joe: You know I didn't count the first 24 but I know that you and I were … we were in Dallas and on the way to Houston for a meeting and I think we pulled it up and within the first 4 hours, we had something like 185. So within the first 24, I think it probably doubled to close to 400 would be my guess.
Mark: That is insane. Now I do remember obviously these are all loaded questions so anyone listening like I know the answers to most of these questions—
Joe: No, he doesn’t. He forgot them all. He can—
Mark: I actually—
Joe: Yeah.
Mark: I was introduced by the way this is completely outside; a complete diversion here. So sidebar I was introduced at a group of CEO's yesterday. And in front of the entire group of CEO's the guy that introduced me said "And Mark, by the way, took his son, they have seven kids or is it they're expecting their seventh kid. He's got so many kids he forgets their birthdays because he took his son to urgent care the other day and he got his birthday wrong." I'm like thank you for that. I'm so glad to be known as the guy who forgets his kids' birthdays.
Joe: You've got a lot of kids man.
Mark: I got the month right. I didn't get the year or day right. I know the answer to this. We were in the car together and your phone was blowing up. We were at a conference. You were trying to schedule out all of these people wanting conference calls and you did this right over the conference itself which maybe we can talk about in just a little bit here. Within that first 24 hours if you would just guess how many conference call requests did you get?
Joe: Well, let's keep in mind that that our process requires that the buyer either speak to me first before requesting a conference call or we've spoken in the past. So in this case in the first 24 hours, I had at least 10 requests for conference calls with buyers that I've already spoken to in the past that have looked at prior listings of ours and they wanted to make sure they were on a call with this one. We wound up with a total of 15 on this. As I said the owner of the business, Paul, is a stay at home dad. It's funny and I don't know if they loved this or just love making fun of Paul for this but he's a stay at home dad right? His son is a couple of years old but he takes his son to daycare at eight and picks him up at five. So I'm not sure how stay at home that is. Anyway so … but the beautiful thing is that he maybe … Paul if you're listening I'm sorry, maybe it's nine to four and you expanded it. Either way, you're a great guy and people love you and your business. I am not getting a Christmas card from Paul this year.
Mark: I'm sure you are.
Joe: Anyway, he was able to clear his calendar which was great. I was getting so inundated and I was at eCommerceFuel and I'm like I can't do these conference calls. And I had said to Paul on the way through eCommerceFuel look I want to bump this launch a week because it's going to get crazy and I'm not to be able to be on this conference calls. He says oh god really? Come on I really want to get it launched and it totally got my heartstrings so we launched it anyway. So I took the two days … it launched on a Wednesday I think and I took Thursday and Friday and all I did was talk to folks and schedule the calls for the following week. Paul cleared his calendar. We set up a link so that people could just grab a link and schedule them. We did a max of three a day separated by at least an hour a piece and we wound up I think by Monday closed the business. We had all 15 slots scheduled. We capped it at 15 which is really five too many. You just don't have to have that many conference calls. Normally we have three to five conference calls and we have at least one acceptable offer. Here we had 15 scheduled and we wound up with nine.
Mark: These are 45 minute slots or are they an hour long slots?
Joe: They were hour long slots. I go with an hour yeah.
Mark: So just to put this in perspective for people that have not been on the sell side, I know I had this with a listing last year that I represented where it was just a really favorable price on the business and so we had that 15 conference call sort of scenario that we were doing in one week. For anyone on the receiving end of that our clients, the sellers, that's exhausting to go from one conference call to the next to the next; an hour where you're being asked the same questions and you're doing the majority of the talking during that time. This might be a little bit beside the fact but how did he hold up throughout all those calls?
Joe: He did pretty well. They were spread out which was nice. He usually had … he had a minimum of an hour but usually, it was two or three hours in between. And we had one drop out so it ended up being 14. But he did pretty well. He had to keep moving around the house. That particular week his son was home because he got a fever a couple of days before and he was quite sick so he couldn't take him to daycare. And his mother flew up from Arizona to be with his son while he moved around the house to be in an appropriate place to do the conference calls. Most of the time he was actually in the nursery doing the conference calls from his laptop.
Mark: Right. So I want to get into a couple of big topics here. I want to talk about what were the characteristics that made this business and you already talked a little bit about this but what were the characteristics that made this business so attractive? Because I also know that we suggested to Paul going out at a 3.5. He's the one that wanted 3.3 for the asking price on this. That's the multiple that we're asking on the earnings. So I want to go into what was it that made this such a hot listing where people just needed to look at the teaser that we gave and that alone generated 200 plus inquiries within the first 24 hours? So what's going on there and then second I want to go through a little bit more of the process that you went through in selecting the buyers that were going to get those conference calls. Because out of 250 finding 15 you know I know a lot of buyers out there would be like well how would I become one of those 15 if I'm going to be competing against this? And then last I mean this is kind of the darker side now or the bad side I guess of what we have to do when you have a hot listing like this is we have to disappoint a number of people that actually really want this business but lose out in a bid for it. So I want to go over those three categories with you and then obviously Joe you're better at this podcasting thing than I am so if there's something I'm missing let me know.
Joe: Can you repeat that last part again, please?
Mark: You are better at this podcasting thing than I am but I still have the number one episode thank you.
Joe: And two and three, yes you've got them all, but you do the title so I think there's a little trickery going on it.
Mark: And I used to do the promotion too so … your podcasts easy for me what with number one.
Joe: I mean you talked about the four pillars; risk, growth, transfer ability, and documentation. And when you go through these things Paul's business just checks all of these off and all the subcategories within those checks them all off. He owned his own brand. He developed it himself. It's in a niche that is out there and there are other brands but he picked a … he specifically chose a niche within a larger niche to serve a certain segment of these people to start with. So there's a growth opportunity to go. He picked the sort of beginners in this sport. He didn't go with the top end of the product. He went with a middle of the road product that beginners … a price point that beginners would enjoy. So right away you could say okay well I'm learning this business and now I'm going to take this to the new level and go with the more professional people that play this sport. It's not quite professional but retired professionals can play. So he did a really nice job there in picking the category. It was just by happenstance. He happened to be on vacation visiting his folks in Arizona and saw this game that they are playing and said what the heck is that? Looked it up, studied it, researched it and it started growing like crazy and chose to go in that category. A registered trademark, beautiful brand, beautiful packaging, and again let the business age. We've been talking for probably nine months and it was getting close to the 24 month mark but we got through that Christmas holiday season. This particular business is not fourth quarter heavy seasonal. It's actually better in the spring and summer months. So we got prior to the spring and summer months so that a new one would have a great advantage with an upswing in the summer months. It was clean books, SBA eligible which helps cast a broader net to probably half the offers. I can't say half because they were nine. So four out of the nine offers, five out of the nine were SBA offers. The growth trends were fantastic; 80, 90, 100% year over year, month over month growth. It looked really good comparing month to month and from year to year. Transfer ability; super easy, he owned the brand. He wasn't reselling anything. He had a good relationship with his manufacturers. And the documentation, of course, good SOP's in place. He did it all himself so there weren't VA's that were combing [inaudible 00:11:42.3] anybody else or people that works on his house or anything like that needed to transfer. This sort of intangible thing that I think took this to the next level is the person behind the business. He's not transferring with the business but he is so, so likeable and so trustworthy; just the full story behind him. And I'm not suggesting that everybody goes and becomes a CPA, quits their job, and works from home and be a stay at home dad. But people want to invest in a business and buy something from somebody that they like and they trust. As Mike Jackness said on a call recently you have to be a good human being in order to get the deal done. It needs to work for both parties. And just describing who Paul is and then how he is in the video and how he came across, he's just a good person and people wanted to buy the business from him.
Mark: Yeah, I'm looking at the teaser right now. It's cool if I read some of the teaser, right?
Joe: Yeah of course.
Mark: All right so again I'm just looking at this. I'm … this is selfish on my part, the next listing I put out I want to get 250 inquiries because that's awesome. I mean that's great for our clients. All right so I'm looking through this and look in through the prism of those four pillars of risk, growth, transfer ability, documentation. Risk; Amazon businesses, this is primarily Amazon. The biggest thing that I find and maybe you'd disagree is that it needs to be defensible against competition. In here I see towards the bottom there's a trademark and the brand is brand registered, there we go. There are over 2,000 reviews you are … these are getting harder and harder to fake. So you're speaking towards this … the main risk that people associate with Amazon. Right away people are thinking oh awesome that's great. Growth; this is rapidly growing. You leaved this but this is rapidly growing as one of America's fastest growing sports. So A. this business is growing, B. this niche is growing; two really good things, so growth is checked off pretty easily. You have some other stuff in here. Transfer ability; the owner, single owner, dedicates approximately 15 hours per week running the business. I could do that right? Who can't do 15 hours a week on something? And then lastly documentation; the owner is a former CPA. Do you need to say anything else? I think you checked each of those boxes with a giant red check mark to say everyone looking at this; this thing is going to check all of these boxes and become really valuable. It turned out surprisingly enough to be true. These four pillars work.
Joe: Yeah, they do. They do. And one of the pillars is growth but within that is growth opportunities and growth trends. And the opportunities I'll dig into the package itself. I can't quite remember but he had launched new SKUs in 2018 and so we look at the revenue when did he launch those and the revenue by SKU during that time period. And it was clear that some of these SKUs had gained some traction in 2018 but they hadn't been available for the full 12 months. So that's a built in path to growth. So it's one other thing that buyers liked. And then when you … I mean that teaser it obviously checks all of those four pillars but then when you get into the package and we recorded a video, a video interview with him via Xoom like we're doing now. Obviously, people are listening to mostly audio but we do the video as well. And he's in his home you can see the kitchen in the background and he's got the packaging and he holds up the packaging and it's just beautiful. It's a really nice product and this is again hard for people to duplicate but this particular product it's just cool. It's just a cool niche and a cool place to be and he did a really nice job with the packaging. He did everything right as far as I'm concerned and obviously as far as buyers are concerned as well.
Mark: Yeah, one thing I want to touch on here because we talked about this a lot for buyers that you want to be likable and come across well to the potential sellers. But it works both ways too right? I mean obviously, somebody who's selling who's a complete jerk probably isn't going to get too far with us because the process is just too difficult. So most of the … most of our clients are great people anyway but there are some people who have just magnetic personalities. And for this deal, you for I think one of the first times we experimented or you experimented by doing more video conferencing between buyers and sellers on that. How did that impact the deal and what should buyers take away from boy these guys want to do a video conference should I turn on my camera or should I, oh no, no I don’t really have good lighting for this and a good set up for it.
Joe: Do it. One of the best calls we had was with a guy named Noah. And he hadn't planned on doing video because he was on his dad's party boat. I know he's 35 years old but he's helping his father move this big boat from one port to another because it's being sold. And Paul and I are on video and we said the video is optional and said it's recommended but optional. And he said well both of you guys are there and he goes I'm kind of embarrassed. I'm on my dad's boat. I'm on a boat. I'm like we have to see it, turn it on.
Mark: It's great.
Joe: Yeah. His dad was in the background moving stuff around and he's shooing him out of the frame. It was fantastic. So Noah was like able and memorable and that stuck with Paul. Paul wanted to sell the business to Noah at the end of the call. So that makes a huge difference. Not everybody did it. There were two or three that were in the top three. Yeah, obviously three when the top three but two or three that stuck out. Two of them did a video one of them didn't do video. The very first person that we had a call with he chose not to do video. He made a great offer and he … we came close on having him but we ended up … Paul ended up choosing someone else. But I think you do the video. I'm doing it more and more and if you've got an opportunity as a buyer to do a video if your broker allows that then, by all means, do it.
Mark: I think on the sell side this is something just to note. To people listening, we're going to be doing this more and more because it really makes a difference on the sell side as well. Sellers most likely will be doing video. And I love that he was able to just hold up some of the product on the video to be able to show it there directly. I mean how cool is that?
Joe: People are … I mean they're buying a business potentially just based on the black and white information that we put in a package. It's worked for years but we moved to doing videos in the interviews and making it part of the full business summary. 24 months ago I remember doing the very first one. It was horrible. I just did audio actually. I recorded it on my phone and it was horrible but beneficial. And now we've moved beyond that to video. You get to look relatively in the likes of someone's eyes and gauge whether you trust them or not and if you're going to put your life savings on the line and buy their business. And I think it just makes a tremendous amount of information.
Mark: Yeah, absolutely. That's really cool. And again this is coming from somebody like myself that does not like video … doing video personally. I tend to be one of those shut the camera off types of guys but I'm more and more warming up to it and definitely getting more accustomed to it as well. So that's pretty cool. And also the odd story, by the way, I know our content director Chris Moore and Chris I know you're listening to this you're going to hate this that I'm saying this but some of the most memorable conversations I've had with people have been in the oddest places. The podcast with Chad Annis where he was in his RV and I could see the pine trees out in the background or Andrew from ECF Live, eCommerceFuel, awesome forum, he was in his van holding up a microphone. I'm like this is great. It's this weird background that only entrepreneurs understand.
Joe: Exactly it's classic entrepreneur stuff. You know people when I'm having calls with them and valuations and you hear the dog barking in the background oh I'm sorry, I'm sorry, I'm like you're an entrepreneur you're going to hear mine any minute. This is the life that we live. It's great. So back to the points, the last point I want to make in terms of what makes a difference … what made a difference for this particular business I think is the images. Paul provided me with great images for the package. And he had them because he had professional photography. And it helped. Obviously, everyone knows that runs an Amazon business what a difference good images make. But he had great images of packaging, of the product being used by human beings having fun and all that stuff. And I was able to litter them throughout the package and it just brought the whole thing to life. And I think it made a bit of a difference too.
Mark: Yeah, you know something I've said over the years I've told you Joe and the others here at Quiet Light is that some of the packages that we put together are supposed to tell the story of the business. And I look for that with every business I represent. Like what is the thread that I want to tell you? What is the common thread throughout this? The data and everything else supports a story. And hey people love stories right? That's … we're all drawn to them.
Joe: Right. And you said data, I just want to say one more thing I keep looking at the package and I'm like there's another thing. One more thing they gave me was data; data from the outside world that proved that this is one of America's fastest growing recreational sports. So I was able to link to outside magazine articles and newspaper articles and outside sources that backed up what he was saying and what I was saying in the package which is really, really helpful.
Mark: Okay, I might regret this question because I don't want to go long on the episode here but you said more than once that he was just a really likable guy. Do you know what made him likeable? It's such a hard question to ask, right? How can somebody be more likable than another person? We've identified when Walker did an acquisition through Quiet Light Brokerage thanking the seller; taking the time to thank our client and saying thank you for agreeing to sell me your business and how much of a difference that made at that point. Was there anything that kind of stood out outside of the video that really made him stand apart?
Joe: He was who we described him to be which was a CPA, a stay at home dad, and honest, and uncomfortable in front of the camera, and vulnerable, and real. He never watched the video that I did with him. I told him. He's like I might watch it because I hope that was okay. I was really conscious here and there. I'm like well let's not watch it because you were great. You were human. You were real. And I'm not editing anything out of it and I'm not redoing it because you were great. People are going to love you because you're just normal. And he never watched it. I don't know if he's … I ought to ask him if he's gone back and watched it since we've got it under contract. But he was just real. Just real and honest and he wasn't selling. He was just stating the facts and that's one of the things that we do … I get excited so maybe it feels like selling but stating the facts is what he did. He didn't try to pitch or sell. He was just being himself; likable.
Mark: That's … I think I heard that somewhere recently about authenticity among like millennials and I would broaden that out and say among those within internet realm because we've seen so much stuff that it's so easy to colossal or make yourself look bigger or better or more polished than you are. I think people within the internet world we tend to value authenticity a bit more than people might think. And so that vulnerability I think is a key. I'm not saying that you put on a show like oh look at me I'm all vulnerable. Hey, look if you are really confident in what you're doing be confident. Be true to who you are. That comes through. You can tell that in people, right? You can tell when they're being real or when they're trying to make themselves sound better than they actually think they are.
Joe: Absolutely, no doubt about it. You want to go on to process and what we do there?
Mark: Yeah. I want to know. So 15 conference calls tell me … again mistake that you probably made in this and you told me this, I'm not accusing you of this; launching a listing during two conferences. You were sick that week. You were flying to two different cities, driving to one city with me as well. So how did you manage getting that many inquiries, that many requests for conference calls with everything else going on?
Joe: Well, it actually worked out pretty well because I was not feeling well and I was at the conference and I said I am not doing this over the next two days we're going to push it all the next week. And it enabled me to communicate in writing with all the people that inquired, all the people that … look there were a couple of hundred in the first few hours of course but those that I've spoken to before that know the process they reached right out to me. They called me, they texted me, they e-mailed me and said, Joe, I want to talk to this guy. I want to get on a conference call. Because they know that's the process. And so those that have followed our process, looked at as many listings as possible so you know the right fit when it comes along and you can act quickly did just that and reached out to me. And so I just walked it all off and we scheduled the calls. For the process when we had the calls if anyone hasn't been on them, us the broker we talk as little as possible. We make introductions, hand the call over to the buyer to give a little bit of background on themselves and then go right into their calls. We put ourselves on mute and in this case, I took myself off camera as well and we listen and we jump in if we can help out but for the most part we stay quiet until the very end of the call and then we just wrap things up. At the end of each day, I had a quick wrap up call with Paul and I said okay you've had three today, its Monday, you've had three, who do you like the most? And then on Tuesday, I said all right you've had six who are your top two? And the same people kept rising to the surface. Although people near the end of the week very quickly got to the … Noah I think was probably on Wednesday or Thursday. So we ran through the process and I think one mistake I made Mark in hindsight when I look at it, I knew it was going to be a frenzy and as much as people think oh multiple offer situation you going over asking price etcetera. We did. Yes, we had them and yes we did go over asking price because we priced it right. We didn’t price it too high or too low; we priced it right. And that gets more increase than anything else buyers know. We chose to go best and final. And I think in hindsight I probably would have had two rounds so that … you know what we did was we told everyone we're going to have a call with every buyer. You may submit offers prior to the following Monday at noon if you wish too but we will not be making a decision until close the business the following Tuesday. You've got to have it in my Monday at noon and we'll make a final decision close the business Tuesday. It gave us a little time to review. Everyone gave it to us in the same exact format that I provided so it was easy. We didn't have to interpret different offers. And most kept it simple which is what I knew Paul was looking for and what I suggested that they do. One made it a little complex but I know them and I know what their goals are. They're raising funds so they've got investors to satisfy. And then tell me what you did? We get a clear deadline of Monday at 12 pm Eastern Standard Time. I got one that came in maybe at 4 o'clock that day and one that came in at 9 o'clock that day, pm, with apologies and a text saying I thought it was midnight. Would you have allowed those offers to be presented or would you've been cold and said no?
Mark: I don't … it depends on the situation. That's a tough one especially because of the [inaudible 00:27:08.9] when you said 12, and 12 is I mean you can interpret that both ways.
Joe: 12 no we had a total of nine offers. We ended up with 14 conference calls because one fell out. We had nine offers.
Mark: No I mean you put your deadline at 12.
Joe: Why? I said 12 pm Eastern Daylight Time.
Mark: Yeah but I mean you have to think like 12 pm, you think night and you know. Maybe I'm the only one that can read time but—
Joe: I don't … I only speak Eastern as I tell everyone else in every other time zone. There's too many time zones and I just say Eastern. I try not to coordinate with their times anyway now we were accommodating. In hindsight I think we probably should've narrowed it down to the top two or three and gone back out to them. But the reality is that when you have a seller that has multiple offers it's hard on the seller. First is that they're on … in this case 14 conference calls that are lasting about an hour each. That's 14 hours. And then he's talking to me for 15 to 20 minutes at the end of each day as well. That's a lot of time in one week. More time than he spends running the business right? 15 hours a week of running it. More time selling it than running it. And then you've got to make a decision based upon we had one offer that was … let's see; it was $150,000 over asking price.
Mark: Wow.
Joe: A pretty big jump.
Mark: Yeah.
Joe: That one was an SBA offer. So the benefit there is that not only is it $150,000 over asking price but it's going to take upwards of 60 days longer to close than a cash buyer. So he's going to put another $50,000 in his pocket by waiting an extra two months. I mean just a cash windfall right?
Mark: I want to disagree with you on something real quick before we get too far away from this point because it said that—
Joe: Is it back to me being the better podcaster or something else?
Mark: I'm going to say that to the end after this because I think I'm doing such a stellar job at this interview.
Joe: You're doing great.
Mark: It's easy when you know the person you're interviewing and you know the story as well. But I'm going to disagree with you on is should you have gone a second round with the offers. Okay, that would be the standard process when you're not expecting multiple offers and when maybe … like if I have a listing that's been sitting around for a month and we narrowed down and we happen to have three buyers that kind of called us around the same time then it makes sense. Because the buyers don't know that they're in a competitive situation but … and I might sound a little harsh here but hey if you're a buyer and you're in a situation where you know it is competitive, and the buyers, in this case, knew it was competitive, that there was a lot of stuff going on.
Joe: Yeah.
Mark: My guidance has been the same like put in your best and final. There's two sides of that coin; the first … one side is don't try and necessarily get a discount because the market is going to speak. It is going to push that price up necessarily. And two don't over bid what you're comfortable bidding. Find out if I get it at this price I'm going to be happy or satisfied at least? If I go above I'm always going to wonder if I paid too much. Find that, make the offer, and get it done. So I actually think that you did the right thing by doing one round instead of two rounds. I would recommend the two round again if it was kind of a surprise multiple offer situation.
Joe: Well, I think … you know I had one person tell me they wish there was a second round. But it was crystal clear in writing in black and white that it was best and final. And so I took his suggestion and constructive criticism in a way that I thought maybe was worthwhile and we could do a second round next time possibly. But when you're in a multiple offer situation it's emotional for the seller.
Mark: Yeah.
Joe: Believe it or not people it's hard. It's hard for the broker as well. So I just want to reemphasize one thing that you said and that is you don't want people to get … the buyers to get emotional in their offer. We want them to make an offer that they're going to be happy with after they're under letter of intent because we want two happy individuals at closing; the buyer and the seller. It has to be a good transaction for both of them so we don't want them to overbid and so we work really hard to make sure that they're making an offer that they're comfortable with that assuming everything's good in due diligence that we'll get all the way through the closing with.
Mark: Yeah and I think if you're a seller out there you're thinking why wouldn't you want to get something above what they're comfortable with? The reason is simple; the offer is the beginning of a longer journey, right? You've got to go through that due diligence, you've got to go through transition, planning, there's a lot of time in there for those cold feet to really, really freeze up a little bit. And for the buyer to say I made a mistake I got caught up in the heat of passion and now yeah. And I want to emphasize one other thing that you said here and that is we think multiple offers is a really good situation and it is but for anyone that hasn't been in that situation before where you have multiple buyers all of whom are very qualified to buy your business and given you good offers. It's really tough to choose because you can't choose five offers. You've got to choose one.
Joe: Yeah.
Mark: And in your head, you're going to be thinking I've got to get this right because I don't want to go through this again or I don't want to go through this due diligence process and then have to go back and what are people going to think I have to go back. So it's actually really stressful and one of those good problems to have but still a problem.
Joe: And that's where I think the video … the folks that did video you know a better connection with Paul little bit although one of the top three didn't do the video but just a super nice guy. I mean I just wanted … we both, Paul wanted him to be able to buy the business. He travels all over the country all the time and has two teenagers that he just doesn't see enough and he wants to work from home.
Mark: So there was that personal connection.
Joe: Well, it's that personal connection tugging at Paul's emotional heartstrings, at mine. I think he's a great guy. I would love to help him find an amazing business so he spends more time with his family and becomes an entrepreneur which he's not now. He's in the corporate world.
Mark: All right we're getting close to the end so let's wrap. I want to get to the end here and talk about—
Joe: Sad news. I'm sorry. Sad news having to tell eight people they didn't get it.
Mark: Then also I want to know the metrics. Because I know you had recommended to him go out, we should go out at a 3.5 multiple. We covered that the beginning and he said I don't know if we need that you know as … being and Paul sounded like a great guy 3.3 is what it went out at. I'd like to know where the highest and lowest came in and then also the sad news portion having to tell so many people that wanted this business sorry we're going to keep you in mind, we'll keep looking for you.
Joe: Yeah, again I wanted it to go at a 3.5. I thought it was worth a push and I let him know it's a bit of a risk. We haven't sold one at 3.5 that's 100% Amazon business with discretionary earnings this "low". It's still 440,000. We wound up with the highest one being at 3.6, 150,000 over asking and the one that he chose was 50,000 over asking at 3.4, 3.41. And it was an all cash buyer and had the funds on hand. Had had the funds and had the experience and has bought Amazon business before so he looked at the full package. Cash buyer, close in 30 days, hiring Centurica for due diligence but understands Amazon really well and that training and transition was going to be a breeze. It's the full package and that's why he chose that particular buyer.
Mark: Yeah, again we've talked before about people winning with lower bids. Not necessarily being the top bidder but still being able to win. And we've also talked about the idea that financial motivation isn't always the sole motivation right? People sell for a variety of reasons and so being able to understand, as a buyer understand some of those secondary goals can really help you out quite a bit.
Joe: Let me just jump in, it's not always a cash buyer that wins as well. If everybody remembers the story I've had Syed Balkhi on the podcast and he chose a buyer that was an SBA buyer at full price on his business versus a cash buyer because he just really bonded with that SBA buyer. And he carried a 10% seller note on that particular listing too. So he chose an SBA buyer and a seller note over an all cash buyer. So SBA wasn't necessarily the problem it was just a combination of a number of things and Paul really wanted to get the business sold. And he is kind of a nervous guy a little bit so he didn't want to have to wait upwards of 90 days; 30 was comfortable.
Mark: All right what final thing should people know about this particular deal? Because this is a fascinating little case study of just a listing that's going crazy, how to act on the buy side, and also how to set your business up from the sell side. So what final things should we probably round this episode with?
Joe: Well I hate to finish it with … you know just because this one sold a 3.4 doesn't mean yours is worth 3.4. This one has all of these little points and metrics to it. I launched one this week Monday at 3.3 and some of those same buyers, those eight buyers a few of them have looked at it and said no. Others are comfortable with the niche and like it and see the upside to it so I think we'll get at or close to asking. But just being prepared running a real business, think about it from a buyer's point of view. They're going to be investing their life savings and if you were them what type of business and what type of person would they want to buy that business from? We want them to succeed. You want them to succeed. And that's really what you need to focus on.
Mark: That's fantastic. Hey, thanks for sharing all of this. I know that you always have the best case studies mainly been because you do the most deals at Quiet Light. So thanks for sharing this one. The next one I'm going to write a better teaser than yours and I'm going to try and get like 251 inquiries in the first 24 hours.
Joe: You taught me how to do it so I know you can do it.
Mark: Well, then I'll make sure that I'll let you know in every podcast. All right cool, hey thanks, Joe. I appreciate all of it.
Joe: You bet.
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