00:00:11:29 - 00:00:14:21 Welcome to our weekly livestream recording of The Amazing,

00:00:14:21 - 00:00:16:18 A podcast series devoted to acquisition

00:00:16:18 - 00:00:19:31 entrepreneurs, search funds and holdco builders in the UK and EU.

00:00:19:31 - 00:00:23:26 Discussing the topics and challenges to impact SMB succession, M&A

00:00:23:29 - 00:00:25:17 and exploring the highs and lows of searching,

00:00:25:17 - 00:00:29:06 acquiring, owning and operating small and medium sized businesses.

00:00:29:08 - 00:00:32:22 Today I am your host, Alfie Lambert, co-founder of Biz Crunch

00:00:32:22 - 00:00:34:02 and our resident outreach expert.

00:00:34:02 - 00:00:37:24 And I'm joined, as ever by my co-founder or CEO,

00:00:37:24 - 00:00:41:21 serial acquirer and all round good at Gareth Wilkins.

00:00:41:24 - 00:00:44:21 Stephanie Egghead Yeah,

00:00:44:21 - 00:00:46:05 thanks for the help.

00:00:46:05 - 00:00:50:19 Yes. As you say, as ever, I am a permanent fixture that never goes away,

00:00:50:22 - 00:00:53:16 but it's great to have somebody else in the driving seat this week

00:00:53:16 - 00:00:56:03 and I can take it a bit easier. Last week's episode was great.

00:00:56:03 - 00:00:58:26 That was really great. I enjoyed the interview format.

00:00:58:26 - 00:01:01:11 Before we kick off with this week's topic.

00:01:01:11 - 00:01:03:28 What's the news, Gareth?

00:01:03:30 - 00:01:05:30 Well, the news, yeah,

00:01:05:30 - 00:01:10:15 It's been quite an interesting pan-European news round up this week.

00:01:10:16 - 00:01:12:07 I would say

00:01:12:07 - 00:01:16:05 there's growing activity a couple of deals that have got done.

00:01:16:05 - 00:01:20:33 There's a couple of bit of new expos and conferences.

00:01:21:02 - 00:01:23:18 So yeah, let's start with deals over the line.

00:01:23:18 - 00:01:30:09 I guess the probably most notable of which is FinTech capital of Italy,

00:01:30:12 - 00:01:35:08 led by Daniella Schiff Yellow and Giulio Marini.

00:01:35:10 - 00:01:39:29 They have acquired an industrial laundry company

00:01:39:29 - 00:01:45:26 and hotel supplies outfit called Napoli Lido Industries.

00:01:45:28 - 00:01:49:04 And yeah, really interesting deal for those guys.

00:01:49:07 - 00:01:53:23 Not hugely plugged into the Italian scene myself, but lovely to see that it's

00:01:53:31 - 00:02:00:32 growing in activity for ETA in Italy.

00:02:01:00 - 00:02:01:23 Yeah, that's interesting.

00:02:01:23 - 00:02:05:03 We don't tend to hear a lot from Italy, but obviously as we know

00:02:05:03 - 00:02:08:33 and as we spoke about in our episode that is is growing in

00:02:08:33 - 00:02:12:12 Europe and hotel supplies laundry is really interesting.

00:02:12:13 - 00:02:15:33 I spoke to one of our users about this a couple of weeks ago and he said that

00:02:16:02 - 00:02:19:00 been looking into it really.

00:02:19:02 - 00:02:21:31 It's probably not the first thing that you that comes to mind when thinking

00:02:21:31 - 00:02:26:03 about buying a company, you know, But I think it's such a smart buying,

00:02:26:05 - 00:02:29:13 such an interesting industry and one that's going to persist.

00:02:29:13 - 00:02:32:12 They're always going to need more. There was a need for clean sheets.

00:02:32:12 - 00:02:33:07 Well, this is true.

00:02:33:07 - 00:02:36:07 We we need a clean sheet going.

00:02:36:14 - 00:02:36:26 But yeah,

00:02:36:26 - 00:02:41:17 no, it's one of those evergreen industries that is going to have constant demand.

00:02:41:17 - 00:02:44:10 It doesn't look like is going to disrupt it anytime soon.

00:02:44:10 - 00:02:48:07 No, I think Daniella specifically, who who's obviously

00:02:48:10 - 00:02:52:07 qualified from Boston College in the US

00:02:52:10 - 00:02:54:26 has and has got some experience actually

00:02:54:26 - 00:02:57:26 with Bright Star and Bain out of the US.

00:02:57:33 - 00:03:01:12 He's obviously taken a fairly long

00:03:01:12 - 00:03:06:09 sighted view of the sort of industries he wants to

00:03:06:12 - 00:03:09:07 acquire in and hospitality.

00:03:09:07 - 00:03:12:07 Just if you look at the category of hospitality in Germany, it's growing.

00:03:12:12 - 00:03:15:20 But having a and allowing service industry

00:03:15:22 - 00:03:18:10 like industrial laundry can only be a good thing.

00:03:18:10 - 00:03:22:10 So yeah, I wish him absolute well, absolute success and no doubt

00:03:22:10 - 00:03:23:28 it will continue.

00:03:23:28 - 00:03:29:04 Maybe he'll come on and tell us all about it at some point and

00:03:29:06 - 00:03:32:11 further north in the continent, actually out of Berlin,

00:03:32:15 - 00:03:36:30 there's a conference, the Middle Eastern Summit, 2025

00:03:36:30 - 00:03:41:26 that's been announced, taking place on the 20th of May,

00:03:41:29 - 00:03:45:06 which will be a nice sort of hub

00:03:45:10 - 00:03:50:22 for the German ITAR space, which again continues to grow in activity.

00:03:50:25 - 00:03:52:06 It's invite only.

00:03:52:06 - 00:03:54:28 So I think Google will put will put a link in the show notes

00:03:54:28 - 00:03:58:27 and folks can see who they can tap up to get an invite.

00:03:58:27 - 00:04:03:24 But certainly great to see that forum evolving.

00:04:03:26 - 00:04:04:14 It seems to be quite

00:04:04:14 - 00:04:07:14 a quiet calendar this year at ETA events across Europe.

00:04:07:16 - 00:04:10:32 I was about to say, seems like every week we're announcing a new one.

00:04:10:32 - 00:04:11:29 That would be really cool.

00:04:11:29 - 00:04:12:13 I love Berlin.

00:04:12:13 - 00:04:17:18 It's a great city and it's an absolute prime market for succession

00:04:17:23 - 00:04:21:02 acquisitions, so that'll be a really cool event.

00:04:21:05 - 00:04:24:21 Yeah, it most certainly will,

00:04:24:23 - 00:04:25:28 in fact.

00:04:25:28 - 00:04:26:00 Yeah.

00:04:26:00 - 00:04:30:16 Hot on the heels, I guess, of an event that's taking place

00:04:30:19 - 00:04:34:20 later this month actually in Stockholm, a couple of weeks time, 17th to 18th.

00:04:34:20 - 00:04:39:03 There's the serial acquirers event by RedEye,

00:04:39:06 - 00:04:42:06 the Nordic Growth Hub.

00:04:42:14 - 00:04:46:10 They they tend to put on a pretty good event and this one is a two day

00:04:46:10 - 00:04:50:06 one attracting folks from from all over the scene.

00:04:50:08 - 00:04:51:31 So yeah I think that's worth worth checking out

00:04:51:31 - 00:04:54:23 looks like that might actually be sold out already but

00:04:54:23 - 00:04:57:18 yeah you could spend you could spend quite a lot of your year

00:04:57:18 - 00:05:00:04 traveling around Europe attending these ETF events.

00:05:00:04 - 00:05:02:17 I'm sure there's folks out there that do. Wouldn't that be lovely?

00:05:02:17 - 00:05:03:20 Maybe that would be us Next year.

00:05:03:20 - 00:05:06:06 We can live podcasts from all of them.

00:05:06:06 - 00:05:10:14 Well, look, if we can get air doing everything at best Crunch will

00:05:10:17 - 00:05:14:09 living the living, the Adam Smith dream of huge automation

00:05:14:09 - 00:05:19:08 and putting our feet up humanity's savior, not

00:05:19:11 - 00:05:21:26 but you know, all jokes aside, it is really great

00:05:21:26 - 00:05:24:33 for Asia and Europe that we have so many events.

00:05:24:33 - 00:05:27:18 You know, it does show that there is a growing appetite for it

00:05:27:18 - 00:05:30:22 and it's only going to inspire more acquirers, you know,

00:05:30:25 - 00:05:34:08 more search funds to pop up as they start to see this momentum grow.

00:05:34:08 - 00:05:39:08 And so I'm super excited for what this means for Asia in the EU.

00:05:39:11 - 00:05:40:22 Well, success breeds success, right?

00:05:40:22 - 00:05:41:27 And if we can have more forums

00:05:41:27 - 00:05:45:24 in which people can see, you know, examples of people like them

00:05:45:24 - 00:05:48:33 that have gone on to great things and, you know, managed to acquire

00:05:48:33 - 00:05:53:18 or managed to potentially even exit their acquired businesses.

00:05:53:21 - 00:05:57:10 And yeah, it's that's why these podcasts are so great.

00:05:57:13 - 00:06:03:15 The interview oriented ones like acquiring minds, etc., because you get to hear it

00:06:03:15 - 00:06:07:09 from the horse's mouth, right, that, you know, success is possible.

00:06:07:09 - 00:06:10:28 And I think that only creates more people that want to go off

00:06:10:28 - 00:06:11:23 and achieve the same thing.

00:06:11:23 - 00:06:15:10 So it's a great catalyst for change.

00:06:15:12 - 00:06:17:15 I agree.

00:06:17:15 - 00:06:19:20 But having said that, the flip side of the coin is that

00:06:19:20 - 00:06:22:21 there is a growing amount of noise in the news at the moment.

00:06:22:21 - 00:06:26:18 I've seen it in Search Funds News, and there was a great podcast

00:06:26:21 - 00:06:31:21 in the trenches, I think it's called by Ken Weaver that is talking

00:06:31:21 - 00:06:37:00 about the declining acquisition success rate in search in the USA.

00:06:37:03 - 00:06:40:06 Historically, it used to get, you know, two thirds of searches

00:06:40:06 - 00:06:43:07 would get a deal over the line, and that's been impaired

00:06:43:07 - 00:06:46:12 slightly over the last decade, falling to about 57%.

00:06:46:12 - 00:06:49:15 Now, I guess the question that everybody's trying to grapple with

00:06:49:22 - 00:06:52:30 is why is it oversupply of searches?

00:06:52:30 - 00:06:55:26 Is it an under availability of of businesses?

00:06:55:26 - 00:06:57:15 We know that not to be true.

00:06:57:15 - 00:07:00:13 Is it a change of cost of capital?

00:07:00:13 - 00:07:03:01 Is it increasing multiples?

00:07:03:01 - 00:07:07:07 Is it you know, it's internal succession, like you noted.

00:07:07:07 - 00:07:11:20 But they postulate these different possibilities in these articles and book

00:07:11:20 - 00:07:15:22 also well worth diving into at some point in the future, I guess as to, you know,

00:07:15:23 - 00:07:21:26 what are the the drivers of success in search?

00:07:21:26 - 00:07:24:33 Like what means what leads more people, what conditions

00:07:24:33 - 00:07:28:00 need to be right for people to get searches over the line versus

00:07:28:00 - 00:07:31:00 what are the inhibiting factors that hold back

00:07:31:04 - 00:07:35:11 that part of the the economy or that asset class

00:07:35:13 - 00:07:36:17 answers on a postcard.

00:07:36:17 - 00:07:39:17 What do you what do you think of.

00:07:39:20 - 00:07:41:11 It's really difficult to know.

00:07:41:11 - 00:07:42:22 It's not a huge dip.

00:07:42:22 - 00:07:45:13 I mean, any dip is is obviously a negative thing.

00:07:45:13 - 00:07:47:00 It's not a huge dip.

00:07:47:00 - 00:07:50:14 I would like to see how that trends over the next couple of years.

00:07:50:16 - 00:07:51:13 Sure.

00:07:51:13 - 00:07:53:28 But yeah, it's definitely

00:07:53:28 - 00:07:56:28 not a lack of businesses, as we know.

00:07:56:31 - 00:07:58:26 Maybe a proliferation of new searches,

00:07:58:26 - 00:08:01:27 but I don't think that we are at saturation for that yet.

00:08:01:27 - 00:08:04:29 They would that we'd see a dip, you know, U.S.

00:08:04:29 - 00:08:06:04 wide.

00:08:06:04 - 00:08:09:16 I don't think we're quite at that level. So

00:08:09:19 - 00:08:14:02 yeah, is it I mean the the big tail is, you know, how many deals

00:08:14:04 - 00:08:18:04 rather than a percentage, which, you know, lies, damned lies and statistics.

00:08:18:04 - 00:08:18:12 Right.

00:08:18:12 - 00:08:22:05 And me and the percentage could be impacted by, as you say,

00:08:22:06 - 00:08:25:06 number of new searches on the scene.

00:08:25:12 - 00:08:28:23 So, yeah, if we if we just knew,

00:08:28:26 - 00:08:30:00 you know, what the trajectory

00:08:30:00 - 00:08:33:31 of deals was like in general in in search, I think we'd have a better picture.

00:08:33:33 - 00:08:37:11 Yeah, I think that that's what I was about to say is I think that,

00:08:37:14 - 00:08:40:00 you know, if the number of deals has risen

00:08:40:00 - 00:08:43:22 but the success rate has fallen, I don't think that's the end of the world.

00:08:43:25 - 00:08:44:27 You know, if there are, you know,

00:08:44:27 - 00:08:47:24 more search funds, more searches out there, more deals getting over the line.

00:08:47:24 - 00:08:50:29 But as a result of that, you know, there's a slight dip

00:08:50:29 - 00:08:54:27 in conversion, then I don't think that's the end of the world.

00:08:54:27 - 00:08:56:30 Yeah, very interesting to find that actually.

00:08:56:30 - 00:08:58:18 I mean, we spoke about it a couple weeks ago.

00:08:58:18 - 00:09:03:01 There's a there's a report that obviously will wait for the next Stanford report

00:09:03:01 - 00:09:06:17 because that looks into activity in a very granular and

00:09:06:20 - 00:09:09:15 and forensic way on search funds.

00:09:09:15 - 00:09:11:07 So we'll wait that with bated breath.

00:09:11:07 - 00:09:16:15 But we did talk about the 2024 report of 80 acquisitions globally.

00:09:16:18 - 00:09:20:08 That was search fund led that came up in a show

00:09:20:16 - 00:09:22:28 two weeks ago, I think when we went through.

00:09:22:28 - 00:09:26:18 So yeah, if 80 is the is the number in 2024,

00:09:26:21 - 00:09:29:14 is that significantly higher or lower and is it proportionate

00:09:29:14 - 00:09:31:19 to the number of searches in those periods?

00:09:31:19 - 00:09:33:10 That's the data we we need to get.

00:09:33:10 - 00:09:37:32 So yeah, I think leave that topic there but it's one to postulate on

00:09:37:32 - 00:09:39:06 and who knows, maybe Bitcoin

00:09:39:06 - 00:09:43:33 can be doing our own state of ETA report at some point in the coming years.

00:09:44:02 - 00:09:45:13 Would that be fun?

00:09:45:13 - 00:09:45:31 Yeah.

00:09:45:31 - 00:09:48:28 So should we get into the the main thrust of.

00:09:48:28 - 00:09:52:14 Yes, I was going to say that with this conversation about,

00:09:52:17 - 00:09:57:14 you know, success in S&P, M&A, let's say my Segway into our topic.

00:09:57:14 - 00:10:00:01 So this is something that struck me this week.

00:10:00:01 - 00:10:03:23 I worked with some of our users on the initial outreach, so I help them,

00:10:03:23 - 00:10:05:25 you know, be in their emails and send in their letters

00:10:05:25 - 00:10:07:27 and building their campaigns and all that kind of stuff.

00:10:07:27 - 00:10:11:12 And, you know, success for me is when they get to their first call,

00:10:11:12 - 00:10:14:11 when they first speak to a potential seller.

00:10:14:13 - 00:10:15:08 And at that point I kind

00:10:15:08 - 00:10:18:10 of hand them off and, you know, maybe they'll have some time with you.

00:10:18:10 - 00:10:21:14 But I got to thinking, you know, what makes a good first call?

00:10:21:14 - 00:10:23:17 You know, what is a good qualifying call?

00:10:23:17 - 00:10:25:03 What should people be looking for?

00:10:25:03 - 00:10:27:19 And the man to ask them that is you.

00:10:27:19 - 00:10:30:01 Some of the studies I've done a few.

00:10:30:01 - 00:10:31:15 Done a few.

00:10:31:15 - 00:10:33:12 So yes, that's today's topic.

00:10:33:12 - 00:10:35:32 Qualifying calls with sellers.

00:10:35:32 - 00:10:37:16 Great, great topic.

00:10:37:16 - 00:10:39:32 So let's start with the basics.

00:10:39:32 - 00:10:41:33 What is a qualifying core? You know what?

00:10:41:33 - 00:10:46:21 Why does this initial conversation matter so much for buyers and sellers?

00:10:46:24 - 00:10:48:24 Well, it matters because up until that point,

00:10:48:24 - 00:10:52:08 typically the conversations have been had.

00:10:52:11 - 00:10:57:09 It's purely by email and or LinkedIn or some kind of textual medium

00:10:57:12 - 00:11:00:09 rather than the human conversation.

00:11:00:09 - 00:11:02:21 Right. The human interaction.

00:11:02:21 - 00:11:06:18 And that's a massive icebreaker and a hugely necessary part of the process.

00:11:06:18 - 00:11:09:02 You can't you can't Roberto's the entire thing.

00:11:09:02 - 00:11:13:17 People have got to go into the process very early once, you know,

00:11:13:20 - 00:11:17:06 interest is expressed by both sides.

00:11:17:08 - 00:11:20:24 So it's that, it's that humanizing moment really where there's

00:11:20:24 - 00:11:24:22 a mutual introduction for the seller and the potential buyer.

00:11:24:22 - 00:11:26:26 They get to know each other

00:11:26:29 - 00:11:31:02 is normally punctuated by some fairly

00:11:31:05 - 00:11:32:12 obvious awkwardness.

00:11:32:12 - 00:11:35:03 I guess you got to embrace got to embrace the cringe.

00:11:35:03 - 00:11:37:27 Yeah, I'm afraid, you know, get through it.

00:11:37:27 - 00:11:39:02 There's there's uncertainty.

00:11:39:02 - 00:11:42:11 There's there's trying to think around, you know,

00:11:42:11 - 00:11:45:22 uncover the true motivations of each side.

00:11:45:24 - 00:11:46:15 So, you know,

00:11:46:15 - 00:11:50:20 there's going to be a bit of posturing and positioning is just natural.

00:11:50:20 - 00:11:52:14 But if you approach it as a human

00:11:52:14 - 00:11:55:25 and you hope that that's reciprocated, you know, you can't go much wrong.

00:11:55:25 - 00:11:59:03 But it's an opportunity for the humanity to shine through.

00:11:59:11 - 00:12:02:32 And once you up in that awkwardness is kind of abated,

00:12:02:32 - 00:12:04:19 then then you can start getting into

00:12:04:19 - 00:12:08:20 kind of mutual discovery and working out what each other's ambitions are.

00:12:08:20 - 00:12:11:13 And that's what you know, that's the nub, right?

00:12:11:13 - 00:12:12:32 Ambition,

00:12:13:01 - 00:12:13:33 I suppose.

00:12:13:33 - 00:12:17:15 How awkward that is depends maybe on the buyer's background,

00:12:17:18 - 00:12:18:31 you know, whether they come from a

00:12:18:31 - 00:12:20:13 you know, if they've done a lot of sales before

00:12:20:13 - 00:12:23:19 or been involved in this kind of thing, if they are complete first timers

00:12:23:19 - 00:12:26:33 and this isn't in their wheelhouse, then I can see it being slightly daunting.

00:12:26:33 - 00:12:28:23 But, you know, that's what this episode's here for.

00:12:28:23 - 00:12:31:21 Hopefully they can get away with a bit more confidence.

00:12:31:21 - 00:12:35:12 Yeah, you can't you can't tar every seller with the same brush

00:12:35:12 - 00:12:37:08 or expect them all to behave the same.

00:12:37:08 - 00:12:37:25 I mean,

00:12:37:25 - 00:12:40:12 there are a variety of different psychology,

00:12:40:12 - 00:12:42:07 so maybe, well, maybe we'll get into that as we

00:12:42:07 - 00:12:45:08 as we talk a bit further about the different types of seller

00:12:45:08 - 00:12:47:26 you might encounter, because you probably despite

00:12:47:26 - 00:12:49:31 all your desk research, you probably don't know

00:12:49:31 - 00:12:53:12 the psychology and the wiring of a seller until you really start, you know,

00:12:53:14 - 00:12:57:03 looking at them face to face or or talking to them, you know.

00:12:57:06 - 00:12:57:15 Yeah.

00:12:57:15 - 00:12:57:28 I mean, that's

00:12:57:28 - 00:13:01:23 why getting on these calls as soon as possible is important, I guess.

00:13:01:26 - 00:13:02:22 Yeah. Okay.

00:13:02:22 - 00:13:06:00 So I'm a buyer. I'm having that first call.

00:13:06:00 - 00:13:07:03 What should I be looking for?

00:13:07:03 - 00:13:11:29 What are the key details that I should prioritize to uncover on this first call?

00:13:11:32 - 00:13:14:16 Yeah, I mean, details are going to be fairly light

00:13:14:16 - 00:13:18:14 because it's the dance of the seven veils, you know?

00:13:18:17 - 00:13:20:32 So if I was to work to say that these days.

00:13:20:32 - 00:13:24:20 But, you know, you're the whole process of this, you know,

00:13:24:22 - 00:13:27:22 discovery of each other is is

00:13:27:26 - 00:13:32:23 gradual and slow and so no one

00:13:32:26 - 00:13:34:17 really gives you,

00:13:34:17 - 00:13:37:17 you know, unfettered access on the first call.

00:13:37:17 - 00:13:40:33 So detail is not to be rushed.

00:13:41:02 - 00:13:44:23 What you really want to understand is sentiment at this stage.

00:13:44:26 - 00:13:46:09 You know, the very fact that you're on a call

00:13:46:09 - 00:13:49:31 means that, you know, you've got this fleeting,

00:13:50:00 - 00:13:52:19 apocryphal kind of mutual interest

00:13:52:19 - 00:13:56:02 in having at least a conversation to see what the other one's about.

00:13:56:04 - 00:13:57:27 But how deep does that go?

00:13:57:27 - 00:14:01:08 How ready is the seller?

00:14:01:11 - 00:14:03:31 Because, you know, have you reached

00:14:03:31 - 00:14:06:31 them as a proprietary deal flow kind of exercise?

00:14:06:31 - 00:14:09:10 Have you reached them completely unexpectedly?

00:14:09:10 - 00:14:12:10 And they've never given this any thought, but you've piqued the curiosity

00:14:12:16 - 00:14:16:15 or have they actually sat there with, look, here's my I am and here's my data

00:14:16:21 - 00:14:18:17 link and, you know, I'm ready to go.

00:14:18:17 - 00:14:24:09 And everybody I've delegated enough and I'm I've had my days I'm in the wind.

00:14:24:12 - 00:14:27:25 You you don't know you should treat everybody with an open

00:14:27:25 - 00:14:32:04 mind going in and really you're asking some kind of probing questions.

00:14:32:06 - 00:14:36:20 I always like to open with, you know, tell me how you know, the journey to here.

00:14:36:20 - 00:14:37:27 What's it been like?

00:14:37:27 - 00:14:39:25 What got you started in the business?

00:14:39:25 - 00:14:40:25 And that's a great

00:14:40:25 - 00:14:44:16 you know, how is how have you seen your industry evolve over the last sort of,

00:14:44:19 - 00:14:47:31 you know, couple of decades of your tenure or few years of your tenure?

00:14:48:00 - 00:14:51:23 Because you're sellers are often proud of what they've built.

00:14:51:23 - 00:14:52:24 They right. They should be.

00:14:52:24 - 00:14:53:16 Yeah.

00:14:53:16 - 00:14:59:04 And can be relied upon often to give you the sort of potted history

00:14:59:06 - 00:15:02:18 and that's a good warm up method, a good icebreaker, you know is

00:15:02:26 - 00:15:04:04 is tell me about your journey.

00:15:04:04 - 00:15:07:04 I'd love to know how you built what you've got today.

00:15:07:12 - 00:15:09:18 Yeah, I think that's a lot. I think that's a lovely first question.

00:15:09:18 - 00:15:11:08 So searching friendly.

00:15:11:08 - 00:15:13:11 Like you said, lots of sellers are going to be proud.

00:15:13:11 - 00:15:16:24 They want to tell you their story and you can uncover quite a lot.

00:15:16:27 - 00:15:18:28 Probably not just about the business, but about the seller.

00:15:18:28 - 00:15:21:03 Like you said, we want to kind of understand what how,

00:15:21:03 - 00:15:24:00 what makes them tick, how they're wired, you know, what the buttons to press.

00:15:24:00 - 00:15:25:29 And I think that in asking that and getting them

00:15:25:29 - 00:15:27:22 to explain how they got where they were,

00:15:27:22 - 00:15:30:21 you probably start to chip away at that a little bit.

00:15:30:21 - 00:15:30:33 Yeah.

00:15:30:33 - 00:15:34:12 And as you can tell from the way that they

00:15:34:15 - 00:15:38:05 the bits that they emphasize, the different emphasis through the narrative,

00:15:38:07 - 00:15:41:28 you can tell whether you know, what their motivations were

00:15:41:29 - 00:15:46:29 or how they've changed, whether they are commercially driven

00:15:46:29 - 00:15:51:12 or whether they are motivated more through like a kind of existential

00:15:51:18 - 00:15:56:07 self-actualization need for like, you know, validation for their success,

00:15:56:07 - 00:16:01:12 whether they are all about their people or they're all about a profit or both.

00:16:01:15 - 00:16:04:24 So you can you can kind of just through the narrative, have a bit

00:16:04:24 - 00:16:10:32 more of an understanding of their culture as business owners and their drive,

00:16:11:01 - 00:16:12:08 their motivators.

00:16:12:08 - 00:16:14:20 But what you really want to understand from

00:16:14:20 - 00:16:17:05 that is their sort of willingness and readiness.

00:16:17:05 - 00:16:19:05 You know,

00:16:19:05 - 00:16:23:17 particularly in a proprietary off market kind of code outreach sense.

00:16:23:17 - 00:16:24:29 You've got this call.

00:16:24:29 - 00:16:27:18 You don't want to look like you're you're wanting to rush anything,

00:16:27:18 - 00:16:30:12 and you also don't want to look like you're trying to cheat anybody.

00:16:30:12 - 00:16:34:12 You really want to have this gradually warming conversation

00:16:34:12 - 00:16:38:22 to sort of just tentatively explore whether the timing might be right for them

00:16:38:22 - 00:16:39:28 to consider divesting.

00:16:39:28 - 00:16:42:25 And and, you know, if not now, when?

00:16:42:25 - 00:16:45:13 Because lots of these processes

00:16:45:13 - 00:16:49:25 start with seeds being sown and, you know,

00:16:49:28 - 00:16:52:25 roots kind of taking hold over the course of a year

00:16:52:25 - 00:16:55:25 and just little regular kind of

00:16:55:33 - 00:16:56:28 how's it going?

00:16:56:28 - 00:16:59:20 Kind of chickens over a period until the seller feels like

00:16:59:20 - 00:17:02:01 they've got their ducks in a row ready to to,

00:17:02:01 - 00:17:05:07 you know, maximize the value of their exit by having a conversation.

00:17:05:13 - 00:17:08:13 So you're only really planting seats at this stage.

00:17:08:14 - 00:17:13:00 And if or if you like baiting the hook and throwing your line in the water

00:17:13:05 - 00:17:16:05 and if there's a bite, then it's a question of, well,

00:17:16:12 - 00:17:18:22 how strong is that bite? I.e.

00:17:18:22 - 00:17:21:14 how ready are they to go?

00:17:21:17 - 00:17:24:15 You know, some some sellers are just knackered

00:17:24:15 - 00:17:27:10 and looking to pass the baton on

00:17:27:10 - 00:17:31:18 and some are flattered but are not yet ready to go,

00:17:31:23 - 00:17:35:20 but want to at least the optionality of knowing who to call when they do.

00:17:35:23 - 00:17:41:02 So it's it's working out where on that spectrum the seller really is.

00:17:41:04 - 00:17:44:00 Now what they're probably not going to tell you in the first call

00:17:44:00 - 00:17:47:05 is their number their magic number two to go,

00:17:47:05 - 00:17:48:08 because you're probably not going to get

00:17:48:08 - 00:17:51:08 anything by way of a deal structure out of them On the first call,

00:17:51:15 - 00:17:55:00 I mean, you can tease it, you know, what are your ambitions for the business

00:17:55:00 - 00:17:58:30 is always a great a great question

00:17:58:33 - 00:18:02:30 and you know that you can tease from that whether they are like, well, look,

00:18:02:30 - 00:18:07:03 I think I've taken it as far as I can or I'd love for it to grow,

00:18:07:06 - 00:18:09:23 you know, three X And yet, do you still feel like

00:18:09:23 - 00:18:12:16 you've got the appetite to deliver that three X?

00:18:12:16 - 00:18:13:07 Well, no.

00:18:13:07 - 00:18:14:32 So I probably need to bring in, you know,

00:18:14:32 - 00:18:17:28 additional management or spend some additional investment.

00:18:17:28 - 00:18:20:20 So, you know, you can get a feeling

00:18:20:20 - 00:18:23:14 kind of more generally

00:18:23:14 - 00:18:27:17 about where they feel the business is at and their relationship with the business.

00:18:27:24 - 00:18:30:28 That's probably about as much as you can glean it.

00:18:30:29 - 00:18:31:33 It's a damn good starter.

00:18:31:33 - 00:18:35:31 It's a lot better than kind of poking around in the dark over email.

00:18:36:00 - 00:18:37:20 absolutely. Absolutely.

00:18:37:20 - 00:18:39:04 Okay. So, you know, we're on the call.

00:18:39:04 - 00:18:40:11 We're talking to the seller.

00:18:40:11 - 00:18:42:27 How hard should you press for information?

00:18:42:27 - 00:18:43:14 You know, what's the

00:18:43:14 - 00:18:47:12 that kind of balance between asking tough questions and getting what you want

00:18:47:12 - 00:18:51:24 from the call and also doing that all important rapport building?

00:18:51:26 - 00:18:55:19 Yeah, I think it's like a coaching contract to some extent.

00:18:55:19 - 00:18:59:18 Like, you know, long as you're asking for permission

00:18:59:21 - 00:19:01:02 along the lines of,

00:19:01:02 - 00:19:03:20 tell me if this is an overreach or I completely appreciate

00:19:03:20 - 00:19:04:21 you might be too early to have

00:19:04:21 - 00:19:07:21 this particular conversation or let me know if I'm overstepping.

00:19:07:21 - 00:19:11:16 But you can you can be very British about it and

00:19:11:19 - 00:19:15:01 and sort of excuse yourself, but but it prepares them

00:19:15:01 - 00:19:18:25 for the fact that actually it's okay to say not yet.

00:19:18:27 - 00:19:21:19 But, you know, God loves try and there's no reason

00:19:21:19 - 00:19:24:27 why you can't sort of say don't, don't this is too early.

00:19:24:27 - 00:19:29:11 But I'd love to know, you know, what your five year plan is for the business

00:19:29:11 - 00:19:34:23 or do you see yourself with the business in the next two or three years time?

00:19:34:26 - 00:19:37:14 So you can I think there's a

00:19:37:14 - 00:19:41:00 nothing is off limits, but as soon as you give them the permission

00:19:41:00 - 00:19:44:17 to tell you that it's off limits, then no one's going to feel like

00:19:44:17 - 00:19:49:23 they've let the other side of the call down or, you know, have have

00:19:49:26 - 00:19:51:11 if done, something that they shouldn't have done.

00:19:51:11 - 00:19:51:32 Yeah.

00:19:51:32 - 00:19:56:03 So each call is different and unique.

00:19:56:05 - 00:19:59:02 I don't think there's any harm in working up

00:19:59:02 - 00:20:00:29 to asking the sort of information that you want.

00:20:00:29 - 00:20:05:02 But I think some of the sensitive stuff around what's your magic number

00:20:05:02 - 00:20:06:30 and what kind of deal structure do you see?

00:20:06:30 - 00:20:10:33 I mean, the first call is too early really to be getting into that sort of detail.

00:20:10:33 - 00:20:14:29 You've got to build rapport and trust on both sides

00:20:14:29 - 00:20:18:13 before that can really even be a meaningful answer.

00:20:18:16 - 00:20:21:15 Yeah, I know I've not been through this particular process,

00:20:21:15 - 00:20:24:15 but I did sales for quite a long time, and it's a similar thing

00:20:24:15 - 00:20:28:15 that I have always found in any, you know, any of these sort of,

00:20:28:15 - 00:20:30:00 you know, sales or marketing

00:20:30:00 - 00:20:32:14 or any of these sort of conversation that people do quite

00:20:32:14 - 00:20:33:24 appreciate you being direct.

00:20:33:24 - 00:20:35:28 If you have got a question to ask that you like, ask me.

00:20:35:28 - 00:20:37:03 But I do love your

00:20:37:03 - 00:20:40:27 you know, give them permission to say no, it's a very British thing to do.

00:20:40:27 - 00:20:43:16 But I can see that working really well.

00:20:43:19 - 00:20:43:28 great.

00:20:43:28 - 00:20:45:18 Well, yeah, I mean, it's worked for me in the past,

00:20:45:18 - 00:20:49:03 and I think it's just it's just polite really, to sort of,

00:20:49:06 - 00:20:52:07 you know, set those that envelope, if you like.

00:20:52:13 - 00:20:54:28 And that's a mutual thing to set that envelope.

00:20:54:28 - 00:21:01:29 You know, you don't have to go in on Gordon Gekko guns blazing.

00:21:01:32 - 00:21:02:10 Okay.

00:21:02:10 - 00:21:04:31 So now we're in the seat of the off.

00:21:04:31 - 00:21:06:13 What do they want to hear from you?

00:21:06:13 - 00:21:09:15 Because, you know, this is your opportunity to demonstrate

00:21:09:15 - 00:21:12:15 some credibility, especially if you're a first time acquirer.

00:21:12:15 - 00:21:14:09 There may be other people that have approached them.

00:21:14:09 - 00:21:16:24 You know, what are they looking for in that conversation?

00:21:16:24 - 00:21:19:13 What do they want from you as a as the buyer?

00:21:19:13 - 00:21:20:31 Great question.

00:21:20:31 - 00:21:23:14 Well, they want to know that you're a good human and that they can trust you.

00:21:23:14 - 00:21:26:13 I mean, everybody really needs to know that

00:21:26:13 - 00:21:29:13 this person isn't going to have them over.

00:21:29:17 - 00:21:31:05 But but also

00:21:31:05 - 00:21:34:22 from a credibility perspective, they want to know that you understand

00:21:34:25 - 00:21:37:00 what you're getting into or potentially getting into that

00:21:37:00 - 00:21:39:09 you might be a good steward for their business.

00:21:39:09 - 00:21:42:26 A lot of these sellers are driven by legacy and care

00:21:42:27 - 00:21:46:10 and concern for their staff, you know, post their own tenure.

00:21:46:13 - 00:21:49:31 They want to make sure that the business is going to be, you know, in good, has

00:21:49:31 - 00:21:53:23 no one wants their reputation or legacy destroyed.

00:21:53:26 - 00:21:56:33 So, you know, that will that trepidation will be quite

00:21:57:02 - 00:22:00:26 paramount, I guess quite apparent in the sellers

00:22:00:28 - 00:22:02:26 hesitancy.

00:22:02:26 - 00:22:06:14 They're going to want to know that the person on the other side of the call

00:22:06:17 - 00:22:08:27 has some knowledge of the space,

00:22:08:27 - 00:22:11:22 has actually taken some time to research their business.

00:22:11:22 - 00:22:14:22 And the market that they that they serve

00:22:14:24 - 00:22:17:24 has looked at maybe some comparators.

00:22:17:29 - 00:22:20:22 Yeah, I, I personally have had conversations

00:22:20:22 - 00:22:25:33 with sellers where they have deliberately asked questions to, to, to

00:22:25:33 - 00:22:30:01 ascertain whether I have even bothered to to look at, you know, other transactions

00:22:30:01 - 00:22:33:15 that have happened amongst their competitors or

00:22:33:18 - 00:22:35:00 whether I really understand the market.

00:22:35:00 - 00:22:40:01 So it's important not just to do a complete kind of

00:22:40:04 - 00:22:44:07 scattergun approach to every single market.

00:22:44:09 - 00:22:48:30 And then on the back of the fact that you might get, you know,

00:22:48:33 - 00:22:50:32 some interest from somebody in a market that you don't

00:22:50:32 - 00:22:55:20 necessarily know, jump straight on to call it think it's probably

00:22:55:23 - 00:22:57:14 it probably behooves you to

00:22:57:14 - 00:23:00:10 to take some time just to research the industry before you,

00:23:00:10 - 00:23:04:14 you know, try and have a sensible call with these people or say, look,

00:23:04:17 - 00:23:07:17 you know, I'm not an expert in your industry,

00:23:07:18 - 00:23:10:27 so, you know, this is super early, but I'm just I'm just interested

00:23:10:28 - 00:23:14:11 in what you've achieved and the space you serve.

00:23:14:13 - 00:23:17:33 I fully intend to bring a subject matter expert with me.

00:23:17:33 - 00:23:21:19 There is an industry specialist and

00:23:21:25 - 00:23:26:11 and take my time learning about this before I try to get involved.

00:23:26:13 - 00:23:27:30 You know, you can

00:23:27:30 - 00:23:30:01 you can be authentic about that if you're in a hurry

00:23:30:01 - 00:23:30:25 to have a conversation

00:23:30:25 - 00:23:33:25 with a seller in an industry that you don't really understand.

00:23:33:33 - 00:23:37:21 Yeah, I think that's wise because a lot of people are sector agnostic

00:23:37:21 - 00:23:40:27 and they're maybe not going into something that they have a direct experience in.

00:23:40:27 - 00:23:43:11 So I think that's a nice way to approach that.

00:23:43:11 - 00:23:46:26 And you give the seller a chance, you know, wax lyrical about what they do,

00:23:46:29 - 00:23:47:19 you know.

00:23:47:19 - 00:23:49:07 Are there any deals that you've heard of?

00:23:49:07 - 00:23:50:27 Is there any way that you think I should start?

00:23:50:27 - 00:23:52:12 What do you think I need to know about your industry

00:23:52:12 - 00:23:55:05 that I don't already know and give them a chance to do some talking

00:23:55:05 - 00:23:58:05 and more often than not, I think they'd be happy to do that.

00:23:58:10 - 00:24:00:02 great. Absolutely right.

00:24:00:02 - 00:24:06:26 As you rightly say, you can learn a lot from sellers when you ask them questions

00:24:06:28 - 00:24:07:16 and ask them to

00:24:07:16 - 00:24:11:09 expand into that space that you know is left by the question.

00:24:11:11 - 00:24:13:32 Yeah, fully a great, great tactic.

00:24:13:32 - 00:24:16:20 Okay, So I'm on my first call.

00:24:16:20 - 00:24:19:10 I'm talking to the seller. We're starting to build some rapport.

00:24:19:10 - 00:24:22:24 What are the sort of green amber and red flags I'm listening for?

00:24:22:24 - 00:24:27:20 So what are the triggers warning signs that might dictate whether

00:24:27:22 - 00:24:30:03 this might progress towards a deal?

00:24:30:03 - 00:24:31:07 Things that they say that might,

00:24:31:07 - 00:24:34:29 you know, potentially flag a sort of warning sign in your head,

00:24:34:32 - 00:24:39:10 You know, what's your sort of red amber green for that call?

00:24:39:13 - 00:24:42:06 I was going to differ on the basis

00:24:42:06 - 00:24:46:22 of each type of company and each market that that company serves.

00:24:46:25 - 00:24:49:09 But and remember that

00:24:49:09 - 00:24:53:22 everything that you're hearing on this call is sort of veiled.

00:24:53:25 - 00:24:54:06 You've got to

00:24:54:06 - 00:24:57:30 you've got to try and calibrate to how authentic this conversation is really,

00:24:57:33 - 00:25:01:08 because, you know, you're not you're not probably having a

00:25:01:11 - 00:25:04:31 no holds barred, fully transparent, open book conversation.

00:25:04:31 - 00:25:06:05 You're still doing that down.

00:25:06:05 - 00:25:10:07 So the seven veils that that, you know, getting to know you thing. So

00:25:10:10 - 00:25:14:03 is the seller going to betray themselves?

00:25:14:05 - 00:25:15:11 Unlikely.

00:25:15:11 - 00:25:18:06 But if they're starting to mention

00:25:18:06 - 00:25:20:27 things like,

00:25:20:27 - 00:25:23:27 yeah, you know, we had a pretty bad year last year

00:25:23:28 - 00:25:26:24 and, you know,

00:25:26:24 - 00:25:29:07 I've fallen out of love with the business because of it,

00:25:29:07 - 00:25:33:07 then obviously that's probably an Amber flag that you, on the one

00:25:33:07 - 00:25:37:03 hand might be an opportunity for you if it was an aberration of a year.

00:25:37:06 - 00:25:41:07 But if that is sort of speaking to a trend and you've looked at

00:25:41:09 - 00:25:42:33 the balance sheet over the sort of

00:25:42:33 - 00:25:46:10 the prior years and you think, yeah, this is in a sort of state of decline,

00:25:46:18 - 00:25:51:03 then that might just confirm for you your your

00:25:51:06 - 00:25:53:30 suspicions that the business is on the wane

00:25:53:30 - 00:25:58:03 and can actually be restored to its former glory.

00:25:58:06 - 00:26:01:11 You know, even if you do bring new blood into the business and new capital is

00:26:01:11 - 00:26:05:30 the business is it is it able to be saved in that sense?

00:26:05:33 - 00:26:06:18 Yeah.

00:26:06:18 - 00:26:07:06 Green flags

00:26:07:06 - 00:26:10:11 are probably what I'm listening more for and not to get emotionally attached

00:26:10:11 - 00:26:11:07 to any transaction.

00:26:11:07 - 00:26:14:11 It's often said it's on, but I would be listing more for green

00:26:14:11 - 00:26:18:22 flags like, you know, did they speak enthusiastically about their team?

00:26:18:22 - 00:26:21:19 Do they speak about delegation?

00:26:21:19 - 00:26:23:29 You know, you can ask them some really great questions about

00:26:23:29 - 00:26:25:26 how do you interact with your team and, you know,

00:26:25:26 - 00:26:28:13 how much are you still involved in the business day to day?

00:26:28:13 - 00:26:32:02 And how do your management meetings generally go, you know, to

00:26:32:05 - 00:26:35:04 having them frequently? Who leads them?

00:26:35:04 - 00:26:39:05 You can kind of open the door for them to talk about their team.

00:26:39:12 - 00:26:42:10 And if that is sort of like, no, I said, I do a lot of this myself,

00:26:42:10 - 00:26:44:05 or haven't you got anybody there that I can,

00:26:44:05 - 00:26:45:27 you know, that I can trust to go away

00:26:45:27 - 00:26:47:25 for a couple of weeks and it's all going to be in safe

00:26:47:25 - 00:26:52:25 hands like then, then, you know, the business isn't yet fully

00:26:52:28 - 00:26:54:10 detached from

00:26:54:10 - 00:26:57:05 the owner in their day to day operation.

00:26:57:05 - 00:26:58:27 And so you'd have to start thinking from a deal

00:26:58:27 - 00:27:01:31 structure perspective, like I've got to retain this person role

00:27:01:31 - 00:27:07:02 over equity or whatever, because, you know, if they're out the door,

00:27:07:05 - 00:27:10:05 you know, as soon as the anchors dry on the s.p.a,

00:27:10:05 - 00:27:13:28 there's a great risk concentration risk on this business failing.

00:27:13:28 - 00:27:17:18 So, you know, it's these sort of things that you're listening to in terms of

00:27:17:21 - 00:27:21:19 whether the seller has taken the necessary steps to delegate and trust

00:27:21:26 - 00:27:24:26 and whether they have the right people in the team that they can do that with.

00:27:24:33 - 00:27:25:13 Okay.

00:27:25:13 - 00:27:29:07 Another any green flags that you listen for that indicate that a seller would be

00:27:29:09 - 00:27:31:13 perhaps more ready to go for a deal?

00:27:31:13 - 00:27:32:32 I mean, one he wants to sell.

00:27:32:32 - 00:27:35:07 You said, you know, some sellers will come ready with a

00:27:35:07 - 00:27:38:01 you know, their deal room and you know all of their data

00:27:38:01 - 00:27:39:30 somewhere and access to their finances

00:27:39:30 - 00:27:42:13 and you know, maybe they've had an offer before, you know, or anything like that.

00:27:42:13 - 00:27:46:08 Well, makes you exactly that I would love I actually really enjoy it

00:27:46:08 - 00:27:48:29 when they said, well, we were in a process with such and such and,

00:27:48:29 - 00:27:51:09 you know, we had to walk away because, you know,

00:27:51:09 - 00:27:55:07 either the buyer re traded on them, which happens so frequently.

00:27:55:07 - 00:27:59:01 You know, we they changed the deal

00:27:59:03 - 00:28:01:32 to the detriment of the of the seller.

00:28:01:32 - 00:28:06:01 And so you know, the fact that they may be a little wounded

00:28:06:01 - 00:28:09:01 from that time suck that they went through

00:28:09:01 - 00:28:12:15 previously but but still open

00:28:12:15 - 00:28:18:01 minded and semi prepared enough to get stuck in do it again like

00:28:18:04 - 00:28:18:24 you know

00:28:18:24 - 00:28:22:25 you could take the white knight approach there couldn't you that

00:28:22:28 - 00:28:26:22 you know you know you're you're kind of riding to the rescue a little

00:28:26:25 - 00:28:29:11 so yes having been in the process

00:28:29:11 - 00:28:32:21 before and having had it not complete

00:28:32:24 - 00:28:35:22 and I'd want to drill down as to whether that was the the buyer

00:28:35:22 - 00:28:39:16 not being able to come up with the money or wanting to change the terms

00:28:39:22 - 00:28:43:25 significantly rather than what, you know, they discovered in due

00:28:43:25 - 00:28:48:01 diligence that, you know, if it was a quarter of what they thought

00:28:48:01 - 00:28:51:30 it was or something like that, you know,

00:28:51:33 - 00:28:54:02 again, are you going to really find that out in the first call?

00:28:54:02 - 00:28:58:02 I think you're really making notes at this point as to what you delve deeper into.

00:28:58:05 - 00:29:00:17 So, you know, you might hear from the seller

00:29:00:17 - 00:29:03:03 that they were in a process and they no longer are,

00:29:03:03 - 00:29:09:15 but it might be a little too early to probe that or to poke at that wound a bit.

00:29:09:17 - 00:29:09:25 Okay.

00:29:09:25 - 00:29:12:13 That's interesting.

00:29:12:13 - 00:29:12:27 Okay.

00:29:12:27 - 00:29:15:24 So we're coming to the end of our call now.

00:29:15:24 - 00:29:17:32 How do we, you know, what's the best way to wrap up that call?

00:29:17:32 - 00:29:20:25 How do we set some clear next steps, action items?

00:29:20:25 - 00:29:22:13 I know it would depend on how the call goes

00:29:22:13 - 00:29:25:26 and you know how the seller feels, but how how would you do that?

00:29:25:26 - 00:29:26:27 What's the next step for you?

00:29:26:27 - 00:29:28:09 At the end of that call,

00:29:28:09 - 00:29:32:29 I would want to create the conditions for Canada whereby the seller feels like

00:29:32:29 - 00:29:36:28 they are willing and able to share more information in a

00:29:36:28 - 00:29:40:18 in a trusted environment, in a safe and protected environment.

00:29:40:18 - 00:29:46:06 So India is normally the next step, a mutual India that

00:29:46:09 - 00:29:48:27 can allow both sides to talk a bit more candidly.

00:29:48:27 - 00:29:51:21 It doesn't have to be an outline offer at this stage.

00:29:51:21 - 00:29:54:14 It can be, well, you know, do you want to send me your management accounts?

00:29:54:14 - 00:29:56:01 If you're interested in exploring an option,

00:29:56:01 - 00:29:59:01 I can give you a kind of an indicative valuation,

00:29:59:09 - 00:30:02:18 unless you want to tell me what you feel your value action

00:30:02:21 - 00:30:04:32 might be for the business or what valuation you were

00:30:04:32 - 00:30:07:32 you were at when you were in this process previously.

00:30:08:05 - 00:30:11:00 But again, that's probably kicking the tires

00:30:11:00 - 00:30:14:18 and asking permission to ask that kind of a question.

00:30:14:21 - 00:30:18:05 But yeah, an NDA is, is is it useful?

00:30:18:05 - 00:30:19:05 Next step. Okay, great.

00:30:19:05 - 00:30:21:17 Well, it sounds like we might have something we can explore a bit here.

00:30:21:17 - 00:30:23:23 And if the time is right for you, then maybe,

00:30:23:23 - 00:30:28:11 you know, it's getting India out there and we can start to trade some information

00:30:28:14 - 00:30:30:17 so that we can give you a bit of a picture as to what

00:30:30:17 - 00:30:33:17 this deal might look like if it's to proceed

00:30:33:18 - 00:30:35:01 and express our interest.

00:30:35:01 - 00:30:38:18 Because at this point, you've not an EOG ally.

00:30:38:25 - 00:30:41:18 Sorry, you've not sent any heads of terms.

00:30:41:18 - 00:30:43:30 This is purely speculative at this point.

00:30:43:30 - 00:30:46:30 So you need to see a little bit more of something

00:30:46:30 - 00:30:49:30 in order to validate, you know, your research.

00:30:49:32 - 00:30:54:18 I love the setting, the conditions for, and I think that's a really nice way

00:30:54:18 - 00:30:57:02 to put that. Yeah, and India sounds like a good next step.

00:30:57:02 - 00:30:58:28 Makes everybody feel comfortable.

00:30:58:28 - 00:31:01:26 Like I said, expresses your interest.

00:31:01:26 - 00:31:02:14 I think

00:31:02:14 - 00:31:05:22 if for me I would have thought that next that would be kind of an in person thing.

00:31:05:22 - 00:31:07:32 But would you go to that India and maybe do a little bit more digging,

00:31:07:32 - 00:31:10:26 I suppose, before you spend your time going to see them in person?

00:31:10:26 - 00:31:11:11 Yeah.

00:31:11:11 - 00:31:14:32 I mean, remember that seeing them in person in

00:31:14:32 - 00:31:18:23 their workplace can be can get the heckles up.

00:31:18:28 - 00:31:21:16 You know, you hear all these stories about

00:31:21:16 - 00:31:25:31 who you have to pretend to be when you go to visit the seller,

00:31:25:33 - 00:31:28:33 you know, it's someone from the bank or

00:31:29:07 - 00:31:33:14 it's it's the landlord or it's the man from the council or whatever.

00:31:33:14 - 00:31:35:12 You know, it's it's

00:31:35:15 - 00:31:36:05 that the

00:31:36:05 - 00:31:39:05 seller is going to want to keep this under wraps really from.

00:31:39:07 - 00:31:42:24 But their most senior staff and other shareholders.

00:31:42:26 - 00:31:46:12 So yeah, I think if you can get more done

00:31:46:15 - 00:31:48:26 at a distance before you create that disruption

00:31:48:26 - 00:31:53:00 o me offsite, I the other option go meet somewhere neutral, neutral ground.

00:31:53:02 - 00:31:54:20 I still think having

00:31:54:20 - 00:31:57:21 if there is mutual interest in exploring this further, I think going

00:31:57:21 - 00:32:01:14 and having that conversation, mindful that there's an NDA in place already,

00:32:01:21 - 00:32:04:19 means that both sides can be a bit more candid.

00:32:04:19 - 00:32:07:15 You know, they're still going to be that same hesitation

00:32:07:15 - 00:32:11:12 if they could be revealing all this information to you

00:32:11:12 - 00:32:17:15 and you've got no legal obligation to respect it.

00:32:17:18 - 00:32:18:10 That's interesting.

00:32:18:10 - 00:32:20:25 I hadn't thought about the reaction of the staff When you go.

00:32:20:25 - 00:32:22:33 Maybe that'll be a podcast topic for another time.

00:32:22:33 - 00:32:23:15 How to.

00:32:23:15 - 00:32:25:19 Should we not have the masqueraders?

00:32:25:19 - 00:32:29:08 The man from the council.

00:32:29:10 - 00:32:30:12 Okay, interesting.

00:32:30:12 - 00:32:34:24 So I think that that pretty much wraps up that that first call

00:32:34:27 - 00:32:38:04 as someone that's done this a few times, do you have any sort of memorable

00:32:38:04 - 00:32:42:05 successes or horror stories with qualifying calls?

00:32:42:08 - 00:32:43:24 I one guy

00:32:43:24 - 00:32:48:09 happily take my call from my outreach just to tell me to f off.

00:32:48:12 - 00:32:50:10 So that was nice and asked me

00:32:50:10 - 00:32:56:05 how I had the audacity to think that I could acquire his business.

00:32:56:07 - 00:32:57:00 So that was interesting.

00:32:57:00 - 00:33:00:00 But then I've had far more

00:33:00:08 - 00:33:04:09 infinitely more pleasant conversations with people.

00:33:04:16 - 00:33:08:06 And, you know, it's quite interesting that there's been a sort of smorgasbord.

00:33:08:06 - 00:33:12:19 I've had some really prepared sellers that have actually exited previously

00:33:12:19 - 00:33:16:19 from another business and know exactly the steps that they want to follow

00:33:16:19 - 00:33:22:04 and need to follow to to sort of execute this process to their best advantage.

00:33:22:11 - 00:33:24:07 And they're like running the course.

00:33:24:07 - 00:33:27:02 It's actually, you know, it's like methodical music.

00:33:27:02 - 00:33:29:27 You know, it's like, well, when we're really moving at pace here

00:33:29:27 - 00:33:32:15 and they really want to know, you know, multiple,

00:33:32:15 - 00:33:34:07 you know, have you have you done your homework?

00:33:34:07 - 00:33:36:12 Have you looked at comparatives?

00:33:36:12 - 00:33:38:23 You know, the average price that people pay

00:33:38:23 - 00:33:42:27 as a as a multiple of EBIDTA in this space, in this sector?

00:33:42:30 - 00:33:45:07 Yes. You dance with those sorts of sellers that I guess

00:33:45:07 - 00:33:46:17 strong straight to the point

00:33:46:17 - 00:33:49:16 and you can tell the ones that have had a lot of these conversations and are like,

00:33:49:16 - 00:33:51:13 come on Mike, you know, that was what's on.

00:33:51:13 - 00:33:52:17 Give me the number.

00:33:52:17 - 00:33:52:25 Yeah.

00:33:52:25 - 00:33:52:30 Yeah.

00:33:52:30 - 00:33:55:01 And, and that you know if you're going into these calls

00:33:55:01 - 00:33:57:10 expecting it to be kind of softly getting to know you

00:33:57:10 - 00:34:00:17 and then you get hit with one of those, it's like, okay, right.

00:34:00:19 - 00:34:01:31 Get me game face on right.

00:34:01:31 - 00:34:05:09 So yeah, I mean that's I wouldn't say it's a horror story.

00:34:05:09 - 00:34:06:27 I quite enjoy that.

00:34:06:27 - 00:34:11:26 Yeah, there has been one where I've been speaking to the wrong person

00:34:11:29 - 00:34:16:25 entirely the wrong person, and they haven't

00:34:16:28 - 00:34:18:19 fessed up to that

00:34:18:19 - 00:34:21:19 until about halfway through the call.

00:34:21:20 - 00:34:25:25 And yeah, that's, that's a bit of a,

00:34:25:28 - 00:34:28:31 a shame because you, you feel like

00:34:28:31 - 00:34:33:23 you may have betrayed some confidence and also wasted some time.

00:34:33:25 - 00:34:34:18 So who were they?

00:34:34:18 - 00:34:37:32 Someone else that the business

00:34:38:00 - 00:34:39:08 the Yeah.

00:34:39:08 - 00:34:43:09 The another a minority shareholder basically in this case

00:34:43:12 - 00:34:47:01 rather than the majority shareholder who had decided to take the call

00:34:47:03 - 00:34:51:08 had agreed with with the person that you've been speaking to on email

00:34:51:11 - 00:34:52:13 to take the call.

00:34:52:13 - 00:34:55:22 And of course, you know, I've gone in with, you know, Hi, Dave, whoever

00:34:55:22 - 00:35:00:25 his name was only about 20 minutes later to determine that it's Toll not eight.

00:35:00:27 - 00:35:04:05 And the team really has no saying whether this deal goes forward,

00:35:04:05 - 00:35:07:05 but is just gathering facts on behalf of Dave.

00:35:07:06 - 00:35:10:10 So you just have to roll with that one, because that's the decision

00:35:10:10 - 00:35:15:03 they've made between them to sort of fence the conversation and

00:35:15:06 - 00:35:20:14 they learn more from you than you learn from them in that scenario, which is fine.

00:35:20:17 - 00:35:24:07 You know, that's good screening expects expect that to be the case.

00:35:24:10 - 00:35:26:01 But yeah, I kind of left the

00:35:26:01 - 00:35:32:17 call thinking I wish he'd said he was dumped to.

00:35:32:20 - 00:35:33:31 Well, maybe it was my assumption.

00:35:33:31 - 00:35:34:32 Maybe it maybe I kicked myself

00:35:34:32 - 00:35:38:10 for making that make an assumption, making an act of you and me, As I said,

00:35:38:13 - 00:35:39:09 as I say,

00:35:39:09 - 00:35:42:29 have you ever been on a qualifying call and, you know, sort part the way through?

00:35:42:29 - 00:35:45:29 I just thought this is this isn't going to happen.

00:35:45:31 - 00:35:48:07 this There's definite record moments,

00:35:48:07 - 00:35:52:30 definite record moments where you think this this business really isn't for me

00:35:52:32 - 00:35:57:27 or best seller and I aren't going to get on and

00:35:57:30 - 00:36:00:32 or he or it's a potential hospital pass like they are deliberately

00:36:00:32 - 00:36:03:32 trying to offer something that is

00:36:04:02 - 00:36:06:20 going to be a problem.

00:36:06:20 - 00:36:11:17 So so yeah I mean maintain your politeness but don't exhaust

00:36:11:17 - 00:36:15:09 more time than you need to and maybe don't offer the NDA.

00:36:15:12 - 00:36:18:12 I think it's a good point to remember to not be too emotionally

00:36:18:12 - 00:36:20:17 attached to this, because I think that especially

00:36:20:17 - 00:36:22:14 for first time acquirers and I've seen this happen a lot,

00:36:22:14 - 00:36:25:14 there's a lot of legwork that goes into getting to that first call.

00:36:25:21 - 00:36:26:32 And it's kind of like, you know,

00:36:26:32 - 00:36:27:32 I relate this back

00:36:27:32 - 00:36:31:25 to like having my first sales job and you finally get that person on the phone

00:36:31:28 - 00:36:34:17 and there are kind of red flags that say, this probably isn't right,

00:36:34:17 - 00:36:36:02 but they might be a part of you that thinks, I've worked

00:36:36:02 - 00:36:37:07 so hard to get this call.

00:36:37:07 - 00:36:39:08 I might put pushing the cost fallacy.

00:36:39:08 - 00:36:41:25 It's a sunk cost fallacy out, right?

00:36:41:25 - 00:36:44:14 You know, people value their time and their effort

00:36:44:14 - 00:36:49:09 and they're emotionally wedded to the the potential to success.

00:36:49:12 - 00:36:52:11 And so it's almost like the Eddie Murphy sketch,

00:36:52:11 - 00:36:56:10 you know, from RAW back in the eighties are old enough to remember.

00:36:56:10 - 00:36:57:00 But like,

00:36:57:00 - 00:36:59:28 you know, the man's walking the desert and he's hugely hungry

00:36:59:28 - 00:37:05:03 and hands of a cracker. And he's like, my God, it's that cracker ever.

00:37:05:05 - 00:37:05:24 I don't do that.

00:37:05:24 - 00:37:06:02 Just this.

00:37:06:02 - 00:37:11:25 But it's that it's like over it's over attaching to, to the outcome.

00:37:11:28 - 00:37:15:03 And that is a that's a big no no. Right.

00:37:15:03 - 00:37:20:18 So you've got to you've got to be cold without appearing cold to the seller.

00:37:20:21 - 00:37:22:20 You've got to be cold in the way you treat this like it could.

00:37:22:20 - 00:37:24:09 It could fall out a bit at any minute.

00:37:24:09 - 00:37:25:27 The deal is off until it's on

00:37:25:27 - 00:37:26:33 and it has to go through a lot

00:37:26:33 - 00:37:30:28 of your own personal kind of ratification in order for it to be on.

00:37:30:28 - 00:37:35:12 I imagine your life depended on it, right?

00:37:35:15 - 00:37:36:23 Yeah.

00:37:36:23 - 00:37:38:25 So so yes,

00:37:38:25 - 00:37:41:00 I have seen some sellers eventually don't.

00:37:41:00 - 00:37:44:22 And as we talked about earlier, you know, if the average success rate is

00:37:44:25 - 00:37:49:14 between 57 and 63%, be go in prepared with that fact,

00:37:49:14 - 00:37:52:27 you know that it's not going to be a one and done it's not, you know,

00:37:52:28 - 00:37:55:22 going to maybe view the first business and the first conversation end up

00:37:55:22 - 00:37:57:29 buying that company.

00:37:57:32 - 00:38:01:23 Yep. And every every single call is training for the next one.

00:38:01:23 - 00:38:04:18 Right. It's a it's sharpening your instruments.

00:38:04:18 - 00:38:08:00 It's honing your skill, perfecting your are.

00:38:08:01 - 00:38:11:30 You know, all of this is failure is feedback, if you like.

00:38:11:33 - 00:38:14:02 And you're going to take something from that core,

00:38:14:02 - 00:38:16:33 which was a learning experience, even if it isn't the one.

00:38:16:33 - 00:38:20:01 As I was once told on my first day at a call center job,

00:38:20:01 - 00:38:21:16 every know is a step closer to me.

00:38:21:16 - 00:38:23:00 Yes, you are.

00:38:23:00 - 00:38:25:09 And that is a huge motivator.

00:38:25:09 - 00:38:29:27 Then you go, okay, so let's sign this off with

00:38:29:30 - 00:38:31:33 the one thing a first time I should remember.

00:38:31:33 - 00:38:35:00 So if this is your first time, a business acquisition, you've done

00:38:35:00 - 00:38:37:22 the outreach, you've got that seller on the phone,

00:38:37:22 - 00:38:40:06 what's the one thing that they need to remember they should take away from this?

00:38:40:06 - 00:38:43:15 What's the big tip?

00:38:43:18 - 00:38:45:13 Don't play all of your cards

00:38:45:13 - 00:38:49:23 in the first call.

00:38:49:26 - 00:38:51:17 If you don't get through the entirety

00:38:51:17 - 00:38:54:17 of what you wanted to, that's okay.

00:38:54:24 - 00:38:59:09 As long as the call feels organic and natural and that you feel

00:38:59:09 - 00:39:03:31 that you've reached a kind of an accord at a human level

00:39:04:00 - 00:39:06:26 with the seller,

00:39:06:26 - 00:39:08:17 that's that's mission.

00:39:08:17 - 00:39:10:29 Okay. You don't have to tick all the boxes.

00:39:10:29 - 00:39:12:30 We'll be able to populate all of your spreadsheet

00:39:12:30 - 00:39:17:20 from the 60 Minutes you might spend on this initial call. The

00:39:17:23 - 00:39:20:21 the goal is to have another call, right?

00:39:20:21 - 00:39:23:32 The goal is for you to feel that this is something you want

00:39:23:32 - 00:39:27:29 to look into further and for the seller to be open to a meeting,

00:39:27:32 - 00:39:31:19 a deeper conversation, that's that's all you're looking

00:39:31:19 - 00:39:35:09 to really hope to get out of this rule in, rule out.

00:39:35:17 - 00:39:39:19 And if it's in move to the next call, the rest of your data points

00:39:39:19 - 00:39:43:12 you can garner as you go further along the process.

00:39:43:15 - 00:39:46:01 But I guess that's tip number one.

00:39:46:01 - 00:39:49:01 And number two is don't try and treat every set of the same,

00:39:49:03 - 00:39:52:03 try to calibrate to their psychology.

00:39:52:08 - 00:39:56:31 And, you know, I could probably list five different psychologies of seller

00:39:56:31 - 00:40:01:07 that I've I've come into contact with like an experienced seller,

00:40:01:10 - 00:40:04:16 a prepared seller, an accidental seller

00:40:04:21 - 00:40:09:25 that is sort of like completely, totally unprepared but is up to the task

00:40:09:25 - 00:40:14:02 and, you know, ready but not but, you know, really emotionally,

00:40:14:02 - 00:40:17:02 I mean, and the business is probably just about ready,

00:40:17:05 - 00:40:18:14 but they've never done it before.

00:40:18:14 - 00:40:21:14 And they're probably, you know, the optimum for me on the spectrum,

00:40:21:14 - 00:40:25:27 the daunted seller who's panicked by this process and really I would say

00:40:26:01 - 00:40:29:32 the daunted seller should have some kind of representation like you did.

00:40:30:01 - 00:40:33:18 Whilst I'm not an advocate for intermediaries, traditionally,

00:40:33:18 - 00:40:38:26 I do think they can be very helpful to people that maybe are,

00:40:38:29 - 00:40:41:22 you know, are not

00:40:41:22 - 00:40:44:22 familiar with the process or up for learning

00:40:44:27 - 00:40:48:06 and they want to kind of pass the baton to somebody else to see them through

00:40:48:06 - 00:40:49:12 and that's that's normal.

00:40:49:12 - 00:40:51:13 I've been on calls where basically it's like, hey,

00:40:51:13 - 00:40:53:01 I'm going to your party, to my accountant.

00:40:53:01 - 00:40:54:24 And then you're like, okay, right.

00:40:54:24 - 00:40:55:25 Well, you're going to act for this guy

00:40:55:25 - 00:40:57:29 that to a certain point, that's totally fine.

00:40:57:29 - 00:40:58:28 You know,

00:40:58:28 - 00:41:02:27 business owners are good at often good at their craft in their industry,

00:41:02:27 - 00:41:03:15 not necessarily

00:41:03:15 - 00:41:07:18 at the sort of spreadsheet semantics and financial alchemy that we did.

00:41:07:18 - 00:41:08:22 We live in.

00:41:08:22 - 00:41:11:00 And I guess finally there's that distressed seller

00:41:11:00 - 00:41:16:21 where like it's take this off my hands, I have had my fill, I'm done.

00:41:16:24 - 00:41:20:26 And you need to be very much aware of the kind of emotional roller coaster

00:41:20:26 - 00:41:25:08 that they've been on and the the volatility of that situation for them.

00:41:25:08 - 00:41:28:18 Yeah, which may be the lens through which they see certain things.

00:41:28:18 - 00:41:30:33 So so don't treat everybody the same.

00:41:30:33 - 00:41:35:05 There is a whole spectrum of personalities that you'll encounter.

00:41:35:07 - 00:41:35:28 Excellent.

00:41:35:28 - 00:41:36:14 I love that.

00:41:36:14 - 00:41:38:24 Well, if you are a first time acquirer, I think

00:41:38:24 - 00:41:41:10 even if you've got some experience, there's something in that

00:41:41:10 - 00:41:42:17 in that conversation for you.

00:41:42:17 - 00:41:44:29 I would certainly feel more confident Guardian Circle after this.

00:41:44:29 - 00:41:46:05 So thanks for that. Gareth.

00:41:46:05 - 00:41:46:15 Great.

00:41:46:15 - 00:41:50:10 Well, the next one's on you and I feel you can do the list, mate.

00:41:50:13 - 00:41:50:27 There you go.

00:41:50:27 - 00:41:53:18 I'm ready. I'm ready.

00:41:53:18 - 00:41:56:15 Before we go, I think this is a good opportunity for us

00:41:56:15 - 00:42:00:26 to remind our listeners one more time about the Spirit of Cards symposium.

00:42:00:29 - 00:42:02:00 Yeah, absolutely.

00:42:02:00 - 00:42:03:32 It is still, some Day past is available.

00:42:03:32 - 00:42:08:28 It's happening on the 18th of June in my abode in central London.

00:42:08:31 - 00:42:12:09 Yeah, we've got a huge amount of guest speakers

00:42:12:09 - 00:42:16:10 now signed up talking about actually one topic is about social psychology and deal

00:42:16:10 - 00:42:19:16 structuring with sellers and we've got somebody telling us about

00:42:19:16 - 00:42:24:01 their first 100 days having built and acquired.

00:42:24:04 - 00:42:26:08 They have built research fund and acquired a company

00:42:26:08 - 00:42:29:26 that what they did in their first 100 days post acquisition.

00:42:29:29 - 00:42:32:12 We have a former dragon who's

00:42:32:12 - 00:42:36:22 talking to us about, Hey, I and how I can be used

00:42:36:22 - 00:42:41:23 both in the process of M&A but also in value creation.

00:42:41:23 - 00:42:43:05 Post deal.

00:42:43:05 - 00:42:44:09 That's something exciting.

00:42:44:09 - 00:42:46:09 Yeah, exactly.

00:42:46:09 - 00:42:50:06 We've got some lawyers talking to us about the necessary legal considerations

00:42:50:06 - 00:42:55:20 and we've got some lenders talking to us about some

00:42:55:23 - 00:42:58:30 emerging innovative ways of structuring the finance

00:42:58:32 - 00:43:02:06 of some of these deals because often they're leveraged.

00:43:02:08 - 00:43:07:03 So yeah, I mean, it's a huge program of of

00:43:07:06 - 00:43:10:00 topics being covered on the day

00:43:10:00 - 00:43:12:24 and yeah, we could you could still save 25% on your ticket

00:43:12:24 - 00:43:16:21 price get it for 245 quid using the code launch

00:43:16:24 - 00:43:19:33 serial acquire a UK that's a steal.

00:43:20:01 - 00:43:21:07 Excellent. So exciting.

00:43:21:07 - 00:43:23:22 I absolutely cannot wait for that.

00:43:23:22 - 00:43:25:02 It's going to be great. Yeah.

00:43:25:02 - 00:43:26:22 And it's across two spaces.

00:43:26:22 - 00:43:31:18 We've got this huge auditorium and then this kind of, like, big glass box

00:43:31:21 - 00:43:33:28 with a kind of networking area and in that class.

00:43:33:28 - 00:43:37:22 But we're going to be doing discussion panels, we're going to be doing

00:43:37:22 - 00:43:41:06 roundtables, we're going to be doing live podcasting.

00:43:41:08 - 00:43:41:33 Yeah.

00:43:41:33 - 00:43:45:16 So, yeah, because not to be missed, I'd say some

00:43:45:18 - 00:43:46:29 you know, we've got to get through.

00:43:46:29 - 00:43:49:22 We've got LBC is this month

00:43:49:22 - 00:43:53:04 back into this month and then there's a bit of a bit of a lull in the UK,

00:43:53:06 - 00:43:57:11 ETA conferencing and so that So I hope you'll join us.

00:43:57:13 - 00:43:59:03 Awesome.

00:43:59:05 - 00:43:59:20 Okay.

00:43:59:20 - 00:44:03:17 Well, I think it's now time for us to head over to our live

00:44:03:17 - 00:44:04:27 listeners in Austin for Q&A.

00:44:04:27 - 00:44:07:00 If you're out there, you're listening and you want to know some questions

00:44:07:00 - 00:44:10:04 about your qualifying calls and questions to ask.

00:44:10:04 - 00:44:12:14 If you've got any feedback for us, now's the time.

00:44:12:14 - 00:44:15:11 Yeah, put them in the chat, folks, and off we go.

00:44:15:11 - 00:44:17:17 And for those of you watching and listening

00:44:17:17 - 00:44:19:10 on our podcast, we'll see you again next week.

00:44:19:10 - 00:44:21:02 People in country see you next week.