00:00:00:00 - 00:00:36:30
Unknown
Though. Welcome back to the Amazing, the weekly podcast for acquisition entrepreneurs, co builders and search fund investors in the UK, Europe and beyond, especially beyond today. I'm your host, Gareth Wilkins, co-founder and CEO of Pitch Crunch The End to end AI powered platform for turnkey small business succession. We regularly dive into the stories behind mergers, acquisitions and entrepreneurship through acquisition here, but today we are privileged.

00:00:36:30 - 00:00:59:04
Unknown
We're joined from across the pond by Andrew Long, core managing partner of the Business Law Group and founder of Cecil Stelling and Co. Andrew has built a career around one mission, helping entrepreneurs and business owners to do good deals. Through his boutique law firm and advisory practice, he guides clients through every stage of the acquisition journey from alloys and due diligence to post-closing integration and growth.

00:00:59:07 - 00:01:23:10
Unknown
So a real full service with over a decade of experience in both the legal and strategic sides of dealmaking, Andrew has seen firsthand how the right transaction can unlock freedom and opportunity for entrepreneurs. But also how the wrong one can create lasting challenges. So in today's conversation, we're going to talk about what makes a good deal the art and science of M&A, navigating the unknown, and how entrepreneurs can approach acquisitions with confidence and clarity.

00:01:23:10 - 00:01:46:31
Unknown
So welcome, Andrew. Thanks for joining us. Yeah, I'm glad to be here. We are delighted to have you with us, sir, all the way from Grand Rapids, Michigan. Yes, sir. Halfway between Detroit and Chicago. Beautiful city. Great, great river running through it. Yeah, Glorious spent many, many a fun time there. West Michigan Whitecaps. Yes, Yes. Our local baseball team.

00:01:46:31 - 00:02:14:20
Unknown
And we've got hockey and so lots of stuff going on. Soccer too soon. Yeah. Focused around football. I'm sorry. Yes, We have a new a new club coming, a new stadium being built and everything, so. right. Well you'll you'll soon be trained with a visit from one of our greatest exports, David Beckham. okay. So, Andrew, you founded the Business Law Group back in 2012 and later launched Cecil Sterling and Co.

00:02:14:20 - 00:02:40:08
Unknown
So can you please walk us through that journey? How was this little group led to the creation of CFC? Yeah, so I came out of law school at the perfect time, 28, 29, when it seemed like all the fifth year associates were getting let go. And so they were applying for the same jobs I was coming fresh out of law school, had to join a firm that wasn't really in my area that I was hoping to be.

00:02:40:08 - 00:03:12:19
Unknown
It was more litigation and dispute focused than transaction based. And so after working there for a couple of years, it quickly became apparent to me that I was working on the wrong end of a lot of problems. And I really wanted to move into the practice of actually doing the deals and in that. And so was kind of faced with a conundrum of whether I would go join a large firm where I could focus specifically on that or go out on my own and then be able to control the types of clients and transactions I wanted to work.

00:03:12:22 - 00:03:51:25
Unknown
Luckily for me, I have a very supportive wife and she said that because my passion was with small and medium sized businesses that I should go out on my own. And so she gave me the freedom to go out and fund the business group. We did that in 2012. It was specifically to be able to work on commercial transactions with small and medium sized businesses, being able to provide them with those legal services that are specialized, but at the same time, in a way that's more digestible in being able to be consumed by them, probably about 2017, it became apparent that because I was becoming so knowledgeable about the entire process of of a transaction,

00:03:51:25 - 00:04:19:20
Unknown
that there was demand on my time for non legal representation and assistance and advisory. And so, you know, obviously talking about kind of the strategy and search and then post-closing integration type things was not necessarily what you want to pay a lawyer to help you out with. So Cecil Sterling company is is more about the full service side, the kind of consulting piece beyond the law that is that correct?

00:04:19:23 - 00:04:41:24
Unknown
Yeah, 100%. So really, I have the ability to kind of take a transaction full circle, but obviously that legal part that's in the middle, which is still very important, is done by the business that everything else is handled by Cecil Sterling Company. Nice. I just want to go back to your supportive wife there. I think. Yes. Behind every successful man and all that.

00:04:41:26 - 00:05:04:20
Unknown
And I would be nowhere today without my wonderful supportive wife, Shelly. So I'm I'm very much inclined to drill down a little bit into into that. She obviously knew your passion for SMB. Could you explain, like where that passion came from and why it was so strong? Yeah, and I have to give her a little bit of extra credit as well too, because we are two days away from our anniversary.

00:05:04:20 - 00:05:41:27
Unknown
So happy anniversary when this comes out. Fabulous relations. Thank you. So it really my passion for small, medium sized business, especially here locally. There was lots of small businesses that I felt were very integral to our community and important. And so it was kind of just a a point that I liked them just naturally. Right? And then I started to kind of figure out some of the once you kind of get out in the real world, you start seeing things, you start understanding that, you know, they account for 50% of the GDP of the country.

00:05:41:30 - 00:06:08:05
Unknown
They are where most of the new jobs are created is in the S&P. So they're the ones who are sponsoring, you know, the local little league teams and the kids, and they're helping out with the church. And so it was really kind of in that vein of of seeing that they are so important to us as a society, but yet they often get overlooked because everybody wants to be doing, you know, the billion dollar deal.

00:06:08:05 - 00:06:26:22
Unknown
They don't want to be working on the million dollar deal. But at the same time, those deals are very important because if, you know, if a small business goes under or it just disappears because the owner can't find somebody to take over, it leaves. And that's that's something that the community loses. And we have to figure out how to replace them.

00:06:26:22 - 00:06:47:29
Unknown
We all know the failure of start ups. So somebody new trying to come in and fill those shoes isn't necessarily a guarantee. So yeah, it was really that's really where that passion came from, was to be able to help contribute to not only the local economy, but then obviously everyone, everyone across the world has their own local economy that those small business, small, medium sized businesses are really important, too.

00:06:48:06 - 00:07:14:13
Unknown
sure thing. They are the lifeblood, the sort of pillars of the community, as you rightly say, and many jobs are dependent on them. And they don't get the press they deserve largely because they often can't afford to lobby for it. So, you know, money goes to money and all that. So if we can, Andrew, I'd love to just get into something that you said to me in the prequel, which I touched on in our introduction there about the unknown.

00:07:14:13 - 00:07:35:11
Unknown
You said to me that your passion is helping clients to defeat the unknown in their transactions. What does that mean in practice and how did you come to that philosophy? Yeah, so one of the big things with whether your buy side or sell side is you don't want to screw it up, right? That's your biggest fear is you're just worried about screwing it up.

00:07:35:11 - 00:07:55:08
Unknown
And it's one of these things that especially when it comes to commercial transactions that are small business owners, medium sized businesses, they don't do, you know, dozens and dozens of these throughout their career. So that that unknown that that what could happen and it continually popped up it was kind of a theme of like well we don't know what's going to happen here.

00:07:55:08 - 00:08:28:25
Unknown
We don't know this is here, we don't know. And so really there was kind of this villain throughout it of going, okay, well, we need to expose the unknown and be able to allow our clients to understand what they're battling and then how to shine the light on that to defeat that. And so really, that's kind of like, again, when we're going in there, we want to build to expose the unknown for both sides so everybody can feel as confident as possible with transactions going to work out the way that they expect it to is how achievable is that, though, kind of discovering all of the unknown unknowns not to go too?

00:08:28:25 - 00:08:46:06
Unknown
Rumsfeld Ian, Yeah, well, and it's a good point that it's one of those things that there's always going to be unknown in there. And so we really like to be able to narrow it down as much as possible. I mean, you could go to the other extreme and say, well, there's always going to be unknown, so what does it matter if we expose any of that?

00:08:46:06 - 00:09:10:08
Unknown
But at the same time, if we can knock out 99.9% of it, that leaves a very small window where something could go wrong. And so, yeah, there's always going to be black swan type events. There's always going to be things that neither party really anticipated or could known as possible that come up. But at the same time, if we can take out as much of that as we can, and really the only way that you know of those where the unknown hides is, is through experience.

00:09:10:08 - 00:09:24:05
Unknown
And so that's really trying to be the guide to our clients to be able to, again, be the heroes of their own story, To be able to help them out in providing them is to expose that. Okay, we need to look in here. We need to look under this part. We need to check in here. We need to make sure that this doesn't happen.

00:09:24:05 - 00:09:42:23
Unknown
We need to have language in our contracts that covers this just in case that happens. And so really, that's what we're trying to do, is to be able to take it up that way and a pretty exhaustive due diligence checklist as well, I should imagine. I mean, that's that's normally the thing that comes with experience is shit, I didn't ask for that last time, so next time I'm going to ask for it.

00:09:42:25 - 00:10:12:16
Unknown
Right. I assume that's part of the playbook. Is it that you just here's the stuff you need to make sure you're on top of? Yeah, there's and it's there's even more to it than just the actual like the due diligence and those analytical type things that we're looking at because there's the unknown of just dealing with personalities and the different roles that people play in there and how they navigate, you know, you know, although the broker said this to me, well, the broker doesn't represent you as the buyer, so can we really trust what they're saying?

00:10:12:19 - 00:10:31:07
Unknown
But obviously, if you don't know, you think this guy seems nice. And so, again, understanding that whole scope of of where everything is in there and again, being able to help them see that, analyze it and then make the decision whether, you know, okay, is this a deal that fits with what we're trying to do or not because of this thing that's been exposed.

00:10:31:07 - 00:10:56:27
Unknown
Right. Got it. Yeah. It's so nuanced, isn't it? And only with experience and understanding the personalities and the psychologies can you can you help the buyer to navigate? I assume that it's largely by side representation that you're that you're doing them more more on that kind of corp dev assistance. Yeah. Yeah. I mean we both, we represent both sides of the transaction, but probably 60 to 65% of our clients are on buy side.

00:10:56:29 - 00:11:24:05
Unknown
Nice. Okay, That's good to know. And so you mentioned that transactions can often be a really powerful tool, sometimes the most powerful tool in tool kit for for entrepreneurs, you know, a lot of anybody automatically thinks that they can acquire to grow. It's it's something that I guess you grow into it's it's shoes that grow to fit. So what why do you think it's so underused?

00:11:24:05 - 00:11:45:15
Unknown
Why do you want to so few people truly leverage M&A as a strategy for growth in your experience? Yeah, I think in the SMB market, it's it's twofold. The first being that it's it's a lot to do with the lack of knowledge. You know, often when we think somebody very talked about the press, you know, the the headlines in the press are all about the big business, the big corpse.

00:11:45:15 - 00:12:05:19
Unknown
And so they think, well, acquisitions, that's something that Google does. That's something that Tesla does. That's not something that, you know, Main Street business owner does, right? So they just automatically put that off. It's it's not even something to consider, let alone, you know, how you scale that down for them. But then it comes back again to that that fear of screwing it up.

00:12:05:19 - 00:12:34:17
Unknown
Right of okay, well, it's really cool that Andrew says that I could double the size of my business with one transaction, but if I screw it up, then I mean, a million millions of dollars in debt and not doubling the size of my business and that's just way too big of a risk. So I'd rather shoot for my, you know, 5 to 10% growth annually and probably not hit it, but I'm okay with that because at least I'm not millions of dollars in debt and screwing it up in front of everybody, right?

00:12:34:20 - 00:12:57:12
Unknown
Yeah. But they'll happily punt in a $60,000 into a trade fair or, you know, $75,000 into a huge LinkedIn and AdWords marketing campaign. I mean, it just it does make, I believe, sometimes like the punch line is treated as a priority to actually going from cash to assets and and doing a balance sheet transaction of, you know, properly leveraging a company and buying buying growth.

00:12:57:15 - 00:13:25:11
Unknown
But yeah, like I say, until you've done it, it isn't obvious, you know, is it. Right. Yeah. No it's one of those things that Yeah. Once you see somebody who gets it and understands how to do it, all of a sudden it does become a priority. And that's, you know, I've got lots of clients that it seems because they're like, you know, we're going to be contacting in six months because we're we look at looking at new opportunities because they just they know the power of that to be able to get them again.

00:13:25:14 - 00:13:46:09
Unknown
I think everybody kind of wants that control and freedom of, you know, whether that's financial freedom, freedom over their time, freedom over what they do, whatever that that definition of freedom is to you. But people see that. And I think that once you get a taste of the transactions, people can see, I can accelerate to that point to where I can have a business, to where now I don't have to wear eight different hats.

00:13:46:09 - 00:14:05:24
Unknown
I can just be the CEO, I can just focus on engineering or whatever it might be that you want to do inside the business. And also they see that like, yeah, this, this is powerful, let's do it is definitely a path, I think like an ascension almost, where you've gone from kind of like I'm an operative, I'm a manager, okay, I'm a team leader.

00:14:05:33 - 00:14:26:09
Unknown
now I'm an owner and I, you know, you kind of go up this kind of ladder of of of, I guess, responsibility, comfort, familiarity with, with, with the task and, you know, seeing behind the veil, if you like, as to as to how business is really done as an asset owner in a capital allocator rather than an operator in the truest sense.

00:14:26:09 - 00:14:48:25
Unknown
So I think part of that enlightenment journey is also like the right playbook for you because everybody gets fixated on getting the deal done. But you know, often the value in the retention of the business and whether you can actually get a return on your investment is always going to come from from what you do with it. Once you've got it, once you once you've earned it.

00:14:48:28 - 00:15:07:08
Unknown
And I'm to think, why do people so so many people under think that? And that's a great question. I think it is that hyper focused on on the closing right You kind of you put the blinders on and you get so focused on getting to that finish line that you start to lose sight of what that larger goal is.

00:15:07:08 - 00:15:25:26
Unknown
Right. You know, that's one of the things that I often talk about with new buyers is taking the time to plan upfront of, you know, what is the finish? You know, what's that post closing? What does that look like? We put, you know, this is your new business or we've put these two businesses together. What does that look like in your mind?

00:15:25:26 - 00:15:44:19
Unknown
Because that is such an important filter throughout the process. And then to be able to go back to it and remind yourself that, okay, you know, maybe it is better to not do this deal because it's starting to veer away from the vision that I had and what I wanted. And because that's where you get into trouble, right?

00:15:44:19 - 00:16:00:12
Unknown
Is you close. And also you look up and you're like, This isn't the situation. I wanted to create this around the people I want. You know, there's just not this fit that I thought there was going to be. And then you're into that battle of figuring out, like you said, how how am I going to not lose all this money?

00:16:00:12 - 00:16:22:19
Unknown
How am I going to make this work? And that can often, you know, even if you can make it work, it can delay all that progress that we were trying to accelerate. It can delay it years as you try to replace people and replace systems and do all that stuff. And so, again, I think it's that, you know, the I was I was in a in a previous life, I was much more focused on the clothes.

00:16:22:19 - 00:16:41:07
Unknown
And I remember I actually had a password from one of my accounts was always be closing. And in reality it was like I'm focused on the wrong thing because my client's goal isn't just to get to the finish line, it's what happens after the race, right? So that's what we're that's what we're trying to focus on now. Yeah, totally.

00:16:41:07 - 00:17:02:03
Unknown
That piece around making sure you adhere to the plan, the vision, and not kind of get the fever and get dragged down a road that is so, so important. I mean, I think you have to have your kind of talking heads moment that once in a lifetime lyric, you know, how did I get here? This is not my beautiful wife, you know, like right, That reality check moment.

00:17:02:06 - 00:17:39:29
Unknown
Yeah. So if, you know, you had a lot of experience, I've seen loads of deals. You've been involved in so many. If there was a recipe for for, for M&A in the round, like if it was a a pinch of this or a dash of that, like what how would you describe it? I mean, so when I go into a transaction, I guess well, to take a step back again, I already mentioned in a previous life was much more focused on, you know, the tangible aspects of the deal and kind of that like, you know, if there were some meat on the bone, I wanted to make sure my client got that meat right.

00:17:39:29 - 00:17:54:20
Unknown
We're trying to pull, you know, get those perks, get those, because who doesn't like to be that guy who, you know, gets to talk to his buddies at the bar or about, like, you know, whole, Hey, I heard this guy. He didn't know what he had, and I bought it. And then I did this and I was able to exit for, you know, ten times what I put into it.

00:17:54:20 - 00:18:21:30
Unknown
Right. And really, that's kind of the way I was. I was going through my early career and then I had a transaction that was a very friendly deal. My client was the seller in the situation, and really he was he was selling it to a friend of his. They had been friends for ten plus years. And the deal was was really, you know, again, it was really easy as things came together.

00:18:21:30 - 00:18:47:28
Unknown
They were really but there was one point in the transaction I remember we were sitting down with my client, we were reviewing the transition services agreement and in the transition service agreement, there was a line that said that for the entire year my client would be providing 40 hours of services per week. And again, my attorney, Brian, was like, you know, we should be able to stagger this down so you can retire and fade out like you want and we can control this.

00:18:47:28 - 00:19:13:16
Unknown
So you're not going to be spending, you know, an eight hour day when you're on day 365 of this agreement. And he said to me, and I'll never forget that, Andrew, I'm not worried about the 40 hours. I'm going to work my butt off. So much over the course of this next year, I'm going to sell so much of this product that there is no way that this buyer isn't going to be successful with this.

00:19:13:17 - 00:19:33:02
Unknown
This set him up. So the and it hit me right there that these are this is a buyer and the seller that are almost looking out for each other. Yeah. In almost like they're the biggest advocate for each other and it was like all the sudden they had this new like there's the pinnacle of what a good deal looks like.

00:19:33:05 - 00:19:58:07
Unknown
And, and so obviously it's really difficult to have, you know, you're not going to have ten plus year relationship with your best buddy is on the other side of the table. But starting to look at things like, well, how do we accelerate that? How do we continue to develop trust? How do we create that scenario where the buyer and the seller both want the other one to be just as successful, just as happy with the deal?

00:19:58:09 - 00:20:24:04
Unknown
And so that's kind of my northern light when we when we're trying to guiding light of what we're trying to go for is that this is a good deal where both sides get more than what they expected out of it, Right? Yeah, I love that. Are they still friends now? Yeah, I think he actually does. I think we put together a independent contractor agreement so we could continue to do some sales along the way on the side.

00:20:24:04 - 00:20:50:17
Unknown
So. Great. Yeah. I mean, looks so few deals are predicated on friendship like that. I mean, it's wonderful if you think of a kind of normal succession strategy, If you had internal succession, it's going to be to someone you trust that you've got that rapport with, difficult to find that external to the business. And so, you know, deal structures are only a proxy for that, like that kind of mitigating the risk that the trust breaks down or that there isn't trust in the first place.

00:20:50:17 - 00:21:07:14
Unknown
So, you know, that deferred the death on the the earnout. You know, they're all there to kind of prevent the need for trust almost, which I think often a complicating factor, the you know, kills deals certainly here in the UK. You know, and I'm sure it's the same in the States, but you can correct me if I'm wrong.

00:21:07:22 - 00:21:26:04
Unknown
Lots of sellers want, you know, the optimum multiple all cash upfront. They don't want any conditions or targets to have to hit. That's just not the reality. You know that. I think as soon as you open your mind as a seller and step into the shoes of the buyer and be like, you know, actually he's putting his capital at risk or his investors capital or he's taken on a peg for, you know, a couple of million here.

00:21:26:07 - 00:21:52:27
Unknown
You know, if there was that empathy, that sort of actual collaborative, shared endeavor, then I'm sure it would actually help get the job done and get more sensible deals structured. But unfortunately, there's typically more often than not in my experience, it's kind of like we're in opposing corners. It's kind of adversarial and I never liked the lawyers, but they're there to kind of kind of go play that, if you will, and the clients.

00:21:52:27 - 00:22:17:32
Unknown
So, yeah, well, and I think that there's again, in my opinion, when it comes to to the practice of law, is it's one thing to protect your client and obviously that's a very important. But that doesn't mean that you've got to create a situation where your client has zero risk at all. I mean, like you said, right in there, there's got to be a balance of risk between the parties, just otherwise everybody's going to say, well, that's unfair.

00:22:17:32 - 00:22:35:26
Unknown
And it could go both ways. So as is when it comes to the actual practice of law, it's to be able to allow the clients to understand their situation, know what their options are, and then to be able to make that decision of, okay, I'm willing to take on this amount of risk where I'm willing to take on that amount of risk.

00:22:35:29 - 00:22:59:27
Unknown
How do we make sure that we hedge it so it doesn't extend beyond us? Okay, yeah, we can put language together and that's where like, it's one of the things that I've noticed and I'm slightly jealous and I know it's it's reversed for you guys. I'm slightly jealous. So the deals I hear about coming out of the UK and EU because they have a lot more tendency to be much more creative in kind of balancing those risks toward.

00:22:59:30 - 00:23:26:21
Unknown
Whereas here in the States, because of the SBA and those the ability to get financing through that a lot more. But it is that while buyer you take it on you take the you've got to lean on your house surrogates to right away into the sunset and be gone and it's like well what happens if I have, you know, some type of 30%, you know, client or customer all of a sudden leaves and now some cash flows dying and I'm stuck with this.

00:23:26:21 - 00:23:54:31
Unknown
You know, the seller is not coming back to save you. So it's just one of those, you know, I think you're right that there is that again where I used to be when it came to dealmaking with the you know, when you slide all the chips to my side of the table and I don't care what you get and how do we get how do we refine dealmaking to become more of that collaborative effort to making sure, like I said, that we have that seller, that who is saying, you know, I do want to see you be successful.

00:23:54:31 - 00:24:15:00
Unknown
I do want to see my my company continue. I do want to see my employees be taking care of my community, stating stay taking care of and how do we make sure we put together a deal that actually aligns with that. And it may have SBA a 90% financing type of a deal, but again, it's make sure that it works for both sides, right?

00:24:15:03 - 00:24:53:20
Unknown
Yeah, absolutely. I mean, deals don't they aren't successful if they don't work for each side. But just to that risk appetite there, I think we're both enviously looking over the pond at the other side, thinking the grass is greener because, yes, perhaps there is there is a bit more shared risk appetite here. But I think we've we've kind of stumbled on a microcosmic example of why America is you're doing more deals and and why there is a exponentially greater amount of deal kind of closure and success in the states than there is in the in the UK and EU, where we're kind of, you know, known for being a bit more risk averse.

00:24:53:22 - 00:25:27:13
Unknown
And that translates through the commercial financing stack where there isn't the kind of highly government underwritten 90% LTV deals that you guys have with the SBA. And it just it just doesn't exist here in any usable format. But but also like the appetite for going and taking a PG and putting your house on the line and, you know, there's a lot fewer kind of bullish, you know, risk on people entrepreneurs in in Europe, it seems.

00:25:27:13 - 00:25:50:08
Unknown
I mean you know you hear I'm I love meeting and speaking with and listening to the stories of, you know, real risk on entrepreneurs that put everything on the line. You know, they went all in. Yeah. And and frequently they're in the States and they're less I'm going out on a limb here but sorry Europe where we're all, you know, a little bit too comfy cozy.

00:25:50:11 - 00:26:09:29
Unknown
Well, I mean, to be fair. So I graduated from Michigan State with a degree in history. So this is something that I do kind of like that you do have to keep in mind that everybody who was very entrepreneurial was the folks who jumped on boats to come over here to the US, to the country. It wasn't the folks who were like, Damn happy with where everything's going.

00:26:09:29 - 00:26:28:03
Unknown
I'm this is I'm content here and in the UK they were the ones who came over here and obviously that that brought in. And again it's funny because I think that that's a lot of the reason why a lot of our startups in that type of community is out in in California now, again getting west. They just kept heading west.

00:26:28:03 - 00:26:58:19
Unknown
And so that was those entrepreneurs just kept moving along, right? Yeah. Here, here. Yeah. The gold rush continues. Right. And probably why the gold is at an all time high in anyway. So let's let's, let's just drill down a little bit more into this kind of like trying to achieve that North Star, trying to get to that that fair balance because you know, there is the analytical side, there's the legal side and due diligence, and then there's the softer human factors that often can be the bits that really make or break the deal.

00:26:58:22 - 00:27:29:02
Unknown
How do you how do you devote your time? Where do you put your focus? How do you balance those those opposing forces almost, that need to live in harmony? Yeah, And that's it's difficult. It's difficult at times. And oftentimes I have to keep reminding myself, but that's kind of those you know, it's it's good communication and it's good, you know, reminders to yourself as well, because it's it's often not new information that we need, but it's the reminder of what what that is.

00:27:29:02 - 00:27:55:18
Unknown
And so it's very easy for me to slip into that. You know, here's my 253 point checklist of do diligence that we need to get through. And if something is slightly off, you know, we're we're killing the deal. You know, it's no way we can do it. But it's also, again, to take a step back and remember that, again, we're dealing with people because at the end of day, even even in bigger businesses, it's people.

00:27:55:21 - 00:28:15:14
Unknown
There's employees or customers, there's vendors, there's all these people who rely on it. Again, going to the community as a large to as a third party beneficiary, there's always people involved and they have their own motivations and their own feelings and thoughts. And so to be able to again understand and again so again, trying to get to that good deal.

00:28:15:17 - 00:28:33:33
Unknown
Okay. Well, you know, Gareth wants to be the speaker who wants to sell this company to me. Well, okay, What is what does a good deal look like for him? Is it something that aligns with what I think is a good deal? Okay, now we're on the same page. We're going forward. Obviously, the box is still going to be checked on the analytical side.

00:28:34:01 - 00:28:58:21
Unknown
But again, we're we're kind of leading a little bit more in making sure that we don't forget that this for me personally, I've I've met other other buyers who are much more focused on the people. I've I've got a friend out East who he doesn't care about the financial he doesn't care about the details. He's like, as long as there's people involved with customers and employees that I know how to deliver value because I can grow it, because I don't I don't care about any of the other stuff.

00:28:58:21 - 00:29:18:17
Unknown
It could be making negative money right now, and I'm confident I can turn it around. Like, okay, what if it was making money? What if it was strong? Well, then I could probably do a lot more. Okay, well, then why don't we love that confidence, though? That's. That's also, you know, I don't care, but I've got to work with I'll make it work.

00:29:18:17 - 00:29:48:14
Unknown
And I think that's great. But yeah, what I really am getting from this is that, you know, you're encouraging people to do deals with empathy, to to understand each other, to to meet them halfway. And that's, that's actually quite unique, quite groundbreaking, because that's not been my experience. I've done, what, nine, ten deals? And they have always been kind of like certainly when it's done one step removed through the lawyers, it's been, this is what I want, I get what you want, but this is what I want.

00:29:48:21 - 00:30:04:18
Unknown
And actually it takes the two parties normally to come together and be like, okay, look, let's just work this out. Yeah. Because the lawyers don't feel they got permission often. And it's a sort of compromise in that way, in that way. But you're leading with compromise. You're being like, okay, look, let's think about what the other side needs to get this deal done and make it a success.

00:30:04:24 - 00:30:29:15
Unknown
Mutual success. I love that. Yeah, Well, and again, that goes towards that that story of trying to create that partnership because you hear a lot of the time, especially when you talk the talking heads where they talk about kind of getting almost a little bit too cute, like, well, there's this place where you can do this and this and this and this also, and you flip it and it's like, Well, yeah, but you're essentially trying to take advantage of of a seller who doesn't know what they're doing.

00:30:29:21 - 00:30:52:31
Unknown
Like if they had half a mind to go out and talk to somebody like myself, I would tell them, no, you're selling your you know, you're selling your business. That should be valued at, you know, $3 million for a million. Like, let's talk about that. So again, it's one of those like, well, what happens if you sit down with your and you say, okay, I understand you want $1,000,000 for your $3 million business and I'll happily buy it for that.

00:30:53:00 - 00:31:13:08
Unknown
But let's talk about how valuations work, because even if you get that seller to close, there's always the post-closing risk. I mean, there's nothing nothing worse than a scorned lover. While there's nothing worse in a deal than a scorned seller who, you know, is sitting at the golf club bragging to his buddy about how he sold his business for a million bucks.

00:31:13:08 - 00:31:33:25
Unknown
And his buddies said, Well, he should have gotten at least three for it. All of a sudden. Now you've got somebody who you know, everything from, you know, kind of just being a pain your butt to straight up going, okay, well, I'm going to breach my non-compete agreement and start stealing your customers and your employees and yeah, maybe I'll lose.

00:31:33:25 - 00:31:59:12
Unknown
But at the end of the day, you will too. And it's like, well, you don't want that. So it's one of those it almost can swing the opposite way if, if you're trying to again, take advantage of the situation as opposed to again, coming to the middle and saying, okay, you let's look, let's make sure we're on the same page and that we're doing the same deal and that it works out the way that we both you know, that we both expect, if not better than we expect.

00:31:59:14 - 00:32:15:31
Unknown
I think, you know, seller's remorse is real. You want to you want to manage that, that post deal risk. You want strong advocates on every side. You want the seller to go out. And actually, if they meet their former clients who often they tend to have still social relationships or whatever, they're they're saying this guy's a great guy.

00:32:15:31 - 00:32:37:25
Unknown
He's going to take the place is on to new new heights rather than, my God, what a shyster. You know? Yeah, everybody screwed me and I'll probably screw, you know? So it sometimes it's worth coming up with, you know, more creative deal structure. The, you know, gives the seller that comfort that they actually got a fair price but still manages the downside risk for the for the buyer.

00:32:37:25 - 00:32:59:11
Unknown
I think it's important that both sides get good advisors right And that's what we're really saying here is go get go speak to somebody that knows what they're doing. I got your back. Yeah. Yeah. It's it's, it's, it's it's interesting because often you'll say that small or medium sized businesses are often much more flexible and able to maneuver and be much more creative in what they do.

00:32:59:13 - 00:33:18:30
Unknown
But it's almost like when you look at those larger deals, those larger companies are doing much more creative and much more flexible type transactions than, again, you're seeing in that smaller market where a lot of again, a lot of the talking heads are pushing the, you know, debt free, cash free SBA here in the States. That's what they're pushing.

00:33:18:30 - 00:33:35:11
Unknown
Is this just yeah, this is the way we do it. Yeah, this is the way we do deals. And it's like, well, no, there's lots of ways we can do deals and there's lots of tools in our toolbox in saying that there's only one way basically says you're, you know, you've got a 250 piece toolset and you're going to use just the hammer.

00:33:35:11 - 00:34:00:13
Unknown
And this one screwdriver and screw the other 248 pieces. Yeah, you're right. Although the talking heads are forever coming up with more inventive ways. You know, I had an annuity purchase, the annuity acquisition the other day, where it just continues to pay the seller, you know, for 1015 years based on what they wanted. And it's kind of like a mitigator for the the crazy multiple.

00:34:00:13 - 00:34:17:00
Unknown
That may be some sellers who are valuing it on the blood, sweat and years rather than the actual multiples that are paid in the market. But you know, you're mitigating for that as a buyer by saying, sure, I can give you that price. Just it's going to be over ten years and you hope that within five years you, you know, you've inflated it away to next to nothing for growth.

00:34:17:02 - 00:34:40:16
Unknown
Right? Right. Yeah. Representing buyers. That's what you just said. There is one of the issues that they often will into is is is trying to buy for that future performance and then what happens when that growth isn't there. And so it's like, okay, well there's like you said, there's ways that we can put deal terms together where if that growth doesn't hit, then you're not paying the absurd multiple.

00:34:40:16 - 00:35:01:08
Unknown
Whereas if you've paid it at the time of closing the, bank doesn't care, the bank isn't going to be. But often, you know, you can't really raise the finance it from a commercial finance like loan perspective on a crazy multiple. Right? You know the DCR the how how affordable is this loan thing And you can you know banks aren't going to lend on the basis hey, I'm going to double this business.

00:35:01:15 - 00:35:21:20
Unknown
No, no, no. We're going to bet we're going to be on what it's done, not what you think you can do with it. So, yeah, interesting. Just got on the talking Heads thing. Like, you know, I think we've both seen the interest in SMB acquisition, you know, roll up to the new start ups. There's so much new blood coming in to do SMB acquisition.

00:35:21:26 - 00:35:46:20
Unknown
And I think that, you know, the proof of the influence is to some extent and, you know, there is a lot of and obviously now we've got business schools that are pushing people down this road more than they were before, which is all good. But with that comes from misinformation. Some hype, some mistakes. What are one of the common kind of landmines that you're seeing these, you know, these freshly minted acquisition entrepreneurs treading on when they're doing their first deals?

00:35:46:20 - 00:36:26:27
Unknown
What are they coming in with? Misconceptions that they may have been that they may have had from their journey? That's far. Yeah, I think it is the the biggest mistake is believing that the two way course that you took from the influencer puts you on par with who's been doing this for two plus decades. It just is. There's so many things and so many nuances and so many aspects, so many different situations that the only way that you the only way that you are able to know them and understand how to navigate them is through experience, is through the actual doing.

00:36:26:27 - 00:36:42:04
Unknown
And so just because you took a course and you got the basics down and then you jump into the market and think, okay, it's going to be easy because they said, you know, just go knock on one of the local businesses door and tell them that you want to buy it for no money down on it. They're so burnt out and tired.

00:36:42:04 - 00:36:58:11
Unknown
But of course they're going to sign whatever you want. And other than that, and it's like, no, it's not. It's it's going to be a lot of work. It's going to be having to deal with people that's going to be able to understand financials. It's going to be all these things that, you know, especially the small businesses like no, no to look identical.

00:36:58:14 - 00:37:21:00
Unknown
So it's one of those, you know, you you going in thinking that you've got the playbook because, again, you took a course or you follow somebody on like, you know, I push out a lot of content that's trying to be educational in nature. But I would even tell any of anybody who follows me like you, you're getting a little bit a little bit of that.

00:37:21:00 - 00:37:38:15
Unknown
And until you get in there and you've done the reps and you've done the reps and you've done the reps, you're just you're just not going to know it until you've done. And that's, you know that I'd say that that's probably what a lot of make up bigger than the biggest mistakes. Yeah, yeah. Sound advice that this, this shit ain't easy.

00:37:38:17 - 00:38:01:07
Unknown
If it was easy, we would have done it and you know, that would have been the norm, right? So, but I think you've said previously that no single part of M&A is especially complicated, but in the round, because of all the moving parts, the process is complex. So those folks that are coming out of these two week courses and, you know, maybe have got a deal under under Eloy and are now engaging guys like you to to do them.

00:38:01:16 - 00:38:28:27
Unknown
What would you say is kind of like the smartest way for these newcomers to manage and navigate that complexity? I'd say it's really to work with somebody who who has the experience that they could get. It's you're almost in a position where, you know, you're you're Luke Skywalker and you've heard about this thing called the force. Well, you need Yoda to teach you how to harness it, how to use it, what it looks like, and then you can go from there.

00:38:28:27 - 00:38:46:15
Unknown
But you need Yoda. You need that experience that that, that, that again, can help you and make sure that you're not missing something because it is it's like we've already said here, it's easy to focus here on the financials and this and this. And also you're like, nobody said, hey, have you taken a look at the management team?

00:38:46:18 - 00:39:12:12
Unknown
You know, are they actually what they are expecting the management team to be able to do and handle? Because, Well, we got through all the financials. They looked great. Let's buy it again. You forgot this again. That's where that it's not just one part. It's all of them combined into one big thing. And it's really hard without that experience to be able to keep all of them straight and understand, you know, how they all kind of fit together and see that bigger picture.

00:39:12:15 - 00:39:32:21
Unknown
Yeah. So I guess the moral of the story is assemble a competent deal team. You must or fail. You will. Yes. So on that topic, you know how what kind of deal team do these guys and girls want to be putting together? You know, what is the right girl team for? For an Etta kind of X and B acquisition?

00:39:32:23 - 00:40:03:02
Unknown
Yeah, that's a great question. My advice often is to treat it like a like partnerships, right? You know, ensuring that there's that alignment. Do they have the experience to fit with what you're doing? It's speaking from a we'll use the attorneys will tell us under the boss, the attorney that's used to doing, you know, billion dollar airline mergers is probably not the guy to do your seven and a half million dollar acquisition of a local manufacturing company.

00:40:03:05 - 00:40:19:15
Unknown
It's just those are you know yes there's a lot of crossover but at the same time he's really used to doing this type of a deal with this. You know, there's this process and everything might not scale down the way that you think it's going to. If you've got incredible resumé, it just isn't necessarily a fit with what you're trying to do.

00:40:19:18 - 00:40:40:04
Unknown
You know, do they complement, you know, where you're at? Do they have that ability to fill in the gaps where, you know, okay, I'm really against using my one body artist who is really into the people. He needs somebody on his deal team that's very detail focused, right? You need somebody who can bring in bring in that area of it in to complement his people aspects of it.

00:40:40:06 - 00:41:00:10
Unknown
And then yeah it's it's at the end of day two you've got to get along right like these are people that you know, you're spending, you know, multiple hours a day. You don't want to have that, you know, God, I've got to call Gareth and I don't he's just going to talk about, you know, football and it's you don't want to deal with that guy.

00:41:00:10 - 00:41:23:18
Unknown
So it's like, well, is that really the guy that you want to be on your deal team? But yeah, you're driving the car. So there's got to be, you know, kind of all those elements in. So yeah, yeah. Take the time, get to know who you're hiring before you do that to ensure that yes, they've got that experience, they complement your skills and yeah, you can get along with them at least in the context that you have to.

00:41:23:20 - 00:41:42:14
Unknown
Nice. And you've really got my number there. I mean, I'll talk anybody's ear off about Chelsea if they'll let me. So pleased that you picked that to pick that up. So before, just as we round out the episode, I'd love to just dig a bit more into the business little group and. And your new firm, CSA. I'd love to.

00:41:42:14 - 00:42:05:20
Unknown
Or your more recent firm. I'd love to understand what your biggest professional challenge is being in building your firms and what you've learned along the way, because you've chosen to go the 0 to 1 route twice and build these firms. So what's that? What's the learning? Yeah, the probably the biggest learning has been how to deal with the loneliness.

00:42:05:22 - 00:42:27:12
Unknown
And obviously that hit an all time high for a lot of leaders, A lot of folks in my position and a lot of folks are going like so CEOs and business owners during cold. It was just the, you know, how do I navigate this? There's just this, you know, again, to go back to the unknown and those situations, you know, we're just trying to do the best we can with what the information is.

00:42:27:12 - 00:42:52:05
Unknown
And it's not like we can go to our employees. It's not like we can feel like we can go out to our customers and tell them, like, I'm really struggling to figure this out and resolve this. And so it was really trying to figure out again how to put, you know, people around me that were in similar type positions and that could be sounding boards and trusted advisers or mentors to be able to kind of help.

00:42:52:08 - 00:43:17:15
Unknown
And I'd say that if I could go back in time to that 2012 version of myself, that would have been what I would have to push myself to do is to to find somebody earlier in the process that, again, could kind of help, you know, to be my Yoda at that time and again. So I didn't necessarily feel so alone at times and have to deal with that stress and anxiety.

00:43:17:17 - 00:43:47:16
Unknown
But you're point now at a point now where you've got, you know, a community of people with you, you know, on this journey and you know, you've got quite a unique approach because you've got the law element and then you've got the the consulting piece. How do you manage to keep yourself and your teams aligned with with that core mission that North Star you spoke about, But, you know, balance the legal and the dealmaking side of of the businesses and that that's that seems like a unique challenge how do you manage it.

00:43:47:18 - 00:44:14:30
Unknown
Yeah it's and I think a lot of businesses, you know have to try to figure out how to navigate this. And that's where I think the traction And Geno Wickman in the iOS model does a really good job of kind of saying follow the system and it'll work. And a lot of people will look at that and say, Well, it's just repeating the same messages over and over and over again.

00:44:14:30 - 00:44:33:28
Unknown
You know, we step in and what's our mission? What's it like? I said, we're doing those types of communications. But it goes back to that, you know, what is good communication and I already mentioned earlier that again, a lot of the time it's not a need for new information, but it's just that reminder of, okay, are we doing this?

00:44:33:29 - 00:44:55:26
Unknown
Are we actually looking at these things? And so, again, having regular conversations and then bringing this up, obviously, like I said, I put I love stuff on LinkedIn that's educational and in this vein. So a lot the people who are in my community and my network are seeing it on a regular basis. And it is that that reminder of, you know, okay, we want to do good deals.

00:44:55:28 - 00:45:24:30
Unknown
You know, let's focus on making sure we're hitting that that North Star, that rock or whatever it is. Yeah. I mean, it's not another advocate for us. I think it's a great, you know, paradigm and playbook to bring post deal after a fashion not day one but you know when you can when you've won the hearts and minds that ownership that it encourages that you know the collective problem solving and doing the reps of like you know we all going to be every week and we all going to have our level ten and we all going to, you know, we are going to focus on these rocks and reset these papers and hold each other

00:45:24:30 - 00:45:47:22
Unknown
accountable. It's beautiful. It's how business should be done, I think. But in a it without making it too, too procedural, I guess. Yeah. So, yeah. Great, great insight. Thank you so much. So let's look at Cecil Sterling and CO and I guess the business law group, if we had to check back with you in 12 months time, what are your goals?

00:45:47:22 - 00:46:20:16
Unknown
What would you like to be able to celebrate and achieve in that intervening period? In the it's a great question. Probably I'd say $1,000,000,000. We could do $1,000,000,000 of transactions this year. It's it's aggressive for where we're at. But at the same time, if if we hit that number, I would I'd be a static and it'd be easier if we did again, if we did $1 billion deal that be.

00:46:20:18 - 00:46:39:20
Unknown
But that's not all built for, you know, 99% of our transactions are sub 25 million. So we've got to do a pretty good volume of transactions to get up to that that billion dollars. But if we could, if we could hit that number, it'd be, it'd be a good year. Yeah. Wouldn't it. When you said a billion. I thought it was fees.

00:46:39:20 - 00:47:06:19
Unknown
I'm like wow, well I'll be the one leader that I mean like retiring this year. Absolutely. Okay. Billion Dollars have combined every in the deal. That would be a nice milestone. Yeah. Although you've picked the section, the segment of the market as you say, where that makes that more difficult. But you're doing it for the love, right? You're doing it for the for the impact.

00:47:06:22 - 00:47:41:23
Unknown
Q And how do people reach you? I mean, business dot com as one of your websites, but I think you've got a few other domains. You want to throw them out there so we can put them in the show notes. Yeah. There's C sterling dot com is is where both those are as you'd expect website LinkedIn is is the best place to connect with me I'm regularly regularly posting information on there but I'm I'm active obviously on there so the DMS and able to chat through there is really the best to get a hold of me is the quickest way.

00:47:41:26 - 00:48:01:26
Unknown
Yeah I understand. And look, you're so generous, so generous with your time and such a great contributor to the space. I would just ask anybody that does reach out to Andre to be respectful that he's got a couple of full time jobs to do alongside that. So, you know, be succinct in what you're looking for and respectful. But Andrew, thank you so much.

00:48:01:32 - 00:48:26:27
Unknown
Any parting thoughts or any, you know, nuggets of wisdom you want in addition to the ones you've already shared that you want to leave the listeners with before we sign up? Yeah, I just I love this space so much. There's just so much that we can do and such a huge impact that we can have. And I think if again, if you go in with that right approach and you do it the right way, it's just great things can happen.

00:48:26:27 - 00:48:48:13
Unknown
So I really encourage anybody who is interested to just to dive in and learn and reach out to to groups like like you guys have reached out to myself and all the other groups just explode space and to till you kind of find who, who and where you fit and then go do deals. Go do deals. Love it.

00:48:48:16 - 00:49:07:00
Unknown
Andrew, thank you so much. I would say if there's one takeaway from today's episode, it's the M&A isn't just about legal documents and financials, it's about the people. The relationships doing that groundwork to ensure that every deal is built to last built on trust. So thanks so much for sharing that with us today. I think it's a poignant thing to be taking away.

00:49:07:02 - 00:49:26:16
Unknown
And thanks, listeners, for tuning in to the Amazing. If you enjoyed this episode, please make sure to follow us and subscribe if you can. It puts up our follow account and we'll be able to continue bringing you bigger and better episodes. So please share it with anyone exploring entrepreneurship through acquisition. We love our audience and thanks for your advocacy.

00:49:26:18 - 00:49:44:05
Unknown
And so next time, keep learning, keep making deals that matter, and keep on punching by for now.