The Deal Board Andy Cagnetta & Jessica Fialkovich

Andy and Jessica are starting with this episode a series of shows dedicated to outlining all the major aspects you need to know when buying a business. The current market belongs to the buyers while the U.S. slowly moves out of the COVID-19 pandemic. Stay tuned, since the following episodes will include a combination of different interviews that were done during almost two years of podcasts. This series includes timeless advice for business buyers seeking great advice, resources, and tactics.
 
Listing of the week: Chris Redmond (Central Florida). Restaurant in business since 1976, located in Orlando. One-and-a-half-acre property and business are for sale for $2.3 million. An iconic Orlando location. Great for national franchise or developer. Call Chris at (321) 299-6867 or email chrisredmond@tworld.com
 
Key takeaways:
[5:50] Why downtimes can be the best times to buy a business.
[8:00] Owning your business is more secure than having a job.
[10:21] Reasons why now is the best time to buy a business.
[11:17] Take advantage of the current flexibility on deal terms.
[12:16] Buyers can dictate the terms of the deal.
[13:22] Acquisition opportunities are really good deals for banks through the SBA program.
[15:30] SBA is waving all payments on 7(a) microloans and 504 SBA loans that are generated before now until September 27th, 2020.
[19:35] Baby Boomer businesses are entering the market.
[21:19] Your home equity should be intact.
[22:46] The pandemic opened a huge opportunity for synergistic or strategic buyers.
[23:12] Take advantage of the reduced competition and the possibility of increasing your market share as a business owner.
[26:15] There will be commercial real state space.
[28:43] Uncertainty can be good for business, risk-takers will take the lead.
[31:45] Listing of the week: Chris Redmond (Central Florida). Restaurant in business since 1976, located in Orlando. One-and-a-half-acre property and business are for sale for $2.3 million. An iconic Orlando location. Great for national franchise or developer.
[34:22] 11 different ways to minimize the risk of buying a business.
[34:50] 1. You are going to need a good attorney.
[38:36] 2. Hire a good business accountant.
[41:05] 3. Do your homework!
[42:35] 4. Tuck the money away: Reserve money for the first year in business.
[44:44] 5. It takes work to buy a business.
[46:41] 6. Use a business broker.
[49:30] 7. Have money on escrow or on a seller’s note to take care of all liabilities.
[51:18] 8. Don’t make any changes in the business for at least six months.
[53:41] 9. Insurance.
[56:05] 10. Buy a business with good systems in place.
[57:55] 11. Relationship with the seller post-transaction.
[1:02:08] Carey Davis (New York City), when a buyer finds a broker: buy-side agreement.
[1:06:34] Advice for buyers from Transworld Business Advisors’ experts.
[1:10:05] Deal of the week: Michael Shea talks about how he sold a 50-year-old sign manufacturer located in Orlando during COVID-19 times.
[1:13:50] Trent Dailey, CEO and President of Insurance Managing Group, talks about how he grew his business through acquisition.
[1:17:41] Trent Dailey shares how to ease the post-transaction period after acquiring a business to grow your business.
[1:19:43] Trent Dailey gives advice to entrepreneurs who want to grow through acquisition.
 
Mentioned in this Episode:
The Deal Board Podcast
United Franchise Group
Transworld Business Advisors
Transworld on Linkedin
Transworld on Facebook
Call us — (888) 711-9018
Email us thedealboard@tworld.com
Call Chris Redmond at (321) 299-6867 or email chrisredmond@tworld.com
Call Michael Shea at (321) 287-0349 or email mike@tworld.com
Email Trent Dailey at trent@insmgt.com 

Andy and Jessica welcome you to another live episode of The Deal Board Podcast. This episode is focused on larger transactions and mergers and acquisitions in regard to the buyer and the seller’s sides. Peter Berg and Sunil Shenoy, two of the top experts of Transworld Business Advisors in the Mergers and Acquisitions department share their acknowledge and experience in the matter.
 
Listing of the week: Albert Fialkovich (Colorado). Niche manufacturing business in Colorado. Agricultural industry. The company has been in business for over 50 years. $3 million in sales. Earnings over $1 million. Great opportunity to expand. Asking price: $5 million. Call Albert at (720) 370-6699 or email albert@tworld.com
 
Key takeaways:
[3:53]  Has the M&A activity slowed since the strike of COVID-19?
[6:49] People are looking for private equity groups as well as family offices.
[8:38] This is not a new normal.
[9:06] Will survivors get a higher multiple?
[12:55] The changes in the lending environment.
[15:04] It is definitely not a seller’s market when it comes to funding.
[15:56] PPP loans created a huge amount of work for the lenders.
[17:30] Are newer private groups in a better place?
[19:38] It is a good time for sellers.
[20:28] Timelines now compared to the previous ones.
[23:23] Sunil shares the detail of his most recent deal.
[26:00] COVID-19 has caused a pause in construction.
[27:40] Sunil talks about the current deal dynamics on the buy-side.
[30:42] PPP loans require a lot of diligence.
[31:33] Who wins: buyers or sellers?
[36:53] What are the metrics and factors lenders are looking for?
[39:05] General structure of earnouts in times of COVID-19.
[42:08] Owners’ compensations for deals in the private equity zone.
[43:10] The buyers market during the pandemic.
[45:20] What kinds of businesses are being looked out for outright purchases?
[48:27] EBITDA after COVID-19.
[54:45] Deal of the week: Sunil Shenoy (M&A division). One of the largest Christmas tree farms. A resilient business that has been operating for over 40 years. A challenging deal that took over a year. The biggest deal in Transworld Business Advisors history.
[1:07:35] Listing of the week: Albert Fialkovich (Colorado). Niche manufacturing business in Colorado. Agricultural industry. The company has been in business for over 50 years. $3 million in sales. Earnings over $1 million. Asking price: $5 million.
 
Mentioned in this Episode:
The Deal Board Podcast
United Franchise Group
Transworld Business Advisors
Transworld on Linkedin
Transworld on Facebook
Call us — (888) 711-9018
Email us thedealboard@tworld.com
Contact Sunil Shenoy (M&A division)
Call Albert Fialkovich at (720) 370-6699 or email albert@tworld.com

Andy and Jessica welcome you to another edition of a live podcast. The Paycheck Protection Program (PPP) loans are bringing up the subject of SBA financing for business acquisitions, Andy and Jessica are receiving the experts to dive deep into the opportunities this kind of loans are presenting in difficult times while coping with the financial impact that COVID-19 is creating.
 
The SBA program has historically been a great way to bail out the economy and that is why, in today’s episode, the future will be assessed with the company of the experts in business lending, John Wahl, from Live Oak Bank, and Lynn Singletary, from BankUnited.
 
Listing of the week: Charles Palmer (Nashville). Family-owned Pizza Restaurant in business for 17 years. Italian menu, ample sitting space. Asking price $175,000. SDE $170,000 annually. Really motivated seller. Great potential. Call Charles Palmer (615) 962-4462 or email ppalmer@tworld.com
 
Key takeaways:
[4:25] What is SBA lending?
[8:16] The only loans that the bank has been making in the last months are PPP loans.
[9:10] The lenders are looking at what industry is asking for a loan and how it was affected by COVID-19.
[10:10] How is PPP affecting what is going on right now in the business world?
[11:48] The rules for forgiveness have not yet been issued in regard to PPP loans.
[15:35] Lynn talks about the waiver of the SBA guarantees.
[17:35] 7(a) loan is approved under the CARES act with 110 billion dollars.
[17:58] There is a risk of dollars not being available, but it is pretty minimal and short term in nature.
[18:35] John talks about the benefits that are available now and will be accessible in the near future.
[21:45] What does a typical 7(a) SBA loan look like?
[26:19] How PPP loans will be handled in the transference of a business?
[29:07] Will PPP money be taxable?
[30:10] Make sure you have clean financials.
[31:30] PPP loans are only being issued to bank customers.
[34:10] How interest rates are determined in these types of loans for business acquisitions.
[36:23] What if someone wants to buy a business above the $5 million range through a bank loan?
[37:55] John and Lyn talk about which loans can’t be done through a bank right now.
[41:55] The opportunity of buying businesses that go bankrupt.
[43:54] Quickfire round questions
[55:58] Deal of the week: Dustin Audet (Colorado). Liquor store specialized in Colorado products. The buyer had an E2 Visa. Listed price $99,000 plus inventory, sold at $50,000 including inventory. The buyer paid in cash.
[1:00:50] Listing of the week: Charles Palmer (Nashville). Family-owned Pizza Restaurant in business for 17 years. Italian menu, ample sitting space. Asking price $175,000. SDE $170,000 annually. Really motivated seller. Great potential.
 
Mentioned in this Episode:
The Deal Board Podcast
United Franchise Group
Transworld Business Advisors
Transworld on Linkedin
Transworld on Facebook
Call us — (888) 711-9018
Email us thedealboard@tworld.com
Call Lynn Singletary at (407) 731-9555 or email lsingletary@bankunited.com
BankUnited
Call John Wahl at (303) 551-4453 or email john.wahl@liveoak.bank
Live Oak Bank
Email Dustin Audet at dustin@tworlddenver.com or call (970) 618-9330
Call Charles Palmer (615) 962-4462 or email ppalmer@tworld.com

Welcome to the second live episode of The Deal Board Podcast! Today Andy and Jessica are talking about what is the business world going to look like after COVID-19, in regard to valuations, buyers, sellers, advisors, and also the banks. COVID-19 is going to affect valuations and Andy and Jessica are sharing three different options based on different case scenarios. There will be challenges and opportunities for business owners and buyers, listen to this episode, and get ready for the near future.
 
Listing of the week: Steve Wright (Raleigh). Great business to invest during COVID-19 times! Bakery and cafe. SBA approved. Annual revenue: $700,000. SDE: $211,000. Grown by 21% since the pandemic started. Listing price: $695,000. Visit tworld.com/raleigh or call Steve at (919) 603-4027.
 
Key takeaways:
[1:39] Quick overview of how businesses are valued.
[2:45] The market method.
[4:33] EBITDA valuations.
[4:45] SDE valuations, what does it mean, and what is included in this business.
[7:09] Recasting processes are meant to normalize businesses.
[9:22] How COVID-19 is going to affect valuations.
[9:52] The case of restaurant owners.
[10:26] Option 1: The V Shape. The case if business reactivates very quickly increasing revenues at the same pace.
[11:11] Valuations might look different in different regions.
[12:10] Valuators might ignore the COVID-19 period and only base valuations on “normal” times.
[13:49] The case of the businesses that are spiking in their sales during the pandemic.
[16:48] Option 2: What is expected to happen to valuations if there is a hangover or the nation enters a recession.
[19:30] Lots of business might be up for sale after COVID-19.
[20:08] The possible issue with the SBA loans.
[22:40] Banks want to lend money through the 7(a) program.
[24:00] Andy talks about the business opportunities that are arising currently.
[24:38] Quantity and quality of earnings.
[25:27] Option 3: What happens if prices go up for certain businesses post-COVID-19?
[28:49] Jessica gives suggestions for businesses to cope with the crisis.
[29:23] What are the options and opportunities for restaurants?
[30:58] The business is calculated based on a percentage of their assets.
[35:37] The difference between this economic crisis and previous ones is that this time is worldwide; everyone is on the same boat.
[36:20] The future will look different for all of us.
[39:25] Andy and Jessica receive questions from the audience.
[43:25] There is a trend about supporting small businesses.
[52:51] Deal of the week: Nathan Willis (Denver, Colorado). Agricultural Manufacturing business. The seller was a multigenerational rancher who created a product that has been selling for the last three years. Revenue: $500,000 per year. SDE: $250,000. Price $500,000 and sold for a full cash offer.
[56:08] Listing of the week: Steve Wright (Raleigh). Great business to invest during COVID-19 times! Bakery and cafe. SBA approved. Annual revenue: $700,000. SDE: $211,000. Grown by 21% since the pandemic started. Listing price: $695,000.
 
Mentioned in this Episode:
The Deal Board Podcast
United Franchise Group
Transworld Business Advisors
Transworld on Linkedin
Transworld on Facebook
Call us — (888) 711-9018
Email us thedealboard@tworld.com
The Deal Board Podcast Episodes 4 and 5 on Valuation and Recasting
Get Your Business Survival Guide — Transworld Business Advisors
Never Split The Difference: Negotiating As If Your Life Depended On It, by Chriss Voss
Call Nathan Willis at (303)335-7126 or email nathan@tworlddenver.com
Visit tworld.com/raleigh or call Steve Wright at (919) 603-4027

In today’s episode Andrew and Jessica will go into a deeper dive into valuation — they will talk about ten common mistakes people make while valuing their business. To bring some clarity to the topic of valuation, Andy and Jessica are bringing the experts to share their knowledge and experience in this field. Listen to this episode which is aimed for buyers and sellers to have a deeper understanding of business valuations.
 
Listing of the week: Michael Ziff (London). Leather accessory business, in business for 15 years. Purchase Price: 1 million pounds; the owner wants 750,000 pounds upfront and the balance over a couple of years; he will stay to help develop the business. Email Michael Ziff at mziff@tworlduk.com or call (0044) 771-286-7215
 
Key takeaways:
[3:02] 1: Add back distributions
[5:10] 2: Only add back one owner’s salary.
[6:40] 3: You have to value each location as it was run by a business owner.
[8:13] 4: Adding back personal credit card bills on top of the business’ expenses.
[11:04] 5: Adding balance sheet numbers on top of the cash flow valuation that has been calculated.
[12:30] 6: Taking a multiple and applying it to the wrong number
[14:09] 7: Applying the wrong multiple
[14:50] 8: Adding back expenses for failed business ventures
[16:50] 9: Playing the revenue in earnings’ game of good years
[18:00] 10: Not having any negative add-backs.
[22:18] Paul Corrigan (North Shore Boston)
[24:17] The secret is to look at valuation from the perspective of a nonbiased third party.
[30:01] Paul Corrigan shares several valuation approaches to different businesses.
[33:32] Paul Corrigan talks about the biggest mistakes he sees people make while valuating their businesses.
[36:54] Deal of the week: Michael Shea (Central Florida). Printing shop. 40 years in business. The business was booming as a result of the COVID-19. 40% financed, the buyer got in the deal with $50,000.
[40:32] Listing of the week: Michael Ziff (London). Leather accessory business, in business for 15 years. Purchase Price: 1 million pounds; the owner wants 750,000 pounds upfront and the balance over a couple of years; he will stay to help develop the business.
 
Mentioned in this Episode:
The Deal Board Podcast
United Franchise Group
Transworld Business Advisors
Transworld on Linkedin
Transworld on Facebook
Call us — (888) 711-9018
Email us thedealboard@tworld.com
Rosetta Valuations (617) 320-4812 or paul.corrigan@rosetavaluation.com
Call Michael Shea at (321) 287-0349 or email mike@tworld.com
Email Michael Ziff at mziff@tworlduk.com or call (0044) 771-286-7215

Andy and Jessica welcome you to the first live episode. Today you will hear about the opportunities that the pandemic is bringing to the business world. We have been through crises before, and there always have been ways in which the economy is stimulated. When these difficult times pass you will have wish you have bought a business now. Listen to this episode for a deep understanding of how is the process of buying and selling a business and why it is now a great moment to buy a business.
 
Listing of the week: Michael Shea (Central Florida). 30 years lighting distribution wholesale company which also does installation. Working all over Florida. Family-run business. The business is making $3.4 million in sales, $600,000 cashflow. Call Michael at (321) 287-0349 or email mike@tworld.com or visit tworld.com/michaelshea.
 
Key takeaways:
[3:36] Buying a business is not an easy process.
[4:18] Buying a business is more secure than having a job.
[5:34] To buy a business you need to get a team together.
[6:17] Sellers might be extra motivated now.
[6:27] Why is now a good time to buy a business?
[7:12] Take advantage of the current buyer’s market.
[8:59] There is still a lot of money on the street.
[9:42] How is the government injecting money into the system?
[15:25] Baby Boomer businesses are entering the market.
[19:12] There is going to be reduced competition.
[22:18] There will be commercial real state space.
[24:41] Uncertainty can be good.
[25:02] Jessica and Andy answer the listeners’ questions.
[31:30] There will be uniques structures in seller financing.
[32:25] It is never easy to get an SBA loan.
[33:44] People sell for personal issues, not financial ones.
[39:09] Buying an e-commerce business.
[42:54] If you are a buyer right now, get in touch with a broker.
[45:19] Deal of the week: Tony Khoury (Greenville). A 20-year business owned by a couple wanting to retire, seafood processing plant located on the coast of North Carolina, manufacturing plant, wholesales and retail operation, and restaurant. Listing price: $2.95 million. Sold at $50,000 more than the asking price. Seller financing with low-interest rates.
[49:45] Listing of the week: Michael Shea (Central Florida) 30 years lighting distribution wholesale company which also does installation. Working all over Florida. Family run business. The business is making $3.4 million in sales, $600,000 cashflow.
 
Mentioned in this Episode:
The Deal Board Podcast
United Franchise Group
Transworld Business Advisors
Transworld on Linkedin
Transworld on Facebook
Call us — (888) 711-9018
Email us thedealboard@tworld.com
Call Tony Khoury (252) 347-9606 or email tkhoury@tworld.com
Call Michael Shea to (321) 287-0349 or email mike@tworld.com or visit tworld.com/michaelshea