Joe Valley 4:38
So yeah, one of the secret sauces of Quiet Light is that everyone is an entrepreneur first and foremost of all built, bought or sold their own online business most if not all three. We’ve had people that like Amanda she’s been on the cover of Time Magazine for her Pearl importing business, Brad rolled up 30 content sites and sold private equity Pat’s been on Shark Tank With Robert. And they’re all pretty amazing. And I think in many, most ways, actually much more amazing and successful in my own personal journey. I have, you know, built bought sold about a half dozen companies of my own. And that excludes quiet but excludes as per the the one that I sold through quite a lot you mentioned Jason so we’ll go right there. Jason was my advisor, back in 2010, when I sold my own e-commerce business, my last e-commerce business. No, not quite my last my next or last e-commerce business. And it’s a business that really, you know, it was it’s kind of a weird formation, you know, I was, I was an inbound call center sales representative at a company called Talk America in Portland, Maine. And I was 29 years old in what is, you know, somewhat known as the drinking capital of the world, there’s more bars per capita than, or at least back in the day than almost any other small city. I was eating terribly, working crazy hours and just not taking care of my body. And then I tried this product, it was called Pure fast, basically purifying your body fasting, that kind of stuff. And I felt amazing. And I thought, you know, if I ever go out on my own away, know, when I go out on my own, because I knew I was going to, I’m going to start a product like this. That particular company made some claims that prevented them from being able to continue to advertise the product when I went out on my own. It wasn’t the first product that I launched, but it was the second product that I launched, I did a radio campaign with it that a television infomercial that completely bombed. You know, when you’re recording something like, yeah, I just lost $100,000. And that doesn’t actually include the advertising. That was me
Jeremy Weisz 6:52
was for that type of product? Or did you actually license the product from
Joe Valley 6:57
it was for that type of product. So I went out and created Thanks for clarifying that pure stat was done, you couldn’t do anything with it. And I wouldn’t license that product because of the claims that are the issues that they had. So I went out and created pure fast, which was, you know, a same similar product, but eventually morphed it into a full line of digestive wellness products. So total vitamin package, liver cleanse, digestive supplements, digestive enzymes,
Jeremy Weisz 7:29
were ahead of your time at that time, Joe. Yes, I was. Yeah, that’s I mean, my backgrounds in biochemistry as a chiropractor, and I and people were talking about that stuff. I mean, now it’s like, oh, obviously, Joe, people are doing fast. But that’s not back then that is not obvious
Joe Valley 7:45
at all. Yeah, no, it was it was unique. And I just happen to be in the right place at the right time. And instead of doing what most entrepreneurs do, which is think that’s great, I can I should do that. I took the risk and had honestly the balls to do it. I was I made the decision on that one. Actually, when I was golfing with a mentor, Walter, Uncle Walter mentioned him on my podcast as well. And he was selling. He was he was an entrepreneur turned advisors. Well, not quite, but it’s his own world. And was brokering a deal for a lumber company that was worth a half a million dollars. We talked about how, you know, people were buying it and how much money they would make them like, Oh, my God, if I just invest $50,000 I’ll make half a million easily in the world that I lived in. So I pursued that. And it was a challenge. But we did radio television, and eventually built it out to that full digestive wellness product. And I went 100% online in 2005. And took it through the best and worst of the economy came out the other side in 2010. Just worn out tired, exhausted and wanting to move on. It was as I say, terrible situation. I was living on a lake here in North Carolina, my kids were young, my wife would have friends over and all the kids would play the pool and then go down to the beach and go swimming in the lake. And I could see that from my my home office where I was working 20 hours a week and I was miserable. It was just awful. Jeremy, I had to sell
Jeremy Weisz 9:13
you pay this amazing picture. That’s why I did get to that part talk about um, I want to talk about a high point there but also you mentioned blowing $100,000 Hmm, I you know, I want to curl up in a corner right now after you saying that because we’ve all been there where we’ve invested a chunk of money that just did not go where we thought it was gonna go. What? What happened? What would you what’s the lesson there for other people who’s thinking of investing a chunk of money and in something? Yeah,
Joe Valley 9:46
I invested in other people that I thought would do a better job than myself. The first the first TV infomercial that I produced. My wife and I were the hosts co hosts of it and be honest with you We did a, we did a pretty good job. My wife did a much better job than I did, of course. The second one that we decided to do, we hired an x, CNN Anchorman. And sort of the female Doogie Howser young woman that was through med school and just brilliant. And we thought that might be the better approach instead of just us, because this was a health oriented product. She told me, she told and this is when I should have just said no, she told me she wouldn’t get on the plane for less than $25,000. Like, okay, so I was impressed that she said that, and she had the balls to say that, but at the same time looking at him, like, she’s obnoxious, I really should just hang up the phone and stop moving forward. But the chemistry between him and her was absolutely horrendous. They didn’t meet or speak until the day that we were recording. And, you know, you think the professionals would get over that and fake it. And it just there was no chemistry, which is really important when he’s interviewing her and, and vice versa. And for $25,000 She didn’t, you know, to get out she got on the plane. But for the rest of it, she didn’t even like read the script or bullet points or highlights that to focus on. And she she had more trouble reading a teleprompter than than I do. So. During recording, I could I could see that it was just coming together horribly.
Jeremy Weisz 11:28
Why infomercial?
Joe Valley 11:30
Because, you know, that’s where I thought you had to go, you know, we were crushing it on on radio was 62nd spot ads could have produced, you know, could have produced a radio television infomercial for a heck of a lot less.
Jeremy Weisz 11:46
Like he got on direct response. So I’m fascinated by in and I have Ron Popeil on the podcast. No, he’s passed away, unfortunately. But, but yeah, so I geek out on that. So you did radio, what else did you do to market?
Joe Valley 12:05
radio spots? And always 60 seconds. 30 seconds didn’t seem to work. Because there’s always 12 to 15 seconds of giving out an 800 number. This was pre just online stuff.
Jeremy Weisz 12:18
Really good direct response pioneer? Yeah. So radio
Joe Valley 12:22
good old days. Yeah. And, you know, didn’t didn’t do print or anything like that, or snail mail or anything. So we just went from radio straight to, you know, television. So, you know, the, the way that I started Jeremy, I was actually buying media. My first company that started in 1980 97, was a media, radio media buying Directions Media buying company. And my first client was somebody that I didn’t like, or respect a whole lot be blunt, I was a little concerned. But fortunately, my wife said, Don’t burn any bridges. The company I left he, he works there. And he and he came forward and asked me to produce, help them produce spot ads for a particular product. And then by his media, and standing in the studio, listening to him record the ads, there were two ads that were recorded. And we were split testing, right. That’s what people do online. Now. We were split testing the ads. And I spent $4,000 on one ad and $4,000 at other different stations and you know, similar ranking, see what would happen. And I remember leaving the studio and taking the cassette tape, yes, the cassette tape and putting it in my car and listening to it. And listening to him say, how’d you like to look better naked, now you can with fat assassin and going forward with you know, the whole 60 seconds and I’m thinking these are awful. This is just not gonna work. And lo and behold, one of them just was a screening success and the other didn’t work. And within I want to say eight weeks, I was spending about $100,000 a week on media for that ad. And then variations of it. And then, you know, ultimately, I came to really respect that man and what he accomplished and what he produced in that company that he took from the ground up and did some amazing stuff with so I’m glad I didn’t burn that bridge because, you know, he turned out to be a heck of a guy.
Jeremy Weisz 14:24
What made one of them a screaming success and one of them not
Joe Valley 14:29
beats the hell out of me. And that’s was it a
Jeremy Weisz 14:31
different audience? Or was it a different was the same message? Pretty much
Joe Valley 14:35
the same message just with a few words tweaked in here and there and, you know, I say beats the hell out of me because it’s important to know that we don’t know what the customer is thinking or wanting. Right? So when I was doing my own purists that stuff, I would always, you know, especially when it came to online stuff I’m like, Alright, so I can tweak this message here and that’s gonna, you know, increase the click through rate and conversion rate and all this other stuff. And I kept doing it and doing it and doing it by web developer, you know, finally convinced me to stop doing that and thinking I know best and always split test. Lo and behold, every time I did a split test, the one that I was pretty confident was going to be the winner was absolutely the loser. So split testing is critically critically important. You never know what makes one a success over the other.
Jeremy Weisz 15:27
I was in a room full of top direct response copywriters in they couldn’t agree on what the best headline was, which is exactly what you’re saying. It’s like, well, you just have to ask the customer. I mean, they’re the one who’s going to be buying the thing. So it’s not about what you think it’s about what the customer thinks. And so I love that and so Okay, so you blue on the the radio ads are amazing infomercial, not so much, what was another and then you get to that point where you want to sell the business?
Joe Valley 16:04
Yeah, I’m gonna just interject one other mistake I made along the way. So the infomercial didn’t work, but the radio is just killing it. And I had hired a call center and outsourced call center to do that work. And they also did customer service. And I got greedy, Jeremy, and I decided, you know, these customer service bills are a little excessive, all they’re doing is answering the call, I can do that. I’m just gonna bring it in house. So I got greedy and overconfident. And it led to something good eventually, but there was a lot of pain in between. I sent an email to Frank, the call center, one of the call center owners, and said, Hey, look, I decided to bring customer service in house was like on the fifth of the month, they said beginning at the first of next month, I’m going to just redirect off customer service calls to my internal team. It took about a week for Frank engine to respond and said, Thanks for the update, appreciate it totally understand your approach. Unfortunately, it’s not going to be profitable for us, if we’re not doing customer service, as well as taking your inbound calls. Therefore, effectively the first of the month, we will no longer take your inbound sales calls either. And I was spending about $50,000 a week at that point on advertising. and I in you know, all my you know, wisdom and experience in the health Yuto, I guess you’re doing is taking the amount of calls, I quickly drafted an email. No problem, guys, I’ll just use a new call center starting the first as well, I’m not going to send you my inbound calls, either. So I quickly shifted by $50,000 in media to a new call center that had no experience or training in that particular brand that I was selling. And it was an epic, epic failure to the point where I had to re invent the ad campaign to do free trials instead of risk free trials, which just means buy it with a 30 day guarantee this was buy it for the cost of shipping. And if you don’t cancel, we will send you a three month supply in 30 days. And ultimately, at the end of the day, you know, spending $50,000 a week on that campaign taking my eye off the ball, I got an email from my merchant provider that said, you know, basically, Mr. Vallee, based upon the chargeback rate. At this point, we expect that you’re going to owe $250,000 In chargeback to the customer. So therefore, we’re going to start with holding all of your payments until we reach a reserve of $250,000. Now this didn’t happen overnight, you know, took another year for me to get to that point. And they were absolutely right. I ended up paying back about $250,000 in chargebacks. Because of that, and that ultimately led me to go 100% online in 2005. Forget those. Yeah, I just I screwed up, I let my ego get in the way and told Frank and Jim to go pound it. And first it was great then ego and I was running a great business. They were easy to work with. I just thought I was smarter and wiser than them and I definitely wasn’t.
Jeremy Weisz 19:19
So you go to sell. Then what
Joe Valley 19:25
I woke up decided to sell the business. I had a great conversation with one broker brokerage firm and it was marked down to quiet like the other two that I spoke to at the time there were not many online business firms, brokerage firms at the time. We’re just trying to get their hooks into me for a commission. Mark gave me some advice that was basically based upon your recent growth in last few months. Things are coming back you know your business getting strong again after the Great Recession. I suggest you wait six months. I was like Who the heck is this guy? Tell me go away. Think about me first. I’m definitely using this guy, there’s no question about it. And ultimately, when I came back, my business was stronger, was more valuable. And back to Jason yellow. It’s Jason, you know, was was my advisor at the time, he was the first entrepreneur turned advisor at Quiet Light. And that’s where the business model Bloom from, from Jason saying, Look, Mark, I can do this, give me a shot. And he had it under contract and about three weeks, and I closed in November 2012, I’m sorry, November of 2010. And then stayed in touch with Jason and Mark and eventually joined the team in early 2012.
Jeremy Weisz 20:39
I think, everyone, maybe not everyone, but when I hear the story, I feel that people should aspire to work at Quiet Light. Because when you sell your business, they’re like, What do I do next? Well, you get to help other entrepreneurs sell their business, it sounds like a cool thing to do, like an awesome thing to do, and a lot of fun.
Joe Valley 20:59
Yeah, like a lie. It’s a good gig,
Jeremy Weisz 21:01
do you get a lot of people after they have a few exits or an exit? They’re like, You know what, I would just like to do this. This is a fun process, I get to talk and help other entrepreneurs,
Joe Valley 21:12
it depends on their level of experience and where they are in their life. But yeah, there’s no question that, you know, they get to make as much if not more, in time than they do run an e-commerce business, and they get to do it with no capital outlay, no overhead, no. Boss, there’s freedom and flexibility to work as much or as little as you wanted to. It’s a pretty good gig.
Jeremy Weisz 21:37
Yeah. Do you think there is a place for radio now? For in the businesses? Like I feel that is an overlooked medium? For a lot of people? It’s all online? Are people? Do you? Do you advise anyone now to use radio? Or? Or should they be using radio,
Joe Valley 21:55
I don’t advise them to use radio, because usually the folks that I work with, you know, they’re after their eyebrows, and craziness and their business, and they’re just trying to keep the wheels on the bus. But radio I think has a definite, you know, avenue that still works. It’s different than back in the day, when, you know, that was my primary business. But yeah, there’s a couple of guys that I work with, back in the talk America days that are running sizable media, buying agencies focused on radio.
Jeremy Weisz 22:25
Um, you Yeah, I love that. It seems like just an opportunity that’s untapped, because people aren’t using it. I want to talk about a few things and what to look for in a buyer. And it just reminded me when you said, when you hired that lady, you should have maybe turned away when she said, Oh, 25,000 Because you talk about in the book. And in general, one of the key things to look for in a buyer is niceness. Right. And people will take deals that are not as good based on that. So I would love for you to tell a story about that and what to look for. In a buyer.
Joe Valley 23:05
Yeah, you know, I was I was at a mastermind event called rhodium weekend. by Chris he he also owns Center Commerce a due diligence firm, this is the unplugging all my friends businesses here.
Jeremy Weisz 23:18
This is great. I’ve Yeah, he’s he’s great. Great. Yes, great.
Joe Valley 23:21
He’s great guy. And I was up there on a panel with a bunch of different advisors from different firms. And somebody in the audience said, Look, you know, how do I compete against all cash buyers? What’s the secret? And, you know, a bunch of guys had very intellectual responses, and I had one that was, you know, basically just don’t be an asshole. It’s pretty simple. That’s the secret. And, and the next year at rhodium weekend, lo and behold, I’m there and a client that I have that just he was not my client, he was the buyer right of the business. He just won out on a $2.3 million purchase when he bought the business with an SBA loan, which means that he, you know, had to get a 10% seller note so $230,000 As a seller note, when he was competing against an all cash buyer, so somebody is going to get 2.3 million at closing, or 2.3 minus $230,000. Do the math real quick. It’s a lot of money left on the table. But the reason he got it because he was incredibly likable. He built a connection with a seller early on, he read the client interview, and focused in what on what the seller wanted in this transaction. And one of the key things that he wanted in the transaction was to have his team intact and go with the sale. So the first all cash buyer was overly confident. braggadocious thought he was a cat’s meow because he could stroke a check for $2.3 million. Well, a lot of people can these days in this world that I live in, where’s the other guy? You know? Nathan Nathan’s saying he was just so kind so likable. They happen to go to the same school not at the same time. So he made sure he had the hat on, they talked about that wanted to really focus on on trans, you know, transitioning the team over. And he made an offer that you would think wasn’t going to work but saya who bought the business at night? I’m going with Nathan, there’s no question about it. So he just was more likable than the other person and cared about what site had built and wanted to take care of it and take it to the next level along with the people that helped cya build it, and that close a deal for sale. And that’s just one. One example of hundreds. There’s a guy named Matt how it out there runs a company now called profound commerce. But he just raised $53 million to start buying up Amazon businesses. He bought his first business through cryolite no competition, it was not an FBA business. recommerce the next four that he bought, he was never alone in making offers the last one that he bought from me, there were 13 offers on the business, Matt ended up buying the business for $150,000 less than the highest offer because he was much more likable.
Jeremy Weisz 26:15
Have you found now are you working with more aggregator companies?
Joe Valley 26:21
Yeah, no doubt, no doubt. You know, for those that don’t understand what aggregators are, they’re really smart, likable, people that are well educated that raised funds to buy FBA businesses Fulfilled by Amazon businesses. And they buy them up, they buy them at a low to fair multiple. And then once they put them in the portfolio, they get an immediate bump in valuation, they go from three times to 10 times because the depth and breadth of their portfolio because it’s lower risk, higher value. And what they’ve done Jeremy the aggregators, they’ve sort of opened the blinds to the scalability of online businesses, you know, you know, our firm’s been around since 2007. And we have not been able to do what they’ve done in 14 years, what they’ve done in three, just with headlines in the news and reaching the sheer volume of FBA business owners first and trickling over to content and other DTC brands, that they do actually have a business that is valuable and sellable. And, and they’ve, you know, it used, they used to be a huge disparity between, you know, a Shopify store, where they own the customer versus an FBA business where they don’t, and that disparity has changed the FBA businesses are not quite as valuable, but they’re becoming almost as valuable. In the year to date, we’ve had an average of you know, on on FBA businesses an average of something like four and a half offers, and the multiple is, you know, a full, full point higher on average, than it was two years ago.
Jeremy Weisz 28:00
What is to give people a sense, the type of businesses you sell within the online realm, and then some range of I mean, every business is going to be a little different. But we’re always interested probably in the range of multiple that are within range. And we’re only talking about this point in time that can change. Yeah, what are the type of businesses we mentioned? Obviously, e-commerce, what other what other type of businesses should people look at on your site? Because you can go right now and quiet and go, Listen, I want to buy a business, which is maybe saving tonnes of heartache and starting a business. I mean, I think starting a business, I mean, 30 minutes is tough buying a business, it, I believe is a much better route to go and a lot of ways if you find the right fit, obviously, but you can go by and you could sell businesses that quiet,
Joe Valley 28:53
your your much less likely to fail, statistically proven, if you if you buy a business versus build no question about it. It’s good, but you gotta buy the right one. And oddly, people say well, I’m gonna, I’m gonna, I’m gonna start small, so I’m not gonna risk too much, I’m gonna buy some $400,000 but that that actually is a business that’s much riskier than a million dollar business because it’s smaller, less established, less diverse, hasn’t gone through some tough times and recover doesn’t have SOPs and all that good stuff. But to answer the question of what kind of online businesses do we work with on the sell side, it’s really almost every kind it is e-commerce, physical product businesses, their own store, or Amazon or any other third party sellers, content sites plentiful on the content sites side, the SAS businesses and agencies as well, not as many agencies because historically agencies have been operated, you know, by the experts that did that out of their own expertise. But over time, what they’ve done is learned that the best way to build a sellable agency is not to make yourself the name and face of that agency. And the true and only expert within the firm. So really content, SaaS, e-commerce agencies, you name it. But then there’s some, you know, niches that we won’t touch, you know, there’s no porn, no gambling, we won’t even touch e cigarettes or vaping sites anymore, there’s just the likelihood of them actually selling are just so incredibly low that we don’t we don’t go there anymore. Plus, you know, some of the the advisors get to choose what they want to take on, which is great. And mostly nobody wants to take those on anymore, just to it’s a moral thing for most folks.
Jeremy Weisz 30:39
What is the range? Like? What’s the low end of someone’s like, you know, I’m thinking of some of my business, what’s the low end? Typically are people come in you? And obviously, it goes on up from there?
Joe Valley 30:52
Yes. So I think that is a really tough question to answer with any accuracy in a way that’s going to be useful for the listening audience. Because every business is so incredibly different. Every business gets valued, not just on the numbers, the numbers are, I say, 10% of the equation in the book, even if I’m generous and say it’s 50%, you’re missing 50% of the equation in terms of evaluation. And that’s, you know, the the, the risk of the business, the growth, the transferability, the documentation behind the business, and you’re the owner of that business, that all brings tremendous value that will sway the multiple one way or another. Now, to answer your question, in the last 12 formats, 12 months, I’m looking at my screen, oh, we, we’ve got our deal dashboard up it’s like, comp for real estates, but it’s only within our organization because nobody shares their stuff. It’s the lowest is a one and a half times multiple, and the highest is 7.6 times multiple, so a heck of a range. The larger the business, generally speaking, the higher the multiple. So if you’ve got a business that’s doing, you know, it has 10 SKUs, go to physical product, e-commerce, they’ve got 10 SKUs, equally, selling, you know, 10% each. And but you know, they’re 24, let’s call it 3036 months old, but they’re only doing $100,000 in discretionary earnings, which is what the multiple is based upon. But then you have another business, that’s doing a million dollars in discretionary earnings, same exact SKU count 10, same spread 10% Each SKU that business is going to be so much more valuable than the $100,000 business just because of the size and scope of the business, that $100,000 business might be in that, you know, I’m going to get a broad range here again, because everything’s different in that two to four time multiple range. And then the million dollar business might be in that four to six time multiple range. So it’s they vary greatly based on the size and age of the business, the risks, that diversity, diversification profile. And then of course niche
Jeremy Weisz 33:02
as well. Some of the, you know, the chapters of the book, you know, the index of printers playbook stick out to me, and there’s a lot of interesting information in the book. And it’s also kind of just the fundamentals and brass tacks with some people just overlooked, like you talk about transferability in documentation, which is the non sexy stuff that actually makes businesses run and actually makes it transferable and what stuck out to me and you talk about the valuation multiples structuring the deal negotiating all those things. I want you to just talk a little bit about the advisors like yourself like who do you need to involve in this because I remember listening when to you and mark when you were discussing on the podcast, everyone should check out the other quiet life podcast to that actually the broker that he ended up going with early on basically told them you don’t need a lawyer you shouldn’t bring a lawyer Why do you need a lawyer just gonna hold things up and you laugh like this? He got it so what are some of the in and I I consider if you are making a huge decision to sell your business? I’m on have the thought of you should hire a professional who knows what they’re doing has been doing this many times the quiet life but you also recommend other advisors the table so who else should people involved in this process?
Joe Valley 34:28
Yeah, let me just say that you should hired detached professional that knows what they’re doing. Too many people like I don’t need a lawyer. Well, you know what? My cousin’s a lawyer? Never ever Famous last words. Yeah. Hire mother, father, sister, brother, cousin, aunt uncle. I’ve seen deals fall apart because attorneys that are too closely attached to you personally. Fight like rabid dogs for things that have a 1/10 of 1% chance of ever happening. There’s no fair and balanced. When it comes to those situation. I’ve seen people lose You know, millions of dollars, because they hired the wrong attorney that was too close to them. But if you look, you know, starting from the very beginning, the biggest mistake most entrepreneurs make is that they don’t get their financials in order. They don’t get their books in order books, bookkeeping, not tax returns, there’s a clear and distinct difference between a CPA and a bookkeeper CPAs. You know, they prepare your tax returns, they make tax mitigation recommendations. And they do all of that based on your books that should be produced by a bookkeeper and e-commerce bookkeeper. Don’t, don’t confuse the two, they have distinct jobs. And in my experience, your CPA should not be doing your bookkeeping, because they generally don’t do it the way that it should be done. So first and foremost, hire an e-commerce bookkeeper, long before you ever think about selling your business, you can always do it after the fact but it’s a pain. And it just it takes more time. And when you’re emotionally done and spent need to move on. And then you’re told you got to you got to go ahead and hire e-commerce bookkeeper and put those books in QuickBooks and do it in a cruel format for the last 24 to 36 months, all the errors kind of go out of yourself. So e-commerce bookkeeper number one. And then then you’re going to start talking to an advisor about the value of your business when you’re ready, right, I want you to set a goal in terms of exit in terms of dollars, Date, End feelings, and then reverse engineer path to that. So I want to sell for $5 million in q1 of 2023. And when I do, I’m going to feel unburdened because I’m out of debt my kids college paid for and I can move on to my next adventure and spend more time with my family. So now you know $5 million, just go Megan to know where you are today value wise, in order to get to that goal, reverse engineering a path to that. And the book will get you 70% of the way there. And it’s really the book is designed to help you navigate the whole process of even starting to think about selling to actually selling either on your own through an advisor. But if you can’t figure out your current value, you don’t know how close or how far you are from that goal. So step number two would be to hire an advisor with that. And then along the way, as you’re getting closer to that potential $5 million dollar exit, I would say 12 months in advance, that’s when you really want to hire a tax advisor to make sure that you’re creating this exit to minimize your taxes as much as possible. And there are some real experts out there that can help with that. Then you’re back to the advisor and you’re signing that contract. At that point, you may want to hire an attorney for the engagement letter contract. A lot of folks do a lot of folks don’t probably 50 60. There’s not ever a whole lot of edits to it. Because you know, it. I’m not advocating don’t hire an attorney for the engagement letter, when it’s a quiet lead engagement letter, you got to do what you got to do. But there’s not a whole lot of edits that need to go into it. Even for the letter of intent, I don’t think you need an attorney in most situations, let’s say if it’s sub $5 million, if it’s laid out properly, the letter of intent is really a non binding Letter of Intent fully contingent on due diligence, and a further detailed asset purchase agreement, we need the attorney. And it’s non binding. So if in due diligence, it turns out that your numbers are completely wrong and your biases you know, I’m out. There’s no commitment from either of you. But at some point along the way, you want to have a conversation with a really highly qualified contract attorney, one that ideally specializes in e-commerce. So they understand that, you know, these businesses generally don’t have a whole lot of assets, it’s mostly goodwill. So either pre Letter of Intent pre engagement letter, and definitely pre asset purchase agreement, hire an e-commerce attorney.
That asset purchase agreement is the most critical part because that’s the true legally binding contract that’s going to hold your feet to the fire as a seller or as a buyer and make sure that you both sleep at night after the deal closes. And you know, if you end up with any kind of earn out or seller note, you know the legal language behind that will reinforce how well you sleep at night and making sure that you’re getting paid and making sure you’re you know, fulfilling your obligation and pellet paying as well. So e-commerce bookkeeper, tax mitigation specialists, e-commerce bookkeeper, advisor, broker, tax mitigation specialist and sometimes that your CPA, then the adviser again, maybe the attorney for the engagement letter letter of intent, definitely the attorney for the asset purchase agreement. And then after that, you know, talk to your favorite person in the world, your spouse, whoever it might be for figuring out what your next plan is. Hopefully you’re gonna take some time off After the transaction closes, and just recoup and focus and get a clear head. Most of the most successful people do that some of the some of the most successful people don’t and they wish they had. And they say I’m gonna do that the next time, but I definitely recommend some time off for sure.
Jeremy Weisz 40:16
Last question, Joe, first of all, thank you and I want to point people towards learning more, check out more, they can go to exitpreneur.io. Check out more about the book that you can get a free chapter of the book, then go on Amazon and get the book The EXITPreneur’s Playbook. They can go to Quiet Light, where else should we point people online? Maybe within Quiet Light or anywhere else?
Joe Valley 40:39
Well, honestly, if it’s if it’s a buyer, you know, yes, you can look at Quiet Light’s listings, and I highly recommend you do you want to look at individual broker firm listings, inquire on them, the listing that you see online, folks, it’s just a teaser, you’re not going to figure out the name of the business, just by the listing not to learn anything. So you’ve got to inquire on it, you’re going to have to sign in not sign a nondisclosure agreement agreement, and then look at the full package to really determine the quality of the business and also the quality, the quality, the firm and the brokerage firm that’s putting that package together, especially if you’re selling a business, right? You don’t just look at the listing of the house that’s being sold, you look at the virtual tour and go deep. You want to do the same thing here go deep, before you decide to list with one brokerage firm or the other. If you’re a buyer, yes, you can look at the Quiet Light listings, yes, you can look at Empire Flippers or Fe International, whoever you want to look at. But I kind of advocate not necessarily doing just that. And that’s why I mentioned Centurica earlier. So essentially, Centurica, Centurica is a due diligence firm that gets hired by the buyer, and due diligence to make sure the numbers are right. So I’m on the sell side. But oddly enough, I really encourage people that are buying to hire a firm like Centurica to help them with the bias. And we want it to go well for you because you’re eventually gonna grow that and come back to us eventually, and sell it for, you know, five times the value. But Centurica has a tab on their site called MarketWatch. And what they’ve done is build an aggregator tool. So they pull in all of the listings from all of the online business brokers. And you can you can you can segment those and say, Look, I don’t want to buy something with an SBA loan. And you can click that mark. That way, you’re not looking at every possible listing, you’re looking at the ones that are already SBA pre qualified. And you can do that whether it’s a SaaS, business, e-commerce, you can break it down size, I think you may be able to do age, you can eliminate some brokerage firms, if say, nine, I want to look at any of their listings, you can you can do that as well. It’s an incredible tool that I you know, I wish I wish we had dealt but, you know, Chris has more than I do.
Jeremy Weisz 42:47
I love it. Yeah. Thanks for sharing that. That’s great. So you can check out that check out Quiet Light, check out the website for the book, exitpreneur.io. And last question, Joe, you were talking before we hit record about the buyer changing their mind? Or sorry, the seller seller changing their mind? Yeah. And why? And Ali, partly because of the advice, but I love before you answer that. I love what you said about it’s like if they’re successful, if you have a Sexton is successful buyer. It’s kind of like a real estate person who did great finding you a house, it’s like, you end up selling it through them also later on when you move. So yeah. So changing mine.
Joe Valley 43:35
Yeah. So, you know, people ask me, you know why I wrote the book? And for a long time I had I had trouble answering that question, you know, but it’s it’s really to help people understand and navigate the entire process of selling an online business. It’s great for the buyers if you want to get the other team’s playbook by The EXITPreneur’s Playbook. But it’s it’s really the entire process and full of stories. And the the one kind of story that I left out is the surprising one. And there’s there’s many of these examples. It’s actually we talked about a little bit with Lee in the book because she ended up listing and pulling back and listing it again, you’re later so focus in on Leah and her story in the book. But there’s another person that I didn’t bring up her name’s Elizabeth. We had talked for a couple of years. Jeremy prior to actually listing her business for sale we sat down face to face talk about moving forward at an event called e-commerce fuel with Andrew Yeudarian as you know, Andrew,
Jeremy Weisz 44:35
Andrew on the podcast, great guy community.
Joe Valley 44:40
The process that we went through with Elizabeth was, you know, deep and thorough in terms of the current valuation pulling the right levers to increase the value, pushing the levers to get rid of those things that decrease the value. And then a deep, deep written client interview is part of the process at quietly and that deep written client interview Ask every question, we think a potential buyer is going to ask. And we have the owner of the business answer in writing, then we do a recorded interview video audio interview, as well as part of the package. When somebody goes through that entire process, what they begin to realize is often, I’ve might have left a lot of money here on the table, there’s some opportunities in this business that I’m really seeing that I didn’t take advantage of. And if they have enough emotional reserve, that’s really key. You know, when you plan to sell your business, when you train for it, you set that goal, you will have emotional reserve, when you get there, if you just wake up, decide to sell your business, because you totally toast and emotionally done, you’re not going to have that reserve. So in the case with Elizabeth, we got to the point where we’re ready to list and it’s a strong value, we’re talking many zeros. She says, You know what, this has been very helpful. I’m not going to move forward yet, we’ve identified so many things here that I need to do pull levers, and we’re at the value that I wanted to exit at. But now, I’m so excited about the business, I’m going to, I’m going to I’m going to hold on for another 12 months, I’m gonna push that value a little bit more, we’ll be back let’s let’s just hit the pause button and talk again in 12 months. And oddly enough, that’s really an exciting part of what I do. It’s helping entrepreneurs fully realize the value of what they have, and making sure they take great care of it, because these businesses are quite likely their greatest asset in terms of value more than their house, their car, their investment portfolio, these things explode in value very quickly. And if they don’t understand what levers to pull, they can lose value very quickly. But in her case, and in many other cases, you get to that point, you’re like, ready to move with you pause the Reflect, say, I am going to go ahead and move this goalposts. Hang on, I’ll be back. And when they come back, that business is so much stronger, not just for them. But for the buyer, which is really exciting because they’re building a better business not just for themselves, but for the buyer. And ultimately, it sells for more value. And the buyers buying something that’s more stable, and will grow much more quicker. So eventually they can turn around it and sell it for a higher value as well. So it’s it’s it’s odd when you know, you you get less selfish and you always think about the other party and do the right thing. And how that benefits you and that Jeremy, as you probably know comes with age and experience long
Jeremy Weisz 47:39
game. The long game yeah, yeah. Having other people’s interests. Yeah, you
Joe Valley 47:45
know, I didn’t know that. 20 To 25 28 Probably 31 32. But when you’re in it for the long game, and you’re doing it right, it’s better for you. It’s better for the other parties as well and it works out incredibly well and you do what Rise25 does sell well, which is build beautiful relationships with great people.
Jeremy Weisz 48:04
Amen, everyone. Thank you for listening. Check out quiet life check out Exitpreneur.io and EXITPreneur’s Playbook. Joe, thank you so much.
Joe Valley 48:14
Thanks for having me on Jeremy. I appreciate it.
