Latest / It's Time for Success: The Business Insights Podcast / The Power of Yes: Turning Challenges into Chapters of Success with Nina Ellis

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The Power of Yes: Turning Challenges into Chapters of Success with Nina Ellis · It's Time for Success: The Business Insights Podcast

• Sharon: [00:00:16] Today's guest is a woman whose journey is rooted in grit, growth, and fearless leadership. She started her first business at just 21 years old. Did you know I started my first business at 21 years old too? Colleen: [00:00:29] I did, I did, yep. Sharon: [00:00:29] Driven not by a roadmap, but by a relentless desire to create something meaningful on her own terms. From navigating the roller coaster of entrepreneurship to leadership as CEO of Caprice Commercial Cleaning, which we'll talk about. And now serving as a business broker with Sunbelt Canada, Colleen Pusher brings not only experience, but heart, humility, and vision. So we are going to talk a little bit with you today, Colleen, about both your business ventures, but really focusing on the business broker part of it just because I feel that there is a need for that. And I also feel that a lot of people don't even know it's an option out there that's available to them. So I would like to dive into that if we could. So just tell us a little bit about yourself, Colleen, and welcome. Colleen: [00:01:11] Thank you so much, Sharon. Thanks for having me. Yeah. So, you know, I started a house cleaning business when I was 21 years old. I already had an entrepreneurial spirit, you know, back when I was a kid, I think with my grandpa, he was a veteran, and he hired me to do his lawn work. And I had to write a little invoice for him every week. And then he would pay me cash so that he could submit it to like Veterans Canada to help him. And that kind of sparked my whole mindset, I guess, on how entrepreneurials can, you know, make a living and make money. And so, yeah, when I was 21, I started my house cleaning company, really had an older lady who I was working with at the time who kind of just said, you know, like, you could do this yourself. And I just did. I got out fliers, put them on mailboxes—back in the day—and grew a little company. And from there it grew and grew and grew through mostly word of mouth and moved more into the commercial cleaning industry. And that's where I had been growing and building up a business when, you know, I started getting a little bit bored. Like, I don't want to clean forever. I don't want to own a cleaning company forever. And what else can I do? Do I need to go to school? That's kind of the timeline when I ran into Sunbelt Business Brokers and the opportunity came to me to join the brokerage. Sharon: [00:03:29] I bet… I'm just thinking outside the box here, I bet because you learned to be a business broker, so you know what to watch for and what to monitor. So do you incorporate that into your own business? Colleen: [00:03:40] Oh my gosh. So you know the saying where they say like you… if only you had known would you back then with what you know now? Yeah, I look at all the lessons I've learned in the last three years being a business broker. And I'm like, oh, if I had done this early in my business career, like where Caprice Cleaning would be right now. I have implemented some of those things into the cleaning company, but my brokering career is definitely where my full-time focus has been. And the cleaning company, as great as it is and stable as it is, we're managing really well on that side and I'm focusing on helping business owners sell their companies. Sharon: [00:04:23] Very cool. Your mindset about “I wished I would have known then.” that's what this whole podcast was about. Because like after being in business this many years, it's coming on 20 years for me. I mean, I've been in different businesses, but this particular business, It's Time Promotions has been 20 years and there's so many things that I think as an entrepreneur, you need to know. You need to know when you're starting up, you need to know what ten years, you need to know what 20 years and these podcasts is… I'm doing it because I'm selfish, because I get to learn so much as well. And this particular episode with you. You know, because I'm 57. I've been in it for 20 years. So what's my next step? So I'm going to be taking so many notes on what we're going to talk about today. So I really appreciate you joining us. Okay. So on that note let's just get right into it. Okay. So as a business broker, and I feel that there's not a lot of people out there that knows this is even an option. So can you explain to our listeners what a business broker is and what they do? Colleen: [00:05:20] Yeah. So a business broker is, what we actually we consider ourselves intermediaries. So we're basically intermediaries for business sales between a buyer and a seller. And our job is to… typically we have a seller side client where we evaluate a business, put it on the market confidentially. We find buyers and screen the buyers, make sure they're a good fit and that they do have liquidity to buy the business. And then, you know, we make sure that the buyer and the seller, their values kind of align. That's really important. And then we walk both parties through to the end with working with their accountants and their lawyers to get the deal done. And so we walk them through right to the end. So mostly, yeah, intermediary, making sure that, well, we're like the glue of the business deal. Sharon: [00:06:19] All right. So say, if I wanted to sell a business, how long does this process usually take? Colleen: [00:06:26] It's a long transaction. And lots of people don't realize that and they'll come to us a little bit too late. And they want to sell their business right now, and they want it gone within six months. That's not… most likely not going to happen. A business sale average timeline is 8 to 18 months. And if you have a really complex business, it could take up to three years potentially to sell your business. Sharon: [00:06:55] So average. Okay. So why is that such a delay? Why tell me what's going on behind the scenes there? Colleen: [00:07:02] There's a lot of emotion I would say tied to it. But on both ends and for one, the business value sometimes a lot of times is not what the seller had been expecting. And the buyer, on the other hand, also has a huge commitment on, you know, putting down a lot of their capital money that they have been saving for many years. So letting go of that and actually committing to a purchase is really, really hard for a buyer sometimes to let that go and and really live within the vision. Hey, like, I can grow this business to more than where it's at right now. Like, they really have to have an idea of how they're going to succeed. And I think that that's scary for a buyer. Sharon: [00:07:49] So what's the difference between me putting my business out there for sale and coming to you? Colleen: [00:07:56] Well, first of all, we market things confidentially at Sunbelt. So we don't put the business name or location out on the market. And one of the most important reasons that we do that is to protect the business. You know, we make sure that the employees don't get scared and try to look for new jobs. And the clients, we also don't want to scare the clients away, thinking, oh, well, you know, if Sally is gone, then, you know, who's stepping in? So they start to look for a different service provider or store or whatever the business may be, and that can, you know, definitely be really important. So not only that, but we're also there throughout your whole transaction. So when we're getting into details, it can be, for one, very complex, very… like if you haven't gone through it, which most entrepreneurs haven't, it's like, what is next? So having somebody there to help you and guide you and get you to the next step is really, really important. So that's a couple reasons why having a broker help you is really important. I mean, we know where to put those listings online. We know how to screen the buyers and we take the brunt of the phone calls. So that's another huge part of our day to day as a business broker is being on the phone, talking to people, talking to buyers. And we have some statistics at Sunbelt Canada. And over 20 years, one office had tracked all their buyer inquiries. And out of all the buyer inquiries, only 2% of them actually purchased a business. Sharon: [00:09:45] Oh, wow. Colleen: [00:09:46] Yeah. So 2% of the phone calls, inquiries that we get as brokers actually go forward with a purchase. Sharon: [00:09:53] And even, I couldn't imagine, like, say like, so you mentioned some good things like, yes, employees is huge. And I never thought you might lose clients. I get all that stuff. Makes sense to me. But also as entrepreneurs, we're busy. I couldn't imagine. And there's so many people that would just be taking up your time for just curiosity reasons even, right? Not, nothing else. So. Okay, so I'm going to ask this question and I hope it's not too blunt, but how do you get paid? Colleen: [00:10:16] If we have a seller side client we get paid upon when we sell the business by the seller. The sellers pay us. Sharon: [00:10:22] Okay, okay. So it's a percentage, kind of like a real estate broker, kind of like that. Or how does that work? Colleen: [00:10:27] Somewhat. Yeah, we get paid, and every deal is kind of different percentage wise, but we get paid at the end of the transaction when the deal is closed. We do charge an upfront like listing engagement fee as well, because we do a lot of work up front to put the value and do a… We call the most probable selling price. So we're looking at your business, what it's worth today on the market to put that together. And all the reports and put the package together is quite a bit of work. So we do charge a small upfront. Sharon: [00:11:00] So if a person like myself has a business, how do I find out what it would approximately be worth? Is that something you can do before we even contact you to kind of have an idea? Or do you just go to you and say, how much my company worth? How do we do that? Colleen: [00:11:13] Yeah, we can do, we can put a value on your business. Like we want people who are going to sell to come to us. We're not necessarily business valuators so there is certifications for business valuators, you know, if you have a partnership that's dissolving or you need to go to a court or something like that, as long as you go to a business valuator and they can do a formal valuation. Sharon: [00:11:38] So there's two different kind of scenarios there. Colleen: [00:11:41] Yeah. Think of us as like the realtor putting the market price on the business. There's lots of different valuation methods that we can use still, but we're going to put together more based on like what the market is saying today your business is worth. So yes, somebody could, you could come to us and we could do a most probable selling price and see what your business is worth. Sharon: [00:12:07] Gotcha. Colleen: [00:12:07] And if that's in a position where you're ready to sell, then we can move forward with that price. Sharon: [00:12:13] Okay. So again, they've been working in this business. They want to build their business to be sellable. So they come to you and tell me if I'm off ground here. So they'd come to you. You'd give me a market value for today's date, but I might not want to sell it for five years. Is that too soon? That's too soon or not too soon? Colleen: [00:12:32] No, that's not too soon at all. Like five years, I think is a good number to come in advance. I tell businesses all the time, like if you have, if you're going to be retiring within five years, come sit down with a business broker and we can show you what that sale process is going to look like. And we'll show you how we do the pricing, how we're going to evaluate your company, right? Because there's going to be pieces in there that, within those five years, that's perfect timing for you to start setting up things, not just the financials, but other aspects of your business so that you can get more profit from your sale. Sharon: [00:13:12] And what would a few of those aspects be? Colleen: [00:13:15] One thing, the financials, you know, like as a business owner, we want to write off whatever we can. We want to save tax money, right? So we're doing that. And in five years leading up to your business sale, you really want your company to start showing a profit if it's not already. So having a profit in your business is really important leading up. So cleaning up things, you know, meeting with your accountant and, you know, having that exit plan with a certified financial planner as well is also really important. So really bringing in your team of advisors together. Even a corporate lawyer. And the most amazing thing, and I don't know if a lot of people even do this, but having an annual meeting with your team of advisors and include your business broker and having them help you set up those financials and the way that your company is being positioned, is going to make the most money from your sale. You will be in the best position. Sharon: [00:14:19] And you can do that? You can literally set up a meeting with my accountant, my financial advisor, my lawyer, and my business broker? Colleen: [00:14:27] Yeah. You know, and then they can determine like if there's, you know, investments in your corporation that need to be moved out. Or if there is, you know, something that you can shift your type of class for your corporation, for example, maybe that needs to be changed. You want to be looking at like, what type of sale are you going to do at the end of the five years? Is it a share sale or is it an asset sale? And your accountant and your team there should be able to tell you, be like, well, what is your tax, like your capital gains tax is going to be upon closing? Oh yeah. We could get really, really. We'll just go weaving through all this information. Sharon: [00:15:10] Oh you're stressing me out. That's so funny. That’s so… okay. So five years is not too far out there? That's not unrealistic. Colleen: [00:15:19] Okay. You know, I've heard this saying so much. And if you can do it, start with the end in mind. Start now in your business, even if you're brand new and make an exit plan, right? It seems hard when you know you're really just getting going and you're developing your systems, you're figuring out the hiring and your team, and then you're trying to think about your exits? Sharon: [00:15:45] Mhmm. Colleen: [00:15:46] It doesn't seem realistic, but in the end, if you did that, your business would be in a position… Maybe you won't even want to sell it at that point, because it will be more hands-off for you in the long run, but that is the best, I think, takeaway that you could take, is start with the end in mind. Sharon: [00:16:06] Because like, even like even myself, I have like I have like because of entrepreneur where you just think, think, think, think, think. We don't sleep, right? So I have all these ideas that I want to incorporate into It’s Time. So the exit strategy is always way down the road because I got things I want to do first. Like I have visions here. Like I have ideas like that's really hard. But if I was to incorporate what you're saying, if I was to incorporate the end in sight. The end. It sounds like I'm putting on my own deathbed, but my exit strategy in sight, as well as my growth in sight that they would actually enable one another, like they would actually enhance one another? Oh, okay. I have one more question. What about is it necessary to come to a business broker if you're leaving your business to your family? Does that ever come across or is it just for when it's sale, like, is it better to still come evaluated? Or have you ever ran across that? Colleen: [00:17:00] Yeah, we can still put a price on the business and we can still help with the transaction as well, right? Like there's still movement. I mean, you maybe won't need us beyond the valuation. If you have a really good lawyer who can just finalize the paperwork. But it really depends. I mean, if you have a really good grasp on what your business is worth and what you want to sell to your kids, then you probably don't need a business broker. Sharon: [00:17:26] Gotcha. I just think, like sometimes as an entrepreneur, we think it's worth all this kind of money, right? And then, okay, so let's go back here. What makes, tell me a few of the top points, what makes a sellable business? Colleen: [00:17:41] Well, like I mentioned before, profitability. Like having profit showing on your financial statements five years in a row, of course, is very important if you're, especially if you're a small business, right? So you want to show a profit. Having yourself as the owner be hands-off in the business is really important. So working on the business, not in the business. If you're able to go on vacation and your business survives and it's still earning income, that's a really good sign. Make sure that you know the procedures, the policies are in place. That can add value for sure. And, you know, that'll make for an easier transition to the buyer to be able to take over and just carry on the business as it was running. That would be a really smooth transaction if you have those procedures in place. Being open to some seller financing, I think is really important, and we can talk about that a little bit more after, but also client concentration. So having one client bringing in more than 10% of the revenue can be a bit of a red flag for a buyer. So we really want to have diversity when it comes to your clientele. Yeah, like I mentioned, it kind of ties in again to the revenue and the profitability, but making sure that the cash flow is enough for a buyer to be able to pay a loan and pay himself, you know, a realistic salary. So no buyer wants to buy a business that isn't making himself money. Colleen: [00:19:25] Sometimes we have sellers that are like, oh, I don't pull a salary, it just goes into the business, thinking it's a good thing, but it's definitely not a good thing. You must pay yourself. I think it's really a real priority to pay yourself, you know, like an average salary that type of industry is calling for. And there's some websites and stuff that you can look that up and make sure you are paying yourself industry standards, because it's going to be really important when it comes to a buyer earning their own salary. Sharon: [00:19:58] So you can actually check to see if we're paying ourselves properly based on industry standards. Colleen: [00:20:03] That's right. Yep. Yep. And it's really important to do that. Like I said, no buyer wants to… Well they don't really want to buy themselves a job. And they, if they are buying themselves a job, if it is a small, small base like owner-operated business, they are going to want to be paid, you know, to the industry standard. Plus, they're most likely, unless they have like a huge cash injection, they're most likely going to have a small financing loan that they're also going to have to pay and the company is going to want, they're going to want the company to pay it. Sharon: [00:20:35] So as a business owner we're going to focus on having profit for five years. And sorry, so again, that, I always look at that bottom number. But that bottom number isn't always accurate. There's some things in there that is taking away that can show a profit. Is that true? Colleen: [00:21:09] Yeah, yeah that's true. And part of what we do when we're putting together the valuation, which we call the most probable selling price, is we do look at the businesses non-discretionary spending we call it. So that is things that you're writing off in your company that are completely unrelated to the business. That is seller’s earnings. Sharon: [00:21:35] What would the example of that be? Would that be me taking my husband out for supper? Would that be me stopping to buy him a box of beer? Would that be me like doing that kind of stuff? Colleen: [00:21:43] Yeah it could be that. So it could be meals and entertainment for yourselves. It can be, say you have kids and you have the kids’ cell phones on your company, you know, policy. It can be travel. Even if it was somewhat business-related. Not every buyer is going to travel. We've seen some really crazy things people are writing off. We do need to make sure that it's legit and we do need records, so a seller can't just come to us and say like, oh, well, you know, $20,000 this year was put towards our personal vehicle and we need to have that record. You're going to have that pulled out. Buyers, when they go through due diligence, they're going to be looking really, really deeply into that. So we want to make sure that everything that we do put in as non-discretionary spending is accurate and honest. Sharon: [00:22:37] Yep. Absolutely. So paperwork is your friend. Colleen: [00:22:40] Yes, yes. I also say, like on top of those other items that we listed, having a good bookkeeper or doing good bookkeeping and monthly reconciling is so important. Like knowing your numbers and where you're at right now is really, really important, especially when we're in the middle of a sale. So between that 8 to 18 months, record keeping has to be kept up because we're constantly going to be asked, what are the current numbers? Where are we currently sitting? Sharon: [00:23:12] What would be the current number? Would that be like your average dollar sales? Would that be your.. What doou consider knowing your numbers? Colleen: [00:23:18] I'd say a monthly profit and loss. P and L’s. Sharon: [00:23:22] Just those like the whole blah blah blah. Cost of goods, sold expenses, your payroll, all that kind of stuff. Yeah. Okay. Colleen: [00:23:28] Everything. Yeah. Your operating expenses, your revenue, your cost of goods, you know, everything updated every month. Sharon: [00:23:36] Yeah. Okay, one thing I find, we use QuickBooks Online. I love QuickBooks online. I could become a sales person for QuickBooks Online, but I really like it because you're talking about paperwork as your a friend, you actually upload all your bills into QuickBooks. It's like it's right there. It's magic. Colleen: [00:23:52] It is. Quickbooks is great. I use that one too. Sharon: [00:23:55] Yeah. Okay. So go ahead. Colleen: [00:23:59] Oh, I was going to say and it's really affordable. Like if you're not paying for a basic software program like QuickBooks, like, and you're doing it the old-school spreadsheet way, you may want to upgrade. Sharon: [00:24:12] Yeah, I like it because like, we have three different locations and my bookkeeper works remotely, but I could be at home and I can do some entering, some stuff or anybody… anybody can invoice from any location. It's genius for sure. Okay. So you talked about the seller's financing, some of that being an option. Can you elaborate a little bit on that? Colleen: [00:24:32] Yeah, I would love to. And I think that this is a really important piece because sellers need to be aware of this and be open to it, especially if it's a smaller business. Okay, so if you're $1 million in revenue and under and you're trying to sell your business, there's a good chance of seller financing being asked for. Or we do often in the industry call it vendor take-back. So VTB. It doesn't mean that you're financing the whole deal. So a lot of the time the buyer will need to put 25% down payment, and then they're going to get some commercial financing, and there may be a bit of a gap required from the bank and by the seller holding back roughly anywhere from 10 to 15% of that purchase price, that can help the buyer with financing. So the banks like to see that because it really says to them, okay, the seller, first of all, believes that the business… believes in the business and they believe that the business is profitable and viable. It can also help fill the gap if the buyer isn't quite at that 25% down payment. Sometimes the bank may consider the VTB part of the 25% down. So depending on the industry, for example, like retail right now, brick and mortar retail businesses are, you know, a little bit harder to finance. And the banks are looking at them with a bit of a lesser value than we would have evaluated about two years ago, even. Sharon: [00:26:15] Why? Colleen: [00:26:17] Well, competing online sales, I believe, was what it really is. Sharon: [00:26:22] Of course. Colleen: [00:26:23] They’re looking at it, well retail is kind of going out. Do we want to put, you know, our risk into this financing? And especially if the buyer, if they're not putting 25% down or more, that can be, you know, alarming to the bank. So even two years ago we would be doing our inventory as additional above and beyond the asking price. Currently right now for retail, some retail, they're saying they want the inventory included in the valuation which is bringing down the value of the business. Sharon: [00:26:59] Yeah, those are money hanging on hangers. I always say it's money hanging on hangers. Colleen: [00:27:03] Yep. Yep. And unfortunate for them. But if you are selling, you can still sell them. You can still get financing, but having some vendor take back included can help with that. And I like to tell all my sellers in the beginning about it, be like, just be open to it because some people are very scared about, okay, am I ever going to see my money? You know, so I'll kind of explain how the vendor take back works when we're dealing with a commercial bank as well, because the commercial bank will want to be first charge on the loan. So they get their money first no matter what. And they want the vendor take back to be interest-only payments for five years and then a balloon payment at the end. Typically, what will happen, that balloon payment, the bank will turn around and say, hey, we'll lend you the money to pay out the VTB. But they don't want the buyer using up all their cash flow to pay both loans, because they want to make sure they have enough money to run the business, pay themselves and pay back the commercial loan first, or at least get a good foothold in the loan and then pay back the seller. So that does make sellers, you know, a lot more scared of or not really wanting to do the vendor take back because they're nervous they're not going to ever see their money. And I don't know if we've ever like, seen somebody not ever get paid back. There is a lot of securities that your lawyer can put into the agreement. There'll be a general security agreement and a promissory note. There can be other securities, like getting into technical legal stuff here, but like, it's called a hypothecation of shares. That's another security that, you know, the seller can ask for to make sure that if you know the buyer does default on their payments, then the seller can take them to court and, you know, go back and to get their money, or even potentially take the business back. Sharon: [00:29:08] So say for example, a seller does do this vendor take back. They opt into it. So it's usually anywhere between 10 and 15% you're saying, approximately. Does it affect their capital gains at all? Will it be beneficial if they did that in that route or not really? Or do you know or is that more of an accounting question? Colleen: [00:29:24] Well, my disclaimer is I'm not an accountant. But there could be definitely a capital gains. If you're selling as an asset sale and you are having to pay capital gains, you know, having that paid out over five years could be beneficial. But I recommend to all my sellers to include their accountant into that conversation so that they can properly tell them exactly what situation they will be in. But yeah, there can be benefits. Now, if you're selling your business as a share sale, every person, I think it's at $1.2 million in capital gains exemptions in a lifetime. So, you know, if you sell your business for $1 million as a share sale, you most likely won't have to pay capital gains tax. Sharon: [00:30:16] So what's the difference between a share sale and an asset sale? So for example, I have a promotional company, I’ve got inventory, which we just talked about is no good for nothing. I got a few equipment to make stuff, but the buildings I'm going to keep into my numbered company. So if I was to sell It’s Time Promotions right now it's just the name. Would that be considered a share sale or an asset sale, or how do you decipher those two? Colleen: [00:30:41] Are you selling the corporation? Sharon: [00:30:44] Why do you have so many questions? Just. Yeah, I guess so. I don't know. So what do I do? Colleen: [00:30:52] Yeah so you’re selling… You said you had a number company, so I would assume that in that case you have the two entities or more, whatever. So if you're going to sell the actual entity like the corporation. That's a share sale. Sharon: [00:31:06] That's a share sale. Okay. Colleen: [00:31:07] It's a share sale and it's a change of shareholder. Sharon: [00:31:11] Oh, that's why it's called a share sale. I was always confused by that. So what's an asset sale? Tell me what an asset sale is. Colleen: [00:31:18] So an asset sale is similar to a share sale in the aspect that you're still getting the company name, the website, the phone number, the assets in the business. But you're not selling the corporation. You're not selling the entity. So the buyer goes and opens a new entity, but takes over the assets. Sharon: [00:31:42] Oh, so say, for example, somebody comes in, they buy It's Time Promotions, but they're going to call it, whatever, something else. Colleen: [00:31:49] It’s Time 2025. Sharon: [00:31:53] Yes. So they rename it something different? So they're not keeping the name? Colleen: [00:31:57] Yeah. But they will take, it'll be… For example, it could be like Alberta Incorporated Lumber Company operating as your company name. Sharon: [00:32:07] So what happens if they still want to do a share sale but they changed their name? You can't do that at all. And I just can't run It's Time Promotions anymore. Like It's Time Promotions. Like that's no longer mine. Colleen: [00:32:19] Exactly. So there typically is a non-compete and exclusivity of the name given to the buyer agreed upon when we agree on a share sale. Sharon: [00:32:31] Okay. So a share sale up to an X amount typically I think that's the word you use, you don't have to pay capital gains. Colleen: [00:32:40] Yeah. Up to your lifetime amount. I mean, even if the business value is just for round numbers, say $2 million, we can still sell a share sale for $2 million. The owner, if there's one shareholder, will claim 1.2 million in in capital gains exemptions. And then the rest of it will be taxable. Sharon: [00:33:01] I gotcha. Oh my goodness gracious. Colleen: [00:33:04] I know. It’s a… Sharon: [00:33:05] It's a lot. Colleen: [00:33:05] But essentially, like I, just because people get confused about an asset sale and they're like oh all I'm buying is the assets. Like they're thinking tangible hard assets. Sharon: [00:33:15] Yeah. Like my vinyl printer. Like that kind of stuff. Right. My silkscreen machine. Yes. Yeah. Colleen: [00:33:20] But it's not necessarily just the tangibles. You're also buying the name, the website, the you know, the people, the systems, the recipes if you're, you know, like I have a brewery for sale right now, like the recipes are a part of the business operation. So those go even if it's an asset sale. It's not asset liquidated sale. We’re not selling your equipment. We're selling an asset business. Sharon: [00:33:49] So say, for example, I focus for the next five years or any of my customers focus on the next five years, he have, we turn the ship around, we have a great profit showing on the bottom. This is what we're focused on. Is it harder to sell that business because they can't… They have to pay top dollar? Or is it does that come into influence? Does that make any sense to you, like because it's a higher selling business for sale now versus, you know, I'm saying only make an X amount as profit, but they can make it better. Does that have any influence on it? Colleen: [00:34:21] No, I actually, no, from my experience the businesses that are making more money are easier to sell. Sharon: [00:34:27] Okay, I see okay, just because I know a serial entrepreneur and she's always wanting to buy businesses, but she wants to buy businesses that she can fix. Colleen: [00:34:35] Yeah. So we have buyers like that as well who are, you know, the serial entrepreneur. We have a few of them who keep coming back for more, and they're okay with buying like a business that is hurting, you know, profits are down. You need some cleanup and need somebody to come in and do some, you know, refreshing. Like there are buyers on the market, but those buyers definitely are looking for a deal. Sharon: [00:34:58] Gotcha. Okay, okay. So they're the ones that are… because what do you call that? Like almost like shotgun selling or whatever. Like the rapid Colleen: [00:34:40] Fire sale. Sharon: [00:42] Fire sale. That's the word. I knew I wasn't using the right words. Okay. Very good. Okay, so I wanted so this is something we're going to... Well, we shouldn't even say that any business, first of all, any business should focus on this because we talked about you're going to grow your business, but you should always have the exit insight as well and know what that is. So where do they start that at? Is that still coming to you, or do they go to a somebody who can evaluate it, or do they just write it on their vision board, or how do they do this? Colleen: [00:35:38] I mean, I guess it will depend on the entrepreneur and how self-starter that they are, like into, you know, researching what to do. But, you know, they can come to us and come to a business broker to walk through that process. Take a look at you know, what does it look like? What are we looking for? I think sitting down with any of us at Sunbelt Edmonton or Sunbelt Canada in general, they really will give like a good idea of like what you need to do to prepare your business for sale. So that's really like the first thing that you should do. But I think too, like really incorporating your team of advisors and bringing those people in together is going to help. It's going to help a lot. Sharon: [00:36:25] So they come to you. And is that something that… do you work with them for the next X amount of years of what they can focus on to make better? Is that something that you guys help with, or is that more in the accounting department? Colleen: [00:36:37] We don't do a lot of like consulting and advising on that end, but there are some really amazing exit planning advisors out there that specifically are working with businesses to prepare them for sale. And really, like at Sunbelt, we really try to stay within our lane, right? I like to work with those business advisors who are working with businesses that are, you know, planning their exits because they have the tools, they have programs to help you, you know, pinpoint okay, what area do we need the most work on? And somebody to help them guide them through that. That's not necessarily my expertise. So, you know, we stay within our lane and we refer to our partners out there who can do that. And so yeah, there's exit, there's actually like a certification on exit planning. Our brokerage really here in Edmonton we really have focused on the business sale. Sharon: [00:37:36] Gotcha. Colleen: [00:37:37] If you came to me and I could still help you learn what the process looks like. Sharon: [00:37:41] Yeah. Colleen: [00:37:42] You're not in the position yet to sell. And you need, you want that five years to prepare, I would probably refer you to a couple different like coaches, consultants that can help you, right? We can pinpoint a couple things that, you know, really pop off the paper and give you some suggestions. But when it comes to actually guiding you and walking through that prepared planning, I think that that is more of a designated. Sharon: [00:38:08] And that's a business advisor, you called them. See another new thing I learned. Okay. Colleen: [00:38:14] Yes, so having that exit advisor on your team helps. Sharon: [00:38:17] Business exit advisor. Okay. So they're going to come to you. You're going to help them with the current market value. And that would change yearly, of course, until they get to where they want to sell. But they'll have an end in sight. They have a clear goal. Again, much like their vision board of what they're wanting, they're going to work with their financial advisors, their accountant and their lawyers, as well as yourself and also their business advisor together to get the best value on their business when they go to sell, whether that be three years, five years, 18 months, if they need to. Whatever that looks like. Colleen: [00:38:54] Yeah, exactly. And I just wanted to note too, like in our office here when we, I mentioned that we have like an up front engagement fee to put together that valuation. When we bring in a client, they’re our client for life. So every year, even if they're not on the market yet. So the business may be like, okay, this isn't what I want to sell it for. I'm going to work with my business exit planner to get it to a better, higher value. But every year they can send me the financials and I'll continue to update their valuation for no cost, no extra. It's a one-time nonrefundable fee. So we'll continue to update those financial statements so we can watch the growth. Sharon: [00:39:38] Okay. That makes more sense to me because I couldn't grasp why I'm going to come to you for five years and then have to come now and then. Okay. Colleen: [00:39:45] Yeah, yeah. And then, you know, at one point it might be like, okay, well, I think I'm ready to go on the market now, right? Sharon: [00:39:50] Right. So it might not be right now, but we can clean up for five years until we're ready because we're comfortable with that. So how long, what's the average, so say if I put a business out there and you put it on their website or put out to the world, however you guys do that, whatever avenues you guys use, how often, like what's the length that it usually stays on the market for? Is there an average? Colleen: [00:40:11] Higher profitable businesses will go quicker. Sharon: [00:40:14] Okay, so that answered my other question before. Okay. Colleen: [00:40:17] Yeah. Like, and certain industries will also go quicker quicker right now. Like I've had really good success in the construction industry. My construction businesses that I've sold have sold within 8 to 10 months. So on the market for 8 to 10 months, not, well, the whole transaction, I should say, from being put on the market to closing. Where, you know, the retail’s longer. Smaller owner-operated businesses may also be longer because we're looking for a very you know, the buyer pool is shrunken down because you're looking for a very specific buyer at that point. Sharon: [00:40:58] Yeah. Colleen: [00:41:00] So if the owner is really active and really key employee in the business, then it's going to take longer. Sharon: [00:41:07] Yes, of course. Totally makes sense. What are some key things right now that would help somebody buy a business? Like I'm thinking to myself, like right now we're just incorporating online stores. We talked about the brick and mortar. So we're trying to incorporate where people could sit at home in their pajamas and order stuff from us, from our bigger companies, right? Like, so they can literally log into their, their, their portal and order their stuff. So we're trying to incorporate that kind of stuff. But what else would there be? Is there anything else out there that jumps out at businesses being sold that they've incorporated that's a little bit different than the norm. Colleen: [00:41:39] Like for the buyers looking? Sharon: [00:41:41] Yeah, yeah. Something they might be looking for that we're that we don't even think about doing. Sorry, that wasn't a written question. I know I did that too. Because I thought about the online stuff, right? So we're trying to adapt to the current world, right? We're trying like we created our own software actually too, which is a genius. One day I'm going to market that. We just don't have time to do that right now, but we're going to incorporate AI into our software. I think as a business owner, I think and correct me if I'm wrong, when you go to sell, the more that you stay current in your avenues, I'm thinking it's probably easier to sell down the road. Is that correct? So we talked about good, good financing or good financial or good paperwork. What else? Colleen: [00:42:23] Like intellectual property I think is kind of where, if you're developing, you know, software specific for your company, that is definitely going to be helpful, right? Implementing AI into your systems, definitely. Like you got, you have to stay current and you have to keep innovative even once you're on the market. Like I have to tell my sellers all the time, like, don't stop. Like just because you're for sale now, don't stop. Because people do, because they think, oh yeah, I'm done. And it can make the numbers go down. So you have to continue to think about the future and have to keep thinking. Don't think like it's already sold. Continue to run your business like you would and make those decisions. You have to continue buying inventory, right? And so the minute that you stop doing all that, your business value is going to come down. So keeping current is important, right? Sharon: [00:43:23] So that does get valued in the sale of your business? If you're doing all that kind of stuff it will show. Because it doesn't show on numbers. It doesn't show on the numbers. It doesn't show anywhere. It just makes our life simpler. Colleen: [00:43:35] Yeah. We do have a checklist as well, like from Sunbelt, that when you are coming up to prepare your business, you know, what are things that you can start to do? And, you know, simple things can be like if you have a store, well, you know, keeping it clean is important. And you'd be surprised, like, people decide like, oh, I'm just not going to dust the inventory anymore. Buyers want to see a nice, beautiful space when they come in. They want to see themselves there. Too, like cleaning up like your books and cleaning up your procedures, preparing items, like, we have a list and I can make that available for you and your viewers if you want, because, you know, there are a few things there that you may not be thinking about internally. You know, like I have a seller who was using his Instagram, his company Instagram, kind of like as a personal Instagram too. So it was like, okay, you have to clean that up, like remove your personal stuff off those items, off of social medias and really remove a lot of your personal aspects of the business in the back-end and clean that kind of stuff up. But yeah, there's a list of things that you can do to start preparing. One thing also, like I feel like I learned from my lessons in my… Right? And one problem that came up recently was my seller could not find her minute book, and it was an old minute book I've heard. Sharon: [00:45:04] That's so bad, you have to do it yearly. I just learned that from one of my podcasts. It's hugely reflective on the sell of your business. Why? They're just boring, blah blah blah gibberish. Colleen: [00:45:17] Well, if you are selling as a share sale, you cannot sell it without it, right? And little things like what type of shares you have, you know, have you, your minutes are supposed to be put in there. I know a lot of small businesses are like, I don't have minutes. I don't have anybody to do a meeting with. Yeah, yeah. But those annual renewals and everything goes in that minute book. I personally, and I think it's a good idea, is to keep your minute book with your lawyer. Sharon: [00:45:49] I do, because otherwise I'd forget about it. That's why they just tell me, Sharon it’s time. I'm like, thank you. Good. Got it. Colleen: [00:45:54] Send you your bill. Sharon: [00:45:56] Yeah, I just get a yearly bill. Colleen: [00:45:58] Yeah. And they also, a lot of law firms are creating a digital minute book. So a lot easier when you need to find it. But in this case that I had, it was a 32-year-old binder, hard copy binder. And it went missing. And the lawyer was going to re, you know, recreate it. It was going to cost money to recreate 32 years of it. And luckily the seller did end up finding it, but it did cause a lot of also, you know, concern on the buyer's end because they were like, well, what are you hiding? Why can't you provide this? Like, what are you hiding? So it was, you know, not good. So really, really recommend that you have your minute book up to date or keep it with your lawyer. Sharon: [00:46:50] I'm surprised. I just, this is the second time somebody told me that. And I'm really surprised that it's that important. Like, it's super important. Yeah. And I think again, as an entrepreneur, especially a small business, we don't even think about that kind of stuff. We would never even think that was an issue. Colleen: [00:47:04] Right. Yeah. When you go to sell it, it will be. Sharon: [00:47:08] Yeah. Wow. Okay, so we've been on here for a while, so we should probably wrap up because I feel I could talk to you forever, so let's just… I always have these few questions at the end, and they're just kind of, like, fun. So what's the most underrated business skill that they should have? Colleen: [00:47:24] Talking on the phone. Yeah. I feel like a lot of people don't like to talk on the phone. Sharon: [00:47:31] Well, it's a different world. People don't even want to answer the phone anymore. Colleen: [00:47:35] I know. But like, when, if you can and you feel comfortable talking on the phone, you can get so much more done. And it does… It took me a while because, you know, I was starting to like, you know, hide behind my text and stuff like that. And my the CEO of my office, Ish, he was always like, dialing for dollars, you know, don't email, like you're wasting time. Sharon: [00:48:01] Yeah. The phone is green. The green is phone. Yeah, yeah, yeah. Colleen: [00:48:04] And it took me a few years to be like, oh, I'm so comfortable with picking up the phone now and having a conversation with somebody to explain, especially in my industry. It's really complex. Like explaining over the phone with a buyer or seller is so much more like successful. Sharon: [00:48:22] Yeah. Colleen: [00:48:23] If I was to type that all out, wouldn't be the same. Sharon: [00:48:26] Yes. So I always tell my team too, if you're going back and forth like, say three emails deep, you're phoning them because that's a big room for error. I actually have one customer. They sent me four different things. They want different items. Can I just phone you because I'm... My brain's going to blow up. I'm going to do something wrong here. So it's just much easier to go over with the phone. But another thing that we've incorporated, because sometimes my well, a lot of people, they're busy, right? They can't take the time to come down to meet with you or whatever, but they want, they need to see something. So we've incorporated a Zoom call, much like what we're doing right now. And then I can show them different platforms on the different websites. Right? So utilizing that and then you get the bill. Also, I feel like you talked about the phone skills, but it's also building relationships. You're not building that same relationship over a text message or even an email off the get go. Down the road a quick text is fine, you know, just say your order’s here or whatever the case is or but you need to pick up that phone. You need to have phone skills. Yes, for sure. And I think the more authentic you are when you're not trying to be something you're not, the easier it is. Colleen: [00:49:28] Yes. Like, I 100% agree. Just be yourself. Sharon: [00:49:33] Okay. Any books that you have read that changed your life that you can refer back to regularly? Colleen: [00:49:39] Yeah, I think that the first book actually, in Covid, I did a little pod-like group thing with a group of people, and we studied the book Atomic Habits by James Clear. I think everybody should read that book. Sharon: [00:49:54] Everybody needs to read that book. 100%. And yes, and I think the more you do it, the more you do it, it does become a habit. And what does he say? Is it three, six? I forget how it goes. It's been a while since I read it, but everything that he says is so clever. So clever. Colleen: [00:50:06] Yeah, yeah. I suggest read the book or do the audiobook. One of my favorites was that. Sharon: [00:50:14] Atomic Habits. Okay. All right, so tell us where our listeners can get ahold of you. Colleen: [00:50:20] Yeah. So I am reachable online. Our website, SunbeltCanada/ Edmonton. I'll send you the link there, Sharon. Also, you can find me on LinkedIn and I'm on Facebook. I'm starting to dabble in Facebook. I'm trying to get better at my social media stuff, but I do have a profile there for work. Yeah, or you can call me. Sharon: [00:50:47] Yeah, call. I got phone skills. Colleen: [00:50:49] Pick up the phone. I'll answer. Sharon: [00:50:53] It's so true. It's funny because LinkedIn is a whole different platform than Facebook like, but it's still, they coincide, right? So I, my take on it, Facebook is if they want to get to know you to your core, like that's where I put a picture of my dogs or, you know, ride our e-bikes. So that's those pictures, right? But LinkedIn is more professional and helpful. Like that's where the podcasts go and all that kind of stuff. So it's two different platforms, but both beneficial in so many ways. So absolutely. Okay. So they could, I did go on your website and I did find a picture of you on your website. So anybody that's wanting to get ahold of you, they actually list all the brokers on the website. So you can go there and find your broker. And is it okay, so say for example, somebody just playing with the idea and I didn't answer the proper question or I didn't ask the proper questions. Is it okay if they just phone you and ask questions to see if this is a feasible resort for them? Okay, okay. Colleen: [00:51:41] Yeah, absolutely. I definitely like to start any conversation with a phone call and see, you know, is it time for us to sit down together or is there a couple questions I can answer? And I'm all about educating for like this purpose. Right? Like if I can provide you with any kind of education or info that's going to help you over the next five, ten years, I'm definitely open to that conversation. And obviously no obligations, no cost for that, right? Sharon: [00:52:15] I love it. Well, I am going to be reaching out for you, for me, because I don't know if I'm going to retire in five years, ten years, or 15 years. But that's something I don't know what it looks like. Yes. We have to sit down and do that. Okay. All right. So anything else you want to add to our listeners before I sign you off here? Colleen: [00:52:31] I don't think so. I just, you know, want to encourage everybody, you know, that this is possible for everyone, right? Like, if you ever envisioned you selling your business, is that why you're growing your business? Then you know, you can do it, right? Sharon: [00:52:47] Whatever… Like, I know quite a few businesses that just close their doors. And what? Why is that? Like why is that? Is it just because the bottom number, the revenue, that number we looked at, the profit on the bottom? Is that what that is? Colleen: [00:53:01] Often, and this has happened even to a couple listings that we've listed and they have gone you know, they haven't worked on their business while it's on the market. And they start injecting their own money into the business. They're having massive cash flow problems. That can be probably the number one reason why the business closes. Sharon: [00:53:21] Thank you so much for joining me. And I know we changed the whole agenda off a little bit, but I really think our listeners would benefit more so from this. But I know that you are a fountain of information, being an entrepreneur yourself and being a business broker is hugely beneficial to our listeners. So really, really thank you for that. So thank you for joining us today, Colleen. We really appreciate it. Until next time, thank you for tuning in. Remember, your voice, your journey, and your leadership all have value. Keep showing up everybody. Thank you for joining us.