Latest / The Inspired Stories Podcast / Business Valuation and Exit Planning with Greg Waller, the Blue Collar Scholar

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Business Valuation and Exit Planning with Greg Waller, the Blue Collar Scholar · The Inspired Stories Podcast

0:04
Welcome to another edition of the Inspired Stories podcast,
0:08
where leaders share their experiences so we can learn from
0:12
their successes and be inspired by how they've overcome
0:14
adversity. As you listen today, let one
0:18
idea shape what you do next. My name is Anthony Kotaspodi and
0:22
today's guest is Doctor H Gregory Waller, Managing Partner
0:26
of Cornerstone Valuation, a 25 plus year firm that helps owners
0:31
of closely held companies understand, grow and ultimately
0:35
realize the value of their businesses through rigorous
0:38
business valuation, exit planning and transaction
0:42
readiness. In addition to his valuation
0:44
work, Greg is a Partner and Managing Director at Windward
0:48
Advisors, a middle market investment banking firm, where
0:52
he advises founders on sell side M&A and selective buy side
0:56
transactions, guiding companies through strategic positioning,
1:00
confidential marketing and deal execution.
1:04
Greg's work sits at the intersection of financial theory
1:07
and hands on deal experience. He has published research in
1:10
leading journals, including the Journal of Financial and
1:14
Quantitative Analysis, and regularly speaks to groups such
1:18
as the Virginia Bar Association, Virginia CE OS, and the Virginia
1:23
Manufacturers Association. Greg holds a PhD in finance from
1:28
Purdue University and until 2025 served as a finance professor at
1:33
Virginia Commonwealth University.
1:36
That combination of academic rigor and real world advisory
1:39
work has made Greg a trusted voice for owners navigating high
1:43
stake business transitions. Now, before we get into all that
1:48
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2:44
All right, back to our guest today, the Managing Partner of
2:47
Cornerstone Valuation, Greg Waller.
2:49
Thanks for making the time to Share your story today.
2:52
That's my pleasure. Thanks for having me.
2:54
So, Greg, you've been a professor at Ohio University and
2:58
Virginia Commonwealth University.
3:01
Is it unusual for someone with your experience to have both a
3:06
foot in the academic world as well as the business world?
3:09
Yeah, I always tell people that I'm probably the most unlikely
3:13
academic that you're ever going to meet.
3:14
I I was raised in a blue collar entrepreneur household.
3:19
My father owned a small business that repaired painting and
3:23
sandblasting equipment. And from the time I was in high
3:27
school, I was doing painting and sandblasting work.
3:32
I, my father used to get these calls from customers, you know,
3:38
do you sandblast trailers? Do you sandblast lawn furniture?
3:42
And he always had to say no until I got my driver's license
3:46
and it was like, OK, this is your opportunity to go make
3:49
money. So from the time I was 16 years
3:51
old, I was out doing painting and sandblasting type work.
3:55
I ended up starting a company that painted structural steel
3:57
bridges, tanks, towers and, and that kind of stuff.
4:00
And at one time I had a reasonably good sized group of
4:04
folks out doing bridge painting work and other structural steel
4:07
painting. And there there was a time I
4:11
remember working, I was working on a bridge and I was underneath
4:15
of this bridge with this guy. I had to fill in for a couple of
4:18
folks that I had to fire. And I was working on a on a
4:22
scaffold with this old guy that had been doing this for a long
4:26
time. He was probably like my age, but
4:28
you know, he seemed old at the time.
4:30
And he was like, he's like, look at my hands, look at my face.
4:33
He said I'm doing this because I don't, you know, I don't have
4:36
any other options. And like he said, go back to
4:38
school. You're a smart boy.
4:39
So I went back to school I because.
4:41
Of that conversation. Because you know, it was like
4:44
there it was a confluence of events.
4:46
But but that that summer in particular is when I really
4:50
committed to like going back to school because I dropped out of
4:53
college to to run the painting business.
4:56
And when I went back to school, I finished my undergraduate
5:00
degree and got my MBA. And while I was doing my MBA at
5:04
Ohio University, some of the faculty said, Hey, did you ever
5:07
think about doing academics as a career?
5:09
I was like, no, I never thought about doing academics as a
5:11
career. And they said.
5:13
Your plan at that point? Go back and run the family
5:16
business that my father had. That was the, the plan I was
5:18
going to do my MBA and, you know, go back and run the family
5:21
business. And so they were like, you know,
5:24
you ought to think about doing academics.
5:26
And I was like, why would I like, why would I want to do
5:28
that? And so they broke down, you
5:31
know, nice predictable lifestyle and, and all the good things
5:36
that go along with, with higher education.
5:38
And so I I stuck around Ohio University for a year after my
5:42
MBA and did some research and did some teaching, build up my
5:46
academic resume and applied to doctoral programs and then got
5:51
into the doctoral program. But it was not like it was not
5:55
the first thing that came to my mind to do academics.
5:58
So how did you eventually transition from academics back
6:02
into the business world? Well, I, I don't think I ever
6:05
fully transitioned into academics.
6:07
So when I was at, when I was at Purdue University, I was my
6:12
teaching assistant assignment was in the executive education
6:16
building at Purdue University. And, and I had a, a gentleman
6:20
there that I was working for one of the long time tenured
6:23
professors, Bill Llewellyn. And, and I had a pretty easy
6:27
job. I mean, I did my class work and,
6:29
and I helped out with the executive education when the
6:31
executives were in town. But at the same time, I was also
6:34
doing a real estate development outside of Chicago.
6:37
And from Purdue to Chicago was a reasonable commute.
6:41
And so I was doing real estate development deals while I was in
6:43
my PhD program. And, and I remember Bill
6:45
Llewellyn coming in just looking at me a couple times and shaking
6:48
his head. It's like he couldn't believe I
6:49
was just sitting there running real estate deals while I was
6:53
doing my PhD. But so I don't know that I ever
6:55
fully got out of it. And then, you know, when I took
6:58
the academic position, I, I finished my PhD in, in 2005.
7:03
And it was right around the time when the, you know, the big
7:07
financial crisis was starting to take hold and real estate
7:10
development was like getting hurt pretty bad.
7:14
And so I rode out the, I rode out the the recession, the Great
7:18
Recession as a tenure finance or a tenure track finance professor
7:23
at the time. So yeah.
7:26
So how did the opportunity to join Cornerstone Valuation come
7:30
about? This is roughly 12 years ago.
7:32
Yeah. So when I was after my MBA and
7:36
while I was in my doctorate program, I, I had a couple
7:40
acquaintances who were accountants and they had
7:42
businesses that they were representing that needed
7:45
valuations. I remember the first one I did
7:48
was for a a family owned restaurant operation.
7:52
There was a death in the family and they needed evaluation to
7:56
settle the estate. And so I was doing business
7:59
evaluation work kind of ad hoc while I was at Ohio University.
8:03
Some expert witness testimony. And when I came to VCU in
8:08
Richmond, I I met my soon to be partner, Jim Edge and he had
8:15
started Cornerstone before and before I arrived in Richmond and
8:20
he was transitioning out and asked me if I'd be interested in
8:22
in buying the practice from him, which I did.
8:25
How did the two of you meet? We had a mutual acquaintance.
8:29
So I had a a colleague at VCU whose husband was a real estate
8:33
guy and we kind of told war stories together and he said,
8:37
hey, you know, I got to introduce you to this friend of
8:39
mine. And and so that that's how we
8:41
got, we got introduced. And what was it about this
8:45
opportunity that attracted you to it?
8:48
Well, I've been doing some, you know, business evaluation,
8:52
expert witness testimony on my own.
8:54
I like the idea of meeting somebody local to Richmond who
8:58
could help me network in the community.
9:02
The company had a great reputation and my former
9:06
partner, Jim Edge was just a a great guy.
9:10
He became a great friend and was a very gracious person.
9:16
In terms of transitioning of business over to another person,
9:19
he just did a great job. So tell us about all the
9:22
services that you guys offer today.
9:25
Yeah. So we do.
9:27
In a nutshell, we value and sell companies.
9:29
So we do business evaluation for lots of reasons.
9:32
They're, you know, I think the average person may not realize
9:37
when a business valuation is needed death, right?
9:42
If there's a a death and the decedent owns a fractional
9:46
interest in a company, in order to settle out the the estate,
9:51
you're going to need a business valuation gift taxes.
9:54
If you're going to gift shares of a company to children or to,
9:59
you know, other people, the you're going to need to have a
10:01
valuation put on that on that gift size.
10:05
We help for internal planning purposes, you know partnership
10:09
transitions with internal buyouts and buy insurance
10:14
litigation support. You know whenever all
10:18
partnerships start out well and not and many of them don't end
10:21
well, when they don't end well and there it's a business
10:24
relationship, they often end up in court and there are
10:27
evaluation issues that have to be litigated and so I can get
10:30
called in as an expert witness. We help with M&A work as well
10:35
too. So if somebody wants to sell
10:36
their company and they want to know, you know what is the
10:38
company worth, we help in that regard and we also help with the
10:43
transaction side. So if a client is looking to
10:48
exit their business through our Windward Advisors platform, we
10:53
execute that transaction. So we do sell side advisory
10:56
mainly. Some select buy side advisory as
10:59
well too. So Cornerstone is really focused
11:03
on doing the business valuations.
11:05
Windward gets more involved in handling the actual transaction,
11:09
maybe getting the business prepared for sale, sort of
11:15
guiding them through that M and a process helping them find and
11:17
vet buyers. Am I understanding that
11:19
correctly? Yeah, Yeah, you got that right.
11:22
Just because there are certain professional liability issues
11:26
associated with business valuation because when I sign on
11:28
a business valuation report, it's kind of like an audit.
11:31
So to keep the to keep the practices separate and and the
11:35
liability issues separate, we run the business valuation
11:39
through Cornerstone and we run the M&A advisory through
11:42
Windward got. It OK.
11:44
So Cornerstone has been around for over 25 years.
11:48
You've been there for about 12, right.
11:51
Can you share a specific challenge in the early days that
11:56
helped to shape how you approach business going forward?
12:00
Yeah, So Cornerstone was a a pretty smooth transition,
12:04
honestly, because I had the, I had the the luxury of having a
12:09
stable paycheck at from the university.
12:13
So I had my full time faculty position and I had the
12:18
consulting practice outside. So I was able to make the
12:21
transition from academics back into the private sector pretty
12:26
easily because I had, you know, I had the stability of the
12:30
academic paycheck. And then the cornerstone is I,
12:34
you know, is my side hustle, if you want to call it that.
12:37
Over time, you know, the, the practice grew and I had to make
12:41
a choice about what I wanted to do to be fair to everybody.
12:44
And so I ended up leaving academics and, and pursuing
12:48
cornerstone and, and the M&A advisory.
12:51
So the challenge is there. It was actually a pretty, pretty
12:57
smooth transition. I think, you know, if anything
13:01
it was balancing my responsibilities to the
13:04
university along with the responsibilities to the
13:07
practice. Which is why you eventually
13:10
decided to focus 100% on the practice.
13:13
Correct. You know, and you talked about
13:16
how, you know, when you sign evaluation, it's kind of like
13:20
signing an audit. So like, this is a, you know,
13:23
pretty significant document. This isn't just writing some
13:26
numbers on the back of a napkin, right?
13:29
So what steps do you guys take to ensure that your valuations
13:34
will stand up under scrutiny? Yeah.
13:36
So all of the valuations, let me backtrack just a moment and and
13:42
talk about valuations, the quote products that we sell.
13:46
So valuations come in a couple different flavors much like
13:51
financial statement preparation from accountants, right.
13:53
So you can get evaluation that is like the audited financial
13:57
statement version we call and that results in what we call an
14:00
opinion of value and that has the highest level of review and
14:05
the highest level of professional liability.
14:09
You know, if a business owner came to me and said, Hey, I just
14:12
want to know what my company's worth.
14:14
You know, I've got a amicable partnership situation and they
14:18
want to buy in more equity. We could do what we call a
14:21
calculation of value that is a little less rigorous.
14:23
And I, I tell people that it's a lot like compiled financial
14:27
statements as opposed to audited financial statements.
14:30
So when we do the, the opinion of value, the more formal
14:33
valuation work I draft or if I'm, if, if I'm the lead on the
14:38
project, I will draft the the report and then I pass it to one
14:42
of my partners for review and one of my colleagues for review.
14:45
So we always have a, a second set of eyes, in some cases a
14:48
third set of eyes on the, on the project.
14:52
Analysts are working on it, mid level people are working on it
14:56
and then the senior project lead is also working on it.
14:59
So is it the case where like you're just, you know, you need
15:02
to find what the revenue is, the EBITDA and then, you know, you
15:05
multiply it by sort of multiplier that's typical for
15:10
the industry, right? That's a pretty straightforward
15:13
approach. You got it.
15:14
You hit on a topic I talk a lot about and that is the difference
15:19
between price and value. And so you know, the market
15:23
prices, assets, right? And I, I told people, you know,
15:26
I got, I'm going to have to come up with a more current example.
15:29
But if you guys remember the, the GameStop thing, when
15:34
GameStop stock was going through the roof, right?
15:36
So what was happening? The market was bidding up the,
15:38
the price of GameStop stock, but fundamentally nothing really
15:42
changed about the, the business, right?
15:44
And so when the market realized that, hey, you know, the,
15:47
nothing really has changed about this business, what happened to
15:49
the price that came back down, right?
15:51
And so that's kind of the difference between value and and
15:54
price. So when we take a company of the
15:57
market, we're trying to price the company, you know, as
16:00
favorably as we can for the client.
16:02
We want to get the highest price for the client.
16:05
When we do evaluation, we are trying to determine the true
16:09
value with a capital V The, the, the problem is that it's an
16:14
unobservable variable. Like nobody knows the value of a
16:17
company really. We can, we can estimate the
16:20
value of a company. And so whenever I, whenever I do
16:23
valuation work, I always tell my clients that it look, if you
16:28
want me to tell you what the company is worth, I can't tell
16:31
you that. I can tell you my opinion of
16:33
what I think it's worth. And, and the reality is that if
16:37
anybody ever tells you that you know, I'm looking at your
16:39
company and it's worth X, they're not telling you the
16:42
truth. Their opinion is worth X.
16:45
It's not an observable variable, so we estimated.
16:48
What do you mean by it's not an observable variable?
16:50
Are you just saying that, well, it's worth what somebody is
16:54
willing to pay and we don't know what that number is until we
16:56
take it to market? Well, I would, I would say that
17:00
you, you can't observe the value until a transaction happens, but
17:05
then you know, it gets into this Gray area between price and
17:08
value anyway. So when we try, so we have
17:10
techniques that we use to try to estimate the value of the
17:13
company. We look at the, the cash flows
17:15
that the that the company is generating, right.
17:17
Whenever I was teaching finance classes to to students at the
17:22
university, I always said that the value of any asset is the
17:25
present value of the expected future cash flows that the
17:28
assets going to generate, whether that's a company or a
17:31
piece of equipment or whatever. So we that's one approach that
17:34
we take. We call that the income
17:35
approach. We look at the cash flows that
17:37
the company generates, we find an appropriate risk adjusted
17:41
required rate of return and we find the present value of those
17:44
cash flows. That's the that that's one
17:47
indication of value. So basically just to break that
17:50
down into kind of layman's terms, I think what you're
17:52
saying, Greg, is how much money do we think this company can
17:57
make going forward? In today's IT, yes, in today's
18:01
terms, right. And so you know, $1.10 years
18:04
from today is not worth a dollar today, right.
18:07
So, so that's one approach. We call that the income
18:10
approach, but we also look at multiples, we call that the
18:13
market approach. We look at, you know, publicly
18:16
traded companies that might be similar recent transactions that
18:20
have happened and we can take multiples from those
18:23
transactions. And then we zero in on, you
18:27
know, some of the non quantifiable aspects of the
18:31
company. Does it have a deep management
18:34
bench to in the event that the owner dies?
18:37
And we had these other qualitative effects into the
18:41
into the analysis and we come up with an opinion of value.
18:44
So let's pick one of those variables.
18:47
What was the last one that you just mentioned there, Greg,
18:49
that? If there's a deep management
18:51
bench. Management bench, OK, so let's
18:54
say that there is not a deep management bench and we identify
18:58
this as being a potential risk. Then are you, you know, dividing
19:05
by, you know, a certain percentage like you take, hey,
19:08
we thought this business going to be worth a million, but
19:10
because the management bench is a risk, like we're going to say
19:14
it's worth 925 instead. Yeah.
19:18
So just to your your your point about risk, you know in very,
19:24
very simple terms of value, you can think of it as benefit
19:28
divided by risk. Benefit would be the cash flows,
19:31
risk are the the risk factors and we we use what we call the
19:36
required rate of return to quantify those risk factors.
19:40
So the deep management bench example is makes a company more
19:46
risky. So if the if a company is more
19:48
risky, the required rate of return is going to go up.
19:51
So if you think about this, this fraction benefit divided by
19:55
risk, if risk goes up, all else equal value is going to go down.
19:59
We try to, we try to estimate some of these qualitative
20:04
factors, but you know, admittedly they're subjective
20:07
and you know, there's a lot of theory out there about how best
20:11
to estimate some of these qualitative factors.
20:13
But I don't know that there's, I don't know that anybody has like
20:17
the silver bullet for how to put a number on these.
20:20
We look at it. And there's always sliding
20:23
scales of, you know, how much is this going to impact the value,
20:27
right? I mean, if, if I've got a
20:30
business owner who's in his mid 60s and has no bench, well, it's
20:36
obviously more risky than a startup company with somebody in
20:40
their mid 30s that is building a bench, right?
20:43
And so, so we try to assess that as qualitatively and as
20:47
accurately as we can. OK, why do some folks call you
20:51
the Blue Collar Scholar? Yeah, so I, I told you a little
20:56
bit about my, my early background working, painting
20:59
bridges and, and doing all that stuff.
21:01
So I come from a blue collar background, probably my father
21:06
was a blue collar entrepreneur. And you know, it was a huge
21:10
influence on my life, taught me how to do a lot of things,
21:13
taught me the value of hard work.
21:15
And, you know, having been, you know, climbing steel and
21:19
painting bridges and doing like, you know, hard kind of physical
21:23
work, I think I bring a a blue collar mentality to what is
21:29
really not a blue collar profession right now.
21:31
You when people think about investment banking or business
21:33
valuation, they think about a very white collar type job.
21:37
But a lot of the business owners that I deal with are, are people
21:41
like my father or, you know, companies like I had the
21:44
industrial painting companies. And you know, so having the, the
21:50
academic background to be able to bring that academic rigor to
21:54
the engagements that I that I take on, as well as the, you
21:58
know, the hard work blue collar background.
22:01
It's kind of an interesting blend of real world hard work
22:06
and academic theory. So that kind of came up with the
22:10
name Blue Collar Scholar. I like it.
22:14
Who's an ideal client for cornerstone valuation, whether
22:18
it's geography, size, industry? Yeah.
22:23
So value ranges, you know, we like to work with companies
22:29
where the transaction value for M&A activity is going to be in
22:33
the, you know, call it 15 to 200 million range.
22:38
And you know, so in, in terms of what they call EBITDA earnings,
22:42
you know, 2 million in EBITDA and up.
22:45
Generally I, I tend not to put hard fast rules on that because
22:51
there may be some early stage companies that are recurring
22:55
revenue type model companies that that would attract, that
23:00
would attract the type of buyer audience that we do well with.
23:06
But generally speaking, I would say, you know, the 15 to 200
23:09
million enterprise value range geography, we're, you know,
23:14
we've done transactions across the country.
23:16
So there's really no geographic limitation in terms of
23:20
industries. I, you know, I, I like
23:24
infrastructure engineering type companies.
23:26
I've done a lot with that. But I also bring to all my
23:29
engagements a, you know, a, a deep understanding of
23:32
technology. When I was in academics, I've,
23:35
you know, reviewed and and and sampled and worked with many,
23:40
many Ed tech providers. I've probably a third of my
23:46
valuation book of business is tech related in some form or
23:50
fashion. And I think now is, you know, as
23:53
we look at, you know, what we typically think is like
23:58
traditional blue collar industries, technologies
24:01
everywhere. So I, I'm active with the
24:04
Virginia Manufacturers Association and tech enabled
24:07
manufacturing is, is, you know, is huge.
24:11
And I think, you know, when I was doing academic research,
24:14
right, we had to learn programming.
24:16
We had to learn, I mean, we were immersed in, in all this stuff.
24:19
So, you know, I had the opportunity early on to work
24:23
with large language models. And, you know, so I saw, I saw
24:28
kind of what's now AI, you know, seven years ago when I was doing
24:32
academic research. How fascinating.
24:35
What was your opinion back then? Did you have any sense of what
24:40
we were about to stumble into? I knew it was powerful.
24:44
So we would do things like take annual report filings and scan
24:49
them for certain keywords to assess sediment of management or
24:55
the company. And so it was out there and it
24:58
was happening. What I didn't realize was how
25:01
seamless the interface was going to become and that is the thing
25:05
that I think is just mind blowing.
25:08
Any predictions on where it's going?
25:12
Right. If I had that one, I, you know,
25:14
I think, you know, there are, there are a lot of people who
25:18
are, you know, scared to death about AIII think that I think
25:23
that it's going to create a division.
25:27
And, and I, I, you know, I still have like relations and
25:31
academics. My wife is still a finance
25:32
professor. And, and so I'm still, my head
25:35
is still there and, and I see the challenges that young people
25:39
are facing now by just relying on AI to do a lot of the
25:45
thinking form. So I, I think that there's going
25:47
to be this bifurcation between people who can actually think
25:51
and then people who rely on AI. And that scares the crap out of
25:54
me because I would say that, you know, human nature is such that
25:58
we may take the path of least resistance when it comes to
26:01
doing the heavy lifting. And unless we really, really
26:04
discipline ourselves to, to structure our educational system
26:09
and our, and our work environment.
26:10
So people are actually thinking, I think there's going to be big
26:14
problems there. I tend to agree with that.
26:17
So who are your ideal clients for Windward?
26:21
Yeah. So I will say that whenever I
26:25
talk about M&A advisory, I always divide the world of
26:30
buyers of companies into two camps.
26:32
So on one hand, you have what I call owner operators, and these
26:36
would be people who let the corporate job get an SBA loan
26:39
and buy a company, right? And then the other group or what
26:43
I call professional buyers, strategics and private equity
26:46
firms. And it's really important if
26:48
you're going to sell your company that you know who you're
26:51
selling to because the process that you use to appeal to these
26:54
two audiences is vastly different.
26:56
So we work with companies who are selling to professional
26:59
buyers, to strategics and private equity firms.
27:03
The the owner operated. Generally this breaks on size by
27:07
the way, smaller companies are generally acquired by owner
27:12
operators, not always, but generally.
27:16
So the the process that one takes to sell a company to a
27:22
professional buyer is a much more rigorous process.
27:25
There's, you know, due diligence, there's cultivating
27:28
the buyers list and you know really importantly the way that
27:33
a companies are marketed to owner operators as much like the
27:37
way a house is sold in the market, you put a price on it.
27:40
When we take a company to the market, we never put a price on
27:43
it. We let the market decide the
27:45
price. So we create an auction process
27:48
among these private equity firms and strategic buyers for a
27:52
particular company. And it's a very disciplined
27:55
process. And you know, getting a letter
27:57
of intent is like the easy part. Now, once you get the letter of
28:00
intent, you got to get it from LOI to close and you have to
28:03
take the company through the due diligence process, which is
28:05
pretty rigorous when you're dealing with professional
28:08
buyers. And so we excel in working with
28:12
companies that are selling to professional buyers.
28:15
And so are there particular industries or I think the
28:20
geography is probably the same answer as before, you're kind of
28:23
agnostic there? Yeah, industry strengths are
28:28
tech firms, Ed tech, prop tech, manufacturing tech, engineering
28:34
and infrastructure firms. I would say the, you know, my
28:39
partner's at Windward. Between us we have probably sold
28:43
companies and virtually every industry through my valuation
28:48
practice, I've been under the hood of companies and virtually
28:50
every industry. So I think that the combination
28:53
of coming from the valuation background into M&A has really
28:57
set me up well to understand the value drivers of businesses and
29:01
understand the activity in those markets who's who are the buyers
29:05
of companies. And I think when, you know, when
29:08
somebody's contemplating selling a company, they want to make
29:11
sure that the the person representing them is going to be
29:15
able to market the company to to a group of buyers that are going
29:19
to be good buyers for the company.
29:22
You know, we mentioned before how you speak at a lot of
29:25
events, Virginia Bar Association, Virginia CEOs and
29:29
Virginia manufacturers. What are the common questions or
29:32
concerns that you're hearing from business owners and their
29:36
advisors about exit planning and M&A?
29:39
Yeah, yeah, I, I hear a lot about, you know, I'm thinking
29:43
to, I'm thinking about selling my company.
29:45
What do I need to do to make it more valuable?
29:48
And, and I always, I always tell people like that, that, you
29:51
know, the best time to start thinking about when to sell your
29:54
business was three years ago. So you really want to have three
29:58
good years of financial data. That's really important.
30:02
So if it means going back and restating some of the financial
30:06
data because now you're ready to sell, then that's what it takes.
30:09
But you, you need 3 good years of clean financial data.
30:13
And then you want to look at the drivers of, of, of value, you
30:17
know, does the company have a high degree of customer
30:20
concentration or vendor concentration or employee
30:23
concentration? You know, is it work, is it
30:27
working capital intensive or is it working capital light?
30:31
Those are, are big value drivers.
30:33
You know, the company, is it generating, is it generating
30:37
profitable cash flows year after year?
30:40
Is there a good growth trajectory that we can sell on?
30:43
So when, when we take a company to the market, I always want to
30:47
do a a bottoms up forecast of the next year so that I can take
30:52
to the market. A whether it's a pipeline of
30:56
work or backlog or something like that, I can take that to
30:59
the market and and tell buyers, look, you know, yeah, the last
31:02
three years are really good, but it wasn't a fluke because look
31:05
at the forecast for the coming year.
31:07
Now I put some pressure on the owners to be able to make those
31:09
numbers. So we're very realistic in in
31:11
the forecast that we develop, but but we always want to try to
31:15
sell on a forward run rate. If, if a companies in a in a
31:19
growth trajectory, you know, where are they at in that
31:21
trajectory? Are they getting ready to peak
31:23
or are they just now hitting the, you know, the steep part of
31:26
that that trajectory? So, so there's a lot that goes
31:29
into, you know, timing, timing the the exit.
31:34
But but yeah, but those key value drivers never go away.
31:37
Is it generating cash flows? Is it working capital light?
31:40
Is it no customer, vendor concentration, those sorts of
31:44
things? You mentioned that maybe it
31:47
would be an opportunity or a time for them to restate
31:50
financial data. What would be a call for that a
31:53
reason? Yeah, I've got a company right
31:55
now that I'm working with, very good company.
31:59
They use cash. I mean it's it's a reasonably
32:01
good sized company and all their financial statements are on a
32:04
cash basis. And so we are having them go
32:07
back and state those on an accrual basis.
32:10
So that you know accrual basis for you know for those that
32:14
aren't very familiar with accounting, accrual basis
32:17
matches revenues with expenses a little bit better than cash, a
32:20
cash basis basically cash comes in and cash goes out.
32:23
So you don't see the accounts receivable and the accounts
32:26
payable on the balance sheet like you would for on an accrual
32:30
basis. And so generally professional
32:33
buyers are going to want to see the financial statements on an
32:36
accrual basis. And, and so we, we're working
32:40
with them now. We we brought in a third party
32:43
to help them restate the financials.
32:45
I know another unique aspect about what you guys do is value
32:50
building advisory. Can you talk more about that?
32:54
Yeah, looking through looking through the company from top to
33:00
bottom, is there customer concentration, is there vendor
33:03
concentration? How are you handling your 1099
33:07
employees? We had a, we had a situation
33:09
with the deal last year that the company was highly reliant on
33:13
1099 employees and there was a potential tax liability after
33:17
the transaction that we had to that we had to work around.
33:20
So how are you handling 1090 nines?
33:22
Are you E verifying if you're selling into a professional
33:28
buyer and you know, they're going to want to see I nines and
33:32
E-Verify, those are value drivers.
33:36
You know, how are you handling your working capital?
33:38
How are you, you know, how are you handling those those key
33:43
employees? Is there a deep management
33:45
bench? So we work with companies and
33:47
then in those regards to, to address all those issues and,
33:51
and get them shaped up, you know, in advance of going to the
33:55
market. Craig, I'm seeing some glitches
33:58
in your video. Are you noticing the same thing?
34:01
Yeah. And I don't know where they're
34:02
coming from. I don't know exactly what's
34:06
driving that. It's strange.
34:10
It's like your computer's having a seizure.
34:13
Yeah, every. Everything is good on my end.
34:17
I apologize for that. I think it went.
34:24
Seemed to have settled down OK, so I'm just going to make a note
34:27
to cut that out. Yeah, Thank you.
34:29
Do you want to go back and do that?
34:35
The part about the value drivers, because I think we were
34:37
getting some video sure fluctuation there.
34:42
So Craig, I know another unique aspect of what you guys do is
34:46
what you call value building advisory.
34:49
Can you say more about that? Yeah, sure.
34:51
So when we are getting ready to take a company to the market, we
34:54
want to go from top to bottom and and look through the the
34:59
risk factors and the the benefit factors.
35:02
Remember I talked about that benefit divided by risk, right.
35:05
So you know, on the risk side are are there customer
35:10
concentration, vendor concentration over reliance on
35:14
key employees, maybe not the deepest management bench, lack
35:19
of policies and procedures. These are all risk factors that
35:23
that bring down the value of a company and we'll work with
35:27
clients to address those issues on the top part.
35:30
On the benefit side, you know, is the working capital being
35:33
managed efficiently? Are they are the margins at
35:38
least at industry norms, you know, so we'll work with them to
35:42
try to address those. Are the financial statements
35:44
properly prepared and formatted? You know, one of the things that
35:49
it has a huge effect on, on the the price that a company will
35:53
bring in the market are what we call add backs to the financial
35:56
statements. Are their expenses being run
35:59
through the financial statements that a third party buyer would
36:02
not incur? You know, maybe it's headcount,
36:05
maybe it's, you know, maybe it's personal expenses.
36:09
So we'll look through the the financial statements to try to
36:11
get those ad back. So those are all value building
36:15
type exercises that we that we work with clients on.
36:19
How did 1099 employees factor into all of this?
36:22
Yeah, 1099 is like it's becoming more and more of an issue.
36:26
We were working with a company last year that was, you know,
36:30
highly dependent on 1099 employees and it pose a
36:33
potential tax liability. Luckily they had, they had
36:38
their, their documents in order and in fact made a solid
36:44
argument that their employees were, were in fact 1090 nines
36:46
and not, not W2 employees, but professional buyers are going to
36:51
look for those. So if, if there's a company
36:52
that's, you know, heavily reliant on 1099 employees,
36:56
that's something that we want to look at E-Verify.
36:58
That's another, another big thing that professional buyers
37:02
are looking at now. Are there I nines and, and
37:05
E-Verify for all the employees. So, so those are those are two
37:09
other issues on the, you know, with respect to labor that that
37:13
we're seeing a lot of. And so the potential tax
37:15
consequence is that somebody were to evaluate this and say
37:19
those folks don't really meet the definition of an independent
37:21
contractor. They shouldn't have been 1099,
37:24
they should be W2. You guys owe some payroll tax
37:26
there. Correct that.
37:28
That's the, that's the potential problem, yeah.
37:30
So you have to be careful about. That, yeah, how, how about sales
37:34
tax liability? Is this coming into play in any
37:36
of the transactions that you do? Yeah, for for companies that are
37:39
selling products across state lines, that's another issue.
37:42
I mean, yeah, the the number of issues is, is, is as infinite as
37:48
the number of companies out there.
37:50
But yeah, that that is a potential problem.
37:51
So if companies are selling goods across state lines, we
37:54
want to make sure that the sales tax are correct for each state
37:57
that the company operates in. Is it a, you know, a point of
38:00
origin or destiny point of destiny sales tax regime and,
38:05
and all those those different factors that go into the into
38:09
calculating the sales tax liabilities.
38:12
I want to go back to the scholar part of the Blue Collar scholar
38:16
and talk a little bit about some of the research that you did in
38:20
your academic days. You were exploring some topics
38:24
like anti takeover provisions and shareholder wealth.
38:27
Can you share some key insights from that work that are
38:31
applicable to what you're doing now?
38:33
Yeah. So I, I think the, the theme to
38:37
at least the recent research that, that I was working on was,
38:42
you know, there's very rarely A1 size fits all policy for, for a
38:48
lot of the things that we hear in, in the business press, for
38:52
example, we were working a lot with staggered boards or what
38:57
they call classified boards, where the term of the directors
39:02
laughs is over. So you may have a, a board of
39:05
directors broken into thirds, right.
39:07
And so 1/3 of the, the directors is up for election each year.
39:11
And, you know, there's been some argument that, hey, look, those
39:14
are value destroying governance structures because, you know, if
39:18
an acquiring firm takes over a company with a staggered board,
39:22
then they have to wait two or three cycles before they have
39:25
control, full control the board. And then others were like, no,
39:30
it preserves, you know, long term thinking because you're not
39:33
getting turnover at every election cycle on the board.
39:36
And so I, I think that the mainstream academic literature
39:42
has come down on the side of the fact that classified boards
39:46
were, you know, value destroying.
39:48
And I think in, in some of our research, we were showing that
39:50
in fact, in some instances they may actually be value enhancing.
39:54
And so I always look for these, I always look for the these, you
39:57
know, one-size-fits-all statements that people make
40:00
these blanket statements and then try to find some sort of,
40:04
you know, a counter argument. I mean, because very rarely are
40:07
things always that simple, right?
40:08
It's not so simple to say all classified boards are bad or,
40:11
you know, pick a topic. And so and so we always tried to
40:15
find, you know, arguments against the what the mainstream
40:19
literature was saying at the time.
40:21
And so is that the position that you officially hold now or is it
40:26
one of those it depends kind of answers?
40:28
Yeah, I, I think it kind of depends honestly.
40:30
I, I think it depends on the company and, and the people who
40:33
are on the board and, and yeah, so I don't, I don't know that
40:38
they're always value enhancing. I can't, I would never say that.
40:41
But I would say that in some cases they are in fact value
40:44
enhancing because they may, you know, it may be the case.
40:47
It classified boards enable a company to negotiate for a
40:51
higher takeover premium, for example.
40:54
So, yeah, so I think there are instances, I don't think it's,
40:58
it's that cut and dried, but but that was, you know, the thing
41:02
with academic research, right? Once you build a data set and
41:04
you start working on stuff, you really try to find as many
41:07
applications for that data set because it's such a, such a
41:10
grind to get the data together. And so research, not just mine,
41:16
but I think most academics, you're going to see a, a run of
41:20
a few articles or a few publications in a particular
41:23
area because of the fact that they put a lot of work into a
41:26
data set. And so that kind of becomes
41:28
their their run for a while. They try to get as much mileage
41:30
out of it as they can. OK, it's hey, I've invested a
41:34
lot of time and energy into formulating an opinion on this
41:38
and I'm going to stick my flag in the ground and run with it
41:41
for a bit. Yeah, I I have months or maybe
41:45
years building a data set, I'm going to get as many articles
41:48
out of this data set as I possibly can.
41:51
In the time that you've been either on the academic side or
41:54
the corporate side or or both, what's a big change that you've
41:58
seen in the way that business valuation is handled?
42:03
I mean, I think the valuation principles are the same.
42:06
And so I, I was, I, I, I taught finance in the university,
42:09
right? And it's like, it's kind of like
42:11
math like 2 and 2 is always going to be 4.
42:13
The, the principles that we use to value companies the same.
42:17
I think where we are, you know, starting to see where we're
42:22
starting to see some changes is, you know, the effects of AI in
42:26
in writing, actually writing a Business Report or the reliance
42:31
on maybe AI generated results to say, you know, what's my company
42:36
worth? And I mean, unless you really do
42:39
the research, you don't know if Chachi BT is giving you good
42:42
information or bad. It might sound really
42:45
impressive, but but you really want a trained set of eyes to be
42:48
able to look at whatever you're getting out of Chachi BT.
42:52
They might put you in the zip code and, you know, after
42:55
review, they might actually have been right, but I don't know if
42:58
it's luck or if it's skill coming from the AI by side,
43:01
right. So, you know, I, I, but I do
43:04
see, I do see AI tools helping with report writing and, and
43:09
some of the wrote aspects of, of business valuation.
43:13
But the principles are, are always the same.
43:15
And at the end of the day, there are qualitative factors that
43:19
have to get, you know, assessed when you put a, when you put a
43:23
valuation on a company. So your approach today, it
43:26
sounds like Greg, is that you're still doing the valuation
43:31
components, all the research mostly manually by hand.
43:36
Once you've kind of got that data, then you can feed it into
43:40
an AI tool to help you compose the actual report that goes to
43:44
the client. Yeah.
43:45
Or to proof the report, you know, maybe to, to proof it and,
43:49
you know, pick up things that, you know, maybe might be another
43:56
way to think about how to phrase a particular aspect of a, of a
44:00
report. I don't always, I don't always
44:03
land on that, by the way. I mean, I'll take their
44:06
suggestions, but I'm still kind of old school and I like to
44:09
write my reports myself, so. Which is surprising coming from
44:13
a guy who got such an early look at the LLMS. Yeah, yeah, No,
44:17
it's true. I, you know, if I've got to go
44:20
defend it, I want to make sure that I know exactly where all
44:23
the stuff came from, so. That, that makes a lot of sense.
44:27
What's been the best growth lever for you guys?
44:31
Where do you get most of your new clients from?
44:33
Yeah, we do. We do a lot talking directly to
44:37
entrepreneurs and and business owners.
44:38
So you know the, the M&A world is largely divided into, you
44:45
know, folks who do what they call sponsored sell side.
44:47
So they're selling companies for private equity firms that are,
44:51
you know, have have had them in their portfolio for a while and
44:53
now they're going to sell them out of their portfolio.
44:56
We do some of that, but not much.
44:58
Most of our work is with owners of businesses, founders, family
45:03
members of businesses who are looking to exit.
45:07
And so we work with attorneys and wealth advisors and
45:12
accountants and and other intermediaries who are in front
45:15
of businesses. And we get in front of
45:17
businesses ourselves through speaking engagements and through
45:20
social media and other stuff that we're doing.
45:23
What do you think the future of each of your firms looks like?
45:26
Cornerstone and Woodward. Yeah, I think that you know,
45:30
there's always going to be a need to on the M&A side, there's
45:35
always going to be a need for that advisory work.
45:37
I think just because of the the due diligence and and all the
45:42
other stuff that goes into marketing a company, I don't see
45:46
that getting disintermediated much.
45:49
I could see overtime people may be relying more on AI generated
45:55
reports for non reviewed type valuations, for example.
46:02
Oh, you know, Anthony, I have a business and Anthony wants to
46:06
buy a little more equity. Let's come up with something
46:09
that makes sense. You put it into AI and you come
46:12
up with a you come up with a value and you shake hands and
46:16
OK, yeah, this seems fair to me. Good.
46:18
So I can see getting some of that, you know, getting
46:21
disintermediated in some of that.
46:24
But when it comes to litigation support or when it comes to some
46:29
of the IRS filings that we may have to defend, I still think
46:33
that there's going to be a need for human touch on that.
46:37
Say more about when the IRS might get involved in
46:40
questioning evaluation. Yeah.
46:42
So if there's a, a large estate and I did evaluation on, you
46:47
know, a fractional interest in a company and that is state tax
46:52
filing gets challenged by the IRS or gets audited, then I
46:55
would have to I'd, I'd be called in to defend, possibly to call
47:00
to defend my valuation. What does that process look
47:02
like? Well, the IRS has some pretty
47:05
skilled business evaluation people working for them as well.
47:08
In fact, a lot of the, you know, a lot of the guiding laws come
47:12
from the tax courts. So they would review my
47:15
valuation and see if they have issues with it.
47:19
And if they did have issues with it, we would have a meeting and
47:22
discuss it. Normally it starts just as a
47:24
meeting and talking through the differences or you know, how did
47:28
you see this? How did you see that?
47:30
I have to say in all my years of business valuation, I've never
47:34
had one formally challenged. I got one time I had a question
47:41
on evaluation and we work, you know, we work through the, the
47:46
issue that we disagreed on and, and settled it out.
47:50
So I but I've never really had one challenge.
47:53
That's comforting. I'm sure your clients like to
47:56
hear that. Yeah, yeah.
47:58
No, it's so. I mean, we, we know, we know the
48:02
rules. We we know, we know the, the,
48:04
the guardrails that we have to stay inside of so.
48:08
For listeners who are business owners maybe thinking about
48:13
selling their business, are there any resources that you can
48:17
recommend for them to start to educate themselves?
48:20
A podcast, a book, something along those lines.
48:24
Yeah, so I have, I have a podcast, a YouTube channel that
48:30
I'm putting together, middle marketvalue.com.
48:32
There's information there. There are, there are lots of
48:36
good books about selling companies.
48:39
You know, I, I do see, I do see more, I have to say, I have, I
48:44
see more information out there on how to buy companies, which
48:47
is like one of the things that I, I always tell my audiences
48:51
and, and people I work with. It's like, you know, there's a
48:53
lot of stuff out there in social media and, and impress about how
48:59
to buy businesses. And So what that means is that
49:02
like there's this whole universe of very informed buyers, but how
49:05
many informed sellers are there really?
49:08
And so if you are a business owner, you probably want to be
49:11
an informed seller. And so, so I do, I do some
49:15
speaking on that in terms of just like general value
49:19
building. You know, I like, I, I've read a
49:24
couple books by Alex Formosi. I think that, you know, if you
49:27
want to ramp up sales and, and you know, get your company
49:31
juiced up, I think he's got some really clever approaches.
49:35
I, I'm an active member and entrepreneurs organization.
49:39
I highly recommend it for business owners.
49:42
Great educational opportunities there on all aspects, you know,
49:47
personal self development as well as as well as business
49:50
development. Alex Hermosi, big name,
49:55
everybody recognizes. What's one or two of his tips
49:58
that you take some value from? Thinking about thinking about a
50:03
model for revenue generation. I think that's his overall
50:06
theme, right? Like what's your model basically
50:08
and, and how does it work? And then, you know, like
50:10
building on that model and you know, the, the, the willingness
50:15
and, and ability to be able to ditch what doesn't work and
50:20
double down on things that do work, I think is like always
50:23
seem to be pretty successful for me.
50:25
So. And you said something
50:26
interesting that there's a lot of information out there for
50:30
people who want to buy a business, not so much for people
50:33
who want to sell. Why do you think it's so
50:35
lopsided? Yeah, that's a good question.
50:39
But I, you know, I saw it back in like the late 80s with real
50:42
estate, like buy real estate. You know, there are all these
50:44
courses on how to buy real estate now there's like all
50:47
these courses or, you know, information things on how to buy
50:51
businesses. And I, I just think that, you
50:53
know, sometimes people want easy answers to complex questions
50:58
and, you know, it's like, oh, I'm just going to go buy a
51:01
business. Well, yeah, that's fair.
51:04
You can go do it. But, you know, you're, you
51:07
should probably know what you're doing if you're going to go buy
51:09
a business. And, and I don't know that I, I
51:11
mean, I, I can't say that I've looked at all of the stuff that
51:14
I've seen out there. It's like sometimes it becomes
51:16
white noise. I've seen so much of it.
51:18
But I, I think that, you know, there are, you know, there are
51:23
people looking for easy answers to some of these more complex
51:25
questions. You want to try fixing your
51:28
camera there again. Yeah, I don't know.
51:30
What the heck? What did you do last time?
51:32
This helped me. This has never done this before.
51:35
I don't know what the heck the. Problem is, there's a loose
51:37
connection. Maybe.
51:38
Yeah, it's a new loose connection.
51:40
Sorry about that. That's right.
51:42
Yeah. So that was a 58 minute mark.
51:46
OK. Well, and I have a theory why
51:48
there's so much more information available on the buyer's side,
51:52
because there's a much bigger pool of people who are potential
51:56
buyers, right? It's much smaller group of
51:58
people who have a business that's saleable so.
52:01
That's that's a fairpoint. Yeah, that is a fairpoint.
52:04
So, but it's always interesting, and I think that if, you know,
52:08
every business owner I know that has a reasonably successful
52:11
business is getting called multiple times a week by private
52:13
equity firms or investment banks trying to, you know, buy their
52:18
company. And, you know, I think that
52:21
business owners need to be armed with some basic understanding of
52:25
how companies are valued and, you know, how this process works
52:29
and what they're getting themselves into.
52:32
Let's shift gears, Greg. I'd like to discuss in a little
52:35
bit of detail a serious challenge that you've overcome
52:39
in your life, whether it's personal or professional, how
52:42
you got through that and what you learned going through it.
52:46
Yeah, so I told you that I, I used to paint structural steel.
52:49
So back in 19 it was, I'm going to date myself a little bit
52:55
here, but back in 1987, I guess it was, I was going into a year,
53:04
you know, the painting season is pretty cyclical and in the
53:08
winter time things slow down. And so I was in the dead of
53:12
winter bidding work and I wasn't getting any work.
53:14
So I mean, I was like second bidder, third bidder and I
53:17
wasn't getting any work. And, and I had my guys who were,
53:21
you know, generally kind of sit, sit for the winter on, you know,
53:25
unemployment or, you know, whatever they were asking me,
53:29
hey, what do we got coming up in the spring to, you know, to get
53:32
going And I didn't have anything.
53:34
I was getting really nervous and so I had a general contractor
53:38
acquaintance that I knew who had a, a bridge project that he
53:43
needed done pretty quickly. And it was going to start in
53:46
early spring. And I bid it pretty aggressively
53:50
and I wanted to make sure I had something to keep my guys going.
53:54
And so I bid this job really aggressively.
53:57
I got the job and you know, as it turns out, there was like
54:01
another about a month after that.
54:03
I got a really nice job with really good money on the, the,
54:09
the, the good job was in Columbus and the, the one that I
54:11
took aggressively was in is it was in Pittsburgh.
54:15
So I have to start this job in Pittsburgh and I've got a tight
54:18
time schedule. And so I had to split up my
54:20
cruise. I put a foreman on the job in
54:23
Pittsburgh and I was starting the bigger job in Ohio to get
54:28
that thing going. And I, I got a call one day from
54:31
my foreman in Pittsburgh and he said, Greg, you have to, you
54:35
have to come to Pittsburgh. So my first question was, did
54:38
somebody fall? And you're like, no, but you got
54:41
to get to Pittsburgh. We have some overspray damage.
54:43
I was like, OK, so I, I drove from Columbus, OH to Pittsburgh
54:49
and what had happened? The bridge was pretty high.
54:52
It was about 70 feet up in the air.
54:54
And they, the tarps from that they had to protect to collect
55:01
the overspray were whipping in the wind because it was kind of
55:05
like a wind tunnel where this bridge was at.
55:07
And so they had dropped the tarps to.
55:10
So nobody got killed from these tarps whipping up inside of the
55:13
steel. And they were painting while the
55:15
overspray from the spray guns kind of fell down under the
55:19
bridge. And they got carried down this
55:21
valley and they did a bunch of, they did a bunch of overspray
55:24
damage. And that, that instance taught
55:29
me the difference between per claim and per occurrence
55:32
insurance. And so I had to pay a deductible
55:36
for every claim that that got, you know, that got filed against
55:42
that job. And it just so happened to
55:44
complicate matters at the time, the same day there, there was
55:48
like a blast furnace explosion or something in Pittsburgh.
55:51
And there was like dust over all these cars.
55:53
So there were so many claims that the insurance company
55:55
actually set up a job trailer to process claims from my overspray
55:59
damage. And at the time I was, I was
56:03
really young at the time. And so I went to the bank and I
56:06
told the bank that, listen, I'm going to need, I'm going to need
56:09
money to cover these claims and to keep this thing going.
56:13
Don't worry. I got enough money on my job in
56:15
Columbus to be able to to be able to cover this.
56:19
And I showed them what I had in terms of numbers and they called
56:23
my line of credit and it bank, it bankrupted me.
56:26
And so, yeah, it put me under. And so a few things that I
56:31
learned. First, I wasn't very
56:34
sophisticated at the time in doing financial projections.
56:37
I think I probably could have made the argument a little bit
56:39
better to the bank why they needed to keep this thing going.
56:44
I didn't have enough moxie at the time to be able to negotiate
56:47
with other lenders. So, I mean, it just taught me a
56:50
ton about all that the, the practical implications of how
56:55
your insurance is written. Yeah, it was just like an
56:58
incredible learning experience. But it was also, it was also
57:02
catastrophic in terms of in, in terms of the business and, you
57:07
know, my family life too, for that matter.
57:08
So it was, it was a really disastrous time all the way
57:11
around. The good news was that, you
57:14
know, I went back to the drawing board and I went, I got educated
57:18
and I learned a lot of stuff that I didn't know then.
57:22
And so I always think back to those times and I like, you
57:25
know, if I knew then what I know now that I could have saved that
57:30
situation and it would have been a much, much different
57:32
situation. And so I guess in some ways I
57:35
kind of like overdosed on education, right?
57:37
As as a result, did my MBA and finish up my undergraduate
57:40
degree and I got my PhD And so I'm better for it.
57:46
You know, there's like the school of Hard Knocks is
57:50
sometimes a, a, a great place to learn and it makes me empathize
57:54
with, you know, businesses that are struggling.
57:57
So it's so much easier when we're looking in the rearview
58:00
mirror and we're kind of through the dark tunnel and say, OK, I
58:04
learned some stuff that was hard to go through, but I'm better
58:07
for it now. But how were you actually
58:11
getting yourself through that dark tunnel on a day-to-day
58:14
basis? You're bankrupt.
58:16
You need money for your family to survive.
58:18
You don't know what's coming next.
58:20
Yeah, it, it was, it was tough, There's no doubt about it.
58:24
I was, you know, went back to work for the family business for
58:28
a little while, did you know, other painting jobs and then
58:32
finally decided that, hey, look, I'm going to go back to school
58:34
and go do this stuff. So that's what I did.
58:37
I, you know, picked up, picked up the pieces and started doing
58:40
smaller jobs again. I, I had a reasonably large
58:43
amount of equipment at the time of all this that I was able to
58:47
salvage through the bankruptcy. So I, I had like some of it out
58:50
on the lease that I was leasing out some of my equipment.
58:53
And so I mean, I was able to, you know, I was able to hustle
58:57
up a buck to, to keep things going, but the marriage
58:59
ultimately dissolved. And, you know, it's like, you
59:03
know, but I was young at the time.
59:04
So, you know, yeah, live and learn.
59:07
I, you know, made it through. Yeah.
59:10
What advice would you have for your clients or for listeners?
59:15
We're in a tough business situation similar to that.
59:18
Yeah, the, the, I, I would say that, you know, one thing that I
59:21
learned from that experience was that there's always, there's
59:23
always a work around there. There's always a way to pull
59:26
this thing together. And sometimes, you know,
59:30
bankruptcy isn't necessarily always a bad thing.
59:33
It's like maybe it's the the smartest move, but you just want
59:36
to do it on your terms and not, you know, have a forced force
59:40
upon you. And so, you know, I think just
59:44
being creative, thinking through challenging situations, you
59:49
know, generally things are not as bleak as you might think they
59:53
are at the time. There's, there's generally a way
59:56
to put, you know, to, to find a plan or a workaround from this
1:00:00
current situation. So I, I think that that's really
1:00:03
important. I mean, honestly, what when I'm
1:00:06
dealing with companies that are going to the market, they're
1:00:08
generally not in this shape, right?
1:00:09
So we're not, we're not selling distressed companies.
1:00:12
However, I have had many many. People that are acquaintances
1:00:16
and people that I know through the business community ask my
1:00:19
advice on very challenging situations.
1:00:21
And I, and I always share that with them that, hey, look, let's
1:00:24
come up with a plan and, and try to find a way through this.
1:00:27
And it's not really what I do for a living.
1:00:30
And, and I don't know that that that's, that I want to make a
1:00:33
living doing it. But when somebody, when somebody
1:00:37
facing, you know, serious challenges, I'm always willing
1:00:40
to try to help out as best I can.
1:00:41
And to the extent that they can learn from my experience, that's
1:00:43
great. And, you know, generally you get
1:00:47
some reasonably smart people together in a room, they're
1:00:49
going to come up with a good answer for, for whatever the
1:00:51
challenge is. So as you look back at what you
1:00:53
went through, Greg, you know, you made the comment, oh, if I
1:00:56
only knew then, but I know now, you know, I could have worked
1:01:00
through that situation. You didn't have that experience,
1:01:02
though. But looking back, you know,
1:01:05
would you have coached younger Greg to seek the counsel of some
1:01:09
more experienced folks that maybe could have helped talk you
1:01:12
through that? Yeah, You know, that's an
1:01:15
interesting question. I, my father was a huge
1:01:19
influence on my life. He taught me, you know, a very,
1:01:23
very solid work ethic and you know, how to do all kind of
1:01:27
stuff that, you know, a lot of young people today don't know
1:01:30
how to do. It's kind of like my blue collar
1:01:32
roots. But he wasn't the best mentor, I
1:01:35
don't think in terms of, you know, maybe guiding me on a
1:01:39
career path. And so the one thing that, you
1:01:42
know, if I could rewind the clock and go back, I probably
1:01:45
would have stayed in school and not not pursued the painting
1:01:49
company. And you know, if, you know, if I
1:01:52
were counseling young people today, I would say like, finish
1:01:56
your education first. Go work for somebody for a
1:01:58
while, Make sure this is what you want to do, and then you can
1:02:01
get into it and I'll help you however I can.
1:02:04
My, my trajectory didn't take that path.
1:02:08
And you know, it should have, would have, could have.
1:02:11
But I think in retrospect, you know, it taught me the value of
1:02:14
really good mentors and, and, and good role models.
1:02:18
And, you know, that's, that's one thing I, when I acquired
1:02:22
Cornerstone valuation, I will say that, you know, and I was
1:02:25
later in life when I, when I started acquiring Cornerstone
1:02:27
valuation, but the gentleman that I had the opportunity to
1:02:30
buy Cornerstone from Jim Edge was, you know, he, he was a
1:02:35
great in some ways. I mean, I, I, it's kind of silly
1:02:37
for me to say it. I was a, a full grown adult, but
1:02:39
he was kind of like a mentor to me in a lot of ways.
1:02:41
And, and I think that, you know, if I would have had some counsel
1:02:45
like that when I was younger, I probably my life would have
1:02:48
taken a different, maybe a different turn.
1:02:50
But but yeah, I, you know, I, I really came to value good
1:02:56
mentorship and how important that is, especially for young
1:02:59
people. I've just got one more question
1:03:02
for you today, Greg. But before I ask, I want to do 3
1:03:05
quick things for the audience. We mentioned this website before
1:03:10
earlier in the interview, but if you want to get in touch with
1:03:12
Greg Waller, middle marketvalue.com, go to
1:03:15
middlemarketvalue.com. That'll direct to both
1:03:19
Cornerstone as well as Windward. And there's YouTube video
1:03:24
content in there that can help guide you and teach you the
1:03:27
things that you need to know. Middle marketvalue.com.
1:03:29
Anything else that they'll find there, Greg?
1:03:33
Little tidbits, information pieces on, you know, how
1:03:37
companies are valued, how companies are sold.
1:03:39
You know, I'm trying to make it as informational as possible.
1:03:44
All right, so middle marketvalue.com.
1:03:46
And for those folks enjoying the show today, please take a moment
1:03:49
to subscribe wherever you're listening.
1:03:51
It sends a signal that helps others discover our podcast.
1:03:54
So thank you for taking a quick moment to do that right now.
1:03:58
And as a reminder, you can be the hero advisor that helps
1:04:02
clients give their employees access to therapists, doctors
1:04:05
and prescription meds, while paradoxically increasing their
1:04:09
net profits, real gains that can change how a business is valued.
1:04:13
Contact us today at adbackbenefits.com.
1:04:15
So last question for you, Greg, what is your superpower?
1:04:21
I never quit, you know that. I've been knocked down.
1:04:24
I've taken a couple punches to the nose but but I never quit.
1:04:29
It's that blue collar part of the Blue Collar Scholar.
1:04:32
That's right, I'm a grinder. Well, Greg Waller from
1:04:36
Cornerstone Valuation and Woodward Advisory, I want to be
1:04:39
the first to thank you for sharing both your time and your
1:04:42
story with us today. I really appreciate you being
1:04:44
here. Yeah.
1:04:45
Thank you very much for the opportunity.
1:04:46
I enjoyed it as well. Folks, that's a wrap on another
1:04:49
episode of the Inspired Stories podcast.
1:04:52
Thanks for learning with us. And if one thing stood out, put
1:04:55
that into action today.