Josh Grode Wolters with Murphy Business Sales

Intro: Broadcasting live from the Business RadioX studios in Atlanta, Georgia. It’s time for Buy a Business Near Me, brought to you by the Business RadioX Ambassador program, helping business brokers sell more local businesses. Now, here’s your host.

Stone Payton: Welcome to another exciting and informative edition of Buy a Business Near Me Stone Payton here with you this afternoon. Please join me in welcoming to the broadcast with Murphy Business Sales, Mr. Josh Grode Wolters. How are you, man?

Josh Grode Wolters: I’m doing well, Stone. Doing real well. Thank you for having me.

Stone Payton: Well, we are delighted to have you on the program, man. And I got a ton of questions. I know we won’t get to them all, but I think a great place to start is probably if you could share with me and our listeners mission purpose. What are you really out there trying to do for folks?

Josh Grode Wolters: Sure. Well, well, as a business broker, we’re in the job of connecting people. One one example that I was given was we’re almost like a minister and we help make marriages happen. Sometimes we help make divorces happen. But at the end of the day, trying to connect businesses for sale with the right buyers.

Stone Payton: So what is the back story? How did you get involved in this line of work?

Josh Grode Wolters: So I’ve been doing business brokerage for nearly eight years. I started when I moved back home to Sioux Falls, South Dakota, and it was kind of the family business. My dad had been doing it for, I think, most of a decade prior to me moving back home and just the chance to work with him and learn from him and do something that I’ve always been passionate about, working with small business owners and using my experience to help folks move on to the next chapter of their lives.

Stone Payton: So something that I’ve begun to learn a little bit more about as I’ve been hosting this series, is this this topic of valuation? Can you speak to that a little bit, why it’s so important, maybe some some tips or some things to be thinking about as as a business getting ready to sell is approaching that part of the process.

Josh Grode Wolters: Absolutely. That’s always how we start our process. And sometimes we have people come to us years in advance and ask us, what is the value of my business now? What are some things I can do to grow that value so that in three or four years when I’m ready to actually move on, I can make sure that I’ve done everything I can to extract, extract the maximum amount of value from the work that I’ve put in. And so we look at a number of factors when valuing a business, and it isn’t always the same. It certainly depends on the industry. But generally speaking, we like to look at the last few years of tax returns or income statements. We like to pair that with a balance sheet, looking at what assets they have and how they’re utilizing those assets. And then we look at the market, we look at other businesses that are sold, other businesses in the same industry, in the same arena and how they have priced and how they’ve sold. Certainly one thing that was difficult for me when I first first started in this business was as a people pleaser. I often took listings and price them where the owner wanted them to be, which isn’t always the right place. And in the last eight years I’ve come to the conclusion that the the difficult conversation ahead of time with a particular seller explaining how we value a business and why it’s valued that way often outweighs the heartache and a headache of listing a business that’s overpriced. So we just try to list list businesses fairly. And then I had the same conversation with the buyer and explain to them why the business is worth what it is and and what that means to them as a buyer.

Stone Payton: So you bring up a good point about timeline, I guess we’ll call it, because, well, for me, me and my business partner, we run the business radio network. We we’re not looking at an exit any time real soon. But there’s probably absolutely zero downside and perhaps some potential upside in still seeking a valuation, getting a handle on where we are so that so that if we do need to do some things to tweak some things to get the valuation up in coming years, we can we can start working on it now, right?

Josh Grode Wolters: Yeah. So often a business owner will come to me. They’ll be at their age to retire, ready to move on. And they’ll say, I’m just done. I’m done. I want to be out of this. I want to sell this yesterday. And that puts us in a difficult position because we need to list the business. And we don’t we don’t want to sound desperate. And so by starting early, write an ounce of prevention kind of deal and just starting those conversations. I can I can do some light consulting and just help buyers adjust their their business for for sale. Sometimes things that we do as business owners and I also I own a small business as well. Things we do to help us in the moment to help us that year with taxes maybe isn’t always the best for building value. And so we can get in a few years ahead of time and we can work with the owners to to structure their business in a way that is best for the impending sale. Then we can often get out ahead of the curve and utilize our tools to the best of their abilities versus being behind the eight ball and having to scramble to find a buyer in a short amount of time.

Stone Payton: So now that you’ve been at this almost a decade, what’s the most rewarding man? What’s the most fun about this kind of work for you?

Josh Grode Wolters: Stone. Don’t get me wrong, I love doing big businesses. I love doing the kind of middle market businesses that are pulling down a million plus dollars to the bottom line, top line to the bottom line a year. But honestly, for me, having been a small business owner and I’ve owned a small business for the last 20 plus years, started when I was in high school, a pink ice cream truck that I ran around the neighborhood. I love I love working with with small business owners, with entrepreneurs. We’re just wired a little differently. We’re we’re kind of crazy, we think, outside the box. And so working on a business that someone has built over the years, that their blood, sweat and tears are are baked into it and allowing them. A successful transfer. That’s that’s the most rewarding part. So I, I don’t have a very large. Minimum business size because I truly believe that small businesses and small business owners are what run this country and what make it great. And I really enjoy working with folks at that level as well.

Stone Payton: Okay, let’s talk about me some. It’s my show. No, no. Back to me and Lee. Right. We’ve got this pretty successful media company. We’ve been at it a while. But I don’t think that I really know and I’m pretty sure Lee doesn’t either. How to go. Go find the right business broker for us. I don’t know what questions to ask. I don’t know what to what to look for. Share some insight, if you would, on on helping us choose the right broker.

Josh Grode Wolters: There are a lot of brokers in this country. Some are great, some aren’t so great. But it’s hard to know what defines a broker ahead of time. So certainly those conversations and any kind of interview, just conversations you can have with a potential broker, someone that’s going to be representing you, are really important things to look out for. Positives and negatives credentials. Someone that has letters after their name. That can go a long way into establishing that trust and that credibility. So things like MBA, obviously if someone has a degree in business, they may have some experience being on for their business brokerage practice. There are other certifications that folks can receive in the business brokerage world, and so looking for those letters and asking brokers about it. Most of us don’t mind talking about ourselves and about the letters after our names. So that’s that’s usually not an issue. I’m part of a network Murphy business where all over the country into Canada. And for me, that is paramount to delivering the best service to my clients. Murphy Business has 200 and some brokers, and we can lean on each other. And that experience to really help us push deals over the finish line. If there’s an industry, a particular sector that I haven’t worked in, I can reach out to my network.

Josh Grode Wolters: Very collaborative group of folks and ask, Has anyone ever done a business like this of this size or this type? With these sort of issues. It really allows us to to leverage the group so that we can make sure that we’re hitting as many people as possible when we’re doing the marketing. As a as a sole practitioner, I would never be able to afford all the subscriptions that we have collectively to promote businesses and to to really get the word out there. Finally, I think after experience and and connections, you want to find a broker that is is someone that you can work with so that you have comfort with and that you can collaborate with, but also is willing to collaborate with others. We just have so much more success when we work with other folks, whether it’s our firm or an outside firm, because we don’t know everybody. And finding those buyers is often the most difficult part of the of the equation. And so being able to collaborate and using our network on a personal professional and then from a firm level are really, really ways that you can ensure you’re getting the best service possible.

Stone Payton: So there’s the marketing of the business that you’re helping someone sell. But then there’s also the sales and marketing of your own services. How does that work? How do you get the new clients?

Josh Grode Wolters: Yeah, it it really you hit it on the head. It’s, it’s selling ourselves to, to find new clients and then selling often the valuation to the, to the seller to say, Hey, here’s what the business is worth and here’s why. And then we go out and find find the buyers. So it’s it’s a33 sale process for us. You know, we use tried and true methods. I just sent out 500 letters earlier this month. And it’s funny because business owners will receive that letter. I’ll get it in the mailbox. They won’t be ready to sell today. It’s really it’s a timing issue. And you got to find someone when they’re in the in the right frame of mind and ready to do it. But they’ll file that letter away and they’ll call me in a year or even more, and they’ll say, Hey, I got you a letter. I don’t know. It wasn’t too long ago. And the look and it was from 2018, you know, and and it’s those kind of things that business owners, they hold on to that and they call us back. They eventually come around.

Josh Grode Wolters: But we couple that with some other strategies using social media, email lists, those kind of things. And after so many years in the business, you develop a network and you develop a reputation that people know that they can go to you for, for the best service. The other the only other substantial source for for my new sellers are actually repeat customers, something that I never thought would exist when I first started in this industry. But folks that I have sold the business to and now they’re looking to sell that and move on to something else. Folks who have sold their business and they’ve lived the retirement life for a few years and now they’re kind of itching to do something else, get into a different field or or develop a hobby or passion into something more. And so those repeat customers are kind of what keep me in the business here. After a certain amount of time, I spend more of my more of my my waking hours, my business hours working with those those folks than having to prospect new lease, which is always nice.

Stone Payton: So talk to me a little bit about deal structure, because you can get pretty creative with the way that you transition out of a business, the way you transition into a business. You’ve probably seen a lot and crafted a lot of different kinds of deal structures, haven’t you?

Josh Grode Wolters: There’s a thousand ways to skin the cat. There’s obviously the purchase price. That’s certainly very, very important, the purchase price, but there’s also the terms that go along with that. We can adjust the down payment. We can adjust how much the seller is going to carry as a as a loan to the new buyer. We can adjust what we call management contracts if we want the seller to stay on for more than the traditional month or so that that comes with the transaction transition for for a smooth handover. They may want to keep the owner on for for a year, maybe more, especially if it’s trade related or if the business is tied strongly to that person individual. So we can adjust that. There are ways kind of to mitigate taxes for the seller, and so we might see a lower purchase price. But because of the way the deal is structured, there could be less taxes. And so ultimately that seller is walking away with more money in their pocket. At the end of the day, a broker who has done a few deals and understands some of these nuances will be able to point the seller, the buyer on both sides of the transaction in the right direction in terms of a bank or a lending partner to use, in terms of a track tax strategy, in terms of deal structure, just to make make things work. It’s it’s often the creative, out-of-the-box thinking that will help us get the most deals done.

Stone Payton: All right, before we wrap, let’s leave if we could, let’s leave our listeners with a couple of actionable pro tips maybe on both sides of the equation, buyers and sellers alike. Some things to be thinking about, reading, doing, not doing, so that they can they can begin to take some action and learn more about this topic.

Josh Grode Wolters: So research goes a long way and and researching business brokers in your area reaching out to other business owners that you know to find out who they’ve used is a good way to start. But I think it kind of comes back to how we started our conversations, don’t it really begins with that valuation piece. And I should mention that a business valuation and market valuation is different, sometimes very different from a valuation used for internal accounting or from an insurance valuation. In terms of how we how we treat tangible assets, etc.. And so having a business broker produce a market valuation is really the key that someone’s looking for. And there are certain rules that we use when we create these these appraisals. And so if someone comes in and tells you, well, I can look at your business and tell you exactly what it’s worth, it’s just take this number and add add your your assets to it, that might get you in the ballpark. But being able to have a method of valuation that then can be explained to a potential buyer is going to be the most important piece to beginning that that journey on business transaction.

Stone Payton: All right, man, what is the best way for our listeners to connect with you? Maybe have a conversation with you or somebody on your team and continue this conversation and maybe tap into to some some additional work on this topic.

Josh Grode Wolters: You know, email and phone, text or call are obviously the easiest way to get a hold of me. My email is pretty simple. It’s my first the first letter, my first name J dot grody grody at Murphy Business. Otherwise, if you search, search for me, search your business broker, I’ll come up and Google. I’ve worked hard to make sure that I rank on those pages. And then just a phone call. Shoot me a text. 6059519555. Try to keep it real simple. Find me on LinkedIn. Find me on Facebook. I try to try to be accessible. And so I love to have those initial conversations and I’m happy to provide any insight and knowledge that I can. Even if someone just just wants that that first first phone call. Not a problem.

Stone Payton: Well, Josh, it has been a real pleasure having you on the program. Informative, inspiring and really appreciate you coming on and sharing your insight and your perspective and the work that you and your team are doing it. So it’s just it’s so important, I personally think, to the fabric of this country. And one of the things that makes this country so great, this whole notion of capitalism and entrepreneurship. Keep up the good work, man.

Josh Grode Wolters: Stone. Thanks for having me. This has been a pleasure talking to you and sharing one of my passions. I appreciate what you do and help them help them get the word out about best business practices for all your listeners.

Stone Payton: Well, it is my pleasure, man. All right. Until next time, this is Stone Payton for our guest today, Josh Brody Walters with Murphy Business Sales and everyone here at the Business Radio X family saying we’ll see you again on Buy a Business near me.