Brett:

I’m excited about our next guest, let’s face it in today’s economy, there are more people looking to buy and sell businesses than ever before. When a company owner needs to sell their business, they can’t just stick a sign for sale sign in the window, they need the assistance of a business broker to locate and vet potential buyers. On the other side, buyers rely on the broker to help facilitate the process of evaluating potential businesses in franchise franchises for sale, and our next guest is the CEO and I believe me perhaps even the founder of Trans World business advisors, and he is here to offer so much wisdom for us and talk about why you should sell your company now. Please welcome show with me, Andy Cagnetta. Andy, how are you doing?

Andy:

Brett, how are you?

Brett:

I’m better than I deserve. excited to have you on the show. For our listeners getting to know for the first time, would you give us a little bit more about your story and your current focus?

Andy:

Sure, actually, I am not the founder, which is great because I did what a lot of people are doing out there in the world. I came down to Florida looking to buy a business, met with a bunch of Business Brokers who felt like it was in a used car salesroom ran into Transworld one day super nice people. They invited me to join the company, and then I bought it. I bought it two years into my stint as a salesperson, I grew the company from one office to 10 offices, which we still own and operate in Florida, and then to further expand across the world, we decided to franchise with a partnership with United franchise group, and now we have 200 offices, 700 people selling lots of businesses. that’s it in a nutshell.

Brett:

Thank you so much for clarifying that, because there’s a lot going on there, and really cool. You bought basically bought a franchise and you’ve expanded it on multiple multiple offices now. before we dive into why you should sell your company now, why we think it’s the best business environment, perhaps in the history of selling businesses. I want to take one other step back, I want to listeners and myself to get to know you a little bit better. I want you to go back maybe to your high school college days, I believe I’ll be given certain gifts in this life, and these gifts have been given to us to be a blessing and help to others. Some people call these strengths some people call them superpowers. I think their God-given gifts and they’ve been given to us and to help and bless others. What are those one or two gifts that you believe you were given? And how does that help you help people today?

Andy:

I think I was given the gift of empathy by my grandfather. He was a wonderful guy. He was a union foreman for a bookbinding shop. I think I was given that gift. I was also given the gift of education, Lehigh University that my parents paid for. I think that was an incredible gift, and I met some wonderful people there that I actually went into business with later that helped finance Transworld and take it to the next level. I’ve been given many gifts along the way.

Brett:

I get empathy, empathy, the gift of education, the gift of other people helping you to excel in your career along the way. Very cool. Now let’s dive right into the topic at hand. What’s the number one reason why a listener who has a company, has a business? Why should they sell or consider selling right now?

Andy:

There are a few reasons I guess the main reason is demand right, there’s more buyer demand for businesses than ever before, and that could be pointed to a few reasons. One of them is the availability of money and how cheap it is. That is an incredible opportunity right now, and the other thing is that there’s just not a lot of inventory out there in the world to sell, and I think that’s changing. By the way. I do think baby boomers are coming to the market again. But a lot of people decided to hold on through this pandemic, and I think it created kind of a perfect storm to sell your business.

Brett:

More demand than ever buyers wanting to buy interest rates being lower than ever so money is cheap to borrow to be able to buy, and then there’s inventory kind of got, I guess stopped or things got delay during the pandemic. People probably don’t want to like sell their other their baby, they’ve been working for 10, 20, 30 years, and in a down year and so, all this, all the pivot all improve it or just hold on to that I don’t want to sell it at a discount. Is that a fair summary?

Andy:

That’s great. I agree with that, and there’s tons of private equity money out there too. The markets are crazy people are making money, and so there are available funds to make investments and companies are making more profits than ever. The strategic buyers, the M&A buyers, the private equity, the family offices, all this wealth is looking for a home, and when money interest rates are so low, you have two choices, basically, you got to dump it in to try to build a company or in private equity, or you got to, take your chances in the stock market, which people might feel is kind of overinflated at this point.

Brett:

That makes sense. What’s the number-two reason why you might consider selling your company right now?

Andy:

Because the baby boomers, so the numbers are just they’re not, can’t be denied that $12 trillion worth of private equity has to change hands, and a lot of those companies out there that need to sell the baby boomers are well into their 50s, at a minimum, at a maximum, they’re in their 70s, and those baby boomers are still holding on to their companies. Yes, people are more healthy than they used to be. But a lot of people are looking at this pandemic, saying, hey, it’s time for me to sell when that amount of businesses comes to the market. I think for the first time in 25 years, or maybe the second or third time in 25 years, we’re going to see it flipped from being a seller’s market to a buyer’s market because there’s just going to be too much business on the market. You want to beat that you don’t want to come in at that time.

Brett:

You want to sell and it’s a seller’s market, and when there’s low inventory, and you want to be early versus waiting when everyone’s trying to sell it’s pretty common sense economics. Is that a fair summary?

Andy:

Guns and butter, I guess, you just got us. It’s supply and demand.

Brett:

What’s the number three reason if you can think of one right now why you should consider selling your company right now?

Andy:

After this pandemic, have you looked at your life and said, If I am not truly enjoying what I’m doing, or you are getting to an age where it’s time for you to look at life in a different way, or spend time with your family. I mean, after this pandemic, shouldn’t we all look at ourselves in our lives and say, maybe there’s a better way to do this. I think just introspectively it may be a great time to sell your business.

Brett:

I couldn’t agree more. That’s so true. Because one thing I try to pray and remind myself of is how short I have been on this planet. 38 now five kids 12 years of marriage, oldest is 11. Youngest is three, and men time feels like it’s going faster every day, every week, every month, and it’s probably part of the season we’re in with our lifestyle stages with the kids 24. Seven, but it’s also part of this, this ever-increasing technology pandemic, work-from-home environment, and you’re right, you have to ask yourself, Am I truly enjoying? If you’re not? Perhaps now’s a good time to sell? Is that a fair summary?

Andy:

I mean, and there are alternatives. There’s, this is the greatest time I’ve ever seen for people to change careers, or maybe get a different education or get into a gig economy or do something that they truly love to do. Again, there’s a lot of money out there, and maybe your investments have gotten to the point where you can take that pause in your life, and as you said, My kids are 25 and 26, and they’re gone. Me, I don’t have that opportunity to enjoy them on a daily basis anymore, and so would have gotten back maybe worked less. You’re right in the thick of it right now, and, all I can say is enjoy because it does and, you don’t want to look back and say I should have done this or that.

Brett:

Thanks so much for that encouragement, I appreciate that. Maybe number four is the number four. We talked about it, there’s more demand than ever right? inventory is very low. The demographics and the baby boomers and the pandemic give clarity on being introspective, and when I’m really enjoying what you’re doing. Is there a number for that kind of comes to mind, Andy?

Andy:

It might be a really good time to sell to another company. I think for the first time I’m seeing small businesses get smart. I think there’s a big education going on out there in the world where you can get information about anything, via podcasts or YouTube or anything like that. People are learning that they can build their business through acquisition. I think there are more acquisitive companies, small company companies out there on the hunt, and again, SBA financing is a gift that keeps giving, since they raised it from $2 million to $5. billion, almost a decade ago, and because of the incentives that they had through late in September of this year, they’re ending, of course. I think it’s a unique time for other people to borrow money to basically buy businesses.

Brett:

Actually, it’s an opportunistic time to sell or merge with another company. Seeing what’s going on as well as SBA financing being very favorable as well. Fantastic. Now, let’s shift a little bit and what are some questions that, if someone’s considering selling their business, that they should be asking that they’re not asking that you’re like if I could talk to every, let’s call it one to $5 million EBIT (Earnings before interest and taxes), right company. Would they sit down with you, and they’re just so focused on growth, growth without preparing themselves for selling? What’s the one or two questions they should be asking themselves right now?

Andy:

Well, am I building my company to eventually sell do am I building value, like you said, I mean, growth, growth, growth, growth, but sometimes growth isn’t a good thing. I mean, you might have a customer concentration issue, where you have one customer, it’s great. But again, the margins are small. If that one customer goes away, or one supplier goes away, you’re in a tough, a tough position. There’s nothing wrong with meeting with someone like myself, or someone like an advisor saying, what should I be doing over the next three years? Because that’s really what counts. I mean, when everybody goes to look at a business, the banks are looking three years back, they’re looking at current financials, that’s the other thing they need to be currently making money and continue to make money. You don’t slow down your business and then sell you have to sell on its way up.

Brett:

Developing a vision and a plan and, and selling with the end in mind, if you will, are preparing to self within the mind, and what should I be doing over the next three years, and then meeting with someone like Andy Cagnetta, by the way, can learn more about Andy Cagnetta. At TWorld.com, it’s TWorld.com. There’s wisdom and lots of advisors, and getting these perspectives and getting these thoughts and look, and I imagine and you’re doing a lot of this at no cost, no charge in that with the hopes of listing and selling represented representation, but maybe not. But would you talk about a little bit of how you offer that service? What does that look like?

Andy:

Listen, we do it for no cost a lot. In fact, one of my dearest agents who happens to have retired, he used to say, where we do a lot of public services, and we do well, I’m a fan of entrepreneurs love to sit down with you, I just sat down with a longtime friend, she just gave me five years worth of financials, because the last two years, of course, are an anomaly, and we have to kind of look back five years now, to get a real feel for what’s happening in 2021 2022, and, she wants to know how best she can exit her business and when she could, and I think I’ve almost convinced her that she’s ready to go now. But that’s to be seen in the next few months. But, we’re more than happy to sit down with people, and they need a good team. Brett, they need people like you because there are taxes that are going to be involved. Now, that could have been the fifth reason why you want to sell because you’re afraid of what’s going to happen with the capital gains taxes moving forward, I always try to advise people that you’re trying not to time the market so much based on taxes because you’re going to pay taxes anyway. But you should have someone in your corner to set it up to make sure that you’re not going to pay as much tax as you think you are.

Brett:

And we actually, when we talk advise our clients is, is really 2 Exit Plans, there is the Capital Gains Tax and Estate Tax Exit Plan, and then there’s the actual selling and getting with like any cognitive to actually execute the sale to get the buyers to compete for your, for your, for your business or your company, and, and to get the highest price in the best terms, and where people get in trouble at and maybe you can shed some light on this is when they try to merge the two all into one. I could even maybe liken it to your previous statement about the three years in advance. They try to show up, okay, now I’m finally ready Indian, they’re like, three years ago, we could have done A, B, C, D, E, F, G, H, I, J, k, and you’re showing up wanting to do this in the next three, six months, and they’re like, you’re right. Maybe I need to wait another two or three years and do the things that should have been doing. Likewise, when people can’t show to us? They’re like, I’m selling and are closing in a week and a half, and I’m like, congratulations, and I got millions of tax and I’m like, so can you put the pieces back together? It’s like a car wreck about to happen. I’m like, well, maybe right. But part of what we do at the Deferred Sales Trust is if you got I set these things up prior to a certain point where the transaction goes too far, it’s known as a constructive receipt. We always say is preplan and plan and preplan the plan. really make sure that you got a clear exit plan, and then you’ve got a clear advisor to help you actually sell and list so any thoughts and wisdom on that Andy?