Journey of a Restaurant Buyer: Lessons in Business and Growth

Jared W. Johnson Podcast

Welcome to the world of restaurant acquisitions, where dreams are realized, challenges are faced, and success is earned. In this interview, we dive deep into the journey of restaurant buyer and passionate entrepreneur, Jeptune Lupiter. From his background in the industry to the process of buying a business, Jeptune shares valuable insights and lessons that can inspire and guide aspiring buyers and sellers.

The Path to Entrepreneurship

Jeptune’s journey began in Utah, where he grew up and developed a love for the restaurant business. After leaving college to pursue his entrepreneurial dreams, he joined a family member in starting a small Mexican restaurant called Charlo Loco. Through hard work and dedication, they successfully expanded the business, eventually buying out a neighboring Chinese restaurant and transforming it into a thriving establishment.

The Power of Partnerships

One of the key lessons Jeptune learned early on was the importance of partnerships. When he joined the Habaneros brand in Las Vegas, he saw an opportunity to grow their restaurants through franchising. Instead of seeking outside investors, Jeptune proposed offering the opportunity to their skilled cooks, providing them with the chance to become franchisees. This innovative approach not only helped the brand expand rapidly but also empowered individuals who may not have had the means to start their own businesses.

A Buyer’s Search for the Perfect Business

When it came time for Jeptune to venture out on his own, he turned to online platforms like BizBuySell to find potential businesses to purchase. After contacting various brokers and exploring different listings, he came across a restaurant that caught his attention. The location, the concept, and the quality of the food all resonated with him. Despite some initial concerns about the financials, Jeptune decided to make an offer and was thrilled when it was accepted.

The process of buying a business is not without its challenges. Jeptune encountered a hurdle when it came to verifying his down payment, as he had kept a significant amount of cash at home. This led to a last-minute scramble to find a solution, ultimately involving a family member gifting him the funds. Jeptune emphasizes the importance of properly documenting finances and being transparent with lenders to avoid such complications.

Ownership Transition and Beyond

Once the acquisition was finalized, Jeptune focused on ensuring a smooth transition. He retained the existing staff and observed the operations closely, making minimal changes in the first month. However, he plans to grow the business and potentially expand to multiple locations in the future. Jeptune’s goal is to provide exceptional food and service to customers while creating opportunities for his employees and fellow entrepreneurs.

Lessons Learned and Future Outlook

Reflecting on his journey, Jeptune shares valuable advice for aspiring business buyers. He emphasizes the importance of seasoning funds in a bank account to facilitate the verification process. Additionally, he highlights the significance of open communication with lenders, disclosing any potential issues or challenges upfront. Jeptune’s mentor, Dan Pena, inspires him to maintain laser-like focus and embrace the challenges that come with entrepreneurship.

In conclusion, Jeptune’s story is a testament to the power of passion, perseverance, and partnerships in the world of business acquisitions. His journey serves as a valuable guide for those looking to enter the restaurant industry or any other field. By learning from his experiences and applying the lessons he shares, aspiring entrepreneurs can navigate the acquisition process with confidence and set themselves up for success in the ever-evolving world of business.

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If you have questions for Jared, visit JaredWJohnson.com or connect with him on LinkedIn.

DISCLAIMER: The views and opinions expressed in this program are my own and/or those of my guests. They do not necessarily reflect the views or positions of my employer.

Exploring the Challenges of Acquiring a Business

Jared W. Johnson Podcast

Welcome to the Before You Buy or Sell, a business podcast where we help buyers and sellers learn more about the acquisition process, discuss recent transactions, and stay up to date on the latest news in the market. In this episode, we dive into the challenges of acquiring a business and explore a recent deal that unfortunately did not close. Join me, Jared Johnson, as we unpack the insights and lessons learned from this experience.

Background and Motivation

​In this episode, I am joined by Tommy Speigner, an aspiring entrepreneur with a background in IT and a passion for art. Tommy shares his journey from growing up in Florida to moving to Atlanta and eventually settling in Las Vegas. Along the way, he discovered his interest in buying a business rather than starting one from scratch. Tommy’s motivation stems from his desire to replace his current income and his fascination with the art framing industry.

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The Business Opportunity

​Tommy stumbled upon an established art framing business in Las Vegas that caught his attention. The business had a solid customer base and promising initial numbers. Tommy’s personal connection to framed art made it an appealing opportunity for him. He envisioned expanding the business by offering delivery and installation services, as well as exploring digital art and collaborating with local artists. The potential for growth and the alignment with his interests made this business an attractive prospect.

Replica of the painting Au Moulin de la Galette
Replica of the painting Au Moulin de la Galette by Auguste Renoir displayed hanging on a wall in an ornate gilt frame

The Negotiation Process

​With the help of his business broker, Lindsay Devino, Tommy navigated the negotiation process. They analyzed the financials, considered the market value, and settled on a purchase price of $602,000. However, during the due diligence phase, Tommy discovered some significant challenges. The labor costs were higher than anticipated, and the lease agreement had unexpected increases in expenses. These findings had a substantial impact on the bottom line and raised concerns about the viability of the deal.

Adjusting the Offer

​Armed with the new information, Tommy reevaluated the purchase price. He adjusted the multiplier and proposed a revised offer of $535,000. Unfortunately, the seller was unwilling to accept the lower offer, insisting on a price closer to the original listing price of $600,000. Despite Tommy’s willingness to compromise and meet halfway, the seller remained firm in their position. Ultimately, the deal fell through, and Tommy had to cancel the transaction.

Lessons Learned and Future Outlook

​Reflecting on the experience, Tommy emphasizes the importance of patience and thorough due diligence. He acknowledges that buying a business is an emotional roller coaster, requiring resilience and adaptability. Tommy remains optimistic about future opportunities and continues to explore potential acquisitions. He plans to take the time to find the right business and build a network of mentors and advisors to guide him through the process.

Challenges of Buying a Business

​Tommy’s journey highlights the challenges and uncertainties involved in acquiring a business. It underscores the need for comprehensive due diligence and the importance of understanding the financials and market dynamics. The negotiation process can be complex, requiring flexibility and open communication between the buyer and seller. The experience also sheds light on the need for increased regulation and standardization in the business acquisition industry to protect the interests of buyers and sellers alike.

Conclusion

​While Tommy’s deal did not reach a successful conclusion, his experience serves as a valuable learning opportunity for aspiring entrepreneurs. It reinforces the need for patience, thorough research, and a strong support network. Acquiring a business can be a rewarding endeavor, but it requires careful consideration and a deep understanding of the industry and market dynamics. By leveraging the lessons learned from this experience, Tommy remains determined to find the right business opportunity and continue his entrepreneurial journey.

As the business acquisition landscape evolves, it is crucial for buyers and sellers to stay informed and seek guidance from experienced professionals. The Before You Buy or Sell podcast aims to provide valuable insights and resources to support individuals in their pursuit of successful business acquisitions. Stay tuned for more episodes and join us as we explore the ever-changing world of buying and selling businesses.

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If you have questions for Jared, visit JaredWJohnson.com or connect with Jared on LinkedIn.

DISCLAIMER: The views and opinions expressed in this program are my own and/or those of my guests. They do not necessarily reflect the views or positions of my employer.

Choosing the Right Escrow Company for Business Transactions

Jared W. Johnson Podcast

Insights from an Experienced

Business Transaction Specialist

Welcome to the Before You Buy or Sell a Business podcast. We provide valuable insights and advice for buyers and sellers in the business acquisition process. In this episode, we have a special guest, Ron Quinn from Accelerated Law Group, who has over 22 years of experience in handling business transactions. Ron shares his expertise and discusses the important factors that buyers and sellers should consider when choosing the right escrow company for business transactions, the process of asset purchases, the impact of bulk sale laws, and the rise of stock purchases in recent years.

Choosing the Right Escrow Company

When it comes to selecting an escrow company, Ron emphasizes the importance of finding a company that understands business transactions. He highlights the complexity of these transactions. Transactions can involve multiple parties such as buyers, sellers, landlords, and attorneys. Ron advises buyers and sellers to look for escrow companies that specialize in business transactions and have a strong background in business and legal matters. He also cautions against using escrow companies that do not have experience in this specific field. Not all escrow companies are equipped to handle the intricacies of a business sale.

The Process of Asset Purchases

Ron provides a detailed overview of the typical asset purchase process. Once a purchase agreement is in place, the buyer conducts due diligence to ensure they want to proceed with the transaction. During this period, the escrow company conducts various searches and investigations to verify the accuracy of the information provided by the seller. This includes checking business licenses, tax records, lease agreements, and other relevant documents. As the closing date approaches, the escrow company prepares the necessary documentation and facilitates the transfer of assets and funds between the buyer and seller.

Understanding Bulk Sale Laws

Ron explains that bulk sale laws vary from state to state. In California, for example, there is a bulk sales law that requires sellers to publish a notice in the newspaper and send a notice to creditors before the sale can be completed. This law also imposes transfer tax liability on the buyer based on the value of the personal property being transferred. In Nevada, however, the bulk sales law was repealed in 1991, but there are still successor liability issues related to taxes and other obligations. Ron advises buyers and sellers to be aware of the specific laws in their state. Seek professional guidance to ensure compliance.

The Rise of Stock Purchases

Ron notes that stock purchases have become more common in recent years, especially since a change in the law allowed business brokers to sell stock. He explains that stock purchases or membership interest purchases can be advantageous in certain situations, such as when there are contracts in place that are not assignable. However, he cautions against choosing a stock purchase solely because it seems easier. Ron advises buyers to carefully consider the specific circumstances and potential liabilities associated with stock purchases before making a decision.

Ron Quinn

Key Elements in a Purchase Agreement

Ron highlights several important elements that should be included in a purchase agreement. These include a clear description of the business, a list of assets being transferred, provisions for trade name and social media assignment, a covenant not to compete, lease assignment details, seller financing terms, and provisions for training. Clear and concise language in the agreement removes ambiguity and potential disputes.

The Importance of Due Diligence

Ron advises buyers to conduct thorough due diligence before finalizing a business purchase. This may involve reviewing financial statements, tax returns, sales tax records, lease agreements, and other relevant documents. He also recommends verifying the accuracy of the information provided by the seller; not all sellers are forthcoming. Also, ensure that all necessary licenses and permits are in order. Ron emphasizes the need for open communication between the buyer and seller during the due diligence process to address any concerns or questions that may arise.

Seller Financing Considerations

When it comes to seller financing, Ron suggests treating the seller as a lender and following standard lending practices. This includes drafting a promissory note, a security agreement, and potentially obtaining a personal guarantee. Buyers need to consider the term of the loan, the interest rate, the payment structure, and any collateral that may be required. Treat seller financing as a professional transaction and ensure that all terms are clearly defined and agreed upon by both parties.

The Challenges and Rewards of Business Transactions

Ron shares some of the challenges he has encountered in his years of handling business transactions. He highlights the highly personal nature of these transactions for sellers, who have invested their time, effort, and emotions into building their businesses. Ron emphasizes the importance of effective communication and managing expectations to ensure a smooth transaction. He finds the variety and complexity of business transactions rewarding and stimulating.

In conclusion, buying or selling a business is a complex process. It requires careful consideration and expert guidance. Ron Quinn’s insights and expertise shed light on the key factors that buyers and sellers should consider when entering into a business transaction. By choosing the right escrow company, conducting thorough due diligence, and understanding the implications of different types of purchases, buyers and sellers can navigate the process with confidence. With the guidance of experienced professionals like Ron, buyers and sellers can achieve successful and rewarding business transactions.

If you have questions for Jared, visit JaredWJohnson.com or connect with Jared on LinkedIn.


DISCLAIMER: The views and opinions expressed in this program are my own and/or those of my guests. They do not necessarily reflect the views or positions of my employer.

Host Jared Johnson and guest Jarryd Osborne

Exploring the Acquisition Process

Jared W. Johnson Podcast

Welcome to the Before You Buy or Sell the Business podcast, where we help buyers and sellers learn more about the acquisition process, discuss recent transactions, and stay up to date on the latest news in the market. I’m your host, Jared Johnson, and today we have a special episode in store for you. We will be diving into a deal that didn’t end up closing and exploring the reasons behind it. Joining me today is Jarryd Osborne, a past client who has a unique perspective on the acquisition process. Jarryd will share his experience and insights, shedding light on the challenges and opportunities that arise when buying or selling a business.

Background and Search Process

Jarryd grew up in Austin, Texas, and had a diverse professional background before venturing into the world of business acquisition. He played tennis competitively in his youth and went on to play at a junior college. After college, he worked in various corporate roles, including mortgage banking, tech, and insurance. However, he always had an entrepreneurial spirit, coming from a family of business owners. Jarryd decided to give the corporate world a try before pursuing his own business venture.

Jarryd began his search for a business in 2018 and 2019, but it wasn’t until 2020 that he found a potential opportunity. He came across a concierge relocation and home organizing company and started negotiations. However, during the due diligence process, Jarryd discovered some discrepancies and red flags that led to the deal falling through.

The Deal That Didn’t Close

Jarryd’s experience with the deal that didn’t close provides valuable insights into the challenges and complexities of the acquisition process. He initially found the business through a traditional online marketplace and began negotiations. However, he decided to reach out to the company’s competitors to explore other options. This proactive approach led him to discover a potential opportunity with a competitor.

According to Jarryd, “They can just go directly to these deals. So that’s their appetite, right? That’s what they’re seeing.”

The negotiations with the competitor went well initially, and Jarryd was excited about the potential acquisition. However, as the due diligence process progressed, issues arose. One major sticking point was the seller’s refusal to admit that they were following generally accepted accounting principles (GAAP). This lack of transparency and unwillingness to provide accurate financial information raised concerns for Jarryd and his attorney.

Jarryd explains, “I had actually had an operator in place and so I had an operator in place. We had a contract agreement and everything. We found out the financials weren’t on par of course, but um, so that, that the business we were going to buy ended up hiring the person that I found as the CEO to run that company.”

Additionally, there were disagreements over certain clauses in the purchase agreement, such as indemnification limits and representations and warranties. The attorneys on both sides began arguing, further straining the relationship between Jarryd and the seller. Eventually, the deal fell through, leaving Jarryd disappointed after months of hard work and anticipation.

Lessons Learned and Moving Forward

Despite the disappointment of the failed deal, Jarryd learned valuable lessons throughout the process. He realized that he enjoyed the art of the deal and the fundraising aspect of business acquisition. He also discovered his talent for advising others and helping them navigate the complexities of buying or selling a business.

Jarryd made the decision to transition from full-time searching for a business to becoming an advisor. He joined Riviera Capital, a company founded by Luke Ellis, who has extensive experience in brokerage. As a minority partner in the firm, Jarryd now helps individuals and businesses buy and sell businesses.

The Role of an Advisor

When clients approach Jarryd for assistance with buying or selling a business, he begins by understanding their criteria and timeline. Riviera Capital offers two types of services: retained clients and contingent clients. Retained clients pay a monthly fee for Riviera Capital to handle the entire buying process or assist with the search. Contingent clients handle their own search but engage Riviera Capital to facilitate the transaction.

According to Jarryd, “We’re going in we just got an executed ally with with a 10% rollover, so we’re going to need to address that.”

Riviera Capital has built a network and database of investors who are interested in cash-flowing businesses. These investors are looking for opportunities in the SMB (small and medium-sized business) world, which offer higher cash distributions and potential for growth. They see these investments as a real estate play with better upside.

Conclusion and Future Outlook

Jarryd Osborne’s experience highlights the challenges and complexities of the acquisition process. His journey from searching for a business to becoming an advisor showcases the opportunities that arise when buying or selling a business. As an advisor at Riviera Capital, Jarryd helps individuals and businesses achieve their goals in buying or selling a business.

Looking ahead, the SMB market continues to evolve, with private equity firms showing interest in smaller businesses and pushing up valuations. However, it is crucial for buyers and sellers to carefully evaluate deals and consider the long-term implications. With the right approach and support, success in the acquisition process is within reach.

As the market continues to grow and change, Jarryd and Riviera Capital are well-positioned to assist clients in achieving their goals and navigating the complexities of buying or selling a business.

Jarryd concludes, “I think that’s what I’d really do. So one of the deals that we didn’t talk about that failed, we were post low. I had actually had an operator in place and so I had an operator in place. We had a contract agreement and everything. We found out the financials weren’t on par of course, but um, so that, that the business we were going to buy ended up hiring the person that I found as the CEO to run that company.”

The acquisition process can be complex and challenging, but with the right guidance and support, buyers and sellers can navigate the journey successfully. Jarryd Osborne’s experience and insights provide valuable guidance to clients, ensuring they make informed decisions and maximize their opportunities.

To connect with Jarryd Osborne, you can find him on Twitter at SMBKapital or on LinkedIn as Jarryd Osborne. 

If you have questions for Jared, visit JaredWJohnson.com


DISCLAIMER: The views and opinions expressed in this program are my own and/or those of my guests. They do not necessarily reflect the views or positions of my employer.

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Lessons Learned in Business acquisition with Alina Joseph

Jared W. Johnson Podcast

Welcome to the Before You Buy or Sell the Business podcast, where we help buyers and sellers learn more about the acquisition process, discuss recent transactions, and stay up to date on the latest news in the market. I’m your host, Jared Johnson, and today we have a special guest, Alina Joseph, who has acquired two businesses and is in the process of selling one. We’ll be diving into her background, the challenges she faced, and the valuable lessons she learned along the way.

Background and Journey to Business Ownership

Alina Joseph has a diverse background with a bachelor’s degree in political science and a minor in business. She initially considered going to law school, exploring various fields such as sports entertainment, criminal law, and business law. However, after some consideration, she decided that pursuing a career in business was the best fit for her. She moved from Florida to Los Angeles to pursue a dual degree in MBA and JD at Pepperdine University.

While studying, Alina gained real-world experience by working in the finance and regulatory department of California’s leading utility company. She spent five years in this role, dealing with rate cases and other complex financial matters. This experience provided her with a strong foundation in finance and a deep understanding of the regulatory landscape.

After completing her degrees and gaining valuable work experience, Alina and her husband decided it was time to pursue their entrepreneurial dreams. They wanted to be more independent, start a family, and create a lifestyle that aligned with their goals. They spent months devising a plan and exploring different business opportunities.

The First Acquisition: An Auto Repair Business

Their first acquisition was an auto repair business in Arizona. Alina’s background in finance and her ability to analyze businesses from a financial standpoint played a crucial role in evaluating the potential of this opportunity. She focused on the business’s profitability, growth opportunities, and the financial goals she wanted to achieve.

Alina emphasizes the importance of conducting thorough due diligence when evaluating a business. While the SBA may vet the business to some extent, it is essential for buyers to do their own homework and evaluate the business independently. This includes analyzing the financials, understanding the key players in the industry, and assessing opportunities for growth.

In the case of the auto repair business, Alina looked beyond the top-line revenue and focused on the seller’s discretionary earnings (SDE) to understand the true profitability of the business. She also considered the industry dynamics and the potential impact of changes in regulations and market saturation.

According to Alina, “You want to make sure it’s a fit for you and for your family. And then, you know, you want to make sure that you look at your goals financially and how the business can help you achieve that and your goals for the business.”

Lessons Learned from the First Acquisition

Alina shares valuable lessons she learned from her first acquisition. One of the most important lessons was people management. She realized that managing people’s expectations, both within the business and in the community, was crucial for a smooth transition. Alina and her husband found themselves in the middle of a community with high expectations and concerns about big corporations entering the industry. They had to navigate these dynamics and build trust with the community.

Another lesson was the importance of patience and taking the time to understand the business before making significant changes. Alina advises buyers to wait and observe, focusing on learning and building relationships with the existing team. This approach allows for a smoother transition and better buy-in from employees and stakeholders.

The Second Acquisition: An E-commerce Snack Business

After realizing that the auto repair business was not the right fit for them personally, Alina and her husband decided to sell it and pursue another opportunity. They acquired an e-commerce business that sells snacks from around the world. This business aligned more closely with their interests and skills, and they felt more comfortable in this industry.

Alina highlights the importance of finding a business that fits your personal life and values. While financial performance is crucial, it is equally important to consider the industry, the people you will be working with, and the overall fit with your lifestyle and goals.

Now, Alina is the owner and CFO of MunchPak.

Challenges and Successes in the Second Acquisition

The second acquisition presented its own set of challenges. With a newborn baby, Alina and her husband had to juggle their personal and professional responsibilities. They relied on a strong team to manage the business initially, allowing them to focus on their growing family.

Once they were able to dedicate more time to the business, they faced challenges with the existing team and external service providers. They had to make difficult decisions and replace some of the service providers to align with their goals and expectations. This experience taught them the importance of finding the right team and ensuring that everyone is aligned with the business’s vision.

Despite the challenges, the second acquisition has been successful. Alina and her husband have implemented changes, focused on marketing and advertising, and have seen positive results. They are now in a growth phase and have exciting plans for the future, including a commercial and a special candy bar to celebrate the company’s ten-year anniversary.

Advice for Buyers and Sellers

Based on her experiences, Alina offers valuable advice for both buyers and sellers. For buyers, she emphasizes the importance of thoroughly evaluating the business and understanding its fit with your personal and financial goals. Conducting independent due diligence, analyzing the financials, and assessing growth opportunities are crucial steps in the process. Alina also advises buyers to be cautious. Aspiring business owners should not solely on the SBA’s evaluation and to seek professional assistance if needed.

Additionally, Alina highlights the importance of keeping clean books and maintaining transparency throughout the process. Being open and honest about the business’s performance and challenges can help build trust with potential buyers. Sellers should also consider the industry dynamics, their personal fit with the business, and their long-term goals when deciding to sell.

Conclusion and Future Outlook

In conclusion, Alina Joseph’s journey as an entrepreneur provides valuable insights for both buyers and sellers in the business acquisition process. Her experiences highlight the importance of evaluating the fit of a business with your personal and financial goals, conducting thorough due diligence, and maintaining transparency throughout the process.

As Alina continues to grow her businesses and explore new opportunities, she remains focused on finding the right fit and building successful ventures. Her story serves as a reminder that success in business acquisition requires a combination of financial analysis, industry knowledge, and personal alignment. With the right approach and mindset, buyers and sellers can navigate the challenges and achieve their goals in the ever-changing business landscape.

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https://youtu.be/ymIsW4P3Umw

If you have questions for Jared, visit JaredWJohnson.com

DISCLAIMER: The views and opinions expressed in this program are my own and/or those of my guests. They do not necessarily reflect the views or positions of my employer.

Photo of Jim Ely

Understanding Buyer & Seller Motivations with SBA veteran Jim Ely

Jared W. Johnson Podcast

Insights from SBA veteran, Jim Ely: Navigating SBA Lending in a Changing Landscape

Small businesses are the backbone of the economy, and access to capital is critical to their success. In this Before You Buy or Sell the Business podcast, Jim Ely, a seasoned SBA lender with over 39 years of experience, shares his insights on the evolution of SBA lending, challenges faced by small community banks, the importance of education and training, the impact of technology on SBA lending, and the role of loan brokers in the SBA lending process.

Evolution of SBA Lending

According to Ely, the SBA lending program has become more complex over the years, with more rules and regulations. He notes that the program has become more competitive, with more lenders entering the market.

“It’s gotten more complex. It’s gotten more rules and regulations, more paperwork, more things to do, more things to check.” – Jim Ely

Despite the challenges, Ely believes that the SBA lending program is still an important source of financing for small businesses.

Challenges Faced by Small Community Banks

Small community banks play a crucial role in the SBA lending program, but they face unique challenges that larger banks do not. According to Ely, small community banks often struggle to keep up with the changing rules and regulations of the SBA lending program. They also have limited staff, which can make it difficult for them to handle the paperwork and administrative tasks involved in SBA lending.

“The small community banks don’t have the resources to keep up with the constant changes.” – Jim Ely

Ely suggests that one way for small community banks to overcome these challenges is to partner with larger banks or non-bank lenders.

“They can partner with larger banks or non-bank lenders to help them with the SBA lending program.” – Jim Ely

Importance of Education and Training

Education and training are essential for anyone working in the SBA lending industry, according to Ely. He notes that the rules and regulations of the SBA lending program are constantly changing, and it is important for lenders to stay up-to-date with these changes. Ely himself became a Nagel instructor to help people and to force himself to know the rules.

“You really don’t know if you know something until you have to teach it to somebody.” – Jim Ely

He also suggests that lenders should attend conferences and seminars to stay current with the latest developments in the industry.

“You have to go to conferences, you have to go to seminars, you have to keep up with the latest developments.” – Jim Ely

Impact of Technology

Technology has had a significant impact on the SBA lending industry, according to Ely. He notes that technology has made it easier for lenders to process loans and has also made it easier for borrowers to apply for loans. However, Ely also notes that technology has its limitations, and lenders still need to have a personal touch when working with borrowers.

“Technology has made it easier for us to process loans. It’s made it easier for borrowers to apply for loans.” – Jim Ely

He also suggests that lenders should be careful not to rely too heavily on technology and should still have a human touch when working with borrowers.

“You can’t rely too heavily on technology. You still need to have a human touch.” – Jim Ely

The Role of Loan Brokers

Ely explains that his role in the SBA lending process is to help lenders structure deals for credit and eligibility. He also helps lenders talk to customers and explain why an SBA loan is best suited for them. Loan brokers like Ely can also help business owners, CPAs, and business brokers understand the unique aspects of SBA lending.

“The value add I have with lenders is I know how to structure the deal for credit and eligibility. And that value add extends to CPA, his business brokers and business owners.” – Jim Ely

Ely’s experience in the industry allows him to identify weaknesses in deals and figure out how to mitigate them with the SBA guarantee and the structuring of the deal.

“The unique thing about SBA lending is it’s not a cookie cutter one size fits all. The reason why you need the SBA guarantee is because there’s usually a defined weakness, some credit, and you have to identify that weakness and figure out how you’re going to mitigate it with the SBA guarantee and the structuring of the deal.” – Jim Ely

Buying or Selling a Business

In addition to his SBA lending expertise, Ely also shares his insights on buying or selling a business. He emphasizes the importance of understanding the motivations of the seller and the challenges facing the industry.

“Owning a business is not as easy as a lot of people think. You’re you’re you got to understand, why is the seller selling? Is he at that point in his life where you want to spend more time with grandkids? Is he burned out? Does he have health issues or is the business just getting harder, some more competition?” – Jim Ely

Ely also stresses the importance of having fun with the business and making sure the buyer knows what they are getting into.

“If somebody is buying a business, you want to make sure you’re going to be able to have fun with it, too. Yeah, because you don’t want it to turn into drudgery.” – Jim Ely

He also highlights the importance of cash flow in determining the value of a business.“For a lot of people, cash flow means different things to different people. You know, the rule of thumb is IBA doc earnings before interest taxes, depreciation, etc. And you know, that’s the down and dirty key test.” – Jim Ely

If you have questions for Jared, visit JaredWJohnson.com

Connect with Jared on LinkedIn.

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DISCLAIMER: The views and opinions expressed in this program are my own and/or those of my guests. They do not necessarily reflect the views or positions of my employer.

Prioritizing Quality Over Cost, Restaurant Entrepreneurship with Jeff Solomon

Jared W. Johnson Podcast

Jeff Solomon, a successful entrepreneur who has acquired multiple businesses, shares his journey into restaurant entrepreneurship, the importance of prioritizing quality over cost, and offers advice for potential buyers.

Introduction

In this episode of the Before You Buy or Sell a Business Podcast, host Jared Johnson interviews Jeff Solomon on his experience from running casinos to sushi restaurants. Solomon emphasizes the importance of thoroughly researching the industry and the specific business they are interested in and building a strong team of advisors. He stresses the importance of learning from past experiences and taking calculated risks in entrepreneurship.

Background

Having worked on a deal together, Jared and Jeff discuss the experience of negotiating with the seller of Jeff’s first restaurant business, who was initially stubborn about the purchase price. Jeff highlights the importance of due diligence when acquiring a business and recommends focusing on labor, marketing, overhead, and revenue numbers. Solomon and his team use a software program to track food costs and adjust prices accordingly. He advises buyers to look beyond the financial statements and dig deep into the business to uncover potential issues.

Jeff Solomon’s Advice

Solomon stresses the importance of keeping a close eye on costs and finding ways to take out expenses that are not adding value. He suggests that taking calculated risks and constantly examining costs can lead to success in entrepreneurship. Solomon also believes that driving enough revenue can cure most issues in a business.

In addition, Solomon discusses the importance of customer experience and quality in his restaurants. When it comes to restaurant entrepreneurship, Solomon does not sacrifice quality for short-term cash flow and believes that fixing issues now will save money in the long run. He advises buyers to look for brokers who are honest and have high standards.

Solomon’s experience as an entrepreneur highlights the importance of research, due diligence, and calculated risk-taking in the world of entrepreneurship. He stresses the importance of keeping a close eye on costs, finding ways to add value, and prioritizing customer experience and quality.

Not only does Solomon emphasize the need to stay up-to-date with industry trends but also the ability to be open to new opportunities for growth. Furthermore, he suggests that potential buyers consider involving friends and family as investors, but cautions that it can be more complicated without these connections.

Software mentioned by Jeff: https://www.marginedge.com/

If you have questions for Jared, visit JaredWJohnson.com

DISCLAIMER: The views and opinions expressed in this program are my own and/or those of my guests. They do not necessarily reflect the views or positions of my employer.

Oldest Glass Company In Las Vegas – Turnaround Proves Successful For Nevada Buyer

Jared W. Johnson Podcast

In this episode of the podcast “Before You Buy or Sell the Business,” host Jared Johnson interviews Eric Hooiman, the now-owner of the oldest glass company in Las Vegas, on how he turned around the business to become successful. 

Eric was a long-time gold miner with experience in designing and installing fire suppression systems. The conversation is casual and friendly, with Jared expressing his admiration for Eric’s recent deal. They discuss Eric’s background and career in the industry, including his college experience playing midfield for Coos Bay on a Fulbright scholarship.

The podcast aims to help buyers and sellers learn more about the acquisition process. Eric Hooiman found a glass company on BizBuySell that he and Jared decided to acquire. The company was the oldest glass company in Las Vegas and had an unlimited contractors license. Although the company had gone through three generations inside a family and was sold outside the family, the owner passed away from COVID, and his daughter inherited the company. Eric was interested in the deal because of its distressed situation, and the seller had dropped the price.

The conversation also touches on the negotiation process and the initial pricing of the company. Jared Johnson and Eric Hooiman discuss their due diligence process when considering a company for acquisition. Hooiman emphasizes the importance of seeking advice from professionals and staying in one’s lane. He shares that he consulted with his CPA and financial advisor, as well as conducting his own research on the company’s financials to determine areas where they were losing money.

Eric Hooiman provides more advice on acquiring a business, including the importance of transparency and utilizing employees as a resource. He also emphasizes the significance of implementing changes one step at a time and getting buy-in from employees. The conversation also touches on the difficulty of finding good employees and the importance of company culture in retaining them.

Hooiman also talks about his future plans, which include stabilizing his current business and buying another one. Eric believes in the importance of having mentors and attends Tony Robbins events. He emphasizes the importance of adding value when seeking a mentor or learning from someone. To Eric, people are willing to give advice and help as long as the person seeking advice listens to them.

Overall, Eric Hooiman’s experience in gold mining and fire suppression system design, as well as his personal relationships and determination, have helped him successfully acquire a distressed business and turn it around. His emphasis on company culture and adding value to others provides valuable lessons for anyone looking to acquire and run a successful business.

If you have questions for Jared, visit JaredWJohnson.com

Connect with Jared on LinkedIn.

Follow Jared on Instagram.

DISCLAIMER: The views and opinions expressed in this program are my own and/or those of my guests. They do not necessarily reflect the views or positions of my employer.

Professional CPA Shares His Experience Acquiring & Running 3 Different Businesses

Jared W. Johnson Podcast

In this podcast episode, host Jared Johnson, welcomes Ken Kirkpatrick. Ken is a professional CPA and business acquirer of 3 different businesses and is always on the lookout for more. 

Ken Kirkpatrick, CPA & Owner of 3 Different Businesses

Ken Kirkpatrick, CPA &

Owner of 3 Different Businesses

First Steps

Ken graduated from UNLV with an accounting degree and worked for Citibank before joining KPMG, where he got certified as a CPA. After three years with KPMG, he was approached by a small group of casinos looking for a comptroller/CFO and decided to take the plunge into the casino business, where he worked for 15 years. Ken describes himself as cautiously optimistic and always looking for new opportunities to acquire businesses.

In this continuation of the conversation, Ken Kirkpatrick talks about his work experience, which includes working in the gaming industry and trying different industries, including consulting and manufacturing. He worked for an individual who owned about 15 locations in town, bars and restaurants, and one main casino and hotel. He was treated very well and acted as the owner’s personal CPA, ensuring that the financials were sound. Ken also discusses the intense nature of the gaming industry and the control standards that must be met to keep everyone happy on the Gaming Control Board side.

Running a Non-medical Home Care Franchise

Ken discusses how he transitioned from working for someone else to buying his own business, a non-medical home care franchise in South Texas. He also talks about the impact of COVID-19 on the home care industry and the challenges of being a private pay business. Kirkpatrick shares advice for anyone looking to buy a business, emphasizing the importance of buying receivables and having working capital. He also discusses his plans to relocate to South Texas before ultimately deciding to commute between Texas and Las Vegas.

Manufacturing Laboratory Devices

The conversation continues with Jared and Ken discussing the process of appraising businesses and the importance of not overpaying. Kirkpatrick shares his experience of buying another business, MSI Products, after feeling bored in Las Vegas and looking for a small business to work on when he’s in town. The company sells laboratory devices and had been owned by a family in San Diego who put it up for sale after the previous owner passed away from cancer. Kirkpatrick quickly responded to the ad and was one of the first to look at it, eventually buying it. Negotiations for this company were straightforward, and the buyer paid almost the full asking price while also obtaining an SBA loan and a small owner’s loan held back. The quality of the product is superior, making it difficult to get knocked off in China. The conversation also emphasizes the importance of understanding accounting and finances for small business owners.

Acquiring a Live Pet Store

Seeing the potential for growth, Ken acquired a live pet store franchise that was located near his home. Despite the high price, he recognized the store’s outstanding numbers and potential for growth, especially during COVID, which saw a rush in pet purchases. Ken also mentions that the Southern California market does not have a real-life pet store due to state law, and he plans to expand his business to cater to that underserved market. He emphasizes his desire to serve the community and provide a trustworthy source for people to get healthy, well-bred puppies for their families.

Ken’s Outlook on His Entrepreneurial Journey

As a successful entrepreneur, Ken revealed that his motivation to succeed and provide for his family stems from growing up poor and wanting to create a better life for himself and his loved ones. He also shared that his experiences in the casino business taught him the importance of hiring the best people and treating them with respect and that he tries to create a family-like atmosphere in his own businesses. Kirkpatrick emphasized the need for humility and valuing the opinions of his employees, who have a better understanding of the day-to-day operations.

If you have questions for Jared, visit JaredWJohnson.com

Connect with Jared on LinkedIn.

Follow Jared on Instagram.


DISCLAIMER: The views and opinions expressed in this program are my own and/or those of my guests. They do not necessarily reflect the views or positions of my employer.

Expert M&A Attorney Scott Oliver Discusses Legal Aspects of Buying or Selling a Business

Jared W. Johnson Podcast

In this episode, host Jared Johnson sits down with M&A attorney Scott Oliver. Scott is an attorney with the Lewis Kappes law firm. Jared and Scott discuss the legal aspects of buying and selling a business, specifically with SBA lending. They also touch on Oliver’s background, including his education at Purdue and IU law school, and how he ended up at Lewis Kappes. The conversation is lighthearted, including a bit of banter about the pronunciation of the firm’s name.

Scott talks to Jared about legal considerations when buying or selling a business. He advises buyers to hire an attorney experienced in M&A transactions and in SBA lending, cautioning against hiring a large law firm or an attorney unfamiliar with the specific type of acquisition. Additionally, Scott emphasizes the importance of building a deal team with the right expertise to ensure a smooth transaction.

This episode also touches on the nuances of a stock vs. asset purchases, including liability considerations and tax implications. Scott Oliver explains that in an asset sale, the buyer is purchasing equipment, machinery, and goodwill, but the seller usually retains liabilities such as debt and lawsuits.

In contrast, a stock sale involves acquiring the company as it exists, along with all its issues and employees. Jared Johnson asks about how to determine which type of sale to pursue, and Oliver advises consulting with attorneys and tax professionals. They also discuss the importance of lenders considering whether stock certificates are involved and taking them as collateral if necessary. Overall, Oliver emphasizes the need for a customized checklist to ensure all necessary steps are taken for each specific deal.

We hope you enjoy this episode.

To contact Scott: SOliver@lewiskappes.com

Scott Oliver on LinkedIn: https://www.linkedin.com/in/scottoliver5/

For questions, visit https://jaredwjohnson.com/

DISCLAIMER: The views and opinions expressed in this program are my own and/or those of my guests. They do not necessarily reflect the views or positions of my employer.