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The EXITPreneur’s Playbook, Joe Valley

Mar 15, 2022

Entrepreneurial Tips you'll learn today on The Sales Podcast...

  • He used to focus on the money
  • Now he focuses on how many people he can help
  • Now he makes more money
  • Self-employed since 1997
  • Was a media buyer back then 
We present good information and let people make a decision."
  • In 2005 he launched his first online business
  • Came out the other end tired and woke up and just decided to sell his business
  • His advisor told him to hold on for another six months because the market was turning around in his opinion
  • He put together some SOPs and sold in 2010, took a year off, and joined the Quiet Light Brokerage then (a team of two)
  • Last year they did $250 million in transactions
  • Grown 55% a year on average the last four years
  • They represent the sellers
  • They don't "sell."
  • Considers himself an educator
  • When you're desperate you can't give it away
  • He was a typical entrepreneur
  • He ran his business and got sick of it and wanted to move onto the next venture, but he wasn't prepared for it
  • Most entrepreneurs don't have accounting in place
  • Most entrepreneurs don't have accrual accounting
  • He didn't outsource his accounting
  • Outsource your e-commerce accounting
  • Set a goal to sell and reverse engineer your business
  • You need to know your exit goal in dollars to know if it's a pipedream or a reality
  • Buyers are looking for four things
    • Risk
      • Is it a single-channel vs. multi-channel?
      • Is it a young business?
      • Buy a bigger business with more history
    • Growth 
    • Transferability
    • Documentation
  • Gets 300-400 leads a month
  • The valuation call is free
  • Buying with an SBA loan is fantastic
  • But SBA loans are tough for online businesses since they might be too young or they co-mingled their finances
  • You need to qualify as a business and a buyer for an SBA loan
  • E-Commerce Lending in Florida is a great SBA broker/lender
  • His median transaction size was $1.8 million and 90% were all-cash
  • SBA deals are usually more stable and more likely to close, but they take longer
  • It's emotional
  • It's hard to find a buy-side broker
  • He has to help the buyer as much as the seller
  • He creates a detailed P&L
  • He asks all of the tough questions upfront
  • There are lots of reasons to sell a business
  • Entrepreneurs get shiny-object syndrome and want to move on
  • In the vast majority of businesses, the bulk of the money is made when the business is sold, i.e., when Elon Musk or Jeff Bezos "sold" by going public
  • Most people don't take a lot of money out in the early years
  • In 2021, about 30% of buyers were FBA Aggregators—Fulfilled By Amazon
  • This is new in the last five years, Thrace.io is the biggest
  • The other 70% are private equity firms (20%) and smaller entities buying for themselves (50%)
  • "Acquisition Entrepreneurship" - "Buy Then Build"
  • You should like what you're doing
  • There will be tough periods so it helps to have a passion
  • Training and Transition period
  • Hold back 20% to keep the seller around
  • 2013 he closed 23 transactions that were sold by what he'd call kids today
  • We're in a different world now
  • People know what an online business is today
  • Transaction size has grown 10-fold
  • 3.7 offers per listing
  • But it's not as crazy as real estate
  • Younger businesses are growing quickly
  • This is not a passive investment
  • You're buying a job
  • Most transactions are done remotely, without meeting in person
  • He does best when he focuses on one thing
  • His one thing is M&A, so he doesn't mess with crypto

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