Freedom Factory's Podcast

About Freedom Factory's Podcast

Freedom Factory is the world's best business broker. Learn how to sell your business for maximum value. Find out how to get an accurate business appraisal for when you sell your business, or if you are investing in a new venture.

Publisher

Robert Hirsch

Category

business

Language

en

Explicit

No

First episode

27 Apr 2020

Latest episode

27 Apr 2020

Latest episodes

34 episodes in the feed.

1. 

   27 Apr 2020

   Strategies for Getting Your Company Ready to Sell

   Today's episode of the podcast, Robert Hirsch from Freedom Factory talks about the strategies you should be using when getting your company ready to sell. You can listen to the podcast, watch the video, or read the transcript below. Strategies for Getting Your Company Ready to Sell Strategies for Getting Your Company Ready to Sell Hi, it's Robert Hirsch from Freedom Factory. I was just working up in my mountain house and I needed to tell you this. I'm just working on it with a new customer and we're getting their company ready for sale, and I'm going through all their information, and I realized that not only do I need to tell our new customer this, but I think telling all of our customers how to get your company ready for sale is only going to help our tribe and our entrepreneurs. So first of all, I want to talk about a difference between owning a job and owning a business. And I talk about this a lot, but perhaps I haven't explained it as well as I could. So if you're not sure if you own a job or you own a business, just don't show up for a week. Maybe do a little bit of work from home. But if your income stays the same or goes up, you own a business. You've built a machine that makes a machine. If your income goes down or your sales go down, you own a job. And before you go to sell your business, being able to transition, owning a job to owning a business who really help your valuation. And if you don't know how to do it. We help businesses with that all the time with our home stretch program. And so again, if you're not sure if you own a business or you own a job, the best litmus test that I know is just don't show up. See what happens when you're not there because you want a business that's built on systems and processes, not on one person in this intrinsic knowledge. Also when I write my operation manual for my business, I try and make it so easy. I joke that a monkey could do it, but I try and make it so easy that even my teenager could do it. Being able to read it and understand it, not using a lot of industry jargon or difficult to understand words so that the business operates the way you want it to is going to maximize your valuation. By the way, if you haven't put together an operations manual for your company and you're thinking about selling it, this would be a great time to do so. Some of the tricks that I used to do that, I talked to every role and I haven't put their roles and responsibilities. I put it all in there. I take my company mission and values. I put it all in there. I take my contracts and the things that I use over and over again. For example, here at Freedom Factory, we have a pretty robust document set, non-disclosures, letter of intent, asset purchase agreements, stock purchase agreements - all the things that we use a lot for our client's benefit. I put it all in this operations manual to get it into one place so that's easy to use. These and other things are going to help you build a business and not a job. And if you do own a job, please don't be discouraged. You know, transitioning a job to a business is fairly easy to do. It usually takes about three to six months and it can dramatically affect the final selling price of your business. If you need any help with anything, just give us a call at Freedom Factory. Thank you so much for watching. Please hit like and subscribe and we'll see you soon. Contact Freedom Factory Freedom Factory 5500 Greenwood Plaza Blvd., Ste 230 Greenwood Village, CO 80111 Phone: 844-MAX-VALUE (844-629-8258) https://www.freedomfactory.com/ https://g.page/freedom-factory-denver Also Follow Freedom Factory here https://vimeopro.com/freedomfactory/business-brokers https://www.youtube.com/channel/UCXUrv3qYNsR8NjZEWRDch5Q/ https://vimeopro.com/freedomfactory/freedom-factory http://freedomfactory.libsyn.com https://twitter.com/FreedomFactory7 https://www.facebook.com/Freedom-Factory-112201923642080 https://www.linkedin.com/company/freedomfactory Podcast also available to watch on Youtube

2. 

   27 Apr 2020

   What Contract Structure Should I Use to Sell My Business

   Robert Hirsch (https://roberthirsch.com/about/), founder of Freedom Factory, discusses the different types of contracts that you can use to sell your business. What Contract Structure do I Need to Sell My Business Stock Purchase Agreement or Asset Agreement? What's the Difference? Read the Transcript Below Hello, this is Robert Hirsch from Freedom Factory, and I want to talk to you about something that sometimes you get so involved in selling businesses that you don't realize that you have all these TLAs or three letter and acronyms that people don't understand. And so I just got a letter from one of my clients and he was talking about the difference between deal structure when selling a business. And so we're going to cover what's the difference between a stock purchase agreement and an asset purchase agreement because they're, they're pretty fundamental and often in the LOI or the letter of intent, it's going to be listed whether they want to do a stock purchase agreement or an asset purchase agreement. And so as both a seller and a buyer, often if you don't know which one to do, and I'll give you exceptions to the rule before we get through the entire video. But I like asset purchase agreements and there's some fundamental differences, and I'm going to go into those right now. So an asset purchase agreement means you're buying the assets of a company. So you're going to set up another shell company and are going to buy the assets and you're going to put it in there. So. Uh, for example, when I was buying a, I personally bought a boat company I boat manufacturer for, for fly fishing. And many of you that know me know that I love to fly fish and we're up here in my mountain house right now and it's a raining day. And I decided it's probably good to get some work done. So I bought it with an asset purchase agreement. And so when you do that, all you have to do is just get the assets of it and put it in there. So the differences are the liabilities of the old company. Don't transfer. So if they owe the bank $100,000 you buy the assets and you put them in there and they're unencumbered, and then they have to pay off the debt. Obviously, if somebody has a loan on it, you can't sell the assets out from under them. So they're going to have to clear that debt with the proceeds and we can handle that in escrow. But an asset purchase agreement is means you're just buying the assets of a company. So it's not your job to find every liability that they have that sticks with the, with the other company. So conversely, if you do a stock purchase agreement, now the due diligence is much harder. You have to find all the debts of the company, and often they, you can make promises or reps and warrants in the contract of what that means. But a stock purchase agreement means you're buying all the assets, all the liabilities of the company. And sometimes you can do things like have the seller warrant certain risks and there's ways to do it, but stock purchase agreements are much more complicated. 80 to 90% of the deals that we see on high growth lifestyle companies are asset purchase agreements. Sometimes with our bigger companies, or they have a lot of IP or licensure, intellectual property. And licenses. Stock purchase agreements make more sense. For example, uh, if you bought a company and it had a lot of licensure, let's take the boat manufacturer, right? We were licensed as a U S coast guard, uh, approved manufacturer. We were a boat dealer. We also were a car dealer because we had to put tags on the trailers for them to drive it home. And we were ironically an auto manufacturer because we had to make the trailers and put a VIN on it. So that's a lot of licensure. It's a lot of one to three day classes, uh, that we had to take. So in that circumstance, when there's a lot of licensure, you can, if you want to, you can do a stock purchase agreement and the licenses transfer with the company. Again, you have to be a little bit more careful about your diligence and making sure that you identify all the liabilities that the company might be exposed to. That includes environmental risks and business risks. So if you're not sure what to use, 80 to 90% of the. At the time, I would really recommend an asset purchase agreement. If it's a company with less than $20 million in sales. There's obviously exceptions to it, and if you have any questions about what those exceptions are, what it looks like, why don't you just give us a, call it at freedom factory. You know, we have, you know, great middle of the fairway S PAs and APA has their stock purchase agreements and asset purchase agreements you can take to your attorney.

3. 

   27 Apr 2020

   How are Brokers Different from Investment Bankers

   In today's episode of the podcast, Robert Hirsch from Freedom Factory talks about the difference between business brokers and investment bankers. Watch the video below, listen to the podcast, or read the transcript. How are business brokers different from investment bankers Hi, it's Robert Hirsch (https://roberthirsch.com/) from Freedom Factory again. And I wanted to talk to you today about a question that we get a lot, and it's, what's the difference between a broker and an investment banker? And you know, as an entrepreneur, I didn't know the difference. The first time I sold a business, I used an investment banker. And, you know, and long story short, I became a broker because the whole situation could have gone better. And so what I learned was that that brokers, all they do is sell businesses and primarily entrepreneurial businesses. And sometimes they sell it to other entrepreneurs, sometimes they sell it to private equity firms, smaller private equity firms, sometimes venture capital's, sometimes small roll-ups. But they're really focused on helping entrepreneurs get the maximum value for their business. Now, investment bankers and I don't know, they're just very different. And part of our team here at Freedom Factory (https://www.freedomfactory.com/) are people that came from an investment banking background and they did really large deals, you know, primarily, you know, deals over 100 million and many deals that are five, 10, 15, 20 million are way too small for them. Or they just, you know, essentially the fees aren't high enough to make them pay attention. So it's estimated that roughly 80% of all M&A deals are done by brokers, but roughly 10% of all M&A revenue is done by brokers. And again, you know, our average selling price are companies that do EBIDTA of roughly two to 20 million. And what that means when you do earnings of two to 20 million is our sales price are significantly smaller than companies like Google or eBay. And so it's really a, a big difference. So bankers are really focused on large deals, large teams, you know, big deals. If you have a smaller business or a company that does revenue of. 50 or 60 million or less, you're going to be very small for a banker, but you're going to be really immaterial to a broker. And so when it came down to what do I want to do with the rest of my productive life, I've been running entrepreneurial businesses for 30 years, and I've gone from spectacular successes to smoldering holes in the ground and, and everything in between. You know, it really came down to who's your tribe? And I love entrepreneurs and I love helping entrepreneurs with the biggest deal of their life. And we really had a chance to reinvent the brokerage space here at Freedom Factory and done some, some pretty innovative things. To me, the big question becomes, If you've been there done that $100 million company, you know, sometimes bankers can do a really good job and there's only a few institutional buyers and they know most of them. And it can be very easy if you're an entrepreneur that's built a high growth lifestyle company, and again, your earnings are somewhere between two and 20 up to 25 million, you know, your sales are 50 million or less. Then finding the right broker that specializes in deals that size can really make a huge difference. Because if you're, if you're a small fry to someone, no one likes feeling like they're small fries, especially if it's a, the biggest deal of their life. But maybe, maybe your fees on your dealer are just a few hundred thousand and on another deal. You know, bankers can make 10 15 20 million from a deal. So they're really going to focus on that. Ultimately, when you look at what the size of your business is and trying to decide what's right for you, an investment banker or a broker, you know, and I would suggest talking to both, but figure out who makes you feel great. Make the right decision based upon the size of your business. If you have questions on this or anything else like this, just give us a call at freedom factory and we'd be happy to help. Thank you so much for watching. Please like and subscribe and we'll see you soon. Contact Freedom Factory Freedom Factory 5500 Greenwood Plaza Blvd., Ste 230 Greenwood Village, CO 80111 Phone: 844-MAX-VALUE (844-629-8258) https://www.freedomfactory.com/ https://g.page/freedom-factory-denver Also Follow Freedom Factory here https://vimeopro.com/freedomfactory/business-brokers https://vimeopro.com/freedomfactory/freedom-factory http://freedomfactory.libsyn.com https://twitter.com/FreedomFactory7 https://www.facebook.com/Freedom-Factory-112201923642080 https://vimeo.com/freedomfactory https://www.linkedin.com/company/freedomfactory https://www.youtube.com/channel/UCXUrv3qYNsR8NjZEWRDch5Q/about Available on Youtube

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