524: What You Need to Know When Buying a Business with Richard Parker

How do the most successful entrepreneurs buy good businesses at a great price?

In this episode, host Nicole Jansen sits down with Richard Parker, a seasoned expert in Mergers and Acquisitions (M&A) who has acquired 14 companies and advised on transactions worth over $2 billion. Richard shares the secrets behind his successful program, How to Buy a Good Business at a Great Price, and underscores the essential knowledge needed for buying a business successfully.

Throughout the conversation, Richard offers profound insights into business acquisitions, the importance of an advisory team, and the virtues of methodical decision-making. Together, Nicole and Richard explore key strategies for growth, the significance of leveraging an existing customer base, and the often-overlooked need for creativity and curiosity in entrepreneurship.

Join us for this enlightening discussion filled with actionable takeaways, whether you're an aspiring entrepreneur or a seasoned business owner looking to expand.

What We Discuss in this Episode

• Key steps involved in the "How to Buy a Good Business at a Great Price" program.
• How Richard Parker has maintained his childlike imagination throughout his career.
• The crucial role of having a business coach or advisor for business success.
• Common mistakes that entrepreneurs should avoid when looking to buy or run a business.
• Why leveraging your current customer base can be more effective than seeking new markets.
• The risks that entrepreneurs face when entering unfamiliar industries.
• The impact of misinformation on social media on new entrepreneurs.
• The biggest mistakes Richard made in his business career and the lessons learned from them.
• The current hot industries for business acquisition.
• The importance of relationships and trust in business transactions.

Podcast Highlights

0:00 - Lower market business stays steady, active, flourishing.

3:53 - Institutional investors make competition difficult for individuals.

8:19 - Experience highlights risks; business advisers offer guidance.

12:33 - Maximize existing clients by upselling additional products.

15:00 - Grow by adding products/services for customers.

17:26 - Quick decisions often hide incompetence or overconfidence.

20:11 - Successful entrepreneur faced losses after shifting focus.

26:30 – Why likability and trust are crucial for deals.

28:41 - Address business vulnerabilities; ensure operational continuity.

33:38 - Ego hindered hiring; realized teamwork improves success.

34:25 - Surrounding with smarter people improves business success.

40:44 - Intellectual curiosity trumps not attending university.

45:29 - Explore entrepreneurship resources.

Favorite Quotes

"Having someone to guide you, to point out potential pitfalls you can't see on your own, is invaluable in navigating through business acquisitions."

"Imagination is so critical in this game of entrepreneurship. It fosters innovation and helps you look at common problems through a novel lens."

"The 23 steps in our program are designed to simplify the complex process of business acquisitions, making it accessible for both novices and seasoned entrepreneurs."

Episode Show Notes and Resources: https://leadersoftransformation.com/podcast/business/524-what-you-need-to-know-when-buying-a-business-with-richard-parker

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Episode Transcript

(00:04):
How do you buy a good business at a great price? Our guest today is
Richard Parker. He is a distinguished distinguished m and a
expert with a wealth of experience, which includes the
successful acquisition of 14 companies ranging from
50,000 to over 200,000,000 and advisory roles and
transactions surpassing 2,000,000,000. And he was actually hired

(00:27):
by the Ray Dalio family, family office several
years, for several years to mentor Ray Dalio's
son in the art of acquiring small businesses. And
so tons of experience here, and I'm really
excited to talk about today business acquisitions
and how to seize the current market opportunity as well as insights on the

(00:49):
barriers that hinder business growth and entrepreneur action.
So, Richard, welcome to the leaders of transformation. We're glad you're here.
Great. Thank you. I appreciate you having me. There was a lot, lot in your
intro, so I'm eager to get going and lots to cover. That's
terrific. Yeah. Yeah. Well, let's talk about the landscape,
the business buying and selling landscape as it is right now.

(01:12):
Okay. So the it's the cool thing about business,
business buying and selling, especially at the lower market, and it's not really
textbook defined, but I'm talking more for individuals, aspiring
entrepreneurs, small business owners versus $1,000,000,000, sales and
purchases. The cool thing is the landscape stays pretty
steady outside of some catastrophic economic events, like back in

(01:34):
2,008, where there was a dip for quite a while. You know, for the most
part, it stays pretty pretty steady steady, pretty even
keel, very active. Certain things
will impact potentially some valuations or some deal
structure. Interest rates go up, interest rates go down, those
type of things. But the the landscape itself and and the way you know,

(01:56):
right now, what we're talking about because interest rates have have gone up
and there's a little bit of uncertainty in the market, this sort of ever never
ending economic downturn keeps being talked about.
It's actually a pretty flourishing time for on the buy side of things.
Although the sell in the lower market has has has remained strong, it is a
really good time for entrepreneurs to get into, business

(02:18):
simply because people with fear who may not have
true entrepreneurial blood running through their veins, they get a little nervous when when
the economy or something goes, you know, off the rails a little bit. So less
buyers typically means more activity, better deal flow. So it's it it really is a
pretty cool time. Got it. Now what industries
are maybe you most familiar with and or

(02:41):
that you know are the ones that are thriving the most right now?
And given all of the stuff that's going on right now. But by the time
of this recording, we do not know who the next president is. We will know
by, you know, after when this is released. But,
all that being said, you know, what,
where where should people be kinda leading in? You know?

(03:03):
Well, judging by the last election, we may not know by the time this podcast
airs anyways. Fair enough. It's entirely possible. The,
industries that are really hot right now, both both sides of the
equation, let's say both sides buy and sell side, home services are on fire.
HVAC companies, plumbing, electrical, think, anything that you
go to the home to service repeatedly on a on a recurring, not

(03:26):
reoccurring, but on a true recurring basis. Multiples have
gone absolutely bonkers. And you
get a lot of the institutional buyers, private equity firms, family
offices have gotten into the mix, and that typically pushes
up the multiples. A lot of them are on a on a roll up initiative.
And so the multiples have gone absolutely crazy. And

(03:48):
so what what that does is great for business owners, good time to potentially
exit. For individual or smaller buyers makes it infinitely more
difficult because you can't get into a you can't get into a a slugfest with
an institutional investor. I mean, you're just not gonna be able to to match the
way they get deals done, prices that they pay, and
that sort of thing. So those industries have gotten really, really

(04:10):
hot. Home services are always good industries. Now there are some
other ones as well, pest control, alarm companies, window washing,
etcetera. So there are some really nice ones that have stayed out of the
fray, if you will, of the institutional investors. And those
are always pretty, popular businesses. But the hottest
industries undoubtedly are those, type of home

(04:32):
service companies that I mentioned. I know you and I talked
previously about absentee businesses and why you don't
wanna buy one of those. So maybe talk a little bit, like, let's go kind
of the nitty gritty of what do you wanna look for in a
business? What's a good viable business to buy versus
one that you kinda wanna steer away from right out right out of the gate?

(04:55):
Okay. So and we did talk about absentee run businesses. My line that I've
been using for years is your absentee run businesses usually equal absentee
profits. It's very hard on the lower on the smaller scale. If we're talking
about more owner operator type businesses, you can work
towards getting management into place. And that should be a that could be
a terrific goal for people, But you have to acquire business. You've got to get

(05:18):
in there, operate the business, learn the business. Most people buy a business in an
industry that they're not familiar with. And so learning that business, getting
the guts of that business in your belly is critically important because you can't make
any decisions. You can't just put in a manager from day 1 if you have
no experience running that type of business. The manager quits, get hits
gets hit by a Pepsi truck. I mean, you don't even have enough experience to

(05:38):
know whom to hire, what skill set. So you've gotta get immersed in it. Yes.
You could transition out eventually. High level
things, for example, the the number one criteria, whether it be for an
individual looking to acquire business, and then we can talk about some business owners looking
to grow through acquisition. For individuals, you've got to match your
greatest skillset with what that business needs to drive its revenue

(06:00):
and profits. So the, the tagline is always, you know, from my
perspective is whatever it is that you do best has to be the
single most important driving factor of the revenue and profits of
any business you consider purchasing. Along those lines, you
don't wanna confuse experience with expertise.
Experience is the industries where you may have worked. Expertise

(06:23):
is what you did well at those jobs. Yeah. What you did
exceptionally well should match with what that business needs. And there's a
process by which you can figure it out by these visiting a number of businesses.
Other red flags, for example, you know, businesses that have a high level of customer
concentration, you know, where far too much revenue comes
from too few customers, or there's issues if you're talking about in

(06:46):
in retail type businesses where there's lease exposure, competitive
exposure. I was talking with a a buyer today. We're just they were far
down the road through a colleague of mine, had a couple of questions and
came across me. And and I said to him, when was the last time they
did road construction? And they said, what do you mean? I said,
no. The the road. That's the road that's where the where the plaza

(07:07):
borders. It was a big, big location. And,
so but we have no idea. I said, well, go check that out. Sure enough,
it was actually had that conversation today. And in in the
interim, was they found out that the last road
construction was done, I think it was 14 years ago. Typically, road
construction is gonna happen every 10 years, municipally speaking. And so

(07:28):
there's a very good chance within a year or 2 they own that business that
there's gonna be major road construction right outside their
store. People may not be able to get in for a period of time. So
understanding those nuances and related to specific businesses are
really important. Those big mistakes. You're gonna make a mistake when you buy a business.
I mean, you you're gonna make mistakes along the way. You're not perfect. You just

(07:49):
wanna avoid the big ones, like concentration, like over,
paying for cash sales, reported cash sales that don't materialize, those
type of things. Big, you know, big items that can
actually become catastrophic. Well, and when you say
that, I think how many businesses really think about
like, they think location, but how many of them think about all around the

(08:12):
services like that? I mean, when the road who who does that? Who I mean,
you I do that. You do. I do that. Because you have the
experience. I'm gonna I'm gonna guess that came from
learning a lesson when it didn't work. You know, it it you found
yourself in that situation. And, you know, it's really that's why
I think it's so important that you have and I'm not just saying this because

(08:34):
I'm a business adviser, but if you have a business coach or adviser or
somebody that knows what they're doing to look at some of the
things because most times would've especially if you're an
aspiring entrepreneur, you just knew kind of maybe you worked at a
company for years and now you're gonna start a business. And what do they usually
look at? They usually look at all the positives, all the upsides, and this is,

(08:55):
you know, this is like a shoe in. This is a surefire, you know, thing.
And that's usually a riff red flag for me. And I think
about some somebody that I know who and somebody
comes to him as an investor with a deal and he says, I I look
at and when I put deals together, he says the same thing. Is I I'm
looking for people to shoot holes in it because Absolutely. You know, you wanna

(09:17):
start there and see how how, how many holes can we shoot in
this and how bad like, you know, look at that downside. And then
we can can, you know, go back to looking at is the is the upside
there. It's a great observation. You know, I've
looked at been involved with thousands of transactions,
looked at god knows how many business. I've lost count a long time ago. I'm

(09:38):
doing this for over 3 decades. I still learn something new in every deal,
every single deal, at least one thing, usually more.
If you're anyone thinking about buying a business, to think that they could do
this without the right advisory team, accountant,
attorney, adviser, knowledge base.
Mistakes are made when people go into a new area

(10:01):
or a new initiative and don't equip themselves with the
knowledge they need. Just because you've been a,
worked in a company doesn't mean you're prepared to run a company. Just because you
have an MBA from a fancy college, that that
education has does doesn't even conjugate with the knowledge you need to buy
a business. And so if you whether you're

(10:23):
during the process of buying a business or running a business,
the biggest thing you could commit to yourself and to the world is
to know what you don't know and align yourself with
believable parties, really people that have been there, done that, and can do
this, can help you do this successfully. And most people are very
helpful. You know, most people will are happy to to lend a handing lending

(10:45):
hand, especially to aspiring entrepreneurs who may not have done this. You you've just
gotta ask. But to think that you could do this on your own without that
type of top level help, I mean, you're just asking for you're
asking to make a poor investment. Yeah. Yeah.
Absolutely. Let's talk about coming back to what you were saying
a few minutes ago about the difference. Right? You have an an

(11:06):
individual who wants to buy a business versus a business doing
additional acquisition. What do they need to be taking
into consideration? I I know there's this business owners who are like,
well, I'm successful here. So they kind of assume that they got this.
Right? And then they go and they expand into
markets that they know nothing about. And it, you know,

(11:28):
it affects so there's some there there's some different things. There's, like, phases of the
business. You gotta know where you're at and all that. So can you speak to
that? Sure. The easiest way to grow your business is through
acquisition. I mean, organic growth is wonderful. Everybody feels terrific about it. Plans
come into place. But the shortcut, you know, you you buy into someone's learning
curve. I built all my businesses that way. However, you wanna

(11:49):
stick to the knitting. By that, I mean, you wanna be able to buy you
wanna buy something that either,
is competitive or ancillary. Competitive means you're
you own a, you know, you want a chain of,
quick oil changes. Well, you wanna buy a bunch more. Or you own a
distribution company in, ethnic foods, you wanna buy it

(12:12):
to your competitor. That that's sort of an easy one. Ancillary businesses,
there's where you add on products, where you may buy a
competitor or you buy a business that could, has additional
product, may not be dry goods, spices of ethnic
foods. It may be something else related to ethnic foods that you can add on.
So think competitive or ancillary. But the overarching

(12:34):
theme, the way to look at this is when you have a business,
you have clients. Those clients are worth gold,
And it's very easy to sell
the same clients something else in addition because people are
comfortable buying. I mean, I read something many, many years ago. It's a the
statistic way back, and it was in that book, thriving on chaos by Tom

(12:58):
Peters. And he said, you know, clients that are not
necessarily thrilled with the supplier are still 60%
more inclined to buy from them because there's a relationship. And
so I look at it and say and and I don't mean to to
sound crude with all of this, but you have this you have you have a
client base. Look at that as your pipeline. K? And

(13:20):
with and so the goal is figure out
how you could sell more shit to the same pipeline, how you can
stuff more more products or services into that pipeline
so you don't have to reinvent the the wheel. You don't have to go outside.
You don't have to develop necessarily new markets. But a great way to expand
quickly is sell more stuff to your existing client

(13:42):
base, and you can grow from there. They could whether it be
geographically or with additional products. But, you know, if you have a
good customer base, I mean, that's golden. Yeah.
Whatever that looks like. Retail, wholesale, distribution,
manufacturing, that customer base is golden. Priceless.
Yeah. Well and yeah. What I hear in there is a lot of

(14:04):
times and, yeah, you wanna create more value. How you can create more value
for that customer base rather than going so
so when people think about industries and saying, I don't know anything about this industry
or, you know, sure. That's a really hot industry,
is really looking at, does it serve the same ideal
audience? So it's really more about who are you serving

(14:27):
and what are the things that they need the additional services as
opposed to just lucrative industries and Right.
Going from there. And so I think that's that's an important distinction. It's a really
good question for people to ask themselves. Are you gonna be serving the same audience,
the same customers, your existing customers, and that same audience
that you've learned to get to know and be familiar with? Or

(14:50):
are you gonna have to come up with a whole new audience to do that?
And I think that's, that's that's gold right there,
you know, to be able to look at it that way. So that's good. You
know, well, you know, along those lines, very often people will go
outside their area of expertise, acquire other businesses, unrelated business, the world
of the entrepreneur, I can't say for, you know, I bought many different

(15:11):
businesses over the years, completely unrelated.
However, if you wanna grow your existing business,
the way to grow it, if you can, is to find more product or
service to sell to your existing customer base. That doesn't prevent you in any way,
shape, or form. If you own a distribution business to buy a manufacturing business that
has nothing related to it, that's just in your entrepreneurial pursuits and

(15:34):
people own many different types of businesses. But from a platform
of growing an existing business, think about the
value that you you've already created Yeah. Which is that customer
base and and how you can add more, products or services to
that. Well and there's also I'm sure when you did that, you you have
some resource. You need to have some resource to allocate to that

(15:57):
versus, like, if your business is just at a point where it can sustain
itself and there's nothing extra than, you know, going and buying a
business. I think about years ago, there was this woman,
business owner, and she was doing quite well. She'd been business
for 8 years. It was, you know, very hands on, owner operated.
And then her husband came in who came from a completely different

(16:20):
industry and hers was aesthetics. And he's coming in. He's like, look. I'm
gonna show her how this is done. So he Yeah. He ruined everything. I was
just gonna say, did he ruin everything? And he's like, we're gonna expand
and we're gonna do all these locations and so forth over the summer. Like, we're
gonna add 3 locations onto the one in 3 month
period of time. And, you know, taking from

(16:41):
Peter to pay Paul and doing that. And it was just like, what are you
doing? You know? Like, stop. Stop right now. That business was thriving.
It was profitable. And you just literally took all of its
lifeblood and you're starting to, you know, apply it over here.
And and you don't know how to do that and you're trying to figure out
you need to have some cash flow or some resources,

(17:03):
you know, and some backing to be able to do that because And the
brains. Yeah. And the brains. And the brains. You know? Let's not forget the
brains. It's important. And you gotta be I think there's also in that
humility, which he did not have, the humility to ask
and because, you know, he thought he he knew it. So nothing Yeah. I know.
It's true. There's a there's a few of us out there that have that tendency

(17:25):
to think we know. Oh, absolutely, David. I'm sharing with tons of war stories, but
it's a perfect example. You know, I've I've witnessed it year
year of you know, for many years and multiple times where
when people come in guns ablazing, whether it be
as an employee or what have you, when they come in guns ablazing,
they generally are my experience has been they're generally hiding

(17:48):
something. You know, they their skills they've either oversold their
skill set or it's compensating for what they you know, they think
that showing people that they make fast decisions and they move
quickly is a skill that's not always a skill. With moving methodically,
practically, and with with with with common sense often is a
much better skill. And so, as you were telling the story, I'm

(18:10):
thinking you just I'm sure the conclusion here is it probably screwed
everything up. Not not surprising because that, female the the lady who
owned that business, she had a gut feel for that business. She knew what would
work. Now, maybe she may have lacked the resourcefulness, if
you will, or the experience to how do I leverage capital to open up another
location or whatever. But the innate understanding of that business

(18:33):
resides in her belly. I mean, she gets it. Right. And Yeah. And no one
else can tell her different. And I'm sure she, you know, when people are open
minded, someone else comes in with newer ideas, it's great. But when you try to
flip it around, like, why are you gonna screw around with a successful formula? You
just want to ex how do we explode it? Explode it. Yeah. Yeah.
Yeah. So good. Let's talk about that actually, funding a business

(18:53):
and some creative financing because I know that,
you know, I I look at my dad, for example, he owned his first
business was an SO back in Canada, which is like Where from where
in Canada? I remember that. Toronto. Toronto. Yeah. So from Montreal, I used to collect
those NHL power player hockey stickers through SO. I don't know how old it
was NHL. So many of those. Yes. Power players are hockey stamps,

(19:16):
hockey stamps that Esso made. Put them in your saver album. Fun to save and
fun to trade. NHL power players. I used
to drive my father bonkers. If he needed, like, 7¢ worth of gas, I made
him go to the gas station. That's funny. Well yeah. So
so he had an Esso station. I used to do that. We used to watch
also Hockey Night in Canada all the time. So anyways but, and

(19:37):
you said you were from Montreal from Toronto.
Obviously, Maple Leafs are from Toronto, but are we are actually we yeah. I
know. I was gonna say we were actually,
Canadians fans. So we, yeah. I knew you were smart the first time I
met you. Same to that birthday again. We watched, like, 3. Oh, yes.
Patrick, Wap. Patrick Wap. And all Larry Robinson, all

(20:00):
those. Yeah. So Yeah. Anyway Beautiful. Coming back to that. So
he had an SS station in the Gilwood
Village, and it was, it was doing really well. And
then when he went to so he sold that, bought the
Sunoco, the Sunoco station on
progress in in 401 and Kedde Road 41.

(20:22):
And and in order to to grow that he
he thrived and everything was going great up to this point, you know, sold
one business, bought another. Great. Then he went into
another industry, wanted to expand, explode it.
Right? And so he goes to this other industry and he did not at that
time have the understanding that he

(20:44):
could leverage against, you know, his equity and all that stuff.
So he sold that business
to put the money into this other thing. And that didn't work
out and lost everything. And that business, the
Sunoco business, is now sitting on a property which next to it
is this huge plaza, Kennedy Commons, and it's anybody in Toronto. No. It's

(21:06):
like and you think about it and you're like, oh my gosh.
But he didn't have any mentors that really he didn't come from
a entrepreneurial background. He was a mechanic. He knew
how to work on cars. He had the gift of the gab and people
loved him. He was the magic in the business. And so
how often that happens where we don't realize what's available,

(21:29):
you know, to us. Yes, there are some that take it a little bit too
far, right? And they're over leveraging and so forth. But
so talk a little bit about what someone needs to
know, in in order to kind of get into that
space? And and and how do you actually go about it? Right?
So one thing before, you know, before jumping to that, just some context

(21:51):
related to the story that you're telling. It's
it's incredible how many, blue collar
individuals like your dad Yep. Plumbers, electricians,
dock builders, whatever. I play hockey still several times a week.
Although I'm on IR now. Guys that I work with is a blue collar
sport and guys that I play with who are plumbers, electricians, dock

(22:13):
builders, etcetera, that have a little bit of business acumen, how
they've been able to leverage that, with incredible success
because you don't have you know, you you may have people with a lot of
entrepreneurial acumen who don't have the blue collar skills to turn a wrench. So
when you have the combination, someone who can turn a wrench work ethic and all
the work ethic and a bit of entrepreneurial blood, they can really

(22:36):
do incredible things. Yeah. So, you know, in your dad's case, it was it's
just a lack of know how and, expertise, you know,
that he could leverage it. He may have been, you know, he may have been
in that situation, say, look, I don't want to take any debt. Maybe he wasn't
comfortable with it and say, I'll sell this one, buy the other one. That's okay.
But But you have to get comfortable with that because it's the only way to
have any type of leverage is would be best explained to your dad, who's

(22:59):
trying to prop up a tire. Right? I mean, you need you need leverage. And
so when you, when you have
one business, you're looking to acquire another. For example, in the in
the US, you have SBA programming that will fund a a
current business owner to acquire a a like business. They will fund
that. It's a beautiful situation because if you could have some

(23:21):
leverage, like, I've built all my business that way. Once I had one good solid
one, I never took money out of the 2nd, 3rd, 4th, 5th, etcetera. I just
used all that money to pay down debt or, grow the business.
Mhmm. And so in the US, you have things like SBA in Canada. There's
also commercial banks. Commercial banks will be much more,
open minded about lending money to an existing

(23:45):
entrepreneur business owner with a bit of a track record of success than the
average person walking off the street. They're not lending the money. It's gotta be through
a government program, both north and south of the border. Right. So you have a
big advantage if you've got this operating, you know, gas station with 3 bays of
doing mechanics or what have you, and you wanna buy something else. You have
a track record, may become more difficult if it's something completely different, but you've got

(24:06):
to use leverage. Similarly, there's a lot of investors
that are going to bet on someone with a track record. They don't they don't
have the opportunity to to get into business. Sometimes it's your accountant, your
attorney, friends. I mean, I try to stay away from friends and family. And thank
goodness, you know, it's been many years that I've had to rely on them. But
there are, you know, investment groups. They're always there's

(24:28):
there's gobs of money floating around. Gobs. It's gotta
go somewhere. Mhmm. And so getting if you have a
bit of a track record, it's just the matter of getting your story in front
of the right person. There's also, you know, seller finance. We sell a program on
how to buy a good business at a great price, and 91% of our
clients have a component or a significant component of seller

(24:50):
financing. I think in in in Canada, they call it VTBs, like vendor take
back. Yeah. But it's a seller note. And, so
that's that's a big part of it. And and sellers there too
will be more inclined to help finance the transaction when they're
dealing with someone who has a bit of a track record. And in the smaller
deals, seller financing is the only way to get them to the finish line.

(25:12):
So there really are options for leverage. Buying one of the biggest things that
I have to convince people about I mean, I'm not I don't sell them on
this, but to explain to them, this is doable. Right? This buying business
is is not just for, you know, rich people or big companies. It's
very doable. Yeah. Well, it reminds me of a client
that, that I was working with and still working with, but she just

(25:33):
sold her she just sold her business and she just she did that seller
financing for this couple that that bought her salon.
And, and that was the only way that deal was gonna get done. Correct.
They they they weren't gonna be able to do it any other way, and it's
gonna work out to benefit everybody. And,
you know, and so it's so it's great, you know, but you gotta think outside

(25:54):
the you gotta think outside the box. And I had them on a call and
they were kinda like, we can't do this. We, you know, we tried to get
financing and blah blah blah, whatever. And and I was like, well,
entrepreneurs create something out of nothing. Let's let's just explore what the possibilities are.
And when we did that, they were like, really? I can do that? It's like
do that. People aren't aware. And at the lower level, very often, it's

(26:14):
it's you you can't get the deal done any other way. Banks aren't lending. People
don't have that level of capital. That's why it's very important as a buyer
or a seller, you need to you want to establish a
meaningful relationship with the other side. The numbers are
important. That's the easiest part of the deal. But making sure that, you know, you
like them. You trust them. You know, from a buyer's perspective, do I

(26:36):
like this person? I always tell people 4 questions you ask yourself after the first
seller meeting. Do I like them? Do I trust them? Can I seem as do
I like the business? Can I see myself operating it? And from a seller's
perspective, similarly, do I like them? Do I trust them? Can I see them operating
the business? And I would potentially be willing to finance them. You may not arrive
at that answer immediately. So establishing a meaningful relationship with them,

(26:57):
going a good back and forth, not confrontational, developing,
you know, good conversations with them takes multiple meetings, and then you start to
get comfortable with one another. Both sides you know, when a buyer
wants to buy and a seller wants to sell and,
they like and trust each other, you can't stop them from getting a deal done.
Yeah. They'll figure it out. A way. They'll figure it out. They'll find a way.

(27:19):
That's good. Let's talk about from a seller's perspective,
in terms of selling your business, how do you set your
business up? What would you recommend for people to set their business
up for sale? Because there's a lot of people who, you
know, they like the dream of selling their business at one one day, but their
business is not set up to to be sold

(27:42):
because, for example, like, they're the magic, right,
in the business or they built themselves so into the business. So
we we we didn't you know, we talked about absentee owners, but then
there's the other side of it, which is you're so integral into the business that,
you know, you take you out and it all fall apart.
So what do they need to do to set

(28:04):
themselves up? K. There's there's there's
3 really important things here. The first one is should
run your business like you have to sell it. Even if you're not going
to. Even if you're not going to. Run it like you have to sell it.
I have a a a buddy of mine said, yeah. You gotta run it like
almost like the IRS is coming in tomorrow to do it on it. But similar

(28:25):
to that is run it like you have to sell it. Because not only is
that gonna make your business better today even if you have no plans to sell
it, When the time comes to sell, it'll be in better shape. And
throughout that, period, your business is gonna do
better. Mhmm. You think about running it like you have to sell it. And
what does that mean? A couple of double clicks to that. The first is

(28:48):
or second and second point overall is what keep think about what
keeps you up at night about your business. Anything that
keeps you up at night about your business, whether it be customer concentration,
whether it be recruiting, re, training and retaining
staff, whether it be marketing, whatever keeps you up about the business
and make, and make no mistake, every entrepreneur stays up at night about

(29:10):
some, at least one part about their business. Because whatever keeps you up at night
about your business is gonna be magnified to the power of 10 in the
eyes of a buyer because they don't have the understanding of the business
like you do. So you wanna solve for that and mitigate
that and reduce that as best you can. It could be customer concentration
or or what have you. So what keeps you up at night about the business?

(29:32):
The third thing is to ask yourself, what happens if you get hit with a
Pepsi Cola truck? What happens to the business? If the
business can't continue, you haven't built a good business. Now it
may be a case of saying, well, you know, our staff can take over, but
they're eventually gonna need someone to come to place. That's great. That's okay.
It's if the business craps the bed after you get hit by the

(29:54):
Pepsi truck, you haven't built any value in your business. 0. No one's
gonna if if the chances of someone buying it are reduced dramatically because
that's typically a business where, you know, the assets of the business leave at 5
o'clock. And so you want to avoid that. And how do you do
that? Good, policies, procedures you put into place
so people understand how things work, what has to happen. You

(30:16):
know, there's there's an operating manual for all of the components of the
business. You should be able to take 6 weeks vacation.
If you have employees, you should be able to take 6 weeks vacation easily and
never call your business. I had one client. He took he took off three
and a half years. At one point, he went six and a half months during
those three and a half years and didn't call the office. Wow.

(30:38):
So that's extreme. But if you can't take time
off from your business I mean, I know people were were so addicted to our
cell phones, whatever, and email. But if you can't take off 6
weeks and not call the business or not be in touch with the business, you
haven't built the right business. Yeah. Well and and I think in
that, it's interesting. Yeah. The let's be clear

(30:59):
that he's probably looking at numbers, though. Right? Is he looking at that business
at all during that time? I mean, he's paying attention to the reports. He may
not may have to call in. And so I
think sometimes people have this because there's so much out there right now that, you
know, it's like, oh, you buy these businesses and, like, vending machines. You don't have
to do anything. You know? It's No. You have to do something. You have to
do something. You can't make enough money unless you have hundreds of machines

(31:22):
to have people filling up the machines, ordering inventory, dealing with broken
machines, dealing with theft. No. Stuff happens. So
there's very few hands off businesses. You know, I used to work
with a guy. His name was Jerry Efrost. He was a, an older gentleman. He
since passed away. He's a wonderful guy. He was a tail gunner in World War
2. And when people used to ask him, what's the perfect business? You tell him

(31:43):
buy a toll booth. Right? That's about the only thing
people are just driving through and giving you money. Other than that, every business
needs hands on work. Now you can eventually lay off a
little bit, get the right people in place. Don't keep taking out every penny
that the business is producing in profit. So, you know, you you have money to
build a business and put in good staff. But, yeah, that whole concept of

(32:05):
not doing anything, there's a there's a tremendous you know,
social media and the Internet, it's been wonderful for buying and selling businesses and for
entrepreneurship. But on the other hand, it's been devastating
because there's a tremendous amount of misinformation and
disinformation. And, you know, the difference being disinformation when people are
purposely putting out, you know Yeah. That information. There's a lot of

(32:27):
that. And so you have to be very cautious.
But the world of entrepreneurship exists. It it it's it's available to
anybody. But, you know, just these ideas of absentee or vending
machine, whatever business, it takes work. And especially at the beginning, it's front loaded.
You gotta work these things. Roll up your sleeve and deal with all the heartburn
and the, stress and whatever, and it's not for everybody. If it was

(32:49):
that easy, everybody would be an employer, not an
employee. Yeah. Absolutely. Tell us
a little bit about your biggest mistake in business.
And, I mean, I show isn't long enough.
You had a long list. Well, and that's why you're successful because you fail your
way to success. But even like you yeah. What's your biggest mistake or

(33:12):
one that that, you know, that might be relevant to this conversation?
And, and I'd even love to hear, like, what was your first business? Like, I
know you kinda got into that. 12 years old. I'll tell you that story in
a second. Okay. So mistakes I
mean, certainly early on in my career as a young business owner, owned my first
business at 29. I I I wanna say I had one at 12. I did.

(33:33):
But as far as in my adult life, I became a business owner at 29.
I was a young business owner. And for a number of years, I
really let my ego and insecurities get in the way of
me operating the business and really prevented me from hiring people that were
bigger, better, faster than me. And so the I'm not sure
if there there really wasn't a particular incident as

(33:55):
I as I recall. I mean, I have certain things happen along the way, but
when I finally realized, a couple of things, when I
hire better people, my business is better. It's never
it's not about being right. It's about getting it right.
And that evolution to, you know, not having to be the smartest one in the
room. And I and I attached that to ego and insecurity because I was I

(34:17):
was always at the table with people older than me. And so now,
you know, for many, many years, I look at now, if, you know, if I'm
the smartest one in the room, I'm in the wrong room. And and I
and I think those are all tied together, right, as far as Yeah.
You know, ego and and and and how you operate in learning. So
but the underpinnings to all of that was when I finally

(34:37):
recognized that to to to surround myself with people that were much smarter
than me, bigger, better, faster just made me much better. So that was one
thing. Any businesses I bought, I bought for
13 companies and plus one co investment in a wide range,
the the real bad decisions were ones where I
wasn't the right person to run the business because I typically bought businesses, went in,

(35:01):
learned them, operated them, grew them, either sold them, or brought in
someone else. And when I was not the right person to operate that
business, business went south in a hurry. So it's always been,
you know, top of the pyramid, the food chain, when I teach and
preach people to to people how to buy businesses, how to buy a good business
at a great price is the match of your top skill set to the right

(35:23):
business. Is this it's so far ahead being the
most important thing that you could do a marginal job. You know,
there's 23 steps in the business buying process. You could do a marginal job
on 22 of them. As long as you do a stellar job and matching
your skill set to the right business, you're going to be okay. Conversely,
if you do an unbelievable job on the 22 steps, you screw

(35:45):
up as far as what business is right for you, you're going out of business.
You're going out of business. I guarantee it. You're going out of business quickly. Yeah.
Well, in those those first few tips that you gave us and you just circle
back to them is that's how you learn them sometimes is the best way to
learn. The best. I wouldn't say the best way to learn, but one of the
one of the most common ways to learn is because we go through it and

(36:06):
we do it ourselves. So yeah. Yep. That's good. It is helpful. Sometimes, you know,
it's, sometimes the big mistakes is what you do with them and how you learn
from it. Sometimes the learning just takes longer years as far as just being able
to have some, some perspective. And, you know,
I've been very lucky. I've been, I've been luckier than I've been
smarter, and, so it's it's worked out pretty good.

(36:28):
That's good. That's good. You know what? It's funny because luck, you know, what what
does it stand for laboring under correct knowledge.
Sometimes there is a little bit of luck and, blessing
or whatever you wanna call it being in the right place at the right time
or the right people or the right industry at the right time. There's some
of that, certainly, you know Yeah. And you hear all those those stories, like, you

(36:49):
know, the harder I work, the luckier I get those type of things. And sometimes
in the world of entrepreneurship, you know, you have to just get get used to
it. I mean, there's plenty of times I think back, you know, there was Monday
or Tuesday. I don't know how the hell I was gonna make payroll on Friday.
You know, all those type of things. So you really just have to keep one
nostril above the water. You just gotta keep swimming. And if you're if you're
if if you keep swimming, you're you're gonna make progress.

(37:11):
Yeah. Tell us Canada progress. Right? Progress.
Progress. Progress. Yeah. Well, so tell us a little bit about your,
12 year old business that you started when you were 12. Well,
that was great. It was in Montreal. There was a newspaper delivered on Sunday called
the Sunday Express. You have to go to the store to buy it. It wasn't
a home delivery. And Montreal is, you know, Toronto's cold. Montreal's bitter

(37:33):
cold. I used to walk up to the store as a young kid, pick up
the paper from my father on a Sunday, and used to hate it. And I
I remember thinking like, why don't they why can't we just get this delivered? Found
out they don't deliver it. It's all have to be picked up at the local,
convenience store, what have you, a local local shop. And so I
called the Sunday Express and said to him, I wanna start delivering

(37:53):
newspapers in my neighborhood, and they didn't have it any in place. But I said,
well, please give me you know, give me a chance to do it. You could
drop off the papers. You're you're dropping them off at the corner store, drop off,
you know, 20 or 50 papers. I'll go out and see if I can get
people to sign up. So I went around my neighborhood, got a bunch of people
to sign up. They agreed to drop off this bundle to me. I and
pay me 2¢ per paper. They sold for 15¢ a paper. They

(38:16):
pay me 2¢ a paper plus my tips. So at the beginning, it was terrific
because when you went to collect that 15¢, people gave you a quarter. You got
to keep a dime plus the 2¢. Then the price went up to because I
started building up a lot of these. I had 100 and 100 of people on
my route. And so I started after a little while, then
they then they upped the price

(38:36):
from 15 to 20¢. While we went to collect, people were still giving me the
same darn quarter. So my my revenue was dropping dramatically. It went
from 10¢ at a tip to 5 to, I mean, 10¢ to 5¢, so it
dropped in half. I still got to keep the 2¢. I said, this is crazy.
So I was working hard. So I started farming out these
routes to, kids in my neighborhood. Like, I have,

(38:58):
like, 800 papers. It was crazy, maybe a 1,000, and started selling them
in in in, like, tranches of a 100 papers and said, look. You keep you
keep all the tips. You you go out. You deliver. You keep you get a
nickel of paper. I was still getting the 2¢.
And I went from you know, my allowance my allowance used to be, like, a
quarter or something, and suddenly I'm going to making, like, having 20, $30 a

(39:19):
week in my pocket. It was just ridiculous. I mean, that's a lot of money.
Yeah. I wish I saved all of it.
Yeah. What'd you spend it on? Handy crap.
But you know what? There's such a Hockey sticks. You know, the usual. Yeah.
The the going to SO. With the SO cards. Yeah. Yeah.

(39:42):
Baseball cards. I couldn't spend it fast enough. Well, you know what?
But what a lesson in, like, what the little
microcosm of this this business. And when I think about, like, is
that where the paper route started? Like, it was Richard.
Richard started it. No. But that what a brilliant
idea. You saw a need and a gap in the marketplace, and you weren't even

(40:05):
thinking about it. You just went like, hey. I'm gonna do this, and it's being
resourceful. The the genesis was I I didn't wanna walk to this. I was
I guess, like, the genesis was, you know, if I'm gonna freeze my butt off
walking to the store, I might as well make some money. I might as well
make some money at this. Like, I don't wanna keep doing that. And just, I
want, you know, as I've thought about it over the years, because, you know, I've
been a guest on a number of shows and I've thought about this before I

(40:25):
realized, like, put some thinking into what my, you know, what my
my thought process was and all that. So what what started out
as a, I don't wanna walk to the store anymore to,
hey. What about this? I why hey. Why don't they have it? And, you know,
like, you know, I'm I'm not a really I I I don't mean to be
just totally self deprecating. I'm not a brilliant guy by any means. I never went

(40:46):
to to university. But
that intellectual curiosity, and not saying
suggesting that it's the intellect, but the intellectual curiosity, you know,
that I've worked I've had I've been blessed in my life. I've worked with some
ridiculously successful people, billionaires,
you know, who've been, you know, who and and one of the

(41:08):
things that these people do is there's you know, they they
they don't focus on the money. They're focused on building a great business or what
have you. And so from my standpoint, all the businesses that I've either got into
or a lot of them have come from just like, I'm thinking about this. Right?
Sometimes I go down the dangerous path. But if you have people to poke
holes in your in your theory and you have that in, you know, the intellectual

(41:28):
curiosity, I think that it bodes well, which is, you know, something another
subject, you know, scares the crap out of me because I think a lot of
kids now don't have that imagination time. And
and, you know, for me, it was, you know or or my generation
is, you know, you had a lot of time on your hands. You know, good
time good time to to just to dream and imagine and what have you. You

(41:49):
know, I get overly philosophical, but reverting to that thinking the, you know, the
Internet and all that stuff is wonderful. But some place you need to just step
back, clear your head, meditate as I do anyways, and, you know, and
get some context and perspective and and think about this in a different way. And
if you have that curiosity, most people are gonna do pretty well as an
entrepreneur. Yeah. And you know what? To your point, yeah, I believe that there's

(42:11):
a lot of entrepreneurs that, well, there's a lot
of young people, let's put it this way, that I mean, I think we're all
entrepreneurial minded. And then it gets No. Not all of us, but some but it
could amount of us. It gets it gets taught out of us though, you know,
as we are young. You think of kids and they dream and they have all
these ideas. And and then, you know, they get to school and

(42:32):
school tells them, you know, this is how you should do it. And they started
into that conformity and so forth. But we're all creative. I mean, like, we're
dreaming. We're making up our forts in our, you know, in our living room and
all that. But when you when you now put them in front of the TV
and you and you put them in front of a a phone or a
screen for hours and on end, and now it's all about serve

(42:53):
me, you know, or they're entitled to the next thing or they're just
basically, it's just like entertain me. You know? Oh, absolutely. He just need to
be entertained. Oh, and every minute. That's why, like, the Elon Musk
still blows my mind. I mean, he's still the most intriguing man in the world
to me. He's still that kid who's sitting at a desk while they're trying to
teach math and he's drawing pictures of rockets. You know, like, he's still that

(43:13):
kid when you get out to recess, he's telling you about this idea and you
say, this kid is whacked. Right? But he's he's just the mind. Those are the
ones that change the mind. The the choice change the world.
Yeah. Absolutely. Their mind is always going in in a wonderful, wonderful way. It's
like, you know, this, you know, really stimulating themselves from the
they've just got this, you know, wild imagination. And and

(43:34):
it's channeled in the right way. I mean, it's, that's why it sticks out so
much. I mean, to to me, it's a a thing of beauty. Someone asked me
recently who I'd wanna have lunch with more than any else who's living in the
I mean, that's the guy. I just find him. When I saw him, you know,
recently at at some appearance, he's still a kid. Like, he's still when you
were talking about, you know, removing that's that that's that that imagination
from kids, I mean, the first one who comes to my mind anyways because it's

(43:58):
it's still there. Yeah. The wonder of a child.
The wonder of a child. We need to have that. It's all new. It's all
fresh. It's beautiful. Yeah. It's so good. Well, you have a
program. Let's quickly talk about it as we wrap up here. How to buy a
good business at a great price. Tell us a little bit about what that
is and who that's for. That's for anybody who's looking to buy

(44:19):
buy a business, acquire a business, a real stage or, like, are they
if they're new, if they're Yeah. New. Any stage. I mean, I have plenty of
clients who bought several businesses. They buy it. They still use it. I have one
actually in Canada. They've they sold out recently for a $100,000,000. They bought a
small business years ago, bought a bunch of them after. They still use it. They
they now finance people. They still use it as they as he calls it. I

(44:40):
think the video is on my YouTube channel as their bible for all their seller
questions and due diligence. So it's anyone appointed in the process, but it
reduces every step in the process dramatically
to what you need to know, what you need to do, and how to do
it. And it's really it's not dummy down by any means.
It's it's this is a big process, and it could can be,

(45:03):
it's not difficult, but it's complicated. So it reduces the whole process into
real bite sized pieces, all 23 steps in the process.
And, you know, we've been very lucky I wrote it just to help one person,
never think it would turn into a business. We sold over a 100,000 of them.
And so we've and we've of clients in over 80 countries. We've, helped
a lot of people. I I have no more room on our website for testimonials.

(45:27):
We have binders of them. It's it's it's brilliant. And we have a lot of
you know, I'm I'm in the help business on the buy side. I just like
to see people try to accomplish what I've been so blessed and lucky to be
able to do. So, you know, on our website, richardparker.com, there's tons of
articles and videos, free articles, free videos, free special reports, and the
course is there. If someone, you know, wants to learn more and help people, you
know, I think you owe it to yourself to at least if you have an

(45:49):
an ounce of, interest in becoming an entrepreneur or
my my late partner and cherished friend, Devin Dalio used to
say he has an entrepreneur that she wants to scratch. So if you have any
of that, you you know, you always yourself to find out what's involved. You don't
have to do it, but you you should learn about it and see what's involved.
And I promise you, it's not that difficult. Yeah. I love that.
Richard, thank you so much. This has been rich. This has been really

(46:13):
rich with nuggets, insight, practical things that we
can take and apply. And then I I love that. I love
that, especially when it when we talk about this topic here. And like you
said, there's a lot of misinformation, disinformation. And is it possible?
Absolutely. You can do very, very well as an entrepreneur. And it takes
some work, and it takes a step by step process. And I was gonna circle

(46:35):
back to that. You mentioned about the 23 steps. So I'm so glad you mentioned
that. And, you know, what are those 23 steps? How do you find them?
So, we'll direct people to your program. We'll make sure that the link to your
website and all of that information's on the website. And, thank you. It
was just so much fun. Great. It was nice talking to you. Nice talking to
a fellow Canadian, although I'm American now. I appreciate all the Thank you.

(46:56):
Yeah. And where are you located, by the way? Say, in San Diego, North
County. Smart. Okay. So, well, it's nice talk. It's
really wonderful talking with you and and really enjoyed our conversation. And
and I greatly appreciate you having me. Likewise. Likewise.
And where are you? I'm in Southeast Florida. I'm I'm in Boca Raton,
Florida. So between Fort Lauderdale and West Palm Beach. You know? So we both

(47:19):
went south and to the warm weather. Smart I'm going to Montreal
tomorrow, actually. And believe it or not, it's 70 degrees
there. I mean, it's gonna be November in 2 days. I mean, it's crazy. So
normally, I'd be get the puffer jacket, my Sorel boots. At this time of year,
my mother still lives up there, but it's actually gorgeous. So I said, okay.
Just pack a couple t shirts. This is gonna be unbelievable. Yeah. Yeah. Well, you

(47:40):
might wanna throw a sweater in there just in case your shirt is while you're
there. Trust me. It'll be like 40 or 35 and like, oh, yeah.
Gonna suck. Give give it an hour. Right? Yeah. Yeah. Yeah. So,
Richard, such a pleasure. Thank you so much. And thanks to our
listeners for being here and viewers. I hope you got a lot out of this.
There's so much here. This is probably one of those episodes you wanna listen to

(48:01):
and relisten to and and really, take
seriously that program that's available. If you're gonna start,
you're looking at buying businesses or, you know, selling
your business, whatever. But really, like, look at what you
need to know, to make the most of that opportunity.
And I know that for my client, it can make a huge difference

(48:24):
in the at the in the end. And, and so it's
worth it's worth the investment so that you can make good
decisions and, and move forward from there. So I encourage you to do that. I
always say leaders of transformation take action. I encourage you to take
action on that and, take take informed
action, you know, as you look at as you look at, buying a

(48:45):
business and or selling your business or whatever. So encourage you to do that. We'd
love to hear your stories and how this has impacted you. You can go on
leaders of transformation.com. Of course, we're all over social as
well. And, yeah. Join us next next week. We'll have another amazing
guest. Actually, no, we won't. Because when this comes out, it's gonna be Christmas
next week. So we will not have, an episode next week, but the

(49:07):
following week, we will. Yeah. So you'll have an amazing week. Not an amazing guest,
but you'll have an amazing week. We'll have an amazing week. Yes. Yes. So anyway,
thanks so much for being here. We look forward to seeing you next time.