Jordan Kelliher with Investment Business Brokers

Intro: [00:00:07] Broadcasting live from the Business RadioX studios in Atlanta, Georgia. It’s time for Buy a Business Near Me. Brought to you by the Business RadioX Ambassador program, helping business brokers sell more local businesses. Now, here’s your host.

Stone Payton: [00:00:32] Welcome to another exciting and informative edition of Buy a Business Near Me. Stone Payton here with you this afternoon. Please join me in welcoming to the broadcast with Investment Business Brokers. Mr.Jordan Kelliher. Good afternoon, sir.

Jordan Kelliher: [00:00:50] Good afternoon. How are you doing today?

Stone Payton: [00:00:52] I am doing well and I’ve really been looking forward to this conversation. It’s got a ton of questions and I know I’m not going to get to them all. But one of the things I knew I wanted to ask you, any particular types of businesses, industries that are kind of hot right now.

Jordan Kelliher: [00:01:09] Or we’re seeing a lot in the tech space, which makes sense with everything going on, the video streaming the media. One thing that caught our eye, which we’ve been riding the hot tail here is staffing, staffing companies. It doesn’t take much to realize why. If you look over the last two years of what’s been going on in the economy, people need help, people need employees. And so they’re turning to these recruiters to seek help to find talent for their companies. So the staffing industry has been fairly hot over the past two years, what we’ve been seeing on our end.

Stone Payton: [00:01:41] So a lot of our listeners are, I guess I should say, going to be first time buyers. What are some of the things they can expect in the process?

Jordan Kelliher: [00:01:53] I think, you know, just general thing too is just expecting that it is what you call that a process. Right. And we always tell people whether it’s representing a first time buyer or a first time seller of a business. These transactions can take anywhere from nine months to 12 months. So I think if you’re setting out to go buy your first businesses, one, pick an industry that you like, you find enjoyable, that you may have some expertise or knowledge and get a financial guy on your side, but then just expect that this will be a process. There will be some due diligence you have to go through. It’s a roller coaster of a process. As long as you stick to it and you stick with your goal of wanting to purchase a business and get into it, you can pull it off fairly easily and having a good broker on your side is obviously worth the wait And gold.

Stone Payton: [00:02:39] So what is your back story, man? How did you get into this line of work?

Jordan Kelliher: [00:02:46] I’ve always been fascinated by finances. I started out actually in the trucking and transportation logistics world. I was actually a freight broker and I liked that. I liked high stress environments dealing with relationships. But I spent all my free time going home and listening to podcasts about finances and the economy and what’s what’s moving where and going where. And so I wanted to get into the financial world and I kind of forced my way into business brokerage, and I’ve loved it ever since. It’s been kind of everything I’ve liked just in the world that I used to spend my free time reading about. And so I get to do what I was always learning about. So it’s just I stuck with trying to get into that, into that industry. And I finally got into it and I’ve loved it ever since.

Stone Payton: [00:03:31] Well, I can tell that you love it. You clearly enjoy it. What are you enjoying the most at this point? What really gets you fired up about to work?

Jordan Kelliher: [00:03:41] I you know, I think the ment is a weird, weird part of it, but for me it’s the mental aspect of it, right? The first time I got into it, I was told immediately, this is going to be a roller coaster, right? With the industry being mainly commission based and I’m sure a lot of real estate agents understand, what I’m saying to is you’re going to have brutal days that are going to test you mentally and you’re going to want to just quit for the day and stop calling people or doing your sales calls or following up. And it’s tough. But if you can kind of overcome that part of it, you get to see the highs of the highs. And a lot of the times those are higher moments than the average 9 to 5 job that I had in my past. And so it’s very rewarding. It’s very challenging. And I think I like that aspect. I like I like the extremes on both ends of the high rewards and pushing through the hard times as well.

Stone Payton: [00:04:29] So I recognize that there’s the whole sales and marketing process for the business that you may be working with, but how does the whole sales and marketing thing work for a guy like you, a business like yours? Because you’ve got to get out there and get new clients to make this whole thing work right on both sides of the equation.

Jordan Kelliher: [00:04:50] Yeah, absolutely. And I know just from when I first started, I had, uh, you know, I got into the industry and I didn’t have a lot of money to pay for marketing. I mean, there’s a lot of lead lists you can buy. You can buy companies that do that. And I just simply didn’t have the cash when I started. And I was on the emails every single day, and I wasn’t much of a phone cold caller just because I didn’t think it would. I think it was too aggressive calling a business owner and asking if they want to sell their business. And so I did a lot of cold emails. And what I found out fairly quickly is that you don’t get a response or a yes in the same week and the same month, sometimes not even the same quarter. It takes time to nurture those relationships and that’s when it clicked for me is really building those relationships. And you get someone that ends up trusting you, wants to work with you, you give them your full attention, you give them everything you got, and they end up passing your name on to somebody else. And it’s just like anything in this world is your reputation starts to leak out into the marketplace and your name gets out there. And I think that’s that’s the number one way to really market and sell yourself is providing as much value and actually trying to figure out the client’s goal. Right. Why are they doing this? And there’s there’s more to it than a business decision. You know, they’ve got family and they might have kids they got to take care of. So a lot of these is personal, big decisions, big life decisions. And so if you can understand that and be in their shoes and help them, they seem to always pass your name along. And the word of mouth is a very powerful thing.

Stone Payton: [00:06:09] Well, and cultivating those relationships, certainly it makes sense that there’s a time investment there. Let’s talk about time and timing on helping someone buy or sell a business. How much? I don’t know. Runway, I guess you would call it. Does one need to effectively sell, get ready and sell a business?

Jordan Kelliher: [00:06:31] Well, we always look at the previous three years, right. And so and it can vary. I know banks if you wanted to sell your company, banks like to look back at the last three years, they’ve been pretty easy and not as harsh on 2020 because of the COVID pandemic. So they’ve been okay with that if the numbers slipped a little bit. But if you’re looking to sell your business, I would say take a look back at your last three years. Take a look at your profit and loss statement, your tax returns and your balance sheet. Are you in the positive or you’re trending upwards? Does that look good? So you can at least paint the picture of saying, look, our company is growing, whether that owner wants to stay on at some capacity or get out a hole right there, you can at least show that you are growing, you’re improving and you’ve got room for growth. So if you hit a downturn or a couple two bad years in a row, I would take the time to look at your expenses, look at your customer concentration. I like to keep that below 15 to 20%, tighten up a few expenses if you need to, and really try and make sure that those last three years look good. There’s show growth year over year over year and and it shouldn’t be too difficult to sell once those numbers look good. But if you need to take the time to get those three years looking good and take the time to get those triggers looking good, it will pay off.

Stone Payton: [00:07:39] So would the current market and the current economic situation. What does this kind of activity, this buying and selling of businesses, merger and acquisition activity? I guess I got to believe that any current economic situation has some impact on the levels of this activity. Yeah.

Jordan Kelliher: [00:08:01] It absolutely does. And honestly, I was kind of watching everything that goes on each day. It’s a little nerve wracking at times. And I think today, actually, November 2nd, the Fed’s meeting on the prime rate again, and that looks like that’s going to go up another 75 basis points. So now our prime rate is going to be 7%. So it makes first time buyers wonder, you know, is this the right time to do it or not? However, at the end of the day, you still have people who move forward, people who want to pursue their goals and make their company grow and whether they want to increase their top line revenue. There’s still companies and individuals out there who don’t let something like this affect them. And although I know the rates come into play, so it does affect you, but there’s tons of private equity out there sitting on dry powder and there’s there’s plenty of cash out there that people are utilizing to grow or to take advantage of opportunities right now where people are kind of stagnant and staying still, not doing anything. You’ve got aggressive people out there who had the had the discipline to sit on some cash and to now make some moves. Well, no one else is doing that. And they’re either buying cheap or or they’re selling at good prices. So it is it is something to keep your eye on as it is nerve wracking for some people. But then at the same time, you have to look at the whole grand scheme of things that are still people making moves and making plays and there’s still money out there. There’s still people in corporations sitting on money right now.

Stone Payton: [00:09:20] So talk about deal structure a little bit, if you would, because it doesn’t always have to be just a straight up cash deal at the table. Here’s the cash. Here’s the keys. It often involves some some other things. Right.

Jordan Kelliher: [00:09:33] That’s the fun part of what we get to do, I think, is that you can structure this however you want. We call it seller’s expectations. So if someone wants to come to us and sell their business, you know, I have a great example of somebody right now that he built a great business. It’s trending year over year and he wants to sell just a portion of it. And we call it an earnout. So he’ll sell 60% of his ownership. And then in five years down the line, he’s going to sell 40% based on the growth of the company in those five years. To structure it and all these different ways you can have seller financing, obviously, you can bring banks involved. You can do earnout structures. It really is how you want to approach the deal. And then if you can get both sides to agree with that, you can make a lot of deals work that you may not think were possible. And that goes for first time buyers. Also, if you’re sitting there and, you know, just a few 50,000 or $100,000 in your savings thinking it’s not enough or I think you’d be surprised if you went out to your city and walked around town and you found a small business you liked. Go find a business broker to start the introductions and see if that seller is willing to sell a portion of it or if they want to do an earnout over 3 to 5 years. That way you don’t have to give 100% of your cash upfront. You could maybe finance some of it through a bank or you could finance it through the seller. They’ll be willing to take payments over the years from you, and you can use that business to help make those payments. And so there’s a lot of creative ways to acquire a business if you’re looking to do that. It’s just getting on the same terms of the seller and yourself. And obviously I’m going to be a little biased to saying a broker will help you do all of that and will ease the stress of having those conversations.

Stone Payton: [00:11:16] So as you came into the business and now that your practice is evolving, have you had the benefit of one or more mentors to help you kind of kind of navigate the way?

Jordan Kelliher: [00:11:29] Um, yeah, and I’ll even say his name. Our managing director, Bill Bromley. He took a chance on me. I lived up in Saint Paul, Minnesota, and this is when I wanted to get into that finance space. I really I’m fascinated by the game of money and how people reach these levels. It’s not so much chasing money, but to me it’s a game. It’s How are these individuals getting so high? Well, there’s a piece of knowledge that they have that I don’t or there’s experience they have that I don’t. And so I knew if I could get in a circle of people who had the knowledge and experience, I could fast track my way into those positions. And I emailed a bunch of business brokers in desirable areas of my eyes. I was looking at Tampa and Dallas and Bill Bromley, who’s the managing director at investment business brokerage here in Dallas, Texas, and he said, Come on down, I’ll teach you everything. We’re commission based. You know, I could use some help, but I’ll teach you everything. And he’s been probably the number one business mentor I’ve ever had in my entire life. He’s taught me everything I know about the industry, and it’s crucial to seek out people like that. If you’re super aggressive about achieving a goal, you know, and it’s sometimes it doesn’t always fall in your lap. You have to go out there looking for individuals like that and and offer help or services or value for that individual in exchange for teaching, exchange for knowledge. And I was fortunate enough to find someone like him. And he’s taught me everything I know about business brokers and a lot of the financial industry. So it’s a key, key aspect. If you’re hungry and looking to grow out there, find someone with experience, find someone with knowledge and just soak all of that in and it will speed up your process.

Stone Payton: [00:13:02] So are you finding that you personally are gravitating to certain types of businesses or industries or that that you have a favorite type that you really, really like to work with?

Jordan Kelliher: [00:13:16] I personally like the trucking industry just because I have a very good base of knowledge around that. I understand the lingo and the talk in that industry. So I like working in that industry. I like the staffing industry just because it’s hot. It moves fast, but we’re industry agnostic at our firm and so we welcome all different types. But for me personally, I like working in the trucking industry and I like working in the staffing industry. Those are two of my favorite. They seem to be hot, they move quick and so it’s fun, but it’s fun to see all these other ones come in. We get a lot of they get a lot of software companies and tech coming into, and those obviously are usually our hotter listings because it’s more intriguing. It’s it’s what our our daily lives are. Everyone’s on screens now and connected on social media and so they’re hot listings every time we get those too. So I’d say those three are probably my favorite industries.

Stone Payton: [00:14:06] Well, and I would think that being part of the investment business broker’s team, you would have access to other, what would you call them? Use cases, examples where you could bring knowledge or lean on some team members to to help someone in an industry because you’ve probably done it before. Right.

Jordan Kelliher: [00:14:26] Well, that’s exactly it. And it’s you know, it’s funny you say that actually, because we’ve been dealing in the staffing industry for about heavily, heavily for about two years now. And we were talking about it the other day of just how much knowledge we gained with just again, their acronyms. They use the lingo, they use like, oh, I actually I understand how to operate a staffing business just from the talk back and forth. But then like you just mentioned, we can now get on a call with a staffing owner and speak their language, and it’s very comforting for them to hear that and understand that we know your industry, we understand your goals and your objectives and how you bring in money. We can see your business structure and we have a clearer understanding which makes everything easier from both parties. And it obviously makes the client or potential client much more comfortable when they hear that a broker understands what they do.

Stone Payton: [00:15:17] All right, before we wrap, let’s leave, if we could, a couple of pro tips on either or both sides of the equation. Selling, buying a business. Just a couple of things that people ought to be thinking about doing, not doing reading. And of course, look, game number one pro tip, reach out and have a conversation with Jordan. But, you know, between this step and between this, listening to this and that step, maybe just a couple of things that would help them start kind of going down this path and learning more.

Jordan Kelliher: [00:15:49] Yeah, absolutely. As far as the sell side, I think I’m going to mention that again in the past three years, you know, whether you’re at retirement age or you want to move on to a new avenue of interest and you are seriously thinking about selling your business, I would take a look at your financials and I would make sure that the last three years look good. And if they do, then I would start that process and like you mentioned, have a conversation with somebody within the industry. Call me. I’ll talk to you about it all day long. Right. But get a knowledge of what is this going to look like? What are my fees, what are the processes going to be? Who can I expect to inquire my business. Once you have your finances set in place, your business looks good. You’re going to want to get a valuation, go hire a broker, have them help you through it. Right. And from there it’s just being responsive and getting questions answered throughout the process. Right. And that’s that’s it. It doesn’t need to be crazy than that. Right. And then on the buy side, whether you’re a first time owner or you’re looking to acquire another company to grow yours. Right. It’s kind of the same thing. It’s just understand the process. You have the the cash in the bank to make the purchase. Are you going to have capital left over? Because if you’re going to pull out a loan, the banks are going to want to see you still have some capital sitting in there in case anything happens. So it’s just it’s preparing before making the decision. And so I would say prepare, get everything in order, your finances in order, get a little educated, talk with a few brokers here and there, listen to a podcast here and there, and then go pull the trigger and make the decision and commit to the decision.

Stone Payton: [00:17:18] Well, Jordan, it has been a real pleasure having you on the program this afternoon. Thank you for investing the time and energy to share your insight and your perspective with us. This has been very informative and you’re doing important work out there, man. And we we sure appreciate you.

Jordan Kelliher: [00:17:36] Well, hey, I appreciate the opportunity for you being on here, and I hope there’s at least one person out there I have made of help. So thank you for the opportunity.

Stone Payton: [00:17:43] My pleasure. All right. Until next time, this is Stone Payton for our guest today, Jordan Kelleher with investment business brokers and everyone here at the Business Radio X Family saying we’ll see you next time on Buy a Business near me.