YourDealTeam

Wanted to introduce myself: - Part of a small team building a portfolio of $1-5M EBITDA SMBs - We have a buy and hold strategy and are at 50+ acquisitions so far - Industry generalists with a focus on commercial services & manufacturing What can you expect from following me?

I have our companies on it and have customized many workflows on there like CRM, scheduling, project trackers, admin databases etc. The connectivity with Zapier is good so we can connect other tools to it with relative easy. The built in automations and apps are good and plenty, easy to have guests on and pricing is reasonable. Notification system is great too and the biggest pro for me is the interface is simple so my older guys can navigate it. All of these project management tools overlap 90% capability, you can’t go wrong amongst the big ones . I’m sure some people can’t tolerate the quirks Monday has but all tools will have some to an extent. For e.g unless you hop on enterprise, can’t manage data into a pivot table. You can’t customize charts, a bit messy to connect data across multiple boards to name a few issues. Happy to share more if you want. I went through the same stress couple years ago when choosing my tool.

We are about to sign up with Monday . com - the project management software. Any feedback from folks that use it? Should we include another project management tool in our selection process?

Majority do a poor job sourcing deals bc they’re focused on platforms and sites like bizbuy, bizquest etc. The best sourcing method will always be to find local brokerages and connect with them. Use Axials list (1000+ easily) to get in touch directly + signup for email blasts

@bruk_adam You’re 100% right. Wish QBO could have all the features of QBD so this wouldn’t be an issue.

@YourDealTeam Both Workato and Tray.io can bridge between QBO and ChatGPT. I think Tray.io could be a solution, but I think you would need to pull reports down and then import given QBD QB Desktop is the challenge with most as links for QBO are more common.

To all my accountants: Is there a way to connect QB Desktop with other software, ChatGPT etc? Is it even functional? Some of our businesses are too complex to get on QBO so need workarounds.

Been in a cycle last couple months feeling like my companies just aren't progressing. Urgency is missing. Taking forever to get basic stuff done. Anyone gone/going through it? Welcome all advice to pull out of this

@bruk_adam Id like to be able to ask for data similarly to if I upload a data sheet in Chatgpt. "Tell me the customers with AR > 90 days outstanding" etc etc. We spend too much time pulling reports and manipulating

@YourDealTeam What are you trying to automate?

Top sales people often end up being candidates for the CEO role at SMBs Do everything you can to avoid it. Best salespeople are driven to maximize their gain, which is great for the business too. But when you throw them in leadership, they lack the “us” mentality needed to win

@SamJonesKCBiz @jxbusiness @JoeSMBCFO This doesn’t work well in cases where WC >/= purchase price. Very industry dependent as well this argument

Sorry, yes. My comment was in response to a combo of both. I tend to agree the NWC pegs complicate things, but at the same time, financing (verified) working capital needs & paying ‘full price’ is not always realistic. Should note I now see the original post suggested adjusting the valuation.

If you’re buying an SMB with EBITDA below $5M. You should NEVER utter the words “working capital peg” ever. Like EVER EVER. Figure out what you need at close. Have the bank add that to your financing, make sure your valuation adjusts for it. Keep it simple- Seller keeps all AR (ie the sales $ for work they completed), seller pays all AP at close (ie the cost of stuff that went into the sales they get to keep), and only if inventory is significant should you include an option to buy inventory that is present on the day of close (if its not aged or obsolete) at your full discretion. This is much easier to understand for buyers (and you).

This boils down to the industry too. If you’re a small biz and in an industry with a long cash cycle, or don’t turn inventory too often, your WC can be >/= to PP. I’ve done few deals like this and sellers will say I’d rather liquidate the WC than accept the PP Çevir

@bonapartay @YourDealTeam @JoeSMBCFO Hard to lose when you are paying those multiples!

@MatznerJon I'll never understand how this model gets any client. You have no idea what the employee is getting paid. One-time fee is the only model that makes sense or a monthly subscription if volume is there

This is the beginning of the end. When you try and split the baby to find some recurring revenue (bless your heart) you open pandora's box. You either let people hire direct, or you do staffing markup. When buyers have pricing transparency, and they know you pay that "Nick's list" person $1100 of the $2500 you are charging (forever!) - they aren't going to let you keep charging it forever, if all they do is get a lame email once a month from an account manager. If you ever need to brainstorm some better ways to get recurrent revenue, hit me up I can give you some ideas!

@SMB_Dan @joshgcalderon That’s disgusting but assuming 20M+ EBITDA?

@YourDealTeam @joshgcalderon The PE portco I used to work for was paying EY upwards of $200K for QofE’s 😂

QOE pricing getting out of hand. Being quoted $40-60k from independent groups … These are Big 4 prices so what incentive is there to go with anyone else.

Did a walk through at a supplier 250k sq ft facility with 500 employees doing $200M+/yr Beautiful systems. No wasted movement between people. Everything tracked. Whatever industry you’re in, manufacturing is the best teacher for building good workflows + managing with data.

@joshgcalderon 40k maybe not now unless scope is very lean but 2 years ago forsure. Atleast for my team

@YourDealTeam Pricing is up across the board but demand is still there. I also don’t think Big 4 is charging $40k unless its a favor

@yzhang390 Nope no one brought this

@YourDealTeam Anyone quote you a higher price for a contingent fee structure?

@dcfdude Last 4 of my deals have been this price range (1-3M EBITDA biz) Back in 2015 we used to be able to get quotes for 25-35k. The good ol days

Unfortunate reality of SMB world is there are not many A level people. Mostly Bs/Cs/Ds As much as you can grow people, it’s hard to change people who’ve done the same thing for years and have little exposure to new ways of business. So how do you get A level quality? Chase the rare As? I personally ascribe to the Moneyball mindset of trying to recreate Giambi instead of chasing his replacement. The goal is to build A level systems that B/C level guys can operate without breaking them. We get the most out of people this way because they’re set up for success to deliver A/B level quality. This is also a positive feedback loop because the more people see things being done well, the better they become and you get the long term growth of talent as a byproduct. TLDR: build your foundation with good systems that don’t require A level talent. You can force great output without changing people.

ERPs and fancy software will never work without good SOPs and culture of accountability. Tools should build on good systems to drive efficiency. There are no silver bullets.

It feels good when you try new biz strategies and they end up working out. But some of the best moments have been navigating tough conversations with people & push through. Big part of success is managing everyone’s emotions and keeping them on the same page. Not always easy.