The Smart Way to Sell Your Business

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[00:16] SPEAKER_01: Hi everyone, I'm Phil Bliss, Founder and CEO of Candace Entrepreneur coming to you today
[00:21] SPEAKER_01: from Toronto. Today we're going to meet Rob Mitchell. Rob has been helping Ontario business
[00:28] SPEAKER_01: owners navigate one of the most important decisions of their lives, selling their business.
[00:34] SPEAKER_01: As the founder and lead advisor, Premier Mergers and acquisitions, which is actually based in
[00:39] SPEAKER_01: Guelph, he works on hat and zone with every client to maximize value, protect legacy and guide them
[00:47] SPEAKER_01: through a confidential stress-free process. Beyond deal-making, he's passionate about mentoring
[00:54] SPEAKER_01: entrepreneurs and giving back to the business community. Like Candace Entrepreneur, Robert believes
[01:01] SPEAKER_01: entrepreneurship is the cornerstone of Candace economic strength. So welcome to Candace Entrepreneur,
[01:08] SPEAKER_01: great to meet you. Before we dive deeper, let's find out a bit more about you and you know,
[01:18] SPEAKER_01: your entrepreneur journey to this point. Keep it to four minutes, it's been a long journey.
[01:26] SPEAKER_02: Keep it to four minutes. I'll give you as much as I can as fast as I can. Thank you Phil.
[01:31] SPEAKER_02: Thanks for having me. I grew up in East Coast of Canada, did an engineering degree
[01:40] SPEAKER_02: and you know, when I was going to school I was always doing a little bit on the side, you know,
[01:47] SPEAKER_02: known lawns, washing cars and trucks and the neighborhood stuff like that.
[01:53] SPEAKER_02: In university, our residents actually ran our own janitor service. So we took that from the
[02:01] SPEAKER_02: university and managed the whole process there as well as I was the dawn in residence. So
[02:09] SPEAKER_02: you know, not really a business but kind of a bit of a side on the way.
[02:16] SPEAKER_02: And then I started to work at Procter & Gamble, making tide in Brockville. And I saw my neighbor get
[02:25] SPEAKER_02: a in-ground sprinkler system and I thought that was really neat and watched the guy and I said,
[02:30] SPEAKER_02: I think I can do that. So I had a side hustle running a sprinkler business
[02:37] SPEAKER_02: and to jump forward before I go back, when my kids were in high school and they were struggling
[02:43] SPEAKER_02: to get jobs that weren't, you know, Saturday morning to Saturday noon at the grocery store or the
[02:50] SPEAKER_02: midnight shift at McDonald's, I suggested that they ombin up a sprinkler business. So
[02:57] SPEAKER_02: sprinkler brothers was formed and they've been running that in high school and university.
[03:03] SPEAKER_02: So that was a neat continuation. I spent 10 years in Canada and then I went to Asia for 10
[03:11] SPEAKER_02: years with PNG. I met my wife there. She was working there from Canada. I did my MBA in Beijing
[03:21] SPEAKER_02: and looked to kind of do something entrepreneurial before I just aged out of PNG, which is typically
[03:31] SPEAKER_02: the way most people stay for life, which isn't a bad thing to do at all. Great company, great people.
[03:40] SPEAKER_02: But I decided to come back try something on my own, but I wasn't sure what. And I bought some
[03:46] SPEAKER_02: real estate. I built a self-storage facility. I bought another self-storage facility and then
[03:53] SPEAKER_02: was meeting with business brokers and M&A professionals to buy business.
[04:01] SPEAKER_02: And at the time I was living in my cottage in the Thousand Islands and thinking I would buy
[04:05] SPEAKER_02: something in Ottawa. So I met with a lot of Ottawa businesses. But Ottawa is a great town,
[04:14] SPEAKER_02: but very government focused. And I'm an engineer. So I like manufacturing and there wasn't a lot
[04:23] SPEAKER_02: of manufacturing that I could find. But the people I met with said, hey, I think you'd be a good
[04:28] SPEAKER_02: business broker. I think you should try that. And I said, you know what? I think that would be
[04:37] SPEAKER_02: really cool. And I love to try that. I think I'll spend some time thinking about it. So I met with
[04:44] SPEAKER_02: a few people. I decided that I think it would be neat and you know, moved to Guelph and did know
[04:55] SPEAKER_02: a soul here, but I heard it was a nice place to live. And I felt Southwestern Ontario was the
[05:00] SPEAKER_02: place to be. And you know, it certainly turned out to be a great mix of high-tech, low-tech,
[05:17] SPEAKER_02: start-up, established accounts. So yeah, I've been doing it for like 20 years now. And
[05:28] SPEAKER_02: because of an engineer, I often focus on manufacturing. But I'm not limited to that. Light
[05:36] SPEAKER_02: industry, service businesses, business to business, some special retail, some accounting firms,
[05:45] SPEAKER_01: some software firms, anything that's a little boring. It's pretty diverse. We both live in
[05:54] SPEAKER_01: Southwestern Ontario. I'm in Hamilton. So I get where you're at in terms of that.
[06:04] SPEAKER_01: So you're now a seasoned entrepreneur. And you've met many other entrepreneurs and founders.
[06:15] SPEAKER_01: Yeah. So you've kind of in a lucky position on that level, a bit like me doing, you know,
[06:20] SPEAKER_01: running Canada's entrepreneur and meeting everybody. Having met all of these entrepreneurs and founders,
[06:30] SPEAKER_01: do you think entrepreneurs are wired differently? Because it's because what's really cool,
[06:36] SPEAKER_01: you know, you also worked in, you know, Prochland gamble for 20 years. So you lived about
[06:43] SPEAKER_01: as corporate a life as there is, you know, for 20 years. So you really kind of worked on both sides
[06:54] SPEAKER_01: of the edge, if you like. And I'm actually really kind of interested to get your answer on that
[07:02] SPEAKER_02: on that front. So on the differences or specifically what are you looking for?
[07:08] SPEAKER_01: Well, specifically, I want to put, you know, now that you've been working with entrepreneurs for 20
[07:15] SPEAKER_02: years, are they different than culture guys? I mean, honestly, a lot of the entrepreneurs I work with
[07:28] SPEAKER_03: are corporate in a past life or in a current life and they're looking to make a change. And
[07:35] SPEAKER_02: you know, especially when you get into manufacturing, light industry, if you don't have some background
[07:45] SPEAKER_02: in that, you can't just say, hey, I'm an 18 year old entrepreneur, I'm going to buy a $10 million
[07:52] SPEAKER_02: factory. You know, financially, it's not very realistic. And although you may be smart and
[08:02] SPEAKER_02: ambitious, you just may not have the experience in that to take that on. But somebody who's been
[08:11] SPEAKER_02: in manufacturing for 20 years worked their way up to middle or senior management. And basically have
[08:19] SPEAKER_02: made the owners wealthy, often say, hey, I think I'm going to try this on my own. You know, I'm only
[08:29] SPEAKER_02: going to have one opportunity for the last 10 years of my runway. And I think I'd like to buy
[08:38] SPEAKER_02: something. And often those people are conservative. They've saved some money. And you know, that is a
[08:44] SPEAKER_02: typical buyer is someone late 30s to late 50s. And you know, a hardcore entrepreneur that's been
[09:01] SPEAKER_02: an entrepreneur since they've been 12 and have had five companies by the time they're 20.
[09:07] SPEAKER_02: They typically don't buy the kind of things I sell. They start up. Okay. They're a startup
[09:13] SPEAKER_02: entrepreneur versus the buyer build. And so those, you know, people that are hardcore started when
[09:25] SPEAKER_02: they were 12. They're just wired different. They've never worked for anybody else. And they never
[09:31] SPEAKER_02: could where people I often deal with have worked for many other people have really gained great
[09:38] SPEAKER_02: leadership skills, communication skills, and financial skills where they say, I want to put those
[09:46] SPEAKER_02: things together for my own benefit. And you know, some are happy to take a successful company and just
[09:56] SPEAKER_02: keep steering it along. Some are like, hey, I want to be able to scale this thing at least two X
[10:04] SPEAKER_02: if not five X. But you know, they're not likely to buy a business and turn it into Amazon.
[10:16] SPEAKER_02: If things scale that quickly, typically the current startup guy is continuing to ride that for a while.
[10:25] SPEAKER_00: So I didn't really answer your question. I know what you mean, but you did actually, you know,
[10:33] SPEAKER_01: that's good. You know, one of the other things I was interested because you're saying, you know,
[10:39] SPEAKER_01: in your role, a lot of companies. And you know, the last six years, there has been so much
[10:48] SPEAKER_01: change between COVID, Paris, and lots of other things. People forget about the other things.
[10:58] SPEAKER_01: How are people dealing with that change? You know, you're seeing them come to market.
[11:03] SPEAKER_01: How are they handling that change? So, you know, if I were, are they handling that change?
[11:11] SPEAKER_03: Well, if I can go back even a little further, every 10 years, we have a disruptive event
[11:21] SPEAKER_02: in the markets and the world. So, and I'm not going back 100 years, but it's pretty roughly. So,
[11:30] SPEAKER_02: let's say, you know, in 1990, interest rates were through the roof is very, very difficult time.
[11:40] SPEAKER_02: And then interest rates comes down, things were going well, and then we get the dot com. And then
[11:45] SPEAKER_02: 2000, the dot com crashed and everything kind of struggled. And then they recovered. Everybody's
[11:54] SPEAKER_02: doing well. And then in 2009, the US housing market crashed. And then everybody's doing well
[12:05] SPEAKER_02: again. Interest rates are almost 1%. It's easy to just chug along. And during that time, you know,
[12:16] SPEAKER_02: if you know the boomer bust kind of curves, the boomers have this wave of people working their way
[12:27] SPEAKER_02: towards retirement. And a lot of those are business owners. And many of those needed to start
[12:33] SPEAKER_02: retiring, according to the numbers around 2012 to 15. But life is good. Things are easy.
[12:46] SPEAKER_02: Interest rates are low. They're making lots of money. And they're just saying, just going to
[12:50] SPEAKER_02: chug along here. I don't have to work that hard. And life is good. And then COVID hits. And
[13:03] SPEAKER_02: then the world said, Hey, if you are a critical supplier or industry, then you can go back to work.
[13:13] SPEAKER_03: Which was many. But there's lots of restrictions. So, you know, if you are a successful
[13:22] SPEAKER_03: 68 year old restaurant owner, you're shut down. And if you're an ambitious
[13:31] SPEAKER_02: restaurant owner who just opened three new, you know, beer towns or high end restaurants,
[13:42] SPEAKER_02: you're going, I just forked out several million dollars. And I have leases to pay. And I have no
[13:50] SPEAKER_02: income. Very, very, very hard rental car, rental car companies, hotels, that industry was, was
[14:01] SPEAKER_03: really hit hard. Other industries, which were allowed to remain open, every month had a new
[14:10] SPEAKER_03: restriction. You know, first they were shut down. Then they can open. But everybody has to wear
[14:18] SPEAKER_02: PPE. Okay, that's pretty easy. Then everybody has to be six feet apart. Well, if you're an assembly
[14:28] SPEAKER_02: or, you know, trying to do things with lots of people, very, very complicated. And then they just
[14:35] SPEAKER_02: kept adding more. And so some of those business owners are like, what is else is coming? This is
[14:44] SPEAKER_02: just too hard. I'm too old. I've made too much money. I just don't want to do this anymore. So,
[14:49] SPEAKER_03: they were tired and frustrated, but they got through it. And some prospered where, you know, if you
[15:05] SPEAKER_02: were doing things around the house or doing things that were outside like mountain bikes, kayaks,
[15:16] SPEAKER_02: stand-up paddle boards, motorcycles, snowmobiles, decks, fences, pools, patio furniture,
[15:27] SPEAKER_02: anything like that that was around home, just prospered. Blue up. The travel industry was
[15:37] SPEAKER_02: decimated. So then you say, okay, well, if you're a company that nobody bland on COVID and nobody
[15:56] SPEAKER_02: very robust company and so you're attractive. But the problem with some, like a pool company,
[16:05] SPEAKER_02: everybody said, I can't go to Cuba or Dominican. I'm going to get a pool. And a lot of people
[16:11] SPEAKER_02: asked for pools and the demand spiked. But they might have pulled seven years of demand into a year
[16:20] SPEAKER_02: and a half. And nobody says, well, I think I'm going to buy another pool until they move or they
[16:30] SPEAKER_02: outgrow that one or it's aged out, but that's 20 years. So, many of those companies then took a
[16:39] SPEAKER_02: dip because after they get out of COVID and everybody said, hey, I can go to the Dominican or Cuba
[16:47] SPEAKER_02: or wherever. I don't think I want to pull. That's $70,000 and I can go to Cuba for $2,000. So
[16:58] SPEAKER_02: so many of those companies dipped a lot and that was difficult. And so now it's our UE robust company
[17:07] SPEAKER_02: post COVID. And again, a lot of those owners were like, I'm just tired. I want to retire. I need to
[17:14] SPEAKER_02: get out. So that has been difficult for many industries, the ups and the downs or the downs and the
[17:26] SPEAKER_02: ups. But there's always people that want to sell. There's always good companies and there's always
[17:33] SPEAKER_02: buyers with money. So they'll always be transactions. It just has ebbs and flows.
[17:44] SPEAKER_03: So that's very interesting. I mean, let's move to yourself. Yeah.
[17:53] SPEAKER_01: What's the greatest challenge you've faced in your business today that you've been able to
[18:00] SPEAKER_03: overcome and how did you overcome it? Well, in those peaks and troughs,
[18:15] SPEAKER_03: let's go back to the housing crisis.
[18:21] SPEAKER_03: The market took a dip. Money was tight because the banks were getting destroyed.
[18:32] SPEAKER_02: So they didn't want to lend very easily. And a lot of the buyers, whose money was in the market,
[18:43] SPEAKER_02: their money is now worth 20 to 30% less. So they don't want to buy because they've lost that
[18:50] SPEAKER_02: paper equity. And the sellers are like, my sales are down 30%. I don't want to sell now because I'm
[18:56] SPEAKER_02: not going to get what my business was worth. So not a lot of deals happened for about 18 months.
[19:07] SPEAKER_02: But that just means you have to work harder. It means, you know, if normally you talk to
[19:14] SPEAKER_02: 20 people to find a good deal to sell, now you have to talk to 40 or 50. But they're still good
[19:22] SPEAKER_02: companies. Not everybody was decimated in that time either. And there's always money that's
[19:28] SPEAKER_02: looking for good deals. You know, the big private equity companies, the family offices with lots
[19:33] SPEAKER_02: of money. The foreign buffets is, you know, buy when there's blood in the streets and sell
[19:43] SPEAKER_02: when there are irrational values. So deals happen, but they're harder. And, you know,
[19:52] SPEAKER_02: the reality is when it's hard like right now, you know, to not put too fine a point on it,
[20:01] SPEAKER_02: Trump is making things very difficult because we don't have a deal yet. So nobody knows what
[20:11] SPEAKER_02: they're going to have to pay for the raw materials from the US next month. And they don't know how
[20:17] SPEAKER_02: much they can sell to the US next month because we don't know what the tariffs could be on either
[20:22] SPEAKER_02: side. So I've got several deals I've been working on that everybody's taking their foot off the gas.
[20:30] SPEAKER_02: They haven't hit the break and get out of the car, but they're coasting and waiting. And they're like,
[20:35] SPEAKER_02: we need to see what happens. So, you know, that's a challenge. But for all those deals that are
[20:43] SPEAKER_02: coasting, you know, I closed to last month that were very local or regional. They didn't depend on
[20:56] SPEAKER_02: imports or exports. You know, when it was a commercial cleaning company, cleaning offices and
[21:04] SPEAKER_02: businesses, they still need to be cleaned even if Trump is putting tariffs on things, you know.
[21:12] SPEAKER_02: So they just have people come in every two weeks and clean the office.
[21:17] SPEAKER_02: Very, I won't say it's recession proof because if everything goes badly, that might be something
[21:22] SPEAKER_02: that a business would cut off. But it's not tariff issue right now. So whenever everything is hard,
[21:31] SPEAKER_03: you just got to keep working at it. You know, dust yourself off. Don't get frustrated and just work harder.
[21:41] SPEAKER_01: So you built a business in terms of mentorship. What's the best piece of advice that you've received
[21:52] SPEAKER_03: that's really helped you, you know, to stay the coach?
[21:58] SPEAKER_02: Well, you know, when I worked at Procter & Gamble, I was surrounded by very, very good people.
[22:06] SPEAKER_02: And there was always somebody you could trust to have a coffee, bend their ear and say, I've
[22:14] SPEAKER_02: got this issue and I'm really not sure what to do. When you're the person at the top of the
[22:26] SPEAKER_02: ladder, however short that ladder is, it can be a little lonely when you don't want to say to your
[22:35] SPEAKER_02: underlings. And I don't mean that disrespectfully, but you don't want the people working for you to
[22:45] SPEAKER_02: think you don't know what you're doing. You don't have an answer. So, you know, saying, I'm really messed
[22:51] SPEAKER_02: up here and I'm stuck and I, you know, I'm worried about what's going to happen.
[22:58] SPEAKER_02: It's hard to do that as an entrepreneur without, you know, having a network of peers you can talk to
[23:07] SPEAKER_02: other business owners that you trust and can talk to and understand where you've been.
[23:17] SPEAKER_03: And, you know, it's a safe environment.
[23:24] SPEAKER_03: And, you know, we can't have you on with your background. You know, every entrepreneur,
[23:31] SPEAKER_01: not every entrepreneur, but many entrepreneurs, reach that point where they want to sell their
[23:37] SPEAKER_01: business, they want to do this, they want to do that. They want to get bigger, merge with somebody
[23:43] SPEAKER_01: acquired whatever. Is it a kind of rulebook, you know, that has two or three sort of key components in
[23:53] SPEAKER_02: it that you, I mean, I, I mean, a lot of business owners that maybe aren't ready to be clients,
[24:03] SPEAKER_02: what they want to understand, what they need to do to be ready to be clients. And, you know,
[24:10] SPEAKER_02: to overgeneralize people by a business because of its likeness to give them a profit.
[24:28] SPEAKER_02: And, the past profit is the greatest indicator of the potential future profit.
[24:39] SPEAKER_02: So, making as much money as you can is the best thing you can do now that not at the
[24:48] SPEAKER_02: expense of, you know, ripping people off or not providing the service that you promised. But
[24:56] SPEAKER_02: sales are for ego, profits are for your wallet. And, making profit is the best thing. Then,
[25:07] SPEAKER_03: how much they'll pay for that profit as a multiple depends on the risk of it not continuing.
[25:17] SPEAKER_02: So, the lower the risk, the higher the multiple. So, the more the business is dependent on the
[25:24] SPEAKER_02: entrepreneur for sales or leadership or problem solving, the higher the risk that that won't transfer
[25:31] SPEAKER_02: well. So, if you're the entrepreneur and you're the head salesperson because you're best at it
[25:38] SPEAKER_02: and you really like it, you really should try and move that to your other salespeople.
[25:46] SPEAKER_02: And, you know, the more things that are dependent on the owner, the worse it is.
[25:53] SPEAKER_01: Really? Good advice. Okay. Let's have some fun. That's really good stuff.
[26:01] SPEAKER_01: Okay. That last 20, 25 minutes was excellent. Excellent. Let's have some, what I term
[26:08] SPEAKER_01: rapid for our questions. Sure. It's just where we get some feedback. If you want doing what you
[26:15] SPEAKER_02: doing now, what would you be doing instead? So, you know, when I look back at PNG and I was in
[26:24] SPEAKER_02: what they call product supply. So, engineering, manufacturing, designing, building and running,
[26:33] SPEAKER_02: the factories that made the product for the sales term to sell.
[26:42] SPEAKER_02: And I had a very rewarding career there, but I think looking back, if I was to say, I think I would
[26:49] SPEAKER_02: have switched to finance. I did a lot of finance work with managing budgets, whether it was expense
[27:00] SPEAKER_02: budgets, capital budgets or project budgets. And I really enjoy working with that.
[27:09] SPEAKER_02: And I think I would have liked to have done that if I'd stayed. Now, right now, what would I do?
[27:19] SPEAKER_02: It's hard for me to consider working for somebody now with, you know, being on my own for 20 years.
[27:25] SPEAKER_02: But it would honestly just be working with people that I like and respect doing fun things.
[27:38] SPEAKER_02: I found it fun to build factories. I really enjoyed it. But, you know, that was because I was
[27:46] SPEAKER_02: surrounded by people I really respected and trusted and liked.
[27:54] SPEAKER_02: There's a couple of businesses that I would consider.
[28:00] SPEAKER_02: But again, that's kind of more of my hobbies and things like that. So, you have to be careful
[28:06] SPEAKER_02: that you don't make your hobbies into a grind and then you hate your hobby.
[28:12] SPEAKER_02: People that buy golf courses typically don't golf very much.
[28:17] SPEAKER_01: So, you know, what book are you currently reading or podcast are you listening to?
[28:24] SPEAKER_01: Recommend to our audience.
[28:27] SPEAKER_02: So, I just started the secret of secrets with Dan Brown, which is a, is latest.
[28:34] SPEAKER_02: I go through a lot of books. Let's see, the most recent business book.
[28:46] SPEAKER_03: There's an old one that I might even mess up the title. But it's
[29:01] SPEAKER_02: like the theory of tennis. It's about letting yourself go. Not teaching, hey, hold your arm higher.
[29:11] SPEAKER_02: But it's like just practice swinging and just feel how you're reacting.
[29:18] SPEAKER_02: You may know the book. It's probably 50 years old.
[29:23] SPEAKER_02: But it's a very good business book. Podcasts. I enjoy the Tim Ferris podcast. He has some great
[29:30] SPEAKER_02: interesting people on there. And the Michael Lewis, who wrote the big short Liars Poker.
[29:50] SPEAKER_02: And Moneyball. Great podcast. He's just got such a great voice. Interesting person.
[29:58] SPEAKER_03: And then anything with Malcolm Gladwell. He's got a great podcast and great books.
[30:06] SPEAKER_03: Yeah, well, he's a good guy. Yeah.
[30:09] SPEAKER_01: Yeah. You're a morning or a night person.
[30:16] SPEAKER_02: Um, I get a lot done more in the morning. I get up, have a coffee. Saturday mornings,
[30:21] SPEAKER_02: I've got my long list of things to do. By about four o'clock Saturday afternoon, I'm fading.
[30:26] SPEAKER_02: And often the same thing happens at work. I get my best work done in the morning.
[30:32] SPEAKER_01: You joined about 70% of the people. That's good. Yeah.
[30:37] SPEAKER_01: Yeah. You know, if you had to pick one word to describe yourself, what would it be? And why
[30:44] SPEAKER_03: would you choose that word?
[30:59] SPEAKER_03: It's kind of boring, but dependable.
[31:03] SPEAKER_02: I think my friends and my family knows they can always ask me for anything. And I'll do it.
[31:10] SPEAKER_01: That's really good. That's funny. That's not a word I get a lot. That's really interesting.
[31:17] SPEAKER_03: What's keeping you up at night?
[31:20] SPEAKER_03: Um,
[31:21] SPEAKER_03: I don't know if it's keeping me up, but it's frustrating me. You know, the current
[31:34] SPEAKER_02: tear of situation is frustrating.
[31:37] SPEAKER_02: You know, there's a few things that I've been working on that have been put on hold that
[31:43] SPEAKER_02: just frustrating.
[31:46] SPEAKER_02: You know, other than that, I just dropped off my second son at university, certainly not keeping me
[31:53] SPEAKER_02: up at night. Very, very capable and confident kid, but you always worry about your kids a little bit
[32:04] SPEAKER_02: when they're out on their own. Oh, yeah. For sure. For sure.
[32:08] SPEAKER_01: You know, Rob, this has been really, really interesting. I think you gave us some good insights
[32:14] SPEAKER_01: for a lot of the entrepreneurs that listen. So, you know, thanks for coming on to Canada's podcast.
[32:21] SPEAKER_01: It's really been interesting.
[32:23] SPEAKER_02: I appreciate the invitation, Phil, and happy to connect again anytime.
[32:28] SPEAKER_01: Well, that was really interesting session with Rob. So I guess all you want to
[32:33] SPEAKER_01: pronounce out there, you had some really great insights on the process of selling your venture.
[32:39] SPEAKER_01: I hope you all enjoyed listening and got some advice that's useful.
[32:46] SPEAKER_01: I'm Phil Bliss. Don't forget to subscribe to our newsletter on our website and
[32:50] SPEAKER_01: subscribe to our YouTube channel as well or on any one of the major podcast channels.
[32:56] SPEAKER_01: Thanks for listening to Canada's Entrepreneur, where we meet the entrepreneurs that drive Canada's
[33:02] SPEAKER_01: economy. See you soon.