–SINCE 1982–

[Podcast]Rob Amerine talks Current Business Climate in Colorado on ‘The Extra’ with Justin Hermes

Our very own Rob Amerine spoke on the KRDO Radio show ‘The Extra’ with Justin Hermes on March 3rd, 2023.

Listen in as he talks about the important role the FBB Group plays in business transactions, Colorado’s business climate, SBA Loans and planning for acquisitions in 2023.

Podcast Transcript

JUSTIN: Alright folks, we are back here with Rob with The FBB Group. He was just saying he’s been in here five or six times, and I was telling him, “Yeah, I was probably in diapers when you first came in here.” [laughs]


JUSTIN: What do you think, Rob? [laughs]

ROB: Well… I can’t address that, but I’m glad to be here again, it’s good being able to speak with Justin this morning.

JUSTIN: Yeah, and tell us a little bit about how long you guys have been in business and, you know, what you guys do overall, because it is something that most people don’t know about.

ROB: That’s right. And in fact I didn’t know too much about it before I got involved. I’ve been with the firm for 10 years now. I bought my first business in 2004 from a firm like ours, so this has been quite a journey to get to this point. Our firm has been in Colorado Springs and in Colorado since 1982. Ron Chernak founded the firm, and recently – in 2021 – the ownership was transitioned to me. So we are going into a new phase and continuing to build on what has been built over the last 40 years.

JUSTIN: Yeah. What a time to take on a business, like, right in the middle of COVID. [laughs]

ROB: Yeah, well, and it’s a good time. I think it’s a great time. COVID has shaken things up and reset some expectations and made, I think, people look at the basics of business again and the fundamentals.

JUSTIN: Yeah. And so you know, you guys are located right down on Cascade and if you’re listening this right now, you own a business, this is what Rob helps you do. He helps you sell the business, and then you guys also help people sell the real estate with it as well.

ROB: Right. Yeah, a lot of times a lot of the owners have the real estate, and that becomes a very attractive piece of the transaction with buyers. It helps hedge the risk, it helps them look at investment lenders, and banks like the real estate as well. So I’d say quite a few of our deals include real estate as well. We all have real estate licenses in the state of Colorado, and it works very well from that standpoint. We like to make sure that everybody has options and if the buyer can’t afford the real estate, maybe they can afford it down the road once they buy the business.

JUSTIN: Yeah, the owner can carry it for them. And you know, I’ve heard you say before, a lot of the time it’s somebody who’s working at the company already that is your best candidate to purchase the property from.

ROB: Yeah it can be, and we like to say, “Let’s run the process,” and the right buyer comes through at the end. So a lot of times owners have someone in mind who could be an internal buyer, it could be a family member, or could be an outside buyer that has approached them. But what we like to do is run the process, and that works and ensures that that buyer – whoever it is – you get to the finish line. And a lot of times it can be an internal buyer. But too many times these owners only stick with that one option, and usually that can fail pretty quickly due to not able to get financing or they just lose interest. You know, a lot of people want to own a business, but it’s just an idea. They don’t understand what it takes to get there.

JUSTIN: Yeah, once you get in the seat, it’s a little different. You said that business you bought was in ’04?

ROB: Yeah, my first business I bought was in ’04.

JUSTIN: What was that?

ROB: It was a web design database company out of New Mexico that I moved up here.

JUSTIN: Okay. Did you buy that through the FBB Group? How did you get involved?

ROB: No, it was a similar firm down in New Mexico that I worked with. And I had no idea what I was doing back then, so I learned, you know, through that process.

JUSTIN: Baptism by fire.

ROB: Exactly, yeah.

JUSTIN: Sometimes that’s the best way, you know?

ROB: You can’t buy that type of experience.

JUSTIN: Yeah, you can’t read a book, and you know… you got to get in there. And so how did you end up getting involved with The FBB Group, then?

ROB: Yeah, so Ron brought me on kind of this coming up about over nine years ago, and I felt that, you know, I could come in and learn the ropes and understand the process there. And that’s what I really liked, was that the process was set up and I could see a very good process that could work for helping sellers and buyers, and a lot of our buyers become our sellers, right? So this is a relationship-building type platform, and also making sure that the transition goes well with small businesses.

JUSTIN: Yeah, and that’s key. I mean, it really is, you have to have the long term relationship. Because, you know, a lot of these businesses, they last – you know, if they’re successful – you’re lasting 40-50 years, they may be passing it on to the next generation. Is that something you’re seeing more of now, as the Baby Boomers are phasing out, is their kids gaining interest?

ROB: Yeah, there’s a there’s a term coined the “Silver Tsunami” that all these Baby Boomers that are transitioning – and, of course, a lot of them have dreams of passing to the next generation – but what we’re finding is a lot of these younger generation are saying, “You know, I’m not interested. I thought I was, but I’m not.” So now they’re realizing they need to look at other options.

And that’s what I mentioned earlier, is that we like to keep all of our options open going through the process. Because a lot of times people change their minds, there’s health issues, and just realizing that this is probably a little bit harder work than they realize, in terms of running a business. Especially for those that have been 30-40 years, those owners have been through the ups and downs, and a lot of times the risk may be too high for those that they thought they were going to transition to.

JUSTIN: Yeah, I mean, I will say, you know, we had gone through the pandemic and everything, and things didn’t get – they got tough, but there was a lot of money that was pumped into the economy. And now we’re seeing the effects of that, kind of the ripping off the band aids. And, you know, business owners are, you know, unfortunately having to really make game plans and the next generation looking at it is – times can get scary, you know?

ROB: Yeah, yeah. And a lot of the owners are just – they’re tired. They’re burned out. I mean, COVID really made things hard for a lot of people. Finding good labor, finding… just getting through all that, and then coming out on the good side of being able to make it through that in the first place. But then also realizing that they’re, you know, that takes a toll on a lot of owners. So we’re seeing a lot of them that are just ready to say, “Okay, we made it through that. I don’t want to go through another one.”

JUSTIN: Yeah. Oh no, exactly. And I bet there’s some businesses, too, who pivoted, you saw them become very successful, and other businesses who probably couldn’t adjust during that time.

ROB: Right. Yeah, and that’s – the pandemic effect is really… It was a good financial stress test for a lot of businesses. A lot of businesses flourished, and now they’re not doing as well. So you have a decline, which is hard to explain to buyers and lenders, and then others that it just took them out, you know. So sometimes no amount or level of PPP money or anything else was gonna actually save the business, it was just kind of moving… kicking the can down the road, and inevitably they had to close the doors. And that was unfortunate, but that’s just the reality of what we just went through. So those businesses that made it are kind of standing apart from the others that have just kind of gotten by.

JUSTIN: Yeah. What would you say were the industries you saw affected most that became more successful, and industries that really struggled during the pandemic?

ROB: As we know, we like to break up our businesses into what we call, you know, business-to-business (B2B) or B2C (business-to-consumer) type businesses. So the B2C businesses seemed to do better during COVID… in pandemic, but then have kind of reset. The B2B businesses seem to have been… they’re continuing to do well, right? And I think that has a lot to do – I know we’re going to talk about later – but inflation and interest rates have really affected the B2C, the consumer, more, and those direct effects of those businesses. So those have been harder to find buyers for, versus the B2B businesses such as HVAC companies, and, you know, we just closed on a drywall company… You know, those businesses that are working with other businesses seem to be a little bit more protected from those changes that we’ve seen in the last couple of years.

JUSTIN: Yeah, they’re a little bit more insulated. And that’s, you know, we’re still seeing the growth. They’ve got 4000 units coming online of multi-family in the downtown Colorado Springs area and there’s a lot of commercial development. So it’s not like things have come to a halt, it’s just borrowing costs have become higher. And, you know, we saw that happen about eight months ago. Did you see a big effect on that with the borrowing costs? Are you seeing people go, “Hey, we’re going to have the seller carry,” or are there other creative options that are helping people really stay in the game with the higher rates?

ROB: Yeah, the cost of capital has really driven people back a little bit because, you know, when the interest rates started to go up no one knew how much they’re going to go up. So buyers basically backed off, and they said, you know, “We’re not sure where this is going to end.” As soon as those started to basically tail off, and we saw that with the Fed’s interest rate changes, those started to really, you know… buyers started to come back in. So we’ve seen that hold off, and then now buyers are coming back pretty strong.

JUSTIN: How about the last, like, couple weeks? Because the interest rates took a hard jump up, the highest jump they made since November. Have you seen the effect on that or has it really been, you know, things got more positive? When did things change for you and you felt like buyers were jumping back in?

ROB: I would say buyers just held off and they pushed into 2023, so that momentum is continuing. We’ve had multiple Closings in the last month, so things haven’t really changed because it’s kind of cresting in terms of what’s going on. I was reading an article that the Feds, there may be maybe a .25% – a couple, this year – that’s going to happen, but we’re not going to see the .5%, .75% that we had last year. Because the first half of last year was great; the second-half was a real slowdown. So we’re correcting again from last year, but there’s plenty of buyers out there, because they’re getting used to these rates and understand there’s good businesses still out there that need to sell.

JUSTIN: Yeah, you got to adjust and, you know, the average home mortgage over the last 40 years is 8% and, you know, in ’82 when Carter was in you had rates at 18%, 19%, right?

ROB: Right.

JUSTIN: And so it is tough for the next generation because we’re so spoiled. We go, “Well, if I can’t get a rate in the threes, what the heck is going on?” Fours… And so it’s a return to, really, reality from the last 15 years where we saw rates artificially low. I think in ’18 right before the pandemic hit they were getting up higher, and then they had to drop them all the way to the floor, you know. But would you say your business, like real estate, is so driven by the interest rate? Would you say it’s highly driven by that, or there’s some businesses where you’re going, you know, “The seller can carry,” or if the real estate isn’t involved it’s not as affected?

ROB: Yeah, I think it’s just… again, the buyers are getting used to rates doubling. On an SBA, which goes up to five, you know, five million on a business purchase outside of real estate – I mean, you can add more on the real estate side – but the idea is that those rates have doubled in the last eight months. So it went from 5% to say 10%. So that caused buyers to come back, but a business that’s doing, say, a million dollars in cash flow, the reality of that is that they’re going to pay some more interest, but rates are probably going to come back down. These are usually 10-plus year loans. So they know they can either refinance or they can actually… the rates will come down, because a lot of our variable rates anyway. So that’s why I mentioned they’re cresting. So buyers are saying, “Hey, it’s not going to get much worse. So I can buy now, and kind of ride it back down a bit over the next couple of years.”

JUSTIN: Yeah, they’re feeling more comfortable with it. And, you know, talk a little bit about SBA, because some of the radio listeners don’t know what that term is, how it’s different than, you know… Most people are familiar with, “Hey, I put 20% down on my house,” or, “I bought an investment property for 20%,” so explain how that works with the SBA.

ROB: Yeah, SBA is a great program. As I mentioned, it goes up to five million dollars in purchase price. So a business that’s worth five million, they will basically finance that, and usually it’s between… you know, the minimum is 10, we’re seeing more like 15 or maybe even 20% down, depending on the deal, how much goodwill is in the business versus assets. And that’s a great program because that allows you to go through and put probably a minimal amount down on the business, get a good ROI as a buyer on that return, on that cash flow, that you’re putting your money down for that cash flow.

So a million dollar business a year, you know, maybe would sell for say three or four million, maybe more, in terms of a purchase price, but you’re only putting down say, half a million dollars for that business, right? So, you’re getting immediate ROI on the business and you’re buying a business to grow it and continue to build it. And so that becomes a great program and I think, you know, a lot of lenders… people are still lending money on those as long as you’re… as long as you have good financials and a good business that your buyer is looking at.

And that’s what we do, is help those sellers get ready and “pre-flight” a lot of those deals with SBA. We also work with private equity groups and other type of private financing as well. But as I said earlier, we want to make sure we keep the options open and make sure the buyer has everything they need to to be able to purchase the business.

JUSTIN: Yeah. So the SBA sounds like, you know, the FHA version of purchasing a house, right? You’re getting in for a minimal down, but there are requirements that go with that SBA loan.

ROB: Yeah, there are requirements or that it’s not a… I wouldn’t say it’s an easy process, but a lot of lenders we work with, they do a lot of just taking you through it, making sure you’re going through all the checkboxes and the hurdles there. But at the end of the day it’s a great vehicle for buying businesses.

JUSTIN: Yeah. And we talked about the interest rates going up, all these changes and you know, you’re with a company – The FBB Group – that’s been around you said 40 –

ROB: 40-plus years.

JUSTIN: – 40-plus years, so you’ve seen it and that’s the thing. You know, if you own your own business folks and you’re curious about selling, you know, you just reach out to Rob. He will talk to you through these things and they’ve seen all different markets, they’ve seen stuff up and down. It’s not like they’re going, “We’re five years in the business, we’ve experienced the gravy train and nothing else.”

ROB: Right, right. And the important thing about a business is not the trends in the economy that affects it. It’s the trends in the business that affect its saleability. So the economy can be up and down, but if the business is up in a down market, it becomes a lot more attractive. Now if the business is down in a down market, those trends couple together, and it may not be a good time to sell. And we’ve had to say that to quite a few owners where, “Now it’s just not a good time. You’d be leaving quite a bit of money on the table and let’s wait for your trends to come back in the business and then look at it again, you know another couple, you know, a year or two.”

JUSTIN: Weather the storm, yeah. Folks, we’re talking with Rob Amerine, and he’s the President of The FBB Group. They’re located right down on Cascade. ABC News is gonna chime in and then we’ll be right back here on The Extra.


JUSTIN: Hey, folks, thanks for sticking with us. We’re talking with Rob Amerine here with The FBB Group. Been in business a long time. They’re helping you as a business owner sell, make that transition. We talked about how there’s a ton of Baby Boomers out there, and I love it, because Rob’s got this, you know, positive attitude in here and I’m trying to bring him down, saying, “We’re going into a recession.” Rob’s going, “Justin, we already went, we went through it.” And you’re seeing, you know, people really positive on the business side, which is great, because I work in real estate, and people aren’t as positive right now. But you’re seeing, “Hey, we’re having Closings, we’re seeing good activity.”

ROB: Yeah. Yeah, exactly. And I, and as we were talking offline, I mean, the sensitivity to rates is not the same for business transactions, right? It’s more of, there’s so many other nuances of… you know, the numbers got to work, the debt service has got to be there, everything else, but it really needs to make sense. And there’s also a lot of the intangibles. There’s a culture, there’s kind of a… I like to say we’re kind of the between buyers and sellers, and really finding a good fit for that transition, right? And whether it be internal to people that are already working in the business or to buyers.

You know, we have a database of about 3000 active buyers. We get hit up every day from buyers looking for specific type of companies. So we track all that, and so when someone comes when the seller comes in we can basically start matching to literally you know a couple hundred buyers that have said… they’ve raised their hands and said, “Hey, I’m looking for something like this,” that we can start, you know, kind of working towards. And then, of course, we don’t, we just don’t stop there. We look at other avenues, you know, online, everything else for attracting buyers to businesses.

JUSTIN: Yeah, but it sounds like a lot of it’s still old school, which is great, because for normal residential real estate, you know, a lot of it’s just taking pictures, you put it on the web and see who comes. But you’re working internally, it feels like a lot more. You have a database and you, I mean, you’re probably the only ones here in the Springs who really do it, or if there’s others you guys probably have the biggest presence, I would say.

ROB: Well, yeah, and there are others. And we like to, you know… we’re here in the Springs, we have an office in Denver as well, so we work all over Colorado –

JUSTIN: Okay, I did not know that.

ROB: – up and down the Front Range. We have a company represented in Boulder right now, we have… we’ve done deals in Fort Collins. And we’ve done deals in 15 different states because these sellers, a lot of times they’ll sell a business, go create another one, and then they’ll call us back for the transaction. So, you know, we have to… when there’s real estate involved, we have to be careful with the real estate law in different states, but for the most part, the business side, you know, that’s what we’re all about. You know, we’re basically trying to help them get that business ready to sell, and usually – and sometimes that’s a 3-5 year process. It’s not something you just come in – and you’re mentioning like real estate – you just don’t take a bunch of pictures, put a sign in the front yard and say, “Yeah, I’m for sale,” right? So, we’re getting those businesses ready and, you know, it’s on average probably a couple of years to get a business ready to sell to maximize the value of what they’re going to get on the market.

JUSTIN: Yeah, totally different ball game. I mean, you know, sometimes people think commercial, you know, you just go look on Loopnet, you find something you like, but… You know, when you’re dealing with serious people, you gotta a lot of the time have those people in your pocket already, have that database of people and saying, “Hey, this person wants to sell a dry cleaning business, we got like 10 people who’ve been asking for when that pops up to reach out to them.”

ROB: Right. Right, exactly. And it’s more so the size of the business matters too, right? Dry cleaning, they’re usually pretty small, selling under a million dollars, but you know our average deal size is a couple million up to maybe $10-15 million. And the idea is that, you know, buyers want maybe something in industry, but they have certain cash flow requirements too. I was just talking to a buyer this past week that had you know wanted a minimum of $300,000 of cash flow up to say, a million in cash flow for the business that he’s looking for, and so we track all that, right? So you kind of have a cross section of these industries and what buyers are looking for. So there really is a lot of work to kind of get that together and go after a targeted group of buyers.

JUSTIN: That’s great. And if folks want to get a hold of you, what’s good contact information?

ROB: I would say go to our website. Its, so one of the shortest domains out there, you know –

JUSTIN: [laughs] You guys paid a lot for that, or did you get it for a penny? [laughs]

ROB: Well… [laughs] we own it. But yeah, it’s course… back in the day, so FBB – just a little bit history – is short for First Business Broker. So that’s a good way to remember. We don’t call ourselves that, it’s called The FBB Group now, a little more nuanced, but yeah, So First Business Brokers –

JUSTIN: Alright folks, we’re going to keep Rob around here going to the next segment. We’re going to talk about what he’s foreseeing for this year, possibly next year, and he’s going to get his crystal ball out here and help us out. We’ll be right back after these messages.


JUSTIN: Alright folks, thanks for sticking with us. We were just chatting a little bit during the break and Rob was giving me an example of somebody who had a W2 job and then was looking to get some income on the side. You know, it’s kind of, sort of a side hustle, and that may be something that you know, you’re thinking about. Is, “Hey, how can I diversify my income?” you know, “Can I start something else out?” and, you know, reaching out to Rob really may be the first step because they have a bunch of businesses and saying, “How involved do you want to be? Are you just looking for strictly passive? How much do you want to put down? What type of investment are you looking to get back?” But you just gave me a great example of someone who’s going, “Hey, I’m 50 and I want to make a push here to do something else.”

ROB: Right. Yeah. And I think it’s that safety net of the W2 job. I think a lot of buyers are there, but most buyers I talked to are looking… they want to jump out. They realize they’re kind of up against a ceiling from a corporate standpoint or wherever they’re at, and buying a business versus starting a business is a lot less risky, right? Because you’re buying into cash flow, you’re buying into client lists, and reputation, and goodwill, and all these other things that are… take years to establish, right?

So it’s more of a, you know, I think it’s actually better – and having done this myself – I put myself as, I’m better one to buy a business and then grow it, than try to start something from scratch and take on all that risk and hope it works out. And there are people that do that, right? So there’s nothing wrong with that, but by and large a lot of those fail, and so by buying a business and growing it, that seems to be… it’s less risky for buyers, but it’s also something that sellers get paid for the value of their business. And that’s our job, is to maximize that and make sure the transition goes well.

So the example was that, you know, you buy a good business, you know, buyers are going to pay what it’s worth now, not what it’s going to be worth. So that’s where we sometimes are the bearer of bad news from the standpoint of, you know, the client thinks their business is worth millions of dollars, or say it’s worth 10 million, when it’s maybe worth five million.

JUSTIN: Yeah, it’s like going into trade in your car, right? You’re like, “This car is worth a ton!” They’re like, “Nah, it’s not, sir.”

ROB: Yeah. Yeah, it’s, you know, “It’s unique!” “Well, of course it’s unique.” But what does the cash flow say?


ROB: Right? You know, people talk about the name, and the name recognition, and all the great customers they have. Well, that’s all the goodwill, right? But that needs to show up in the numbers. That needs to show up in the net income and the cash flow from a business, you know. So if you have a lot, you think you have a lot of good will in your business and the cash flow doesn’t reflect that, what are buyers buying? Right?


ROB: So that’s what we’re trying to make sure that we can get both to the table and have an equitable discussion on that, on what is the value of the business. And, of course, push that to the higher end as much as we can, with the nuances of the business, and the timing, and the process that we run.

JUSTIN: Yeah, it’s like saying, “Hey, I have a great rental property.” You go, “Let me see your figures. How much are you netting?” You’re like, “Well, it’s got great views!” –

ROB: Yeah. Right.

JUSTIN: – “But it doesn’t make any money. But the views are great!” And you’re going, “I got it.” But you know, you got to have some proof to the pudding here, really.

ROB: Right. Right.

JUSTIN: You know what I mean?

ROB: Yeah, and you’re searching for that one-in-1000 that will agree with you and pay you a premium on the good views, versus the most of them are going to look at their numbers. You know, a lot of buyers go to their accountant. You know, we just had a guy look at a business this past week, loved the business, you could tell he wants to buy the business. He went to his accountant and the accountant and said, “Hey we think it’s worth this,” right, versus what they’re asking for. Well now we’ve got some work to do, because the accountant – they’re going to go to their advisors.

So if the numbers are not there or there’s a decline in the numbers, that really hurts the seller’s chances of really getting that value out of the business. Because with a decline, where does a decline stop? On an incline, now you’re in a good, you know, strong position to sell and that’s a good negotiation… part of the process of negotiation that will help you in driving the value of the business.

JUSTIN: Yeah. And it’s fun, too. I mean, you know, the real estate show I do, we talk about passive income, buying rental properties, and this is just another avenue to do it and to really even protect yourself. You know, having your different buckets, whether it be your 401K, a rental property, you know, your Roth… This could be another bucket where you’re saying, “Hey, like, I’m diversifying and I have a business where I’m getting tax shelters,” and, you know, “What if the rental rates go down or that’s affected, then I got this other bucket over here where I got a business going on the side,” and the more you can diversify the better, wouldn’t you say?

ROB: Yeah, yeah. And I would say too, a lot of… there are businesses that we call owner-operator businesses where it’s dependent on the owner. So you need someone that comes in that then maybe quits their W2 job that comes over and actually is the owner-operator. There are other businesses where the owners have successfully built themselves out and that’s more of that they can kind of run on its own. Now, even those businesses you have to be careful there has to be some level of oversight or management, and so we try to help kind of put the expectations in place of what that’s going to look like. But for the most part, most businesses are being run by the owner-operator.

If you get into bigger businesses that are a couple million dollars in EBITDA, that becomes more of a management team that’s running it, and that’s a good place to be, as well. But sometimes those can be very dependent on the owner as well, right? So, we try to make those adjustments and say well, “How much is the new buyer going to have to work?” Right? “What do they have to do? Who do you have to replace in the business in order to make the transition work?”

JUSTIN: Yeah. And you see a lot of successful businesses and the owners are there all the time. I think that’s why Chick-fil-A, they require it. If you’re going to own a Chick-fil-A, you have to be working there a certain amount of hours.

ROB: Right, right. Can’t be a side hustle, right.


ROB: Exactly, yeah.

JUSTIN: Because there’s certain businesses like that where it is very, you know, owner-involved, and then you mentioned other businesses where you can be a little bit more hands-off to a certain extent.

ROB: Yeah. And the goal I think, for any business owner, is to build themselves out, right? The more the business relies less on you on a day-to-day basis, the more valuable it will be, right? You mean if I mean what you… look at a buyers perspective. Does he want to, a buyer doesn’t want to work 80 hour weeks, if you’re working that, right, as an owner, but if you’re working maybe 20 hours a week, that’s attractive. So now those are the nuances that don’t really show up in the numbers as much, you know. Profitability, the net income statements may be the same, but one that’s working 20 hours work versus 80, which one is going to be more valuable?

JUSTIN: Exactly, yeah. And it just depends on the buyer how involved they want to be. But most people, I’d say 80 hours a week, is a lot. So there’s going to be less value there, probably, than somebody else to be a little bit less involved. It depends, I guess. You know, if they’re trying to keep their W2 job and get something else going, if they’re going, “Hey, I really wanna jump in the deep end and you know,” –

ROB: Yeah.

JUSTIN: – “totally be involved. They may be looking at going, “Hey, it’s… a ton of hours a week doesn’t bother me.”

ROB: Yeah. And most, I mean, I would say most people don’t want to buy a job, right?


ROB: They want to buy a business. They want to buy something that’s running, that has employees. That’s another thing: the tight labor market. Having employees, W2 employees – 1099s are OK, but they’re a little more risky, right, in this market – so having those W2 employees is much more valuable than it was say, you know, prior to the pandemic, to 2020 or whatever, because back then it was easier to hire people.

Now you know you talk to, we talked to, especially contract businesses, they’ll tell us all the time, “We could grow the business, we just can’t find the people to work.” So those businesses are trying to grow. They may be looking for say, an electrical contractor, or a plumbing company, or someone else that basically they can add to their business and they can get the employees along with it, because they can’t grow without hiring employees. They can’t find them, so maybe they’re willing to buy a business to do that.

JUSTIN: Yeah, I mean it’s funny, you know, I know a gentleman who works for El Paso County on the road services and he said, “We’re operating at like 50%, because if somebody has their CDL they can make more somewhere else and then they leave.” And it’s definitely something you’re seeing in all businesses is: can you get people in? And then, number one: can you get them to to stay? Right? And number two: can you keep affording, you know, the pay to keep them around?

ROB: Right. Yeah, exactly.

JUSTIN: You know?

ROB: And you gotta pay them well. And I think that goes to a point of a lot of owners, because of the pandemic, because of how hard things have been, they’re burnt out a bit. The owners are burnt out. They’ve had the business for 20, 30, 40 years, and so now they’re kind of, you know, they’re just done, you know, from that standpoint. So the labor challenges are just making things worse for them, right? They can’t keep [pay] people enough for them to keep them around.

Now, you take a new owner that comes in that’s maybe, you know, younger, has the energy, and the passion, and also has a kind of a different perspective to grow the business. They would do well to attract new labor, right, from that standpoint because that’s what you know, it’s a younger and younger labor force. Versus someone that’s been running it for 40 years, that is kind of, you know, just kind of slowing down, right, and they’ve lost kind of their passion for the business.

And so we try to look for that, we try to look for owners that are really done. I think smart owners understand when they’re done and they don’t just you know hold on to it for years just because they’re making money. They realize they need to sell now before they get too burnt out and that starts to adversely affect their business and the employees.

JUSTIN: Yeah, how do they want to phase out? And that’s something you guys probably talk with people like 5-10 years before they’re even looking to sell sometimes. And saying, “Hey, how do we properly really progress this?” And making a game plan is what we always talk about with people when it comes to even, like, real estate.

And with yours, the game plan we alluded to, it has to be much more thorough and much more thought out than, “Hey, I’m gonna sell my house and take some pictures and put it up on the Internet and see if somebody wants to buy it.” It’s, “How do I make sure my numbers are right and that things are going to work?” So I’m not going, “Okay, I need to sell my business this year. I’m going to call Rob.” And he’s going, “Whoa, we got a lot of legwork to do here.”

ROB: Right. Right. Yeah, and we… and that’s what we hate to see, is owners that aren’t prepared, and then they have to sell for whatever reason, health events… There’s other things that happen that force them to sell. So if they had prepared for that early on, they would’ve been ready. And unfortunately… and that’s why we tried, that’s why we’re doing things like this and trying to get the word out to say, “Hey, look at this before you have to look at it.”

And you know, I really like to hear when sellers say – I’ll ask a question, “Well, when do you have to sell by?” – “Well, we don’t have to sell for another year or two.” Great, because that way, you know, there are sharks out there and they can smell the blood in the water, right?


ROB: But if you don’t have to sell, you’re not, you know… you’re doing what’s best for your employees, you’re doing what’s best for you and your family to build it to keep that value in the business and not being forced into something that really is more of a fire sale liquidation that nobody wants.

JUSTIN: Yeah, exactly. I mean, it’s just, you know, if you’re going to be forced to sell and you haven’t been able to prepare for it, you could be leaving a million on the table, half a million – depends on the –

ROB: Easy.

JUSTIN: – size of the business… and it’s just the lack of preparation almost like doing your Will. Right, Ron?

ROB: Right. Yeah, exactly. It’s… planning is there, we like to say “plan” but we are an event-driven business. Things happen that you just don’t know. Pandemic is one of them, and that’s really shook things up, you know, for people’s expectations. Before the pandemic I would get, I would hear more and more people saying, “Well I’ll just hold on to the business for three to five more years, and make the same amount of money as I would sell it for.” Well, that’s changed a lot now. You don’t know what’s going to happen.

So if you’re burnt out, or if you’re at that point where you can retire, and you have the money to do that, then I would say, “Well why aren’t you?” And I’ve gone back to some of my clients before that had held on what we probably think is too long, and they said, “Yeah, I was just making great money, but I was taking on too much risk” –


ROB: – “of doing that.” Key employees can leave, you know, it’s a… vendors can change, you know. We just saw COVID just shook up everything to realize that, “Hey, things are not as certain as we thought they were.” So we need to be, you know, be better planners when things do come in and you need to move forward on something.

JUSTIN: Yeah, there you go. I need to get glasses, by the way, because I’m looking at this and I’m going… I can barely see the time on it! [laughs] I was panicking going, “Oh, it’s over!” And then we actually had a minute left there. [laughs]

ROB: Okay.

JUSTIN: So boy, I’m starting to feel that older age.

ROB: [laughs]

JUSTIN: Anyway Rob, give the contact info one more time.

ROB: Yeah, I would just say easy, our website And there you can, you know, you can see our team, you can see everyone that… and a lot of articles, too. Just, we like to educate, we like to just get the word out. We have a monthly update, you can sign up for that every month, and of course give us a call and we would love to just have a conversation. Doesn’t cost anything to talk to us. I tell the sellers, you know, “We’re not about trying to get people into contracts, we’re about trying to help them first.”


ROB: And then, if it makes sense, great, you know, we want to of course help and move forward. But if it doesn’t make sense, then we know that, and we can address that or maybe it’s just not the right time. So… buyers and sellers.

JUSTIN: There you go, Rob. Thanks for joining us today.

ROB: Yeah. Thank you, Justin. Appreciate it.