EP372: Build to Sell: How to Maximize Your E-Commerce Exit Without Getting Burned

This is the High-Voltage Business Builders Podcast. Daily intelligence for serious e-commerce…

This is the High-Voltage Business Builders Podcast. Daily intelligence for serious e-commerce portfolio builders across Amazon, TikTok Shop, Shopify, Walmart, and every channel that moves the needle. Neil Twa and his Voltage team all day, every day, since 2012. Let's get into it. All right, guys. So Joe, thanks for coming on the call, man. We're going to chat today about what, M&A or what road you want to talk about? Gardening or what the- Yeah, you know, I think one of the most important things in building an Amazon FBA business in the life cycle is planning for the exit, how much money you can make off of selling that business. And so I, you know, however, going out in the sun today and relaxing a little bit does sound like a good idea. So I don't know. Yeah. We always want to keep that in perspective. You don't want to build to die. We want to build for opportunity. We want to build for fun. And one of the reasons why, you know, Joe and I are chatting here today is, is he's living in the world of building and selling businesses. And you who are listening to this are growing or interested in growing, or are you thinking about an exit or in the process of exiting. Want to know, you know, what is it that I have that this is worth? What is this worth? My time, energy, attention, and money that I spent for a year, two years, five years, seven years, 10 years putting this whole thing together for the future. Amazon being just one part of an omni-channel strategy. Some of you might just be on Amazon. Some of you might be on Shopify or TikTok shop or other places. And we obviously want to talk about what the value of an omni-channel situation looks like today, Joe, because that's an important part of evaluations. And then it kind of helped people understand how to maximize their value. That's kind of what I want them to get out of today's call. And unless you've got a different direction, you want to take them? Yeah, no, that sounds perfect. I also do want to touch in, because a lot of people are always focusing on maximizing value, that they forget to look at the dark underbelly of selling their business, which is getting sued later, the missteps that happen when you didn't sell it the right, correct way. And then you actually end up losing money. And we always want to look on the bright side of things, but we can't stop ourselves from also mitigating any potential risk post-close of the sale of your business. Well, everything we're talking about is risk mitigation, isn't it? Not getting screwed in the deal, not paying too much for the deal, not having the deal fall out at the last minute or not having the deal all go through and then finding out something wasn't correctly done and then somebody wants to claw it back or have some sort of post-agreement option. I bet you've seen all the pros and cons, the ugly side of this, haven't you? Yeah, I definitely have seen it all. I'd be happy to kind of explain to the audience here, you know, my sort of experience and expertise, but essentially it's not even... So I love what I do. I love doing M&A and M&A litigation. That's what I've specialized in. But it's actually really sad when you have a client buy a business or sell a business and now they're bankrupt or going into bankruptcy and spending their final dollars on their attorneys. It's actually really horrible. But that's what we're here to make sure people don't get into. Well, how do those people get into that? How did they find themselves in that situation and then let's back up to how you can avoid that situation? Sure, I'd love to touch on that. And so let me talk about a few examples, a few recent M&A litigation cases. One of the most common causes, and this is actually really counterintuitive, a little bit of constraint. We often say, let's have the seller stay on for a little bit in our business that we just bought from him, maybe an equity rollover portion. That means he's keeping some equity in the business. He's staying on maybe as a brand consultant or some product type consultant. We often wanna bring the seller along with us because of the value he can provide, but we never think of the problems he can cause. Again, the dark underbelly. And here's one example. So we had this one seller stay on for the next year of this business. We just finished the lawsuit. The final trial was in January. We're still waiting for the judgment. My client was the buyer, they're bankrupt. The seller essentially stayed on, didn't like what the buyer was doing to the business. And then at the end of the day, started actually acting against the buyer. And you might say, Joe, that's kind of crazy. Why would a seller act against a buyer here? Well, again, you're dealing with personalities. You're dealing with individuals that might have been in this guy's case the first time you ever even built a business. So you're really dealing with unique characters here. And you have to take that into account when you decide to keep this guy you barely know in your business after you've given him, in many cases, most of the money he needed. Now he can just be a problem. Wow, that's an unfortunate outcome for that situation. That sounds like those people who win the lottery and think they're gonna be doing great. And then four years later, you find out they're broke or bankrupt or some family member killed them for their money. I'm terrible at that. So let's get to the positive side of that. By the way, that's not the only time that's happened. I've seen that scenario happen time and time again. And it's really surprising. But again, that's a lesson to be learned by business sellers and buyers here. Yeah, yeah. So now that we've said what's the worst that can happen, so the question becomes, what's the better that can happen? What's the best that can happen or somewhere in between optimal? Tell us about some of the things you've learned in that process of people, you've done a lot of these. Yeah, I mean, you really touched on one earlier. I'll use the word obvious here, but obviously as an M&A professional, all this stuff's gonna be obvious to me. So I'll try to cut that out and say that when you have a multi-channel e-com business, as opposed to just one channel, you're obviously gonna get a bump and you're gonna have different multiples. You're gonna have a much greater value there. And of course that's gonna depend on several different factors. How much have you built out those other channels? Are some of those other channels actually independent or are they merely relying on, so maybe it's your TikTok really just feeding into your Amazon seller account. There's obviously millions of different ways that these things can be plugged into each other. And so the idea of independence of those channels is critical. And what buyers are really thinking there is they're thinking, how long can this business stand on its own feet? How strong of a business is it? And so having multiple channels makes it stronger. There's also other factors, which Neil, of course, you'll know them all. There's also other key factors to consider that really prop up the value of an e-com business. Yeah. Well, let's get to those. I know what they are. Let's pretend like we don't. Yeah, yeah. Let's open that door here for a second and pack that a little bit more and see what specific areas are you referring to? Yeah, yeah. So another big one, and of course as a lawyer, I'll jump to some legal things, is owning your own IP and actually having your trademarks in place and actually having everything under a cohesive, strong brand and having that brand value all tied together in a nice bow-tied package for that business buyer is gonna give you a lot more value. Another common one is if you have, you talk a lot about this, if you have a lot of product differentiation, let's say dozens of SKUs of variations of the same product, and you're really owning up a space and you really have a strong dominance in a, I'll call it a niche or a type of product, that's another big one. You don't just have, oh, I have a few SKUs that are doing well, a few random SKUs that aren't doing well. That's not really, again, this nice bow-tied package picture that buyers like to see. I had a client turn down a business, oh man, it was probably four months ago now, that was like that. Yeah, yeah. So let's, what are the primary things that people normally don't have prepared when they say, well, I wanna sell my business, and expectation-wise, what are they missing usually? Yeah, so there's, it's actually surprising that people even miss the most basic things, but again, that's what we're here to make sure people have in place. So you really need to make sure that all your financial statements are done nice and tidy in QuickBooks. Some people still like to use old school Excel. Let me tell you, nobody wants to see that. So you have to have your bookkeeper up to speed. Obviously, we can have the facts and figures inside of your Amazon profile account as well, but having all your financial statements nice and tidy is an absolutely fundamental and critical element to selling any business. Another big thing is making sure that you're not, that the business is not dependent on you as the operator. If it's an, sorry about that, dog went crazy. If it's an operator independent business, dependent business, and then the buyer is essentially looking at it saying, hey, you're the business, John. I mean, I'm not buying you. Sorry, but that's not legal. And so how can you sell me this business when you haven't built a business that's operator independent? Yeah. Yeah. What I've taken to is that, most people are not thinking about it from the buyer perspective. They're just thinking about it. How do I maximize all these things? And what's the best way for me to just kind of get this done and get it over with, with the least amount of heartbreak and trouble and expense, if at all possible. And some of the things we've seen during that process are an unwillingness to write a business plan for the new buyer. Align expectations on what they're doing and what they could be doing in the future, right? Yeah. Not coming to the table with the right financials. Yeah, 100%. Oh, sorry, not to cut you off there, but really to echo something you just said, which is so critical. As a seller, you're thinking about how, like you're thinking about the growth of this business, your vision of this business. You're thinking about different things than a buyer's thinking about. A buyer's thinking about, is this business reliable? Does it have a proven track record of performance? If it just got a huge uptick in sales in the last six months, that's actually not the greatest thing in the world. But as a seller, or at least let's just say a business owner you're thinking, this is amazing. Look at it, I'm growing sales so much. This business is gonna be worth so much money. But that's actually not the exact perspective that a business buyer has. Mm-hmm, yeah. Where are they sitting? What are they typically gonna do? Yeah, and so, I mean, they wanna see years of consistent performance, right? For them, it's not a gamble on a new, the new biggest product. Though in some strategic cases, like in cosmetics, that very well may be the case, right? You really might have a strategic buyer say, oh, this is the new trending product. Right, I wanna own that. Yeah, I wanna get on this, I wanna own that. So I'll buy it at a high multiple, even though it's only has some recent financials. But we shouldn't expect to be that magical unicorn. And this is, I've made this mistake in building and selling my own businesses as well, where you kind of get into this unicorn mindset. Mm-hmm. You're not in the reality mindset of what actual businesses do, what actual business buyers do. You're thinking about Facebook, and you're thinking about Google, and that's not 99.9% of actual business purchase and sale transactions. But real quick to answer your question, getting back to, so what do buyers look for? I mean, obviously they want consistent performance. Again, the duration is gonna depend on the buyer, but very often two to three years of strong performance, differentiated across SKUs, across channels as well, would be even more advantageous. And really, again, I'll use the word stable. I'll use the word concrete. You're not using the words high-flying and exciting. The types of investor words we're looking for are that, am I guaranteed a return on this investment? That's really all they wanna know. Yeah, am I putting good money after a good business and not after a bad deal? And really the buyer is also looking at it, in my experience, from can I impact this? I mean, I've seen you do a good job. I see it's working well, but can I actually positively impact this business in some way, shape, or form that I can see myself doing it and actually see it having a positive impact versus what the owner did? Not that I necessarily replaced them or that I didn't think they did a good job. It's just, is there some value add that I have to this business that helps it along, that stabilizes it, causes it to grow? The second thing I think of that a lot of people misses, and maybe resonate with this, do I even know what the heck the business does? Do I even understand how it makes money? Can't tell you how many times I've talked to people who wanna buy businesses and have no freaking clue how the company they're looking at buying even makes money. Yeah, yeah, I do represent a ton of buyers and I represent from first-time buyers to bigger buyers. And you see a lot of that in the first-time buyer space. So especially if you're looking at or planning to sell your e-commerce business like when you hit like 200K a bit, or we use the word SDE a bit, whatever, I'll just use the word a bit for simplicity sake here. If you're looking to sell it when it's sort of smaller as opposed to, oh man, I'm profiting 5 million a year. If you're looking on that smaller side, there's a lot of first-time buyers in that pool. There's a lot of people who won't know how to run your business, but they're excited to get into the game and they'll take out a loan or maybe a family will give them some money to buy your business in. And again, I have a lot of clients like this, so I'm not dogging them. I love these clients, but they might not understand your business very well. And again, we go back to this idea of if you're the seller and you're tied onto that buyer's boat and you guys might like each other, you might vibe, you might get along, but now you've married this guy you just met five months ago and now you have 20% of your equity tied up and he has no idea how to run this type of business. And you're gonna be really upset if he steers it off the cliff and you're 20% or maybe you have a seller note for 20% and retained equity for 20%, meaning he was gonna pay you 20% of the business's price, of the hundred, say the $1 million. He said, I'll pay you 200K later. You keep 200K worth of stock and let's go on this journey together. And it might sound, again, as we're agreeing here, it might sound all fine and dandy until this guy who you've handed the keys to the empire starts running it off a cliff. And it does happen a lot. The problem is on the internet, people are talking up the advantages. It's exciting because excitement spreads and the bad stories, people don't wanna share bad stories. So you kind of get an under saturation or lesser of these important lessons on the internet. And that's why I even speak them out loud. Why I'm pointing them out is because I really wanna make sure people hear all these different types of cases so they can learn all the lessons. Yeah, and there are lots of nuances. I mean, I'd say there's probably, and tell me if I'm wrong, it's about 30, 40% of the time, it's kind of the same thing. And 60, 70% of the time, it's unique. It's unique even if you're selling an e-commerce business because of the outcomes, right? Yeah, we have a rule is we say that everything's on a case by case basis in M&A. And we always, people always wanna say, Joe, just give me the purchase agreement form. Joe, I'll give you $1,000, give me the contract or I'll go have Claude write me a contract. Claude, by the way, has like, I think Fable has a 13% score on legal. So please, please be careful. And it's really great at coding. It's, oh my gosh. Careful with the legal on these frontier models. Yeah, yeah, I was just like, I was just have, I still use it, but then you just look at it and you're like, man, I was just using it like two days ago. Some New York statutes, you know, confidently is telling me what isn't the law. So anyways, we're not gonna go down that rabbit hole. Well, there's a valuable point to doing that unless you wanna get sued out of business. Yeah, yeah. So I guess. You don't have the expertise to know that you didn't know that what it wrote wasn't even legal or some part of it was legal. And then the insert of its own opinion, we had this happen on a doc and then it's inserted its own opinion as it was a valid bullet point on the law. And it just completely fabricated it out of thin air and it wasn't legal at all. Yeah, I'm dealing with a big lawsuit with Meadow right now as the defendant, I'm on the plaintiff's side and they just did that. And one of their motions, they used clearly AI. It's just the wrong citations. So there's people, you hear about this in the news, lawyers are using AI citations and getting in trouble. Right. It's actually, everybody's doing it because they're, you know, like, oh, I don't wanna, legal research is a very difficult task, yada, yada. It just gave me, I love it because it gives me the opportunity to, you know, win an argument against the other side and take leverage, yada, yada, all the- It's all fun and games until you get sued. But the fact is, if you haven't been in business either long enough or you haven't tried enough or pissed somebody off in business to get sued, are you really in business? Are you really trying hard? Dude, that's what I tell people. You get sued for the first time, people get really upset. I was sued in one of the first businesses I built 10 years ago, or more than 10 years ago, something like that. And so that's what I tell people is you gotta take it on the shoulder. It's just part of business, man. It's just part of business, so yeah. But I guess I was finishing up a point there about, yeah, people, just to kinda, my OCD nature, just to kinda cap off the point I was making for the audience there about, well, you know, people come to me and ask for forms, but everything is done on a case-by-case basis. And especially like even a different business, even a different, I'm trying to say like Amazon e-commerce business might have different types of it. I don't wanna get into legalese here to confuse people, but all of us have different clauses, different terms in there, and you really, and that's how you cover all the holes and ensure that you don't have any liability that sneaks out and gets you later is your lawyer looks at your case and covers all your holes manually. It's not a form business. I mean, AI will get there in five years. It will get there, but it's not there today. Well, it's coming. You know, these are new times we're in for legal and e-commerce and drafting documents and selling businesses and building businesses with AI in every corner of it. And I think since you and I last talked, we've released quite a few updates to the models we use in Cayman Data now that have really started to optimize and control as a real operator, the business structures and models of what we're doing. And it's leading us to the realization that our ability to package these businesses up in such a way where they're very AI operator centric because the SOPs are baked into the skills. They're baked into the tools. That's the guardrails that affect the ledger that can be used to determine exactly the worth and value and PNL and trailing 12 months and everything that's just spitting out the backside of these so that when a buyer comes in and they're interested in this business, they're going to be presented with basically an operating system that is managed by, you know, AI, Cayman Data that runs the brand that they're basically going to be able to see full transparency, dashboard, daily, weekly, monthly operations at the task level, just being executed by the AI that they're going to oversee as an operator and as a CEO operator. It's quite a fascinating time because I couldn't even have said that like a year ago. And when we started to do this like two years ago when the models first came out and started playing, actually I was playing with them like three years ago, two years ago, the main model started to come out and really hit mainstream around November of 2024 or so. And now we're really seeing it go into overdrive. We have been able to create systems and operations that I know are going to positively impact the M&A exit of some of these companies due to how easily manageable they're going to become. And I literally wrote the book on this two years ago, Joe, called Almost Automated Income with FBA, right? Yeah, I read. Was I not for telling the future? And that was really about systems processes, SOPs in our playbook that had to do with creating the ability to automate the income through operational standards, right? And SOPs, and it's all baked into the AI now. So that book is not even more relevant. It's the past proves the future kind of thing. I don't know, the almost automated word, it seems like hype, but now you have to change it to automated. It's almost automated. Well, we still want the human interaction. We want the non-legal crap. We don't want them hallucinating thousands and tens of thousands and millions of dollars of income or expenses that came from nowhere, because guess what? You do not need more e-commerce noise. Get the five updates that matter, what changed and what to do next. The Voltage e-commerce brief is free every Tuesday and Friday. Go to voltagedm.com slash newsletter. And now back to the podcast. That's happened before. And we're like, where did this $13,000 come from? Nobody can track it back. And we're like, as far as we can tell, they just hallucinated it. So we've been building and deepening and strengthening that to ensure that there's integrity in the numbers. There's integrity in the data. There are multiple crossover paths. There are now multiple models of checks and balances. So we don't just use the CLAWD, we'll use GPT sold now, which is actually very powerful to go audit what CLAWD did. So then Fable isn't just making up stuff. Then having Sonnet go back and do another check to make sure they got the language and structure right. And so we're having models in what's called loop engineering go and actually check the other models, work and balance, and make sure that it all checks out through multiple vettings to ensure that all the numbers are pulled correctly. It's amazing. And I really want to highlight something you said there in the context of selling the business. When you have the owner, you don't want to be the operator. You want to be an owner. So you have a fungible asset that you can sell off. You don't want to have the business dependent on you in any way, really. I know that's hard to say. Well, Joe, even with your law firm, sure everybody does all this stuff, but isn't it dependent? It's a hard thing to say, but when you're able to off-put so much, especially all those minute tasks that you might not have a staff member for because they only happen once or twice a month. So they come up to you as the owner. When you can automate these things, you're creating a businessman. For a buyer, it's like, when I say this, I'm speaking not just from my perspective, from the actual sensibility of a buyer. From a buyer's perspective, sensibility, that's magic. It's like, oh my gosh, I want to buy that. And you might say, well, Joe, now they're buying something that's really complex. All this AI stuff, it's really not. It's actually simplifying things into dashboards and command prompts that we've taken a lot of time to build. I think for the e-com world where it's becoming fascinating is the interconnected aspects of these different systems that are now API or MCP driven. So it's one thing to just connect and say, well, I got a connector. Like, that's not the big deal. The big deal is what kind of connector did you get and what data and intelligence are actually behind it. And behind that, what expertise actually told that intelligence what it was supposed to be doing. So you cannot take the human out of the loop yet. You simply cannot. Yeah, no, we're not there yet. We don't need to take you out of the legal loop either. Or there's going to be a fable five out here hallucinating rules for New York that don't work and you get yourself sued into oblivion, right? Yeah. It's falsified. So there's a lady recently that had that problem, right? I think she got herself- There's like many people, it's happening all the- When I first saw the article, like the first time it came out in national news, I was like, oh, everybody's going to avoid that. That was just me being OCD, I guess, because I avoided that. Everybody else is actually just doing the same thing. That's you being smart enough to realize you shouldn't avoid it. That's called expertise. That's called experience. And you've watched enough lawyers come up the track who were not willing to do that. Maybe some of the new ones who are not paying enough attention, who are either going to end up being disbarred or get sued and lose their cases because they're simply not paying attention to it. And it structures all the way through the business because at the end, what we're talking about in building a business and selling it is having the right things in place, having the right fundamentals, the right financials, the right plan, the right summary of your business, the right opportunities and channels in your business, and then being able to easily and simply present that to a buyer who looks at it and has the feeling that this is the irresistible offer they've always been looking for, and wouldn't come barging down your door to buy the business, right? Yeah, and I would challenge people out there. First of all, you always need to have the mindset. You even said this in the almost automated income book, I believe, but when you read so many M&A books, well, that was an M&A book technically, customer acquisition book. But when you read so many of them, they kind of blend together, but I believe you said in there, and it is nonetheless a fundamental truth that you need to build your business for the exit. And I would challenge people out there who are currently building e-com businesses or thinking about it or any business to go try and meet some buyer of that type of business, go talk to Neil, go talk to a business broker that's a guy who represents business sellers for smaller businesses. Go talk to somebody about, hey, what would a buyer want in this type of business? Just to ensure you could Google it or talk to Claude, I guess, but you'll get way more expertise on something like this outside of AI and Google. It's actually a fairly simple conversation, but Claude would tell you a thousand things that aren't relevant, actually. I've asked it that question before, and it's like, nah, dude, like half of those nobody cares about. It's not really relevant. Yeah. Right, so yeah, I would challenge people to go like, have those buyer conversations even with real buyers, even if you're not even close to your exit yet, and sure, things could change in the interim, but that'll help change your mindset from where we talked about earlier, as a business grower, you just don't have the same mindset as a business buyer and investor. Maybe somebody is differentiating their portfolio. Maybe it's a strategic, trying to buy up certain assets in a certain niche. You really just don't know how they think. Well, and I feel like we're a bit of a unicorn as I have these conversations, and I don't mean to say that as like braggadocious, but as a buyer and an operator, I've seen both sides of it, and a seller. So I've been able to see the entire process from end to end, as you know, because we did a deal together. And, well, you and I sort of indirectly did a deal. I met you like one time and then the deal did itself. Yeah, yeah, we did it. Which is a great way to do business, by the way. And come to the conclusion that, you know, this is good for everybody, and it was gonna work for almost everybody, because not every deal is perfect. But what is that, you know, as I see it on both sides of the fence, there's three components to what I just said. Where, what is 2026 bringing about with your current clients, the e-commerce deals you're working on? What are the things that have changed in the lending rules, SBA? What are some of the top things you can tell me around that? What people are fighting and dealing with right now if they're thinking about selling their business in the next year? Yeah, I mean, so the lending rule, okay, so there's definitely been some recent changes. The lending rules with the SBA are a constant mutation. I'll touch on a few key things that have been happening recently there that I'll talk to speak to sellers, that business sellers really need to be aware of. And then just e-commerce in general this year. I mean, obviously we're, I mean, to me there's a mix up between so much action happening and so many new businesses. I even go in on CaloData and look at like TikTok shops. So I'm like, there's so many different things and trends going on. And so it'll be hard. I'll try to think of a few key things on that subject as well. But first as to the SBA rules. So one thing that we, so the SBA rules are these business buying rules regarding SBA 7A loans that a lot of first-time business buyers use to buy businesses in the range of one to $5 million. Technically it can go up to like 6 million if there's a seller note or something. But these, I'll call them smaller transactions. I know for a lot of people out there, that's not necessarily, 2 million bucks isn't tiny, right? But in the world of M&A, it's the smallest deals. It's the smaller deals, yeah. Yeah, yeah. So these SBA loan rules apply to, sure the buyers and sellers of these transactions, but I'll talk of a few of the rules. So for example, nowadays as a seller, you can't retain more than 19% of the equity or you have to actually co-sign on the buyer's loan. So back in the day, you could have like a 30% equity rollover. You can't do that anymore with these SBA transactions. Some people think that if you have any percentage as a seller retained, I had clients asking me this, if you have any percentage retained, you have to co-sign. That's not the case. It's, and again, I, yeah, I could be remembering it wrong, but it's 20% is the limit. And another big thing is we used to very often see in these type of deals, non-Americans or maybe people who moved to America don't have their green card yet. I'm not an immigration lawyer, so I don't know all the right words here, but essentially not just a natural American citizen. And the SBA rules have really cut down on that. So if somebody is coming to try and buy your business and they're not American citizen and it's for 2 million bucks, you can pretty much count it out. I've had clients who are, and no offense to them, because I have clients who are not American citizens who are in the buyer bucket and they can't tap these SBA loans. And we run all over the place trying to get them financing. Yeah. Yeah, it's really a nightmare and not saying that there's no options, but it's really tough. That's another. That allows citizens, which I'm not against, to have the first opportunity, first right of that money to build a business, to stay local and stay in our economy. Yeah, I couldn't agree more. In the business. At the same time, in reverse effect, we've looked at companies that were offshore and found at least two of the 50 we looked at were vaporware. Because there was no laws or legal precedents, apparently in their country or situation that allowed them to completely falsify documents, papers, and P&Ls that didn't even exist. And in one case, I forget how we figured it out. It was a totally accidental thing. I think they sent us something we weren't supposed to be copied on. What the heck did we just stumble into? We spent months looking at this deal only to find out that their P&L was completely faked. And so by. We're not thinking legit about it. Yeah, and not to cut you off, but so seriously, if you're a buyer out there as well, do not buy, no offense. So you might have a different opinion. This is just my legal advice. This is our opinion. We can have all our opinion. Okay, don't buy a business outside of America. And it's not really even about it being a bad or a good business. They're outside, even if they say they're gonna be subject to the American courts, have fun with this concept of enforcing an American judgment outside of America. To clarify what you're saying, I think you're saying just, I'm gonna put words in your mouth, ready for this? Yeah, yeah, yeah. A U.S. based LLC owned and operated represented trademark in the United States, even if the outside person owns it is different than the business, not trademark brand registered, legalized or papered in America. Yeah. Outside, it's two different things. Yeah, yeah, I agree with that. And I would even go so far as to say if the guy is hanging out in Dubai and the money is gonna go to a Dubai bank account and he's not an American citizen living here, I still would recommend not to do the deal. And I'm an international lawyer that worked at top M&A law firms. Yeah, there are big caveats. And you know this better than I do. I would say the only caveat is, can they have a U.S. based bank account? Would they be willing to put that online as part of the transactional deal, as part of the requirements of the deal? And so the business is now papered legally and in the event it should come to the U.S. I'm the first guy to want a client to pay me to do a cross border deal cause I get 10 X the fees cause it's so much more complicated. I just say that as a general rule cause I really want people out there who maybe have a million dollar econ business, some guy or I guess we could talk from either which way buyer or sell side, but whichever way I don't want you to get into any trouble. And I don't want you to have to learn, get your law degree by getting in a lawsuit. And so I'd rather you just stay in America where you're much more protected, that's all. Of course, cross border transaction, cross border M&A, that's its entire own universe. Cool. I just put up a legal disclaimer right below this. So when it goes on YouTube or wherever it's, you're now covered. That's good, that's good. All opinions are my own, results may vary, mileage may vary. Yeah, no, it's actually just experience talking. And I don't have any interest in buying companies outside of this country. I will consider companies that are in the country, papered and deal it as long as the money flows into the country and does not flow out of the country as a part of that deal. And then I don't have a problem with the owner living anywhere else they want to in the world, as long as they're willing to do the deal in such a way where everything legally is in the courts of law is in the areas we can control and has a, you know, a precedence behind where we can reach somebody. That's been one of the biggest problems with e-commerce sellers really, because at the end of the day, so much of the business has transferred out of our country into other locations. And so I'm happy to hear, you know, SBA rules and stuff are updating to keep it back here in the country where it should stay first and foremost. They've just called me an American for that reason. And that's not an insult. Sorry to anybody who's international listening to this, but hey, you love your country, so do I. And I would prefer to stay here and prosper our country. That's my two cents in my podcast. So you guys shove it if you don't like it. Absolutely, absolutely. And it is what it is. It's here's the deal is running a business and building a business and selling a business. These are all very difficult things. The last thing you want to do to add on top of that, is have entirely different legal regimes, cultures, and languages. I lived in Japan for eight years. I speak Japanese. I learned the whole culture. Let me tell you, only a couple of the other 400 foreign lawyers there even did that. What I'm trying to say with that point is that it's a whole headache, a whole heck of a lot of problems, and you already got enough problems. You don't need that. It's hard enough. It's a long enough process. And I think a lot, let's talk about that for a second, because as I say it out loud, it's something I know I constantly hear from people. Well, if I put my business up for sale today in 90 days, my windfall is going to occur. That's not the case, is it? No, it's not the case. And I used to yell at people about it. Like you're the seller, your broker's saying you got to close in 45 days. I'm representing the buyer. I used to get really angry at the broker. And now I'm just immune to getting angry about it, I guess. I just sit down. I'm like, hey guys, here's a realistic timeline. Let me see your SBA pre-approval, right? Let me, we have things we do, like get that bank, the buyer has to get that bank application in in 14 days, very difficult. You get that in in 14 days. These are the ways that we start to make sense of timelines. But man, oh man, even to this day, I deal with brokers who are experts, been doing it for 20 years every day, who are demanding, Joe, you need to get your commitment letter in 30 days. If I'm meaning the buyer and I'm on the buy side. And I'm just sitting here like, man, we all know that's not gonna happen. No, it's not gonna happen, man. And most of the time it's some things you can't control, like the bank and the underwriting. And they come back and they're like, well, we'll get that next Monday, which ends up being like six weeks later. And you're like, how freaking slow could you be? Literally all the time, right? It's all the time. And you know what, I have a dream, Neil. This is totally irrelevant to the podcast. Real quick though, a snippet. I have a dream where these lenders for like the sub $10 million deals, like change up like the mortgage industry and are able to give mortgages in 14 days. I have a dream, Neil, but it's not. Dude, they did that back in 2006. You know what happened? You know, and so like- What are you trying to do, recreate that again? Yeah, so actually that's actually a really important point here as well. Back to what I said about business sales failing after the close and causing everybody a problem. One of the new SBA trends I was gonna mention, I know I can't mention everything here today, but one of the other things I was really gonna mention is, because not a lot of people know about this, you probably do, that the SBA loan default rate. So that's the loans for business. Like, you know, a guy sold his business for 2 million. The buyer got an SBA loan on it. The buyer then running that business into the ground or just not being able to service that debt, those default rates are super high right now. Yeah, I've heard they're as high as like 60, 70%. And I've heard, yeah, different lenders have different rates. There's one big lender I know, I guess I shouldn't say the name just for out of respect. XYZ Lender. Yeah, XYZ Lender. I know they had a 20 to 30%. My brain says 20, but then it says 20 to 30% default rate last year, one of the biggest lenders in the space. And so what I'm saying here is that that's indicative of the whole problem we're talking about. If you're selling a business, make sure you're protected, you cut the line, you get your money, you're moving on. Or if you're a buyer, make sure you're really learned up, you know what you're doing. Because that you can buy the business, be all happy and then go into default. And so, and now you have a personal guarantee on these SBA loans as a buyer. And it's not pretty. In other words, you can't outrun it. Yeah, you can't outrun it. It's not pretty at all. You can't get out of bankruptcy with it. Yeah, it's very sad. And so there's, I mean, there's certain rules, I'm not a bankruptcy lawyer, so I won't comment on that. There are different rules about that. But in any event, it's, you know, we just wanna be doing things the right way and following expert advice. We never wanna, I had to learn this the hard way, because I was like a tech kid and I love technology so much. I always just wanted to build cool stuff. And you quickly can run into a domain that you're not an expert in when you do that. And so you really need expert advisors for any new expert field you go into, like M&A selling or buying a business. And again, I mean, a lot of people wanna, especially with AI nowadays, more than ever, they wanna play expert, they wanna play lawyer. Even my smartest clients are doing that, Neil. And it's really, it's actually disappointing, honestly. I'm like, they're really smart, I love them. And I'm like, guys, you're not the ones. You're the ones falling for it too. Then I have to correct them anyways. So just be careful and surround yourself with experts and have them do the expert work for you. You know, the who, not how type mentality, that's what I do. I have my own lawyers. I have like a team of different marketing experts and different lawyers and yada, yada. So it's just the nature of business. It is the nature of business. That's a fun call, man. I didn't realize how far we've gone. We'll have to pause for now because then we can keep going and we're already at 30 minutes on this call. I was like, I didn't even realize how long I've been gone. I'm just chatting along. Yeah, yeah. But we better wrap it up here. Okay, one last final point to wrap up with. Maybe a question I didn't think to ask you or something you just wanna homework. Or a dad joke or something, I don't know. Anything you wanna wrap it up with that comes to your mind. Yeah, yeah. So no, absolutely. I appreciate your time here. Hey, anybody out there listening to this, leave a like or subscribe. If you wanna reach out to me again, I'm an M&A attorney. I represent buyers and sellers of e-com and other businesses. You can find me at my website, principy.com. The name will be spelt around hereabouts. You can get ahold of me and we'd love to help you with anything really. Just feel free to reach out even if you have any questions. So with that, hey Neil, I appreciate your time in having me. You're the goat. I love it. And I'd love to have the chance to talk with you more. Awesome, man. Appreciate you coming on. Like you said, like, share and subscribe. Help us beat big tech. Get the message out there if you're into M&A. If you're thinking about selling your business or you're wanting to buy a business, definitely check out what's going on with Joe. We can have personal experience with him so I can recommend it. And definitely make sure you do not go at it by yourself. For sale by owner is not the way to sell a business. So make sure you get the right expertise behind you in the right place, maximize that opportunity. And as always, we say at the end of the podcast, do something and perfectly, and something perfect will happen along the way. Catch you guys on the next episode. I love it. Today, we had Joe Princip on the show. We talked about how to build your e-commerce business with the goal of selling it for the best price. Joe shared some smart ways to avoid getting burned during the selling process. His insights are key if you are thinking about an exit strategy. Now, if you are tired of all the noise in the e-commerce world, I have something for you. The Voltage e-commerce brief brings you the five updates that really matter. It tells you what changed and what you need to do next. It is free and comes straight to your inbox every Tuesday and Friday. To get your hands on this valuable resource, head over to voltagedm.com slash newsletter. That is it for today. We will see you back here tomorrow. Until then, stay high voltage.