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The Industrial Talk Podcast with Scott MacKenzie - The Industrial Talk Podcast with Scott MacKenzie 8th July 2021
Andy Cagnetta, Transworld
00:00:00 00:26:30

Andy Cagnetta, Transworld

In this week's Industrial Talk Podcast we're talking to Andy Cagnetta, CEO of Transworld Business Advisors about "Strategies to Negotiate and Sell your business for the Best Price".  Get the answers to your "Business Selling" questions along with Andy's unique insight on the “How” on this Industrial Talk interview! Finally, get your exclusive free access to the Industrial Academy and a series on “Why You Need To Podcast” for Greater Success in 2020. All links designed for keeping you current in this rapidly changing Industrial Market. Learn! Grow! Enjoy!

ANDY CAGNETTA'S CONTACT INFORMATION:

Personal LinkedIn: https://www.linkedin.com/in/acagnetta/ Company LinkedIn:  https://www.linkedin.com/company/transworld-business-advisors/ Company Website:  https://www.tworld.com/ Other Great Transworld Resources: https://podcasts.apple.com/us/podcast/selling-or-buying-a-business-with-andy-cagnetta/id1323249710?i=1000515327349 https://podcasts.apple.com/us/podcast/andy-cagnetta-helping-you-sell/id1463251208?i=1000518774158 https://www.youtube.com/channel/UCwQMKGgBRwujx6yMCcC3VAw

PODCAST VIDEO:

https://youtu.be/xpgIbLWDm8k

THE STRATEGIC REASON "WHY YOU NEED TO PODCAST":

OTHER GREAT INDUSTRIAL RESOURCES:

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PODCAST TRANSCRIPT:

SUMMARY KEYWORDS business, transworld, people, buyer, industrial, sell, work, andy, buy, seller, talk, world, deal, cagnetta, marketplace, podcast, industry, understand, listeners, starts 00:04 Welcome to the industrial talk podcast with Scott MacKenzie. Scott is a passionate industry professional dedicated to transferring cutting edge industry focused innovations and trends while highlighting the men and women who keep the world moving. So put on your hard hat, grab your work boots, and let's get all right. Again, thank you very much for joining industrial talk where we celebrate industry heroes, such as yourself, you are bold, you are brave, you dare greatly. You are dream makers. You you solve problems, you ask the questions, why not? And what if, I mean? It just keeps on going and going and you're changing the world. So if you ever doubt if you're coming, if you come to Scott and say, Oh, woe is me. I don't know if I'm, you're changing the world. Put that in your head because that's what you're all about. All right. Andy Cagnetta is in the daggone hot seat. He is the CEO of Transworld. And if you are in the market, to buy to sell to do anything within the industrial space. Transworld. Andy is the place to go. Let's get a kurakin great conversation. He has all of the equipment by the way. He looks good. We go to the same barber. All that stuff. Handsome, handsome. Anyway, we do talk a lot about what do we do? How do you if you're in the marketplace, if you're in the if you're trying to sell your business, you do need help. You do need the experience of somebody that's been around for a long time, who has a real history of success? And is it alright, couple of things that I want to put on your, your? Well, I don't know talk about a little bit. And one is we're we're getting ready to roll out industrial talk to Dotto. We're trying to make it easier for you, industry professionals to find information be a part of a community that is all about industrial education. And it's I'm pretty excited about it. And we're featuring a lot of great leaders within industry, you too can be a leader in industry, and that being able to offer this incredible insights, incredible learning, incredible training, whatever, to communities that are looking to grow, to prosper to the youth that has to learn more about industry, but learn from the people who are just at the cutting edge. boy, boy, as a as a younger, professional, that would have been just how would have been all over that. But we can hear an industrial talk be able to provide that for you, leaders in G five leaders in IoT leaders in edge leaders in cybersecurity leaders in solving all of the problems within manufacturing, oil and gas, utilities, cheese, water, you name it. It's all out there. And and it's all being talked on industrial talk because it does Real Talk is what? Oh, that industrial talk. That's right. All right. Let's get on with Andy. So great stack card out there. His landing page for this particular interview is going to include some other podcasts, some other YouTube videos of him talking about what they do and why they're so great. And we're talking about in this one, negotiating the best price for your business. Now, if you're in that market, if you're saying hey, how do I how do I get out? Or how do I What is my exit strategy, you need to talk to Andy, you need to talk to Team Transworld because they'll set you in the right direction and it's an important conversation. So enjoy the conversation with Andy. Andy. Welcome to the industrial talk podcast. I'm looking forward to this conversation. How are you doing today? I am doing excellent. It's a great day. All right, listeners. You can tell he's he's loaded for bear with his audio equipment. He's coming in five by five. I I'm intimidated. 04:18 You don't need to be intimidated. I'm a little bit of a musician myself. So I have some extra toys around 04:23 it where you can really geek out on that stuff, man. You can sit there and buy it and acquire a lot of things that you need it or not. It's just shiny objects. 04:33 I love all that stuff. Yes, Sweetwater knows my number, I guess. 04:38 All right, for the listeners out there, give us a little background on who Andy is. 04:42 I am a serial entrepreneur. I grew up in the northeast if you couldn't hear it in my voice he had and met my wife, my lovely wife who wanted to move home to South Florida to raise our family which wasn't too hard of a convincing after 22 snowstorms one winter So, I had bought and sold the business, a small little pasta shop in Hartford, Connecticut with my family. We bought it for like $45,000. And it was a positive shop and lunch and dinners to go and catering. And we ran it for a couple years sold it for 65. And so when we moved to Florida, and me not being the the employable type, I decided, you know, so I said, Hey, that experiment worked. You know, I had started a few businesses in the cell phone business sold guitars for a while in the lighting business. And in all those things, starting from scratch is very painful. So I said, let me buy a business again, that seemed to work out well, you buy a business, you're in business The next day, and then you're able to sell it if you just don't like it. So I came down to Florida, started looking to buy a business went to a lot of Business Brokers, for the most part felt like I was in a used car sales room with these guys. 05:57 Yeah, yeah. You've got a you've got an image out there. That's for sure. Go ahead, continue. 06:02 Yeah, yeah, yeah. So I ran into the owners of Transworld went to Transworld one day and the owners were done. And Bonnie Parrish Don was a 30 year IBM executive from Alabama, just a sweet Harvard guy. His wife was from Ohio. She was an ex stewardess on Eastern Airlines and Han M. And she was just super sweet and amazing business broker. So they invited me to join their firm. Instead of buying a business, they said, Why don't you join us as a salesperson. So I joined as a salesperson did well, my first year, and into my second year looked at looked at Don, his full retirement, it kicked in at IBM. And I said, Don, why don't you let me buy the company, it needs to grow. It needs, you know, new computers, it needs to be marketed more. And you're looking, you're kind of on the downslide of your career. So he sold me to company in 97. We grew it from one office to 10 offices in the state of Florida, which we still own and operate. And then 10 years ago, we decided, hey, how do we get to Atlanta? How do we get to Charlotte? And we said, franchise? Let's get partners. Let's get some partners. Let's franchise. So we worked with the United franchise group who owns signarama several other brands, and was introduced to them and we decided to launch a joint venture where we franchise together. And we did that 10 years ago. And now they've grown us to 220 offices around the world 600 brokers and it's been an incredible ride. 07:39 I'm all tingling from that, that that's cool stuff. Because I love entrepreneurship. I love the excitement that comes with that just business in general. So let's talk a little bit about what that looks like. So Transworld pretty much on both sides of that equation. So you can you can buy you can sell you can represent those transactions. Is that an accurate statement? 08:10 Yeah, it kind of usually starts with us having a seller right, we find a business that wants to sell. And we package it, we look at the financials, we do financial recast, trying to understand what the eba is trying to understand how they use their tax returns to minimize their tax implications, while at the same time trying to figure out how much they actually make two an owner, operator of that business and then we package it and we sell it and we work with lots of buyers. So it's kind of usually starts on the sell side. Yes, we have plenty of buyers, private equity groups, family offices that contact us on a daily basis, looking for their next acquisition, but it kind of starts with us kind of working with entrepreneurs, which I love, like you said, I mean, capitalists love it, you know, get together with entrepreneurs, we're making money and helping them you know, take their slice of the American Pie and sell their business. 09:13 in that equation, what is the most difficult part? I mean, seller or seller's coming to you and knocking on the door and say hi, how are you? Like you said, I think buyers the buyer side, you probably have a group of people that whatever that part of people out there say, Alright, I got this business. I'm gonna go to this one. This one, this one and this one. They're interested. They're always interested, whatever. The seller side. Tell us some challenges there. 09:40 Yeah, the seller side, the hard part is finding them right. You know, we're trying to always try to find who's looking to sell a business and again, you know, they're the hero of the story. We're talking about that earlier. You know, we want them to want them to live their best life and their best life might be not in that business anymore. Whether They're burnt out, whether they're going through a divorce, whether they're having financial issues in business, whether the business is growing too large for them, and they could no longer take the risk and cashflow it anymore. There's a whole host of reasons why you want to, you know, Sell a Business and we get it, the hard part is finding them, then the next part is getting them to understand the marketplace and valuation. Because that is probably the number one reason why businesses don't sell is unrealistic expectations by sellers. 10:31 But I, I put my whole life into this business. And it's, it's everything to me, I created the logo I've had, so that I thought that it should be valued at this. And it's I would imagine this is pretty high. 10:45 Yeah, I mean, unfortunately, time doesn't matter. Right? It matters a little bit. Certainly I would want and I talk about great businesses to buy. I love businesses that have been around for 10 plus years, you know, people are used to going to that business, you know, buying a business that's a year old, even if it was making the same money that a business that been around for 10 years, I want the 10 year old business more, but it doesn't make it 10 times more, more valuable. 11:12 Right, right. So how do you as a business, look for sellers? What are your strategies that that you've sort of deployed to find those sellers? 11:24 Well, certainly marketing, right, we're going out there in the world and doing the traditional things like pay per click and mailers and radio advertisements and you know, running our own podcast and social media campaigns, all those kinds of things. But you know, the thing that really I like best, and I think that is most effective is becoming a trusted advisor in your community. And that's done through, you know, several things and getting involved in your community on a few levels. Number one going to networking things and being a part of the solution in in business wise, and I'm part of a few business groups locally. And then I think it's very important to give back to your community, and also be a part of the nonprofit scene. And I think that's been very productive for us to to show people that you're your trusted advisor. And the best way to do that is give back first. 12:22 Yeah, I like that nonprofit side. I think it's a beautiful thing. I we can talk offline about that, and some of the things that are going on in an industrial talk. Okay, so you have found me, I'm interested in selling? What, uh, why what's, what's the biggest problem? And what do I need to consider? 12:45 Well, the biggest problem is, what are you going to do afterwards? Right? I want to know your story. I want to know why you want to sell and how, because maybe the best thing is not to sell. Maybe there's someone in your family that wants the business, maybe there's an employee. That's right. Maybe it's time to just close the business and walk away depends on your timing, it depends on a lot of things. But you know, I'm going to want to know your story, then we're going to want to know the financial picture, what are we selling? Is it an asset sale? Because all there is is a collection of inventory and assets that we have to liquidate? Or is there an ongoing business that has goodwill, tangible assets, intangible assets that are driving revenue and earnings that we could value? And it's pretty easy to value businesses these days? and get you a, you know, a price that and that's going to be our next question is what is your expectations? And if the expectations are close to the marketplace, or at least reasonably close? We're going to go out to market and find you the best buyer. 13:50 Do you find the marketplace today? undervaluing businesses 13:54 now? completely the opposite? Well, you know, I think the marketplace? Well, I can answer that two ways. Number one, this is the hottest marketplace I've seen in 25 years, businesses are selling for higher multiples than ever private equity groups are out there. I've heard crazy things like they're paying 10 and 11 times for businesses were used five and six, right? It's 14:16 always been five or six, seven on no real. 14:20 Right. And on the small businesses, you know, it's two or three times owners earnings and or, you know, we're talking sub million dollar earning businesses. So it's two or three times but we're seeing all that stuff have an upward pressure on valuation because there are so many buyers because money is so cheap right now, because there are plenty of people looking to place money to make money. 14:50 Yeah, because that was going to be my next question is is the why but you You nailed it. You're talking about the cost of capital is low. There's plenty of people who have Have the capital to try to figure out how to get a little return on that a little bit more than what what is available out there. So they're looking for businesses. 15:09 There's not much available, right? Yeah. Where are you going to put half a million dollars these days and make a good return? You're going to put it in bonds? What are you gonna get a couple of percentage points, you're not gonna throw it in the bank or a CD, you're not getting any money there. So people want to put money to work and a lot of people want to bet on themselves, and perhaps not on the stock market. 15:31 And I agree with that. Once you get the little taste of success, and you're trying to make that money work, man, it's it's, it's up. I don't know. I get addicted to it. It's like, yeah, yeah, let's get going. Let's make it happen. Let's make it work. Okay, biggest roadblock? What are we doing? What's the biggest, biggest roadblock out there for these individuals? Well, 15:57 the biggest roadblock block is finding the right buyer and then getting through the process. It's a complicated process there. It's not easy to sell your business. There's a lot of decision makers that come into play. There could be accountants and attorneys and landlords and, and underwriters and valuation experts. And all these people have to come together and basically agree on a structure and get it through. And so third party interferences, we like to call it people with opinions at cocktail parties, mother in law's there's tons of people that will chew in either a buyer or seller's ear, and tell them that they're not doing the right thing. I always tell people, listen, if you want to be an entrepreneur, I think the number one thing you have to have is courage. And you have to have the courage to look people in the eye. My brother's an attorney. And my brother has often said to me, when I'm making business decisions, Andy, I wouldn't do that if I were you. And I'm like, but you're not me. Yeah. Yeah, you're 16:56 right. You're not you're 16:57 different. You're not a risk taker, accountants, attorneys. They're not risk takers. Yeah. For the most part, I mean, I'm sure they, you know, some accountant or attorney is going to call me and say, 17:07 Hey, Doc, I was gonna say, don't start emailing just out fly a jet. 17:12 Just understand. I think a lot of them would say the same thing. So they're not risk takers. So if you're going to take a risk, your family doesn't understand that you're your father or mother may not understand that, that you want to buy a business or sell a business. And they don't understand that. And, and so they're gonna have to get over that. And so all these decision makers, including, you know, the landlords, why do landlords what is ended up in for the landlord to assign a lease to someone they don't know. So there's a lot of things that have to happen to make a deal happen. 17:47 But Transworld handles all that. Right? navigate the water. I mean, I, I mean, I would imagine if I'm telling selling a business, I don't I don't have insights into like the third party interference statement. Oh, I have insights into that I I hear it but but to to pull it off, which is a good time to do it. You need you need, you need an organization like Transworld. 18:12 Yeah, it's kind of like getting a game fish into the boat, you know, and getting it into the boat, clean that on your plate and making it taste good. There's so many things that go into that, that any one place in the process of that of, you know, it's easy to get a fish on the hook, right? We if you went out there and said, I want to sell my business, literally, you could have hundreds of people respond to that and say I want to buy. But the problem with sellers is they try to spend time on that. And they take their eye off the ball, their business, oh, yeah, their revenues and earnings could go down, and their business immediately becomes less valuable. The banks, private equity, the buyers, the day before the closing, they're gonna say oh, by the way, if we were closing today, today's you know, the nine days after the beginning of a month, at the end of the month, they would say, hey, do you have the financials for the last month. Now, if you are working on a deal, going through due diligence, and you were doing it all yourself, your sales and revenues might be garbage, and and they'll immediately say, wait a second, we need to re trade this deal because it's no longer worth what it's worth. So those are the things that we try to avoid. We're taking all that responsibility from you. So you can just focus on running your business. And unfortunately, we tell people, you have to run your business up to the day of closing, like it's not going to happen. Which is hard. real hard, 19:40 because I guarantee you there's that switch inside your head that said, Alright, this is a done deal, man. I might as well just sort of lay down the flaps I'm coasting on into landing and I'm ready to and and we've all been a part of deals that no did not work out. 19:58 Yeah, they All kinds of things people get mad at each other at closing we've had people unfortunately pass away or get very sick the day before closing, oh my goodness, businesses burned down. What you know, they somebody plugged in a machine. Once at one time somebody plugged in a machine at a, you know, a watersports dealership, you know, jet skis all kinds of, they're like, Oh, this machine what says, you know, it's a testing machine, they plugged it in. It was an old machine, heated up overnight, for the whole place that aground. 20:28 I'm sorry, I'm not laughing at them. I'm laughing. Wow, that is a horrible. 20:35 And the funny thing is the seller won because the seller was selling their business holding paper, the whole thing. That didn't work, the insurance company paid them all cash. They won, we lost buyer loses, you know. So you know, there's a million stories like that out there in the world and a million things that can happen. And at any one juncture of a business deal, it can go bad. And so that's what we're here to do. We're here to stand alongside of you. I just got off in our conference call this morning is a very complicated business landmark business here in in Fort Lauderdale. And, you know, it's not that it's going sideways. But you know, buyer seller trying to work, it's it's something that needs to be renovated. There's insurance companies, there's contractors, there's lawyers, there's bankers, and it, people are starting to nip at each other and it's getting a little frayed. And you know, we're just trying to keep everybody happy getting 21:33 a little chippy. Yeah, it's getting a little chippy. Yeah, we just it's true. I mean, it's, it happens all the time. I can I can imagine. So, one last question. How long does that sort of typically take? So I'm a buyer and a seller, I'm a seller, I come to you looking for a buyer, you do what you need to do. From that point on? How long does it sort of 22:00 typically take average is nine months for small business as the larger businesses are about a year? You know, it's a multi million dollar deal. It's going to be a good year, you know, as some people have come to us, it's like, well, we're worried about capital gains taxes going up next year. And I'm, we're, for the most part, we're like, Yeah, well, that's too late. You're probably not going to be able to get a deal done before the end of the year. Wow. Yeah. If you really gave it away, and you're really aggressive. 22:32 Yeah, yeah. Well, that's a conversation to have. I mean, it might might make sense. Your team would probably say, Okay, if it did this, if you put the numbers in front of people, right, right. Sounds like a real deal here. And I I would imagine don't sell your business without a company like Transworld. How about that? You can use that. Go right ahead. 22:55 I appreciate that. Yes, I you know, listen, I believe in the business brokerage industry. I've been the chairman of our association. We have a lot of great people in the industry. It's very unknown. And there's a lot of people that provide a lot of value. 23:08 Unknown. Give me a break. But if he's got a you got to him. I mean, he's got a great stat card out there. Got a team of people on this header. Andy, kick netta Did I say that right? 23:23 Yeah. Perfect. Nice Irish name. Yes, it is. So impossible. Know, how a typical could have been? 23:32 I mean, come on, man. That's, anyway, reach out to him. Absolutely. Excellent conversation, and he loved it. So how do people get ahold of you? That's why we say best way. 23:47 Just shoot me an email AC t world. It's pretty easy. Wow. I don't bring that agneta name in it. So you have to figure out how to spell it. It's just AC at t world. 23:58 Yeah, very nice. Okay, listeners, you're gonna have all that contact information out on industrial talk comm you know that. And anything else? He's got some podcasts out there. I got it all. I got it on his his form that he filled out. He's got a YouTube channel. When I say he, probably your company has. So yeah, I 24:16 think I have a personal one too. Right. There might even be one of me playing guitar out there. So 24:20 yeah, he listeners he also noticed the youth behind me because he comes from a long, long line of uke manufacturers. I don't know family. 24:31 Have you got a villa out there? It could be worth the I've seen going for four or 500 bucks now really, things that 24:38 I'm looking at if you're out on the pier out on the video right there to his left shoulder. There is a huge right there. It's a sort of a red and green thing. No, that's the book the other day. Yeah, that's a toy thing. Oh, nevermind. Just regard that last conversation. Just delete it. It's all good. Eddie, thank you very much for joining the industrial talk podcast. Thank you, Scott. You were wondering Ah, big fan. Thank you. Did you hear that listeners? He's a big fan. My skin is tingling. All right, do not go away. We're gonna wrap it up on the other side. So stay tuned. You're listening to the industrial talk Podcast Network. 25:23 All right. You know, his name is Andy Cagnetta, CEO of Transworld. And I tell you, if you're in the marketplace, you gotta gotta Connect. You got to have your, your team in place to be able to help you negotiate the best price for your business because you put a lot of sweat equity into that business. And you're looking to do something else in the future. Boom. Talk to Andy team Transworld will help you up big time. Alright, again, it does real talk to Dotto. It is a community it's a community that celebrates you industrial heroes. We recognize the necessity to train we recognize the necessity to collaborate and we recognize the necessity to innovate. But we want to do it in a way that's not boring. How's that? We want industrial entertainment. We want to be able to highlight a lot of great stuff. Look forward to it, you will get a notification All right, people will be brave daring greatly. Alright. hang out with people who are bold, brave and daring greatly change the world. You are changing the world. We're going to have another great conversation right around the corner so do not go away.