Podcast: Selling Your Small Business Through M&A Advisors with Chris Shipferling of Global Wired Advisors
February 25, 2020
Listen to the podcast
Here’s a glimpse of what you’ll learn:
- [00:45] Eric Stopper introduces his guest Chris Shipferling
- [01:53] What does Global Wired Advisors do?
- [05:52] What kind of deals are happening in lower middle market small businesses?
- [08:05] How Chris and his partners started Global Wired Advisors
- [10:11] Chris talks about the cost of dealing with smaller firms and why they encourage businesses to have other eCommerce platforms other than Amazon
- [12:31] When should Amazon sellers consider talking to Global Wired Advisors?
- [15:03] Should a business go for niche-based products or should they be looking at a wider market coverage?
- [19:10] Should retail arbitrage businesses start a brand?
- [23:14] Chris’ advice on running Facebook and Instagram ads from brands’ websites to Amazon
- [25:01] Why revenue concentration adds value to your business and why Amazon restricting customer data is bad news for business owners
- [29:58] Chris talks about selling his brand on Amazon and how it helps him get better insight that can help his clients
- [32:57] The most common record-keeping and data issues Chris finds within small businesses and what they can do to fix these
- [36:41] Chris shares why founders need to clean up their books prior to selling their business
- [38:09] Why having a product road map is going to help you in building your brand and establishing your market
- [39:41] How to get in touch with Chris Shipferling
In this episode…
To sell a business, there are a number of important things a business owner needs to take care of first. These include having a profitable line of products and keeping proper accounting records. A business owner also needs to show the return on investment and the lifetime value of his business and assets to potential buyers before a deal is signed.
So how best can one prepare for a successful sale?
Chris Shipferling, an expert in buying and selling businesses, joins Eric Stopper in this week’s episode as they tackle the importance of keeping your accounting books in check prior to selling your business, why the lack of customer data from Amazon are hurting business owners, the value of product roadmaps, how to best drive traffic for your business using ads on Facebook and Instagram, and why having focused branding is a deal-maker when selling your business. Stay tuned.
Resources Mentioned on this episode
- Global Wired Advisors
- Chris Shipferling on LinkedIn
- Chris Shipferling’s email: [email protected]
- Eric’s Interview with Greg Mercer
- Tyler Jefcoat (Seller Accountant)
Sponsor for this episode
Buy Box Experts applies decades of e-commerce experience to successfully manage clients’ marketplace accounts. The Buy Box account managers specialize in combining an understanding of clients’ business fundamentals and an in-depth expertise in the Amazon Marketplace.
The team works with marketplace technicians using a system of processes, proprietary software, and extensive channel experience to ensure your Amazon presence captures the opportunity on the marketplace, not only producing greater revenue and profits but also reducing or eliminating your business’ workload.
Buy Box Experts prides itself on being one of the few agencies with an SMB (small to medium-sized business) division and an Enterprise division. Buy Box does not commingle clients among divisions as each has unique needs and requirements for proper account management.
Episode Transcript
Intro 0:17
Welcome to the Buy Box Experts Podcast with your host, Joseph Hansen. We bring to light the unique opportunities brands face and today’s e-commerce world.
Eric Stopper 0:18
This episode is brought to you by Buy Box Experts. Buy Box Experts takes ambitious brands and makes them unbeatable. They have a team of consultants, I am one of those that will identify key low hanging fruit for some of your best selling a sins on Amazon. So if you are an Amazon seller and want to make more revenue, then go to BuyBoxExperts.com click on the free analysis button. It’s completely free. No strings attached. We’d love to talk with you. Today, I’m really excited for this we have Chris ship furling and by all accounts he is a marketing nerd like the rest of us. He has over 16 years of experience in sales and marketing from working with brands like combee and even flow Owning his own agency, Robert and Pearl, and now working as a managing partner at global wired advisors. Chris is an expert in mergers and acquisitions and his team of investment bankers and digital experts at global wired advisors are looking to innovate the world of buying and selling businesses. By getting involved at a granular level and seeking to understand the businesses he works with better than the business owners themselves. Chris is a husband, a proud father of two. And to me, he’s a clear example of what community-minded business owners should seek to emulate. Chris, welcome to the show.
Chris Shipferling 1:36
Thanks, man. I appreciate you having me on.
Eric Stopper 1:38
So I want to give you an opportunity to talk to the listeners a little bit about what global wired advisors does, as most of our listener base are small business owners, so just kind of give them the the 411
Chris Shipferling 1:53
Yeah, absolutely. Man, thank you for that. And again, thanks so much for having me here on the show. It’s great to be able to get on and Share with your listeners all the wonderful juicy things about m&a and and sell side m&a. So global art advisors was started two years ago, it was really birthed from our, our sister firm which is called premium advisors, which was founded four years ago by my three partners. So the first ever firm that was created was premium group and that’s our private equity effort premium group is more of a call it a middle-market investment bank. And from there, they started premium advisors, which was focused on sell side mergers and acquisitions. What that means is that they were mainly focused on taking business owners to market versus say helping a large company find a business to buy. And so, they also has had they also have and still have other investment banking products like leverage by they can be leveraged buyouts they can do, management buyouts series A so cap rate is larger cap raises, etc. And they’re also very focused on what’s what we would be considered more traditional businesses, manufacturing companies, franchises, you know, a chain of brick and mortar, you know, call it retail stores, etc. But in the process of them, you know founding that, when they founded this firm and the process of growing the firm, their business development team became very much aware that there’s a big paradigm shift that’s already occurred and continues to occur to digital, specifically, Amazon becoming something that five six years ago wasn’t necessarily on the map to sell a business like that. And now, it’s very much on the map to be able to sell an Amazon based business and obviously digitally native companies are digital brands content driven, affiliate driven type of digital brands. So as that became more prominent two years ago, global wired advisors was called And now both firms. Both firms believe that just because your revenue puts you on Main Street Main Street is usually businesses that are under a million. But more specifically where we like to play as the lower middle market, which are businesses that are really from about a few million all the way up to call it 50 to 75 million. We believe that just because you live in this space as a business owner, means that you should settle for mediocrity which we discovered very quickly in this space. And the mediocrity that we discovered was really just in the type of intermediaries that that are that are that currently exist that are taking these businesses to market. You know, our backgrounds are from investment banking, my backgrounds a little bit different as you already know, tated my three partners all came from household investment banks, Citibank, Wells Fargo Bank of America, Deutsche Bank, worked for various hedge funds and etc. And so you know, we’re coming with with very large well over 20 years, each of us have institutional investment banking, we understand capital markets. And now what we’re really trying to do with global wired is bridge that gap of the new up and coming digital brands that are growing and exploding, as you know, very, very well by box experts, and really doing some good matchmaking with smart and sophisticated capital, which is something that they’ve never even looked at before. And we’re trying to make them aware that this this and this whole industry, not only is is thriving, but it’s growing leaps and bounds and it’s absolutely something that sophisticated smart capital should look at.
Eric Stopper 5:41
So has the money that has been going to this this lower and middle part of the market. Been dumb money, right? You’re talking about this smart, sophisticated money, what kind of what kind of deals are going on for all these small business?
Chris Shipferling 5:52
Yeah, good contrast, but no, it’s still there’s still smart money. It’s just, you know, lots of lots of deep deals that have fired off in the lower middle market has been more or less with, you know, either, you know, personal capital, which still was still, you know, we also find buyers with that are, you know, maybe two or three friends or or investors that have pulled some capital together, whether it’s personal capital or, you know, they’ll exercise what’s called an SBA loan, you know, so that’s all all of that still exists and has existed. It’s just for the most part in the lower middle market mainstream, you know, private equity firms who are looking to looking for transactions, they’re looking for deals because they’ve got LPs that are investing lots of cash into the private equity. And they’re looking for deals that are going to give them incredible return on investment, and what you found and called the middle market, and even what’s even in the enterprise or institutional. there’s not as many deals to satisfy the LPS but there’s lots of capital that’s out there. And so in order for These private equity groups to find good deals to bring lots of return to their LPs, they’ve had to come downstream. And as they’ve come downstream, they realize that, wow, there’s a whole growing industry here. And it’s digital. And it’s very interesting. So that’s what I mean by kind of making the folks who haven’t come down stream yet making them aware of what’s here. And that’s really where we believe that we do a great job. But but it’s already starting to occur where they’re waking up and going, Okay, there’s something going on here.
Eric Stopper 7:33
Okay, now, let me walk me through this story. Right. So you guys all have this investment bank experience. You’ve been just, you’ve been wheeling and dealing 10s of million millions of dollars on each of these transactions that you’re doing. You sat down with these partners that you have and you guys just were was it serendipity? Where’d the business all come from? Because it seems to me that typically private equity firms in these in these large dealer brokers, they don’t give a crap about the lower end of the market.
Chris Shipferling 8:05
Now they don’t so yeah, it was a it was not necessarily serendipitous. It may have been a little bit more happenstance. But but it was, it was definitely very intentional. So, you know, when, when my and I’ll give you one story of our partner of our three partners, but my one partner Jason when he he left big capital markets and he went and came to the I would call it the light side, being come in becoming an entrepreneur, when it was time for him to go sell his business. He went and engaged with a business broker. And you know, he owned a business that was, you know, several million dollars. And so, you know, again, a middle market firm or middle market investment bank is not going to take someone like that to market it’s way too little. So he, he went out and engaged with a business broker. Now, what he discovered in his interviewing process for these Business Brokers is that the skills And the document the business or the capital markets, acumen was quite weak. And so from there it was, Hey, I think this is something that we can probably just do a lot better. And that’s really where premium group premium advisors was started. And then really from that same idea, where we started seeing lots and lots of companies that were growing and ready for ready to go to market that were more digitally focused or digitally minded, or Amazon based. That’s where global wired advisors started. Now I came I came into the picture, because I was introduced. I was actually introduced to Jason and my other partner Joe through another just a mutual friend here in town. And when we first sat down together, we had coffee and we realized pretty quickly that this this, this could be a pretty cool partnership together. So
Eric Stopper 9:55
yeah, so I mean, lower into the market, right these these deals are Hundreds of millions of dollars. Like I think a lot of these guys are they’re trying to swing for the fences, right? They’re trying to hit the hit the balls all the way to the parking lot. And so is it a? Is it a strain on your resources to be dealing with all these small guys, right? Like you have to do more deals or the multiples just insane. So it makes sense when you’re when you’re dealing with these lower guys.
Chris Shipferling 10:23
Yeah, I mean, you know, the way that we set up our firm, you know, we’re a partnership firm. So it’s the four of us in a support staff. We have several support staff that sits sits underneath of us, we have made this process extremely efficient. But we do have I mean, our firm in particular, we have a threshold, you know, we will not really engage with a client unless their revenue is looking like it’s about 1.5 to 2 million at the lowest revenue, because usually at that point, then their enterprise value is probably going to be somewhere at least somewhere north of a million dollars. And so that’s where it starts to make sense for us within the efficiencies that we’ve also created here in our in our farm. But But yeah, I mean as far as the multiples the multiples with Amazon businesses and you know, we can dive into that now and I can kind of get very high level but you know we’re trying to push the envelope as much as we can. Unfortunately with Amazon Amazon based businesses, you’re you’re selling in a marketplace even though your private label you’re still renting, you’re renting an Airbnb from Jeff Bezos. And in the process, you’re making Bezos very, very, very rich and fat. But you’re still renting. So you know, we always, of course, will encourage people to have a more diverse portfolio, which is something I’m sure you also encourage. Because the more digital marketing that they’re doing, it actually helps brands that you’re helping on Amazon have a much stronger halo effect because if someone may have saw, you know, their their widget or product through a Facebook ad, they’re more than likely still going to go to Amazon and purchase just because Amazon brings so much trust to the consumer. But we do encourage that, you know, we do Encourage that brands will try and create some type of diversity when it comes to when it comes to the revenue concentration because it does that will actually bring them that brings a multiple up and being only on Amazon, you’re still going to hit a great multiple it’s, it’s just you have more risk downside when you’re only concentrated on Amazon.
Eric Stopper 12:21
Okay? There’s a lot to unpack there. So, Amazon sellers, right? Should they even consider talking to you until they’re making a million bucks?
Chris Shipferling 12:31
No, not necessarily. I mean, we can hear it. Here’s the good news. We’re, we’re very, it what’s the word I’m looking for? We’d like to focus on being a really good advisor or a really good consultant or a really good coach. And what I mean by that is, you know, we’re, we’re going to, we’ll talk to somebody with their, you know, 1218, maybe even about 24 months out and we will absolutely sit with them to walk them through. You know, one kind of Here’s what here’s the checklist you should be really thinking through, here are the things you should be thinking about once you know if you’re really starting to think about going to market, even though we always say, and you know, you’ve heard this probably 100 times, you know, start with the end in mind, everybody talks about that. But it really is true, it rings very, very true. Because if you set up your business to sell, you’re actually setting up your business with with incredible efficiencies, you’re streamlining it, you’re cleaning it up, you’re making it look real pretty. At the end of the day, if you don’t sell it, it’s more than likely, what’s happened is you’ve renovated the cash flow model. And you’re probably going to you’re probably at this point now extrapolating lots of good cash flow from your business, because you cleaned it up effectively. So, so if you if you’re talking to somebody or your listeners are listening to, you know, to this program right now, and they’re going yeah, I’m not going anywhere close to a million, by all means, just reach out to us. You know, we’re we’re happy to have a conversation almost anywhere, anywhere in the process. So
Eric Stopper 13:57
interesting. Now, you you’ve talked to In the past, about companies need to have a really solid product roadmap. Yeah, not not getting stuck on on just like one or two products in their suite. I had Greg Mercer, the CEO of Jungle Scout on on the podcast. And his, his strategy, his philosophy for selecting products was you know, he uses his tool. He looks at market opportunity.
Chris Shipferling 14:24
scouts, great by the way. Yeah, he
Eric Stopper 14:26
ended well, he just like, he just like picks random stuff. We were talking about bamboo marshmallow sticks and the same breath that we’re talking about, you know, like blankets for babies. And those were two products that he launched pretty close together and they had no brand like similarities. They weren’t clustered in any way. They weren’t similar at all. And so, you evaluate the whole business right talking about diversity. would you encourage this more sporadic approach is looking at market opportunities when when launching products or would you encourage brands to stick to a niche, just pick it and stick with it.
Chris Shipferling 15:03
Yes, niche. And the reason why and you know, Greg’s comments around choosing different categories and different products. I think that’s a, I think that’s a great strategy. And you know, and a lot of guys, a lot of guys choose that route. You know, they feel a little bit more like a, an Amazon based Dollar General, right? They are, you know, like an Amazon based Walmart effective for just like a general merchant. They’re just kind of selling anything that they can. And when you’re taking that approach, you’re taking more of an approach just to say, I need to put as much product as I can. That’s profitable, so I can cash flow lots of dollars. Now, is that a sellable business? Of course, it’s a sellable business. We could probably find if it’s cash flowing really well. There’s a lot of call it risk averse. details to each of the products. There’s some level of protection. It’s private label. You know, maybe you can do some more product extensions with the baby blankets, maybe you could do some more product extensions, when it comes to the bamboo marshmallow sticks. You know, you can still extrapolate lots of call it you know, call a value map, and even maybe a product roadmap with that. But unfortunately, you know, when you’re presenting a company when you’re presenting a business to what we would call generation to capital, right, the guy who’s going to take the torch, you want to just make it very, I don’t want to use the word simplistic, but you really don’t want to confuse somebody by having to say, Yeah, man, I got 400 skews. No, thank you, right. And so you just got to keep in mind if you’re trying to build a business to sell, there are a lot of other people who are also potentially trying to sell their business. And so when you’re going out there and you created something that’s unique, it’s easy to is easy to understand. It’s a brand or has lots and lots of elements to continue to create a brand out of this out of this company. You’re just going to be a much more attractive businessmen going to market but i don’t disagree. I mean, I know lots and lots of guys just from from my past and even just within this business who? Yeah man it started with garlic presses and then they started selling video cameras and then they started selling I mean it was just anything that they could find on Alibaba, right? Yeah.
Eric Stopper 17:19
Whoo hoo who’s buying these these businesses? Right? Like, I got 400 skews that have essentially no brand clusters. I mean that’s
Chris Shipferling 17:27
the that’s the problem is honestly and the reason why I can’t even answer that question is we we don’t have we haven’t taken a company like that to market we actually have one company that we took to market and it was it was it was actually a reseller and we tend to shy away from resellers for lots of reasons. But this one in particular was just very, very intriguing the system that he put in place to find really good product to sell through 16 different channels, by the way. 16 across the world, it was a very streamlined process. And it was some of the heaviest cash flow we’ve ever seen in a resale business. So, again, you kind of see what I’m doing there again. Yeah, talk about Right, right. Yeah. 400 skews. It’s kind of like, Okay, wow, that’s a lot. That’s a lot of work. Now, if you tell me, you’ve got 100 skews. I only work three hours a week and I’m cash flowing millions of dollars a year. I’m either going to say That’s great. That’s a sellable business. Or I might just say to you, Hey, man, keep running your business and take the cash flow.
Unknown Speaker 18:37
Yeah, don’t sell it.
Chris Shipferling 18:38
I don’t need to sell this thing.
Eric Stopper 18:40
So the circumstances in which somebody would sell a business like that would be some some critical life event right, like someone passes away or divorce or something crazy.
Chris Shipferling 18:49
Yeah, that’s right. And those you know, those tend to drive decision making when it comes to, you know, death divorce. partner, partner disagreements. That a lot you know being in business with somebody is very difficult you know
Eric Stopper 19:04
we don’t make sense me you would say just sit on the cash man just like keep it keep it right and ain’t no reason to sell
Chris Shipferling 19:10
if you really don’t have something crazy unique like a brand where you know a brand that could be flipped to a strategic and you might be able to come along for the ride for the second exit you know you’re probably not going to get an incredible you’re not going to get an incredible multiple for a business that’s just you don’t really have an identity to the company. So the multiple is probably not going to be that amazing so at that point yeah it’s like get your get your get your surfboard out man ride that cash flow and do what Greg Mercer said you know, hey, go to Jungle Scout and just keep picking all products that you believe are going to be the next winners and just keep doing it create a system keep doing
Eric Stopper 19:50
it, you know, give it to you give it to your kids when it’s all said and done.
Chris Shipferling 19:53
Well look, I mean, it’s it’s in some ways, different but in some ways like retail arbitrage, right? I mean, there’s a thing in the Amazonian world right now, which is I’m went to Costco I bought a whole flippin box full of, you know, a, an aisle stopper box full of, you know, whatever, whatever great I just put it on Amazon I was able to flip it and you know, make 20% net margin just by flipping that. And it just over and over and over again it’s almost kind of the same thing where it’s like, I mean no retail arbitrage business will ever sell nobody will ever buy a retail arbitrage company period. So it’s kind of the same spirit in some ways. It’s like hey man ride the cash flow.
Eric Stopper 20:32
So to the to the arbitrage people who are listening. What do you what do you say to them? Start doing a brand.
Chris Shipferling 20:39
Kudos. Great job and I wish I wish I had time to do it. I love I love reading the retail arbitrage stories, man. I love it. It just it just I think it’s just so cool that they’re able to it’s like it. Honestly it reminds me of treasure hunting, right. It’s like I found something. I used to do this in college. In college. We had a a place called rugged warehouse right near right near our dorm. And I used to buy these. It was when paper denim and cloth Remember to deliver your paper denim and cloth jeans at all? Not at all. Okay, yeah, they’re like worth nothing. Now when they first came out, they were worth like, they’re worth like $200 jeans and like, remember rugged warehouse, I found like, like 10 of them on a rack for like 30 or 40 bucks a treasure. It’s like going to TJ Maxx or Marshalls man to treasure and so I took them and I sold them on eBay. And hey, I made some good cash for being a college kid. So it’s kind of the same deal, man. That’s that’s so yeah, retail arbitrage if you want to get serious about about building a business to sell. Yeah, go start a brand. Create something that you’ve got a nice moat. Watch the thing grow us by box experts.
Eric Stopper 21:54
Shameless plug. I appreciate that. You know, hands on the steering wheel.
Chris Shipferling 21:58
That’s right. watch it grow. Then once once it becomes a really strong brand yes you probably have a chance at that point of going to market
Eric Stopper 22:07
so that thank you thank you for that that’s yeah and and hopefully for the people listening right like they’re this has their this has the wheels in their mind thinking right like how do I diversify my company now there is I have this conversation with brands all the time where they’re there on Amazon they’re doing pretty well but like competition starting to get pretty steep their their ad buying costs are going way up there they’re a cost is is skyrocketing, they don’t really know how to adjust. And so I’ll suggests them Hey, have you ever have you ever considered running some Instagram or Facebook ads straight to Amazon? Yeah, and you would think that I just like insulted their mother because they’re like no, I’m not gonna take away those those sales from my website. But even you mentioned right like the likelihood of an Amazon Prime member buying on somebody’s website is is pretty low. Because they’re an Amazon Prime member, they’re going to go check it out. Is there any, you know, in terms of Facebook advertising and Instagram at advertising? Have you found a best practice for how to allocate those dollars? And which channel they should go to?
Chris Shipferling 23:14
Great question. I mean, I would say that, I would say that if you’re running up against lots of saturation on Amazon, I think, you know, there’s other place that you can do. You know, which would be more Amazon, I would say centric, right? Oh, obviously, lots and lots. what’s what’s nice about Amazon, as you well know, so I’m just I’m preaching to the choir for a moment, the advertising continues to evolve on Amazon. So there are a lot of new things to not have to be so I would say linear in the approach, right. So that’s kind of number one where you can probably try and get away from some saturation, but you’re still running up a brick wall. And you know, to your point, it’s just like, I’m trying everything here. Yeah, I would say, you know, there have been and now Amazon’s actually starting to give you attribution data around Facebook and Instagram, which is really cool. It’s the first time they’re doing this now, you know, I’ve talked to some other people, and they’re saying that hey, it’s definitely still in beta, because they’ve run some tests. Yeah, this is what my what my Facebook analytics say, you Amazon and
Eric Stopper 24:26
you heard it here first, Chris. Chris is challenging phases in his team. You got it wrong, guys.
Chris Shipferling 24:32
Yeah, sorry, dudes. Keep trying. So anyways, yeah, I would obviously mean look, if Amazon continues to be a very strategic platform for your for your company. You know, there’s, there’s also ways to do it. You could also you know, give someone the option, right? I mean, you can let someone know on your website that you also sell on Amazon and give them the option to buy directly from you. I mean, I will say this and, you know, this is just kind of, I’d say a generalized statement. So just Bear with me. But your business has more value if you can, if you can create really good revenue concentration. And the one downside of Amazon is you don’t own the data. And that’s a that that can be an issue. When it comes to, you know, I’m speaking only from an m&a perspective, when it comes to a potential acquirer buying your company. And you don’t have the data of those people that have purchased from you. It can become a risk downside in someone either giving you a better multiple, like we talked about earlier, or maybe even just passing over your brand because they’re like, Hey, I know. I know you’re selling on Amazon, you’re killing it. But I’m really looking for some better LTV over here because I know I can own that customer data and I can have them forever to find
Unknown Speaker 25:50
that for those segments LTV,
Chris Shipferling 25:52
lifetime value. So for instance, you know, on on Amazon, you can get LTV, but it’s really tough to control the LTV right So now I know that Amazon has opened up retargeting, which is awesome, but it’s really it’s really expensive. Yeah, just and display ads, all those things. I mean, even sponsored brands are still way expensive and that car, but when I own the data from my website, it’s a simple email and it’s, you know, several dollars per month
Eric Stopper 26:19
your MailChimp don’t these buyers get it though, right? Like if I have Amazon, I’m making 2 million, you know, 2 million bucks a month. They know that they can’t look at that data. Are they still turned off though?
Chris Shipferling 26:30
No, not necessarily. It’s just if you’ve got a business, if you’re going to put apples to apples, and you have a business that’s only on Amazon, and you have a business that might have some revenue, diversity and concentration, maybe, you know, they’ve got some level of data about the consumer, right because they’ve got some some percentage of sales through their website quote, unquote, or and I can’t even say it for wholesale because unfortunately, you don’t have much data there whenever you’re selling wholesale to you know, either a target or a Walmart or it’s cetera. When you’re putting a, when you’re putting two and two together, you’re just going to have a potential acquire, you’re going to be able to get them to pay more for the data than not for the data. And then you also have a risk, you don’t have a risk downside at that point, or it starts to mitigate. Because you are controlling your sales through your own website, or at least a portion versus just a marketplace. It’s
Eric Stopper 27:23
all about risk. They see less data means more risk for them.
Chris Shipferling 27:27
That’s right. And I mean, in a lot of it, it just goes back to the fact that you’re selling on a marketplace that does not allow you to have data. That’s it.
Unknown Speaker 27:34
And even that data that they provide is
Chris Shipferling 27:37
Yeah, like I Yeah, exactly. It’s you know, and they’re making it even more difficult now, I’m sure I’m sure some of your listeners have ever received the emails they may have used. What’s the feedback frenzy
Unknown Speaker 27:51
is back with feedback,
Chris Shipferling 27:53
feedback? Yeah, exactly. They may have used some of those programs and now they’re getting emails saying hey, Stop it.
Eric Stopper 28:02
Yeah, I was I was talking to Liz at e commerce engine runs feed feedback five. Yeah. It’s stressful, right, that the end what we’re talking about, for those who don’t know, go to your recent orders. And on your FBA orders that I think maybe even on your fbm orders as well, there’s a button that appeared that just says request to review. And that’s as of this recording. It’s in beta. I had a conversation with James Thompson about it as well. And right now it’s manual, but systems like that are, you know, who knows what’s going to happen? Yeah, no one has a crystal ball.
Chris Shipferling 28:38
That’s right. That’s right. So they’re just making it more and more difficult for you to own any of that stuff. Right. Right. And they’re there. They’re there. They’re trying to control the conversation more and more and more, but yeah, so. So yeah, the question was, we were talking about, what do I recommend in turn right or activity? Yes, I agree. Recommended I mean look when it comes to digital marketing, test, test, test, test test test you know you should always be testing different activities and different things to try and create revenue
Eric Stopper 29:11
yeah and challenge your own personal status quo right your the way that your business acts like you know if you’ve been doing something the same way for two years, two years oh my goodness A lot has happened two years. gotta change something right and right No,
Chris Shipferling 29:26
I mean, we have Tick Tock now man,
Unknown Speaker 29:28
that’s what are you on? Tick Tock.
Chris Shipferling 29:30
I only follow the funny Tick Tock stuff on it.
I can’t go there yet. I won’t. I won’t go I don’t even I don’t do Snapchat. I I barely do I barely do Instagram and I’ve got a I’ve got a I’ve got a fake Twitter account so that I can go troll some people. Oh, sure. It’s but it’s real.
Eric Stopper 29:49
Um, okay. One question I have for you. I should have knocked this out at the beginning. Do you sell on Amazon? Do you have your own products?
Chris Shipferling 29:58
I do. I actually sell myself on Amazon Yeah, it’s um, I’m going through a little bit of a, of a repositioning of the brand itself. But yeah I’ve been selling my own brand on Amazon for for a couple years now
Eric Stopper 30:11
so right on so this is a you’re not you’re not just all talking fluff you you know the game you’ve gotten
Chris Shipferling 30:16
emails, what’s the guy that used to come on TV talking about hair loss? He said, You know was it Hair Club for men? Not only am I the president but I’m also the client. Yeah, so yeah, I’m pretty I’m pretty entrenched still in the in the Amazonian world and good will have some friends of mine who who owned businesses who will turn to me for some some help when it comes to Amazon stuff I used to do. Robert and Pearl part of what Robert and Pearl did was some more enterprise Amazon consulting, and a lot of helping businesses move away from vendor and onto seller chairs and, you know, because who knows what’s going to happen there
Eric Stopper 30:54
and I was I was at Expo West when they when they dropped that on everybody that hey, you’re We’re not going to order your products anymore. Oh, God, you would have thought that I was the devil incarnate walking up to these people’s booths, right? They’re
Unknown Speaker 31:06
like, I hate Amazon like Jeff Bezos can go die. Whoa.
Chris Shipferling 31:13
dial it back. Number one. Let’s settle down a little bit. Yeah, that was Yeah, I had a friend. I had a friend of mine who owns a it’s a decent, it’s a decent business. Decent small business, very prominent through vendor Central. And yeah, last three weeks orders. And then week number four, they sent over an order they sent over an order for $1.8 million. And he’s like, you know, I don’t have this inventory. Right. Like what are we doing here? What’s going on? So yeah, anyways, that was a so that’s, that’s what I used to. I used to help doing that a lot. And I’m still very much I keep up I keep up with Amazon. I still read up on all the new stuff that’s going on and for
Eric Stopper 31:55
for you, right, you are this I don’t know if you’re like a school. a diver right? Like you dive deep into these companies and you try to know it better than they do to find all the treasure and also find all the all the bones that are buried in different places.
Chris Shipferling 32:10
We call that the hair, the hair, the hair
Eric Stopper 32:13
on the deal. Yeah, you don’t want hair on your deal.
Chris Shipferling 32:16
don’t want any hair on your deal. That’s what we say internally, man you want to you want to put it but they’re all you always find it and and for us to you know, we do we do lots of due diligence up front. And so, you know, before we take any business to market, we’re going to make sure that the business is is ready for market. There have been times where we discovered something and we had to tell the business owner, sorry, you’re not ready for market but if you can do xy and z, you will be ready for market.
Eric Stopper 32:44
So you guys you guys go through here and you have like an anti hair role that you that you put on these companies. What is the what’s the most common like record keeping issue or data issue or just like comment, you find?
Chris Shipferling 32:57
Yeah, making sure the books I mean you You hear this a lot in the space, but it’s just because small business owners and when it comes to books and small business owners and an organization around finances just tends to be lacking. And so a lot of times you will find that it’s it’s the books, you know, a business owner might have five different businesses, right everybody everybody listening is an entrepreneur, they might have four or five things going on at the same time. And they might be big things. I mean, we’ve run into that before to where they’ve got one large business and a couple small businesses, but everything was run through one QuickBooks file. And this one
Eric Stopper 33:32
can split that up QuickBooks kancha you can have separate you know, you can you can if you want to organize
Chris Shipferling 33:37
your business, and you suggest that Hello highly Hi, I am I highly recommend finding a great bookkeeper, someone that’s consistent. I’ve got lots of resources that I can send you after this so you can send to people people who are you know, we’ve worked with a guy that is affiliated with seller labs. He’s the seller accountant His name is Tyler Jeffcoat. He’s been great because he understands Amazon businesses and he understands Amazon accounting really well, which can be very confusing. Especially the way that Amazon does their dispersements. The way that Amazon reads, gives you transaction reports, some of that stuff can just be very confusing. And especially to someone who doesn’t understand finance at all, it can be extremely
Eric Stopper 34:22
confusing. So for somebody who’s probably thinking, like, holy crap, my my books look atrocious, there’s there’s plenty of ways to turn it around. How quickly do you think somebody can fix? it?
Chris Shipferling 34:32
Just depends. Sometimes it can be in a matter of a couple days. And sometimes and you know, I think I think Tyler would, would agree with me. There are other times that could take a few weeks, and lots and lots and lots of hours and lots of work, but it’s worth it. I mean, you know, especially when it comes to larger businesses, because larger businesses are going to go in front of you know, call it bigger capital players or DJ x. And if you don’t have a good quality of earnings is what we call it in our space. Then they’re just not going to believe your numbers now I gotta have them believe your numbers for sure.
Eric Stopper 35:06
Um would you hire an accountant if you were these guys right because the same you know the same logic and intellect that created the problems likely can solve them so when should you outsource that as a business owner if they’re a mess
Chris Shipferling 35:17
out that’s exactly what I’m recommending I would recommend that anyways I mean unless you’re a CPA unless you have a CPA background and you’re selling on Amazon which is rare then you know you can do it yourself but I recommend that if you don’t if you don’t have a finance background or finance degree don’t mess with it. Just don’t mess with it don’t trust yourself you’re know you’re making plenty of money or you might you might hopefully you’re making plenty of money where you know a lot of these outsource like for instance Tyler you know from seller accountant You know, he it’s not like he’s charging a full time CPA salary. It’s it’s still very a quick or quick cleanup. Yeah, but he’s got different levels of services to depending on how big you are. You know, some guys just truly need a fractional CFO, someone who can help them when it comes to inventory planning, when it comes to operational planning, when it comes to operational will be called op x, right or cap x, like trying to really figure out when they can try and scale their business. A lot of guys, some larger folks will need this and, you know, outsource guys like Tyler will have different services depending on where you’re at.
Eric Stopper 36:23
Hmm, interesting. Well, so I mean, these these business owners are all they’re all listening and they’re wondering, are my books a mess, right? How, what percentage of the time? Do you have to send somebody away and say, Hey, you gotta, you gotta clean your stuff up before you’re ready to do this.
Chris Shipferling 36:41
It’s interesting. I mean, a lot of the guys that are coming to us and they’re real serious about wanting to sell their business, they usually have an understanding that they can’t, they can’t have an intellectual conversation with guys like us. Unless we’re, we’re we’re reading their books, so they get it. Now, I’d say percentage of folks who we speak to in the books are just completely disastrous. It’s, it’s not a big number, because again, usually when they’re coming to us, they understand that that’s part of the, it’s part of the cadence of selling your company, right? Like, it’s kind of first step, I need to make sure that my p&l and my balance sheets are all very much in proper order. So we don’t run into it a ton we do run into, you know, again, we’ll run into a business that might have, they might have books that look okay, or decent. Sure, they’re a larger business and the type of Capital Partners we would put them in front of, they’re going to need something from a CPA like a firm that has stamped we have audited this business we have looked at good to go. Yeah, to go. So that way, when we’re putting it in front of private equity, they’re not going, you know, licking their fingers trying to go through all types of paperwork. It’s right. Here’s a stamped audit.
Eric Stopper 37:56
So yeah, you have a big emphasis on first impressions and And how that’s important. So there’s a lot that goes into the prep work. And you just mentioned the first thing, right? cleaning up your books. That’s the first duck to get in a row. Yeah, what’s the last
Chris Shipferling 38:09
duck to get around in your mind? Man, the last duck Wow, there’s so many I would say that kind of fit within. don’t fit within a sequence, they all kind of fit in together. I would say another big one is you already mentioned it, but product roadmap is is very meaningful. I mean, you know, kind of know where your product is going. Because if, you know, if you’re going out to market, you’re just presenting a garlic press that’s been there for four years, that’s just kind of still running steady, and you have no plan to do anything else. They don’t want to buy that. No, they’re not buying the rearview mirror. They’re buying the windshield. So you got to make sure that the windshield looks really good, right? You got to know where the company’s going. And a lot of business owners, a lot of small business owners, you know, they’re kind of flying by the seat of their pants, unfortunately, but if you want to build a company to sell, you really need to make it that you know First off, organize, organize your business in a manner that’s that’s worth Organizing every function. And one of those functions is obviously product development. It’s very important. That’s, that’s the lifeblood of your company. Anybody who’s listening on this, on this podcast, it’s the lifeblood of your innovator die. Exactly. So being able to create and then articulate a very believable road product roadmap is very important because that’s, again, when you’re, when you’re talking to someone who wants to buy something, you’re able to present to them. This is this is how you’re going to take over and grow the company. That’s all they care about. So that’s the that should be part of your narrative.
Eric Stopper 39:35
Okay, Chris, thank you so much for coming to the end of our time here. How do people get in touch with you?
Chris Shipferling 39:41
So go to our website, you can go to www dot global wired advisors. com. You know, you can find us on you know, you can also go to Google and just type in global wired advisors, we come up number one, even for 5% of your listeners that are still using Bing Yahoo, we still also come up number one for global wired advisors on both of those platforms too. So yeah, and then, of course, you know, I don’t know, you probably have in the show notes, I’m assuming probably my email address. It’s pretty easy. It’s just CS at global wired advisors calm. And yeah, you can get in touch with us. That way, we have a contact form, we have a great valuation tool. So for any of your listeners kind of wanting to know what’s the value of my business, we have a great valuation tool that’s got lots and lots of data on the back end, that they can input all of their information and it will spit out a valuation range to them. Now credible. My large caveat to that is a lot of people will fumble through it, and they don’t know that they put in the wrong numbers or whatever. So I always say that your valuation can go either way up, or sometimes way down. It’s always important to take that valuation. If you’re really serious about wanting to sell your business, set up a consultation with us bring it to you.
Eric Stopper 40:54
Yeah, that’s that sounds prudent. Well, Chris, thank you so much for coming on the show.
Chris Shipferling 40:57
Thanks so much, man. I appreciate the time.
