Sergio DeCesare with Max Business Profits

Intro: Broadcasting live from the Business RadioX studios in Atlanta, Georgia. It’s time for Buy a Business Near Me, brought to you by the Business Radio X Ambassador program, helping business brokers sell more local businesses. Now, here’s your host.

Stone Payton: Welcome to another exciting and informative edition of Buy a Business Near Me. Stone Payton here with you this morning. Please join me in welcoming to the broadcast with Max Business Profits. Sergio DeCesare. How are you, man?

Sergio DeCesare: Hey, good morning, Stone. I’m doing great. How are you?

Stone Payton: I am doing well and I have really been looking forward to this conversation. I got a ton of questions, man. I know we’re not going to get to to them all, but maybe a great place to start is if you could share with me and our listeners mission purpose. What are what are you in your organization really out there trying to do for folks?

Sergio DeCesare: Yeah, that’s a great question. You know, I have a great company and the way I do things are I start with the business center, not not at the end where they’re trying to sell a business like most brokers do. But I also have a consulting firm, which I work with business owners, to help them increase their revenue, increase their profit. We do that a number of ways through marketing innovations in their business, helping them understand financial numbers in their business. But it’s a consulting firm and I’ve had many of my clients down the road two, three, four years, five years, even down the road to say, okay, now I’m ready to sell. Well, who knows your business better than I do because I help them make it sellable. So that’s really my model and I love my work. I’m inspired every day to get up and help my clients make more money and then build an asset they can cash out at a time of their choosing.

Stone Payton: So let’s go a little further back the back story of how you got into the coaching and the coaching line.

Sergio DeCesare: Yeah, that’s that’s a that’s a great story too. I actually come from the perspective of I’ve been a business owner. There’s a lot of there’s a lot of business brokers out there, even coaches who they’ve never actually owned, operated and sold a business. I’ve sold a few. My last business was a computer company. I had a computer service company locally. I had a location, employees, the whole works. And back in 2005, I felt like, you know what? I’m burned out on this. I need to sell. So I called the broker in broker, came in, reviewed everything, inventory money, we make everything employees. And then he scribbled a number on a piece of paper and slid it over to me. And I opened up that piece of paper stone. And I looked at it and I. And my jaw was dropped. I, you know, very tersely asked the gentleman to leave my office. And the number I was looking at was less than my own benefit when I was making every year. And I didn’t understand why at the time. So I spent the next year researching, talking to everybody who’s ever sold a business so I can get my hands on anybody who had an IT company and sold it. And I changed my model and I made some changes inside my business and that next year I actually placed the business for sale and I sold it for five times more than what he wrote on that piece of paper. And that’s that’s a pretty significant difference, right? So I learned. Basically, I figured out the keys to the kingdom. On that.

Stone Payton: One. Yeah. So let’s talk about getting your business ready to ready to sell. Speak to that a little bit about what we should be doing, what we should be thinking about, maybe what we should not be doing.

Sergio DeCesare: Sure. Well, and this is this is important stuff. So if you’re thinking about selling a business and the problem is a lot of times business owners get up one morning and they go, you know what? I don’t feel that good. I’m burned out, or maybe my wife is sick. I got to spend time with her. And that’s when they decide, Well, it’s time to sell the business. That’s about the worst time. Excuse me? You can decide to sell a business, you know, So first and foremost, you have to ask yourself, Am I selling a business or my selling a job? When I first got into the brokering business, which was a couple of years ago, at the urging of a fellow business broker, we said, Hey, look, I see what you’re doing and we need some help here because a lot of these businesses are not ready to sell and said, okay, I can do that. I was I’m a licensed broker in real estate for 30 years in the state of Florida. That’s really all you need to become a business broker. So I said, okay, I’ll bite. But the problem is you have to plan. You’ve got to have some time to put the things in place that make the business valuable to a buyer. Buyers don’t want to buy jobs. They want to buy businesses, you know, and for lack of a better term, maybe they’re looking to buy more of an annuity. Where the business runs, whether the owners are or not. And that’s like one of the big deals in selling their businesses. If I take the owner out of the mix, does that business still survive? Does that business run week after week without the owner being there? And if the answer is no, then you got a job, not a business.

Stone Payton: Isn’t that the truth? So you obviously were not very happy with the cocktail napkin valuation that you received and that one experience you described. But yeah. Talk to us a little bit about valuation, why it’s so important. Best way to go about it. I’m operating under the impression maybe there’s more than more than one way to go about that.

Sergio DeCesare: There’s a couple of different valuation methods, but the problem is people who are who are business owners, who are looking to sell, let’s say, let’s say stone, you want to sell in three years, wouldn’t it be kind of helpful to know where you stand right now in the valuation of your business in order to get to the point you want to get that makes it worth selling? Yeah, it’s going to make more sense. Well, the problem is nobody nobody gets a valuation done until they’re on the doorstep of selling. And by then it’s kind of like, okay, whatever the number is, guess what? You’re stuck with it. Unless you want to spend the next two or three years making that valuation higher. But unfortunately, on the Internet, there are a lot of places where you can plug in some numbers and get a valuation. And those, they’re not very effective. They’re not very accurate. There’s a lot that goes into doing a valuation, and I have two or three different software packages that I run on any given business that I’m paid to do a valuation for.

Stone Payton: So, yeah, what about timeline? I own 40% of a pretty successful media company and you know, I’m not going anywhere anytime soon, but I do have kind of some sort of exit in my sights. What how how far out in advance do you need to start having conversations with somebody like you?

Sergio DeCesare: Well, I have practical experience in that. I’m also a certified exit strategist business exit strategies. So one of the things I would ask you, Stone, is practically, when would you like to exit your business? Right. We got to know kind of what you’re thinking about, because if you’re telling me, wow, I’d like to do in the next year or two, I’d like to do then, brother, you know, But if you’re telling me, you know, I’m thinking about five years out, I’m getting a little older. I want to travel with the wife, whatever. Okay, fine. That gives us some time. But what I tell my clients is, if you’re thinking about selling, you’ve got to start that preparation minimally 2 to 3 years before you’re thinking about exiting. Wow. Minimally. Because there are things. Look, you get a valuation, right? You’re thinking about selling. You want to sell in three years. So you call me and say, Hey, do evaluation on my business. Here’s the fee, do the valuation, tell me where I’m at right now. So here’s where you’re at. Oh, wow. So that’s all my business is worth. I need to get more than that to retire. Let’s put you through the program. Let’s figure out how much more you need and how we’re going to get there. Right.

Stone Payton: Well, what I’m finding attractive about this conversation is that you feel like, Hey, we can probably help you get there. We’ve got this, this, this discipline, this rigor, this structure, this methodology to help you get where you need and want to be before you do exit. It sounds like you got you’re the whole package, man.

Sergio DeCesare: Oh, most certainly. Well, look, if I’m going to do what I’m going to do, I almost feel like I have to be the whole package. I mean, every year I get different certifications and try to fill in blanks that I see, you know, talking about the exit strategy. Yeah, I’m a certified exit strategist. I’m also a certified value builder under John Waldo’s program, which is a great program. It’s a great discipline to put my business owners through and it’s very effective. So I have different tools for different things, depending where that business is on that timeline, because everybody’s in the same place.

Stone Payton: So I can hear it in your voice and I know our listeners can hear it on the airways as well. You obviously find this work incredibly rewarding. What what are you enjoying the most, man? What’s the most fun for you?

Sergio DeCesare: Well, I’ll tell you, I love the day to day work where I’m actually helping my clients make more money, but more importantly, keep more profit. I had a phone call with a client yesterday, and believe it or not, she owns a marketing company and she comes to me for marketing advice, if you can believe that. But I’ve got so many years in that in that area, as you know, in the real estate arena for marketing. But she calls me and she goes, you know, I’m noticing a weird phenomena. I said, Well, what’s that? Talking to my accountant, I see that this year was a little bit slower than last year. I made less money. Overall, the company made less money overall. Profit. I went from a negative profit last year to a very, very strong positive profit this year. And she goes, I’m just trying to figure out how that happened. And I’m looking at it on the phone. I’m like, not looking at her, but I’m looking at the phone going, What do you mean you don’t know how that happened? You know, we spent a lot of work together, you know, working on the innovations of your business and the pricing model. I mean, most business owners get their pricing wrong to begin with, but we worked on all that stuff. So she was in positive territory and she was a static, even though she made less the business made less money. She was ecstatic as finally she was in the black.

Stone Payton: As she should be, Right? When it comes to sales and marketing, I know there’s this this whole area of your business where you’re helping me sell my business. But with respect to you, how do you get the the new business? Do you have to get out there and shake the trees a little bit for your own sales and marketing?

Sergio DeCesare: Yes, I think, you know, any business owner, it’s just I don’t have a team in house to do that kind of thing. I have to do it, which I really enjoy because I get to meet a lot of business owners. I do a lot of networking and I’ve gotten referrals from people. I have clients in three different states. So the ones that are outside of the state of Florida, we’re all referrals to me and they’ve been with me sometimes. So yeah, you know, you have to kind of you got to you’ve got to talk. Look, any business, you’re in stone. You’re ultimately you’re in the people business, right? We’re not selling widgets online here for the lowest price.

Stone Payton: So I saw in my notes that you’re a veteran, you were an airborne paratrooper. Do you feel like that military experience has had any impact on on your ability to run a successful business and help other people acquire and exit from businesses?

Sergio DeCesare: Yes and no. Being in a combat unit, there’s certain disciplines that that come with the job. But I think the positive side of something like that is that I’m a very driven, mission orientated person and my mission are my clients. So I’m very, very much in your corner. I mean, I have I was I had a client call me 5 minutes before this interview to ask me some questions. I’m very accessible. Now. The flip side of that is, okay, what’s the detriment of that? Well, the detriment of that is being in the military, being in a combat unit, you know, orders are just orders. We follow them. And I had to really change my leadership style from from eight, nine years ago when I started this firm to now, where I’ve become less of a dominant personality and more of an intuitive personality where I actually have to read body language and facial expressions. I’m a certified mastermind facilitator, and I’m very good at that job because in the military I was I was a investigator, criminal investigator. So, you know, the great part about that, it translates into being a coach and a broker very, very well, because the the quality of the experience. And for me to figure out what is wrong and what’s going on, you have to be you have to be really good at asking the right questions to be successful in this business.

Stone Payton: Well, you bring up an excellent point. One of the things that I’m coming to realize as a result of hosting this series, your work is so much more grounded in relationship. It has such a much stronger human element to it. I guess going into this, I viewed your work, your arena, as far more transactional, and I know there’s a transactional, but it is really a relationship people business, isn’t it?

Sergio DeCesare: It most certainly is. It most certainly is. I spend a lot of time reading about IQ, which is emotional quotient versus IQ. I think there’s some great work done and and you have to understand people, you have to understand yourself, right? So those relationships are based on compassion and understanding and being able to relate. I think in this right now in our time, there’s a lot of people out there that that lack empathy for other people. I think empathy is in short demand. But going back to your original statement, well, in the beginning, 80%, 85% of everything I was doing for my clients was on a skill set level, right, helping them understand their messaging. Who are we? Who we sending our message to innovations in their own business? Financial aspects of the business is understanding what you can control and what you can control. But I’m telling you, as as as the truth is, as time goes on, it’s switching from 80 to 85% skill set and 15% 20% psychological. It’s reversing. I’m spending way more time on the on the psychological aspects, the belief system of some of my my clients, because, look, I’m a firm believer that most people bring their personal problems to their business. They may be perceived as a business problem, but I’m here to tell you that a lot of those business problems, so to speak, really stem from emotional or psychological things inside my client’s heads, if that makes any sense to, you.

Stone Payton: Know, it makes perfect sense to me and it helps me understand something else that I saw in reading through my notes. But you have a bestselling book about elite business leaders. I’d love to hear a little bit about the book, the structure of it, how people can get the most out of it. But my first question around the book is what was it like writing a book? What was that experience like?

Sergio DeCesare: I got to tell you, that was not that big of a deal for me. There’s several authors in that book, and my publisher at the time came to me and said, Look, I think you’re as qualified as anybody to talk about this. In my particular section of the book is about leaders. Are they born, are they born or are they trained over time to be leaders? And I wrote that section of the book in a weekend.

Stone Payton: Wow, that’s impressive.

Sergio DeCesare: Because I knew exactly. And a lot of it stems around the book, which at the time I hadn’t read, you know, I hadn’t read. E-myth But there’s I’ve been told there’s very there’s a lot of similarities between what I wrote about how business owners are in that book and and what was written in email. And then I ended up reading you think Well, yeah.

Stone Payton: All right, so back to this, this business of brokering businesses say a little bit about deal structure because there’s a lot of different ways. To piece the deal together in her.

Sergio DeCesare: Well, there are, depending on the size of the business, will really dictate the structure of the transaction. I mean, you start getting over $5 million, $10 million. There are earn outs there. There are different things that come into play. My area of the of the brokerage is really focused on the small business owner, which is probably $5 million or less. So to me, those are just straight up asset sales. There’s no need to get cute. There’s no need to get fancy. My job is to get my seller as much money as possible. Now, if that means that they have to hold some sort of financing, which is almost in every single deal, regardless of size. Well, so be it. But they’re going to get a good rate and they’re going to have that that note secured by something. So, yeah, there’s a lot of creative ways to do deal structures. But I think when when you’re at the lower end of the scale, my sellers just want to cash out and get on with their life.

Stone Payton: Is it a little tricky or I got to believe it would definitely be tricky to try to do this without the benefit of someone with your experience and expertise. But still, I mean, it’s got to be a subtle dance or some structured methodology to be able to put a business on the market without jeopardizing the business, having competitors try to sweep in and take advantage or employees get wind of it and want to leave. Yeah. Speak to that a little bit.

Sergio DeCesare: Well, what’s the question specifically? Because you covered about 60.

Stone Payton: Well, I’ll tell you where the question comes from. If Lee and I decided that we wanted to sell the business, one of our concerns would be, you know, some of the folks who are really important to our business right now. Would they want to would they want to bail? Right. Would they would they get wind of the fact that we were selling and want to bail? And would competitors somehow find a way to take advantage of the fact that we’re that we’re trying to be on the market? So is there I don’t know. Is there some there’s got to be some I don’t know. That’s my question.

Sergio DeCesare: Delegate. You’re very you’re very right. It’s a delicate situation now as far as confidentiality, You know, it’s a broker’s responsibility to keep the sale or the marketing of the business as confidential as possible. So it’s kind of a double edged sword for us because we want to tell everybody in the world that we got something to sell. Right? Right. We can’t tell everybody in the world because a lot of times, like you said, employees get wind of that. They’re thinking, okay, we’ve got to jump ship or something because we’re going to be out of a job or some nonsense like that. But I have found that you don’t really tell the employees till after the sales kind of consummated, understanding that the new owner has no intention of changing what’s there now. Now, is that a guarantee? No, it’s not a guarantee, but I just went through a deal in in April of May where it was very, very important for us to keep it quiet long enough to be able to get in front of them and say, hey, we’re bringing in these new owners right now. We’re working both together. Right? I don’t you never know. Never want to make it sound like it’s like, okay, I’m here today and gone tomorrow. No, nobody likes that. So there’s a there’s a you try to soften the blow by by introducing them gradually and saying they’re going to work together. But it was very important that he keep his staff. That was that was very important to the buyer because they were good at what they did. And they did it they did it in a way that the buyer, the new buyer was introduced to each and every single employee. They got to know him. They got to see how he was. And to my knowledge, even to this day, he has the loss of single employee after that sale. And it’s been some six months, seven months now. So it is a delicate dance.

Stone Payton: Well, here again, I mean, all the more reason to work with someone that has the credentials, has the experience, understands both sides of the equation, and can help somebody, you know, like me and Lee navigate this this terrain. And to try to go out and pull this off on your own would just would seem foolhardy to me.

Sergio DeCesare: Well, here’s the real danger. The real danger is and I have clients who come to me exactly after this situation has happened. You know, if you’re a buyer and you don’t have some sort of representation that can guide you and help you see if there’s value in the company and if it’s worth the price you’re paying, you’re really just taking the word of a seller who may or may not be completely forthright in what they’re telling you. So I have a couple of clients who have bought businesses and they’re like, This isn’t what we thought we were buying. So they call me in. I say, Well, then let’s turn it into what you thought you were buying. If that’s the case, you know, on the flip side of seller, you know, he doesn’t really know how to prepare. 80 to 85% of business is stone placed on the market. Don’t sell. Wow. That’s a big number. Yeah. Well, and considering 90% of a seller’s net worth is wrapped up in their business. That’s. That’s brutal. That’s a brutal number now. So why don’t they sell? Right. Why don’t they sell? Because they didn’t prepare. And what did they need to prepare? Well, they needed to show that the business was less dependent on the owner. They needed to show clean books. A lot of times business owners say, oh, well, you know, the books are you know, I have a whole nother set of books for cash and. Oh, okay. All right. You know, we need to take a look at that. Well, you know, I don’t want to show anybody that because the IRS. Well, guess what? I don’t work for the IRS. Neither does the buyer. But he needs to understand what he’s buying.

Stone Payton: Amen. Right. Yeah. All right. What’s the best way for our listeners to connect with you and have a conversation with you or somebody on your team maybe tap into to to some of your work. Let’s leave them with an easy path to get to you, man.

Sergio DeCesare: Well, the easy path is you can just go to the website, which is Mac’s business profits dot com. Pretty simple company name. I can be reached at the email address for that website which is Sergio Gio at Mac’s business profits dot com. And of course I do accept phone calls still. And that number is 2395807408.

Stone Payton: Well, Sergio, it has been a real pleasure having you on the program, man. Informative, inspiring. A little scary there, but just the right kind of scary, right? Like talk talk with Sergio if you’re thinking about buying or selling. You’re doing such important work, man. And we really appreciate you. Invest in the time to visit with us today.

Sergio DeCesare: Absolutely. It was a pleasure.

Stone Payton: Stone mine as well. All right. Until next time, this is Stone Payton for our guest today, Sergio de Cesar with Mac’s business profits and everyone here at the Business RadioX family saying we’ll see you again on Buy a business near me.