108: Journeyman Entrepreneurship with A.J. Lawrence, Beyond 8 Figures

by | Dec 4, 2022

Succession
Stories
Podcast

108: Journeyman Entrepreneurship with A.J. Lawrence, Beyond 8 Figures

by | Dec 4, 2022

A.J. Lawrence is the host of the Beyond 8-Figures Podcast. Having sold several companies for 7-figure exits, A.J. continues to explore opportunities to reach $10 million and beyond and calls himself a journeyman entrepreneur finding joy in learning from others and implementing these insights.

Listen as host Laurie Barkman talks with A.J. about his experience building and selling businesses, dealing with issues, and finding a new path in acquisition entrepreneurship.

A.J. has an appreciation for learning from other entrepreneurs and how to deal with issues. You may feel that you’re the only one having tough times, and that everyone else is succeeding. By listening to stories about how other entrepreneurs are on their journey, it becomes easier to see that it can be done.

Summary description

A.J. Lawrence is the host of the Beyond 8-Figures Podcast. Having sold several companies for 7-figure exits, A.J. continues to explore opportunities to reach $10 million and beyond and calls himself a journeyman entrepreneur finding joy in learning from others and implementing these insights. This episode illuminates the appreciation we might have about the value of learning from other entrepreneurs and how to deal with issues at different parts of your journey.

Listen in to learn more about:

  • The journeyman entrepreneurship framework
  • Missteps to avoid during an M&A process
  • Getting the right advisory before signing the dotted line
  • Business asset valuations
  • Planning for life after a business exit

Show Links:

www.beyond8figures.com 

www.Ajlawrence.com 

About Succession Stories Podcast

Succession Stories is an award-winning podcast hosted by Laurie Barkman, The Business Transition Sherpa– guiding business owners through the process from “transition to transaction.” Subscribe to Succession Stories and share a review if you enjoy the show!

Learn more at https://smalldotbig.com 

Book a 1:1 Advisory call at: www.meetlauriebarkman.com

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Transcript

Intro:

A.J. Lawrence is the host of the Beyond 8-Figures Podcast. Having sold several companies for 7-figure exits, A.J. continues to explore opportunities to reach $10 million and beyond and calls himself a journeyman entrepreneur finding joy in learning from others and implementing these insights. We had an interesting discussion about his experience building and selling businesses, dealing with issues, and finding a new path in acquisition entrepreneurship.

This episode illuminates the appreciation we might have about the value of learning from other entrepreneurs and how to deal with issues at different parts of your journey. We can feel that we’re the only one having tough times, and that everyone else is succeeding. By listening to stories about how other entrepreneurs are on their journey, it becomes easier to see that it can be done. Enjoy this conversation about journeyman entrepreneurship with A.J. Lawrence.

Laurie Barkman:

AJ Lawrence, welcome to Succession Stories. I’m so excited to be with you today. I am curious about you and your background, your experience, being an entrepreneur with exits, and so much to talk about, so welcome.

A.J. Lawrence:

Thank you, Laurie, it’s so great to talk to you again, since just recently, I had you on my show, so now, I get to be in the hot seat. 

Laurie Barkman:

That’s right, from podcaster to podcaster, we love turning the mics on each other, and you certainly know how to ask great questions. I definitely loved being on your show and we’ll tell the audience a little bit about it. Why don’t we start there?

A.J. Lawrence:

Okay, cool. I host beyond eight figures and beyond8figures.com. What we try and do is talk with entrepreneurs like Laurie about the journey they’ve been on to achieve where they are. I jokingly bought the podcast because I had failed repeatedly at going beyond eight figures and when the podcast was for sale, I thought it was an interesting thing, because I had actually used that phrase numerous times, and kind of revamped what I was trying to do with my life because I realized it wasn’t as cool as it would be to, obviously make more than $10 million. It was really about that journey about being an entrepreneur. I just, I love it so much, so the podcast is talking about entrepreneurs, about their journeys, what they do, to practice to be a better entrepreneur, and where they hope to be going with that. Going further on their journey.

Laurie Barkman:

I think that’s a good story arc for today. Which leads to my first question for you to introduce yourself. yYou talk about yourself as a journeyman entrepreneur, what does that mean to you?

A.J. Lawrence:

I’m someone who’s pretty good at being an entrepreneur, but not an expert and I am not a master. As I said, I haven’t rocket shipped. I don’t have my own space company taking me into Mars. I’ve done some really good things, but I haven’t done what I have set out to do and I haven’t created the companies I want to in the manner that I would want to. They’re all sort of my efforts. So far, I’ve always said I’ve been kind of thrown together. It’s part of the journey, but it hasn’t been where I want to be so I continue on and I hopefully continue learning.

Laurie Barkman:

I think that’s a really great framework, that it’s a journey. Many times we talk to entrepreneurs about this process of building the company, and then eventually letting go, so that’s what we’re going to talk about today. Tell us about the businesses that you created as you were getting started. Take us back to that time.

A.J. Lawrence:

Way back in the 90s, going back into the 80s. I was playing with computers, used to memorize coding, journal, magazines and books, because I couldn’t get to a computer so we didn’t actually write code out. I was a weird kid but the early 90s came around, and I graduated and I was trying to get jobs and I just always, I just never seemed to understand how to get a good job. I always got like really crappy jobs, or I would get close to a good job, and then it would go to someone else. 

One time I was talking to a friend who was just starting, I was working for a PR firm, and they were talking about it was one of the first times there was a thing about Big Mac Burger King. At the time someone had gotten a rat, a cricket, a snake, something in the burger and it showed up first in pre web user net discussion, which was this online discussion board that predated the web and they were like, “Yeah, you know, and our client now is all crazy. They want to make sure they know what’s going on,” and I’m like, “Oh, that’s pretty easy.” I spent way too much time playing around the usernet but then too, I knew there were some tools out there to search it, so I put together a company and for about four months, we just did searches for this brand and then about a few other brands for anything negative and it went nowhere pretty quickly. We realized it was as I was about to close it down like, “Oh, what am I going to do?” 

Now I quit my job working for a really bad data processing company where many people get their paychecks from so I’ll just leave that there but I had an interview with like, it wasn’t a Pennysaver but it was that type of like, Chamber of Commerce newspaper from my hometown. My dad had pulled some arms or twisted some arms  and they were like, just like, “Yeah, hey, okay, tell us some stuff,” and I kind of knew it was burning and it was like, okay, nothing was happening. But the very last one, they said, “Oh, so you have one of these new things called a website.” This is really how old this long ago this conversation was. Like, yeah. They said, “Where did you get it?” I’m like, “Oh, I built it,” and they were like, “You know how to do this,” so whatever happens, paper comes out and it’s like, local boy, or local man–I guess at this point–built a web–builds websites for companies around the world, how that came about.

Laurie Barkman:

They helped you pick out your company a little bit there. 

A.J. Lawrence:

Within, like, just hours, I started getting phone calls. I literally just started hiring people and training them on the fly. I had trained myself by going to Barnes and Noble and sitting reading HTML for dummies. We built a company really, really quickly. Within a year we’re doing a little over a million in billings, but I had no concept of like, my accounting was horrible. I barely was paying everyone. All these things. Long story short, one of our large clients that we were doing the backend, we were doing all their web development for them. They were this new hotshot agency who were like, “Would you like us to acquire you?” They really just said, “Oh, you don’t need to talk to a lawyer, we’ll help you with the process. Everything. We’ll make it really easy to do the other stuff,” 24 year old kid said, “Sure.” Gave him my company. Let them have my bank accounts and pretty quickly, they stopped paying my employees and within about a month and a half afterwards, they locked me out, didn’t return my phone calls and then they went bankrupt right after. My very first company, I learned the hard way.

Laurie Barkman:

Wow, what was wrong there? What would you have done differently?

A.J. Lawrence:

I mean, one, I was a kid and I was winging it. This was also before entrepreneurs were widespread and while there are in hindsight, a lot of commonalities with any type of business and sort of the needs and the accounting structure and operational structure, just the phrasing or terminology was so foreign that anytime I even tried to ask for help, not that I asked for that much help but anyone who was more than–this was while almost anyone who was 40, above at that time, barely even use computers, let alone networking and internet and then the web. 

I would have, one, looked at the processes I needed to actually run the business. I knew how to do the stuff to make people give me money but there was nothing…I didn’t put in place enough.  Barely enough to even survive. I didn’t put in place the structures I needed to run the business other than flinging it against the wall and running quickly. Then obviously in the transaction, “Oh, sure. You like me. You’re nice, fine. Yeah, you took me out for drinks, took me to a nice dinner.” God, that sounds like a bad date, but it was like all the things I could have done wrong, I did, but I just had no real knowledge. 

I look at it and it was like, all right. Later on, when I went back to business, I knew what I didn’t want. I knew the type of partners I wanted. I still had new things to learn but it was still like, okay, let’s be a little more careful. Let’s have a little bit better structure. I’ve worked in different agencies, digital agencies for the 90s for the rest of it. A couple of little side projects throughout that but then after well after the dot bomb or the bust of 2000 and then after 911 into that period, a friend of mine came to me and he wanted to build. This is once again the beginning of Wi Fi. Now that it’s everywhere I kind of still remember how magical it was for like a year and then it was like, “Yeah, okay. Right.” This was right at the very beginning and people really didn’t have access to WiFi except for a couple of things. It was expensive. It was hard to set up and my friend had been in the towers. He had been working for one of the companies and had just decided to get coffee that morning and be late. He had dedicated himself to never go, he was never going to go into a building above four storeys, because that’s kind of what he felt he could jump and he had this he lived in Williamsburg. There was a great cafe. He liked it, but it was just a little too far. Like he said, If he walked out onto the street and held his laptop back, he could just get a little bit of his Wi Fi and he put his Wi Fi router in the window so we built a repeater. 

Once again, something pretty common and simple but at the time, they didn’t really exist. We built some software. He wrote the software, I sketched a couple of interfaces, but he did all the coding, and built a whole way of giving people access to the network and charging for it. We thought we had the next big thing. We were going to put these things in cafes around Williamsburg put on top of buildings, people would pay us, it would be our own broadband, skip the broadband, get your own WiFi, made some good business deals in the way up for funding not funding for development, but funding for the capital the equipment we needed, which helped later because it was we found out quickly the landlords wanted us to pay gazillions of dollars to put a little box and a chuck no and plug in. Our business died almost immediately on the vine.

Laurie Barkman:

Wait, so you didn’t know the cost structure as you were moving forward? It was like a steam train, and then you got that information as you were trying to put it together?

A.J. Lawrence:

We knew that cell towers had some huge amount but we’re like, “Okay, come on. This is a box this big that goes into the corner of something. Plug in and then your people in your building don’t have to get it all wired up, you can offer this and we were going to offer kickbacks and all that.” We thought we had this great thing and all these old landlords were like, one, who needs this year to get 20,000 bucks a year I want or whatever they got might have been 4000 but whatever we want that it was like but it’s a 10th. It’s a 20 for the size, so we didn’t find a single landlord to take.

Laurie Barkman:

Wow, it’s really disappointing after all of that you got so close.

A.J. Lawrence:

But like I said, the hardware provider had given us this great line of credit. We didn’t use it but when we told them we were going to close it, they’re like, well, they had seen our software and they had seen our jury rig, and what we had done with a friend of mine who was an electrical engineer who had built this repeater. They were like, “Wow, why don’t we just buy it from you? We’ll buy everything for it.” Two and a half months and another month of going back and forth with a few lawyers because it’s time I did bring in lawyers. My friend and then 1/3 person, we sold the company for $1,000,001.

Laurie Barkman:

One million and one. That $1 was very important.

A.J. Lawrence:

Yes. It was fun so it was just like it was wacky, it was dumb, but they were valuing even making the mistakes and it was one we didn’t know what we wanted to be doing. My friend had been definitely impacted greatly from 911. I was having difficulty after the.com bust, and then sort of the change in the environment, startups and working for different types of companies so it was fun to put something together and still create value, even if we missed what we were trying to do.

Laurie Barkman:

I guess you always sort of anticipated that it could be an asset that would transition to another entity. Did you have that in mind?

A.J. Lawrence:

We were surprised completely and the quick story was that company sold to a company called Orinoco that then sold to 3 Com that then sold it to Cisco or whatever, but we know because my friend then eventually, five years later went to work as product lead for a campus wide enterprise WiFi campus systems and he was like, “It was my code.”

Laurie Barkman:

No way. That’s amazing and was this a–so the buyer found you, I assume, in this process.

A.J. Lawrence:

Well, we had reached out to them. This hardware company had lines of credit for different hardware startups. It wasn’t quite called startups at the time, but like we had talked them into, okay, if we get this to that, we would pay a little bit, but then we get this line of credit for the hardware, and we would use just their hardware we build on top of their hardware, etc. So they were our vendor but yeah, they were a 100 million plus company. Yet at the time, our software, what I keep saying is ours, but it was really, Michael software, was this beautiful thing that we had no idea of its value, because we had put it together to solve something else and they turned it into something that then got turned into a huge line of business.

Laurie Barkman:

Let’s jump forward a few years, I think then you launched a digital marketing agency called the Jar Group. Yes and you ran that company for about 15 years and then you had, I guess, two phases of an exit. Tell us a little bit about the jar group and your journey with that company.

A.J. Lawrence:

Jar Group was a company focused purely on what I always call the transaction, part of digital marketing, anything that touched someone coming in to buy or to interact to sign up. We started off as SEO quickly got into paid media and then, since we had always been providing digital analytics with that, we started building it up over time. At first it was free until people started caring about analytics and then that became a big driver. Over the years, we built consistently on paid media, and analytics with SEO and some other things thrown in. Then we grew very, very quickly when we started doing media buying, which became sort of a big thing in the late noughts. We got a few big clients, we got our own training desk, and it was like being on steroids. We grew super quick.

Laurie Barkman:

How big in revenue were you and people?

A.J. Lawrence:

We got up to 35 people 7.1, 7.2 annual billings was our top when I lost and at that point, I still had systems that were built. I was still running it as if it was a $2 million company with, like, 15 people when we had 35. It was fun. I lost my way. I had to get rid of almost all my high end high value generating people who would go in and talk to the customers about what their data meant, and all that deep thinking so I had to get rid of them because they were so expensive. We fell back down to 2 million before I was able to revamp and restructure and then when we started growing, and then around 4 million had a severe case of burnout, and was seriously just trying to wonder if I was going to keep it going. It was still profitable but it was that type of up and down swings.

One of my ex employees had talked with one of the private equity folks, not the private equity firm, but one of the people the private equity had worked there, and came to me and said, “Well, we would like to buy the media desk, and some of your other assets from you,” and we went back and forth and got them to pay a little more than they wanted but then I agreed to get paid out over time and sold about 80% of the company in that process that found another person to take a different asset and then was just left with sort of the name and the ability to toot some aspects of mostly analytics at the end.

Laurie Barkman:

This was a strategic buyer. This was a private equity group.

A.J. Lawrence:

It was a strategic equity partner. Sorry, I just massacred it. It was a private, it was someone who was working for the private equity firm that had looked at us previously who had a partner who had remained friends. Still another relationship with an ex player of mine who had been sort of the number two person, for me for a while, they had become friends, he had puts, so the private equity person put some money to him, and they were looking to go out and do this on their own. By buying the business unit, this ex employee had built up for me, and that and then built taking on those clients, they were able to jumpstart it, and use it to then go acquire maybe.

Laurie Barkman:

They were bolting together some other assets they went to acquire.

A.J. Lawrence:

Yeah, they went to acquire a few other media buying shops.

Laurie Barkman:

Gotcha, so the business had some ups and downs along the way. I mean, this is a 15 year span of time, right? 

A.J. Lawrence:

Yes. A lot of it was just growing, realizing that growth was so much fun, in so many ways but not looking at what it was going to mean, and not understanding sort of the knock on effects of what was going to be my commitment at different levels, not having the right organizational structure. Even just focusing on growth, and the type of clients that would feed faster growth for us, was so different from the earlier clients that we had built a reputation and had sort of, you know, we had been with customers for five, six years, with no turnover and they were just kept, as we grew, they would keep using more but then we moved up which I thought was a logical thing, being up more to the multiple hundreds of 1000s a year type of clients, so small business units of large global companies, startups, or higher level, large, larger companies but we didn’t have the relationships, we were fighting with other agencies more trying to compete trying to get all this dancing around, so we lost our way. I lost our way, specifically.

Laurie Barkman:

There’s a couple things I want to just drill down on. One is for the business owners who are listening thinking, “Oh, wow, I can sell pieces of my business,” so this is an asset sale, and we determine what those assets are and the buyer and you negotiated a value for those assets. How did that happen? How could they put a price on that? Do you know in the hindsight of the process here, ultimately how they valued those assets, you know, what was their determination of value?

A.J. Lawrence:

They were using some of the valuations we had been given in the past but with a haircut but I had sort of gotten an offer for everything for even a smaller valuation so they thought they were getting and I was just burned out I was going to the first person that give me a penny I think I would have said yes to so they came to me they knew the valuations I had turned down, they knew the valuation because they had been involved in previous stages. They came with a lower offer, knowing the business, knowing the value and knowing sort of where additional opportunity was. I learned a lot afterwards about SDE and sort of things. I didn’t realize I could have added things back but yeah, it’s a learning process.

Laurie Barkman:

Yeah, and it’s good and there is an episode on our show where we take a deep dive into valuations so if anyone is interested in that episode, Christy, it’s a good lesson so I definitely recommended episode 104. So this is an interesting part of your life. You had spent so much time and energy building this as you said and you were burned out and I appreciate you sharing that. That’s not a great word. It’s a word that connotes a health issue, maybe that just saps your energy, there were other aspects of your life that were suffering. Not that you have to take this back to all those areas, but just to acknowledge it. Some people, they brush it off and they’ll say, “Oh, we’ll get through it,” and you did, you got through the ups and downs, but then eventually, when you sold after you sold the business, what did that feel like, and did you have a plan for what you were going to do after you exited?

A.J. Lawrence:

Now it’s not a year but in hindsight, it feels like it was a year. There was a period of time afterwards, where I felt like I was that I made the mistake I’ve done so much wrong, and that this was sort of for sale. Now, like I said, I was also at the point where I was going to just hand it to anyone who asked for it so I realized my emotional attachment to it wasn’t…One of the things I realized about it, I started tracking the last six months, how much I was sleeping, my weight, working out drinking more than a few things, and I realized I had dropped to under, I think it got as low as around just around five hours a night asleep, I was up around four to four and a half drinks a day, put on 30 pounds, working out maybe once a week, it was all these things at the end and it’s like, “Oh, yeah, there might have been a few other aspects in this.” 

Afterwards, as I first tried to just get back into the agency world, I had a bunch of talks and yeah, almost right back to where I was, when I started my first company, a lot of great interviews, runner up, again, and again, for different types of senior roles at places and was like, “Okay, another bridesmaid situation.” Someone needed a little bit of help with his startup so I became an advisor sort of training their CMO, they had our head of marketing and they were like, “Why don’t we just hire you as a CMO?” and then I was like, I didn’t want to do that so we agreed to kind of do it one day a week. I picked up a few customers, clients. Out of that just being a few days a week, a CMO and it’s a great way to let I mean, this is hard when you get paid a lot to kind of go, huh and you help people grow and you’re figuring out ways that individual people can build their talent, it’s wonderful. But for me, I realized after a while, I wasn’t creating any type of equity for myself. I mean, I could have gotten some options, and get stuff but it wasn’t, I wasn’t building anything I was helping other people build, and I am too much of an agency person. I love helping people grow, but I want to also be making something grow at the same time if I’m gonna do it. 

Laurie Barkman:

Well, you’re an operator, you’re a builder, right? 

A.J. Lawrence:

Yeah

Laurie Barkman:

You like to bootstrap and take things from A to Z, so you were finding your way which makes sense. You have found your way and today you are doing a number of things. I call it sort of this portfolio of things that you’re doing. You have the investments that you’re working with, with startups and companies that as an advisor, as an investor want to share a little bit more about that.

A.J. Lawrence:

Yeah. One of the nice things that I kind of did realize before I sold, but then definitely after I sold I was an accredited investor. I am an accredited investor, so I started talking to different startups and I’m invested in some now first, almost fell into the same thing. I invested quickly into a handful of ones and realized, “Okay, I have no idea. I’m just going to whoever’s nice to me,” so how to kind of change that but then I started looking for companies that if they were doing something interesting, and I could help them by connections by advising by connecting with the, you know, the founder, about just the process of growing, having spent more and more time have kind of going ooh, yeah, maybe I did that wrong in hindsight and just kind of share During that with people, I started liking that a lot more.

I started working with-there was one company called Alpha that just recently got acquired. That was really good, great, great, great fun company. I enjoyed it. I invested in a company which is a really sweet company that they’re creating sort of a, they started off as a content site talking about alternative investment assets. But now they sort of have their own fund, they have a paid newsletter, they do all this cool stuff so I got my hands dirty by sort of seeing what was there, in the process. started playing around with different marketing concepts. I spent a year flipping content websites, buying those teeny little websites and seeing if I could put a little SEO love and then sell it for one and a half times 5000-10,000 a pop and it was fun. But that space is so similar to others, but they had their own processes. I got into the funnel world, all those crazy build a funnel and all that just to see how people were doing it. Because once again, these people are doing really interesting types of marketing and it’s very similar, just different vocabulary to more I don’t want to say sophistication but more traditional, even in digital. I think what happens a lot of times when you see these bursts of wacky, wacky crazy mom and pop people doing whatever the latest viral XYZ marketing is tick tock, etc. It’s that they’re seeing things that everyone knows as marketer works, but they’re putting them together in combinations that someone who has more experience, so you can’t do that and that won’t work. Well, it doesn’t work if you do it this way but if you do it that way. Sorry, I’m talking on a podcast using hand gestures. It’s the idea that you can put things together and combinations for marketing, that may not work in one manner, but just twisting it a little bit all the sudden becomes that amazing flavor combination that everyone raves about.

Laurie Barkman:

It seems like you are really trying to, as you described over your career, find something that’s new, that’s different, that’s innovative, and enabling it to grow and sort of helping it grow. You’re also interested, I know, in today’s portfolio of what you’re interested in, is acquiring companies and so I wanted to ask you a little bit about that. How are you going about your search?

A.J. Lawrence:

Okay, well, I’m working a little bit with Elliot Holland, who I know you’ve spoken with. Elliot’s been great. I had their early on downs of being thought I was going to love it and quickly threw an LOI together. I had taken Walker Daniel’s course and bought a bunch of books on this thought it was going to be 123 hired Elliott to look once they accepted me and it turned out very quickly they were fudging their books like no tomorrow, so Elliott was just like, I think we should just move along. From that process, Elliot and I became friends and I just love his approach to looking at what is possible in the, you know, in the acquisition intrapreneurship, he helped me develop a scoring process and what I’ve been doing is working with some people on my team, we evaluate x deals, I try and evaluate a certain amount of deals per week, and I’m way behind, but with my team, we look at those and then start reaching out and trying to get the conversation. I’m actually waiting to hear an LOI right now for a very interesting company. I don’t know what to say, like all of a sudden I kind of written them off because they hadn’t returned. My phone calls after saying, “Oh, yeah, this is great. We’ll talk. We’ll get the paperwork back,” crickets and then they just invited me out to lunch tomorrow so I have no idea why it can

happen. 

Laurie Barkman:

Yeah, sometimes time kills deals. Sometimes people come back around. I think people who are listening, some of whom might be a couple of acquisition entrepreneurs like yourself, some might be thinking about selling and it is quite common to find potential buyers out there who like yourself, right or sort of self funded and and lucky to do a deal. What does it take for you to put an LOI together? What information do you need?

A.J. Lawrence:

Well, predominantly a lot of googling and now SMB Twitter but some of it is looking at the deal, because what I’m building, and I’m continuously trying to refine that is the criteria I’m looking for and the type of deal I’m looking for. I have my own resources but I’m predominantly relying on being able to acquire a company and fund it through the SBA, I don’t know the technical term, but the SBA acquisition loans, that can provide up to 5 million in capital, you have to have at least 20%, well, 10%, but usually 20%, down with some seller financing so I am trying to look for US based companies that have different criteria and when I put together an LOI, I’m trying to tell a story, try and keep it clean and concise. 

Because I’ve seen so much legalese in some of these but I want to tell the story of like, whatever I know the seller is trying to aspire to beyond the price, even though price is 95, 98, 99% of everything trying to release frame it within the story that they’re trying to talk about in their sale. For one person, I really put it up about turning them into because there were certain conditions, they can’t continue working for the company after a year but I couldn’t make them MRS, the sort of the advisor, MRS, I’m massacring that, but basically put them up as sort of the founder and have their likeness on the site for X amount of years doing things that this person wanted, there you go another one wanting to know that his employees were going to have multiple year contracts, just talk to that, talk to the financial structure and put together something that or at least the way I’m trying to approach it is puts us in to a point where we can have a deeper conversation about their numbers, I can go out and talk to banks and get them the money they want, if it’s legitimately if the quality of earnings is legitimately strong enough to supply to non supply to back the offer that I’ve made for the company.

Laurie Barkman:

Okay, and so to get to that point, the business owner has shared with you some tax returns or financial statements, or what are they usually?

A.J. Lawrence:

So far, what I’ve had are all broker based in their SIMS, just sort of multiple page documents, some on audited financial, some projections, usually, in order charter to a basic questionnaire, excuse me, that are outlined sort of where the revenue has been, at least in what you would see in a quick structure and 99% of it, it’s just a Quickbooks download so having done those for years, you look for certain things you look in, you try and make assumptions. What I try and look for is the little: how valid does it feel that this business is ongoing? How valid is just from a light external type of view? How valid is the earnings STE? Is it something where it’s all one offs? Or weird things or this and that and I’m going left and right, then we’re gonna go away is the revenue jumping? for no real reason over the past year? I look for something consistent there that has the foundation to grow.

Laurie Barkman:

Gotcha, and then you’ll put together an offer and then the process gets negotiated from there. I know you haven’t closed anything yet so we’ll have you come back and talk about small stuff. Yeah, I mean, from my side this is obviously a process I’m very close to and I think it’s as an M&A advisor and I work both on and sell side so I’m very curious because here you are in the sea as a buyer, and this is what I often tell the sellers is that value is determined by the buyer and the private markets and that’s an infinite number. 

Write it because there’s permutations of how value is perceived as obviously from the buyer’s perspective, and you saw this in your, in your story, you saw it numerous times, when you got offers and how they determined value varied but it’s very, it’s very important, I think, for sellers to understand what can trigger that discount along the way. Again, you shared some of that in your experience. Now, as you’re looking to make that investment in a business, you’re probably using some of those life lessons and business lessons that you got from hard knocks, and helping you make some good decisions. So I really appreciate you sharing that. Just to wind down here, I love to ask all of my guests if they have a favorite quote, I know you probably have many up your sleeve. But is there one that you’d like to share?

A.J. Lawrence:

Over the years there’s one I’ve jokingly been saying with my kids recently. I used to have some crazy stoic thing thinking it was cool and there’s been different business ones, but the one that always I go back to when I’m put on mark, because my kids we were talking about that about a year ago was I am what I am and what I am, so Popeye, I am. Because at the end of the day, there are so many things I do wrong, wrong in quotes, about the approach there is I yearn to develop an elegance in my approach, a sophistication in how I evaluate how I grow and how I do different things. Most of the time, sweaty, sloppy tripping over my own feet but if I keep moving, and I keep doing it, yes, I’m never gonna dance like Fred Astaire but I will be able to at least enjoy being on the dance floor so I enjoy the journey.

Laurie Barkman:

Yep, you are who you are, absolutely and you accept who you are and that’s amazing. Well, I want to thank you so much for being on, AJ., and if people want to get in touch with you, what’s a great way to find you online?

A.J. Lawrence:

The most basic ways please come check out beyondeightfigures.com and sign up for the newsletter or listen to a few shows. See if we talk to you and we really do try and get into what it means to be an entrepreneur and the journey you go on as one otherwise look me up on LinkedIn I am generally there are a few new you know a few other people out there with AJ.Lawrence but if you put it a j dot Lawrence on LinkedIn, I usually show up first. Anyway, I’m the guy who looks a little weird in the picture so it should be easy enough.

Laurie Barkman:

It’s a very handsome picture. Well, A. J. thank you so much for sharing your journey, your journeyman entrepreneurship experience. I think it’s important that on this show, we celebrate when people have successes and I think it’s also important to celebrate when we have those lessons learned and I really appreciate you sharing your hindsight with me and with the audience today. 

A.J. Lawrence:

Thank you so much for having me on the show. Laurie, I really do appreciate it.

Laurie Barkman:

To our listeners. Thank you so much for your support. You can always catch Succession Stories on any of your favorite podcast players or of course on YouTube. Don’t forget to like and subscribe to the show that really means a lot to us. If you want to maximize the value of your business and plan for future transition, reach out to me for a complimentary assessment at meetlauriebarkman.com. Join me next time for more insights from transition to transaction. Until then, here’s to your success.

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