Summary

In this conversation, Jon Stoddard interviews Christophe Bartos, who shares his journey in the world of mergers and acquisitions, particularly in the digital marketing sector. Christophe discusses the challenges and opportunities presented by the COVID-19 pandemic, his transition from consulting for equity to acquiring businesses, and the importance of financial knowledge in making successful deals. He emphasizes the significance of strategic partnerships and the dynamics of decision-making in business ownership, while also outlining his future plans for acquisitions. In this conversation, Krystof Bartos shares his journey of acquiring a marketing company, discussing the motivations behind the sale, the challenges faced during the acquisition process, and the operational changes implemented post-acquisition. He emphasizes the importance of partnerships, navigating SBA loans, and the role of AI in enhancing copywriting efficiency. Additionally, he highlights the influence of mentorship, particularly from figures like Tony Robbins, in shaping his business strategies and mindset.

Takeaways

Christophe Bartos completed a 100% acquisition of a digital marketing company.
The COVID-19 pandemic shifted business dealings to virtual platforms like Zoom.
Consulting for equity allows for leveraging financial expertise in business growth.
Understanding financials is crucial for making informed business decisions.
Building partnerships can enhance the success of business acquisitions.
Consulting for equity can be challenging without clear profit-sharing agreements.
Going from zero to one in business is a significant achievement.
Strategic partnerships can help navigate complex business landscapes.
Future acquisitions may focus on media companies to enhance audience reach.
Having a balanced team with diverse skills is essential for business success. The company acquired was profitable with a strong cash flow.
Understanding the mindset of business sellers is crucial.
Building trust with partners is essential in business deals.
SBA loans require a US citizen to own at least 51% of the deal.
Navigating the loan process can be complex and time-consuming.
Operational changes post-acquisition can significantly improve efficiency.
AI tools can enhance copywriting and marketing strategies.
Mentorship plays a vital role in business growth and development.
Making payment processes easier for clients can improve cash flow.
Learning from successful figures can provide valuable insights for business success.

 

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Transcript:

jon_stoddard (00:02.71)
Welcome to the top M&A entrepreneurs today. My guest is Christophe Bartos. Christophe just recently completed an acquisition, 100% of it, for a digital marketing company. And he's done some minority investing, consulting for equity, in three other marketing companies. So Christophe, welcome to the show.

krystof_bartos (00:21.73)
Yeah, thank you again. Just to correct, my narrative wasn't in the marketing. It was more on the finance side, financial company. So just to clarify, the marketing was the first marketing. Marketing, but yeah, just so we don't mislead anything.

jon_stoddard (00:35.13)
Well, thank you so much for correcting me on that. Yeah.

jon_stoddard (00:42.352)
Yeah, let's ask about that. I want to find out where you started from. Now, where are you from?

krystof_bartos (00:47.51)
Yeah, so I'm actually from Czech Republic, close to Prague. And then before COVID, I was like back and forth to US. Then I was unable to go back to US. And so we kind of started doing this over Zoom, which is kind of the interesting part about that marketing acquisition. It was completely over Zoom with the partner that I met actually like two months ago, something like that, and JFK at the airport and everything was over Zoom, which I think that's just like,

They're just interesting, I guess.

jon_stoddard (01:20.47)
And that's a epitome or essence of what's going on in this world. We're international doing business on Zoom. Yeah.

krystof_bartos (01:25.29)
Yeah. Yeah. So I kind of in terms of that, like the part of the COVID when I was unable to go to the US when you want to buy business in the US, you are kind of like, how am I supposed to do it? Right? That was the challenging part. But as right now we are on the other side, what COVID bring to dealmaking can being able to do it abroad. And actually, for me right now, we don't need to move to US full time and be able to do it right

jon_stoddard (01:37.112)
Yeah.

krystof_bartos (01:56.052)
that's kind of great so actually I like that part.

jon_stoddard (01:59.17)
Yeah. Well, how did you?

What was your call to adventure to, you know, you started with consulting for equity, you know, minority investment. So what did that look like and how did that start? Why did you start that? What? I mean, a lot of people in digital marketing go, okay, I'll sell my service for X amount a month and you get this results and move on to the next client. How did you decide to go? Well, I'll take a percentage of your company in exchange for, we'll do this for you.

krystof_bartos (02:24.814)
Yeah.

krystof_bartos (02:29.59)
Yeah, yeah, yeah, that's great. So actually in terms of these consulting for equity, more provide like a financial side. So I'm on the financial side, my business partner is like 30 years plus in the marketing and sales. So we kind of like use our stronger parts. So that was one company was in check actually, it was financial advisory company. So basically I'm still there,

set up the portfolios for clients and stuff and help them navigate like the financial work and that it's been often in one other and one company that I it was consult sorry construction company but I work more like a CF CFO the story to get to that point was basically after high school I just started being in the business but at some point I realized to keep story short that why I'm still

krystof_bartos (03:29.89)
it, right? I'm not the startup person. Great. Usually I'm, I am sooner than the market realize it needs it right and don't survive the time when the market is market is really ready for something right. So that was kind of my my thing. And actually I wanted to start building and buying assisted living facilities, the small ones in the US. And I kind of researched that. And then I arrived back to check from one

on the on the couch and think like why I'm still trying to build something from scratch when can I buy something right and then I started Google Google stuff and basically to to people teaching teaching these kind of things show up I subscribe start to learning that and it fits really well with my financial background and from that on I it's 2019 I believe 2019 I will do

jon_stoddard (04:26.41)
Yeah, let me let me ask you about who did you go to? What what coaches you did you kind of lean towards?

krystof_bartos (04:30.63)
Yeah, so first one is Harbor Club, Jeremy Harbrill, that was kind of like a hot spot matter, so to speak, and it opened my mind. And then I really quickly also went with Karl Allen, more focusing on the leverage buyout. So big shout out to those guys, I wouldn't be here without them. So they help in their unique ways in all of those deals. And it's

jon_stoddard (04:35.71)
Jeremy Harper, yeah, yeah.

jon_stoddard (04:44.21)
Carl Allen, yeah, great guy. I've had him on the show, yeah.

krystof_bartos (05:00.813)
for the foreseeable future, right?

jon_stoddard (05:03.63)
Yeah, before we move on, let me ask you about your financial background. Now, are you a CPA or did you get financial modeling expertise or how did you get into the financing part?

krystof_bartos (05:12.135)
Yeah.

So everything around me and my background is entrepreneurs. So it was basically investing, learning it, then realizing when I start wanting to buy companies, I was like, what I don't know, right? And basically learn that part for structuring and more CFO stuff and then kind of learn all this or some like courses and learning more than I need. But I have an MBA that I've done like over online because there are some people ask me like, why you don't have anything?

and education. So I was like, what's the cheapest way I can do it and fastest way so I found some online course that was certified for the MBA but there's the I don't even present it because that's not my way I'm more like sweet smart. So if I can

jon_stoddard (05:57.69)
Yeah, yeah, yeah. But I'm a big proponent and the part of business is the language of business is accounting. So understanding the business of, if you don't know the language, you're just gonna get yourself in a lot of trouble. So, I mean, why did you focus on that area? Some people focus on marketing, obviously, and some people just focus on finance. Why did you key into that aspect?

krystof_bartos (06:05.89)
Yeah, I agree.

krystof_bartos (06:20.75)
Yeah, I think I have the same mindset as you have that you just said, like, like everything is at the end in the numbers, right? And then there's a story behind it. But I just like the magic of, and that's a great question. No, nobody asked me before, like the magic of you see some bunch of numbers can create a story and then turn it into like a actual items that you can kind of use to make more money and make it successful.

And so much people are missing it in terms of being in the business. So it even opens up a lot of opportunities. And I'm like kind of even like from like a personality profile, like I am extroverted in the core, but like I'm able to do a lot of introverted work when I need it. So I'm kind of balanced there. So it's even like a fit. And what happened right now, right, with the banks and stuff, I spent the weekend just looking at it

into everything. And that's what I like kind of deep dive into everything, and not be on the surface. And that's something that I think it's needed for the financial side as well. But I started with the business being in the sales as a financial advisor, then have done bunch, bunch of but just the finance, I enjoy it and then combine it with everything else. But that's great question nobody asked me about. So I had to learn, had to kind of came up with the answer on the on the go.

jon_stoddard (07:43.431)
Yeah.

krystof_bartos (07:50.65)
It's just great, I didn't realize it. Yeah, it was awesome.

jon_stoddard (07:52.41)
That's good. I need genuine. I need to see that. Yeah. So what did you, when you looked at the, when you first got this first consulting for equity, like I'm going to get into your business and, but instead of just getting paid for it, I'm going to take, can I have a piece of your company in exchange? What did that look like? And what was, how did that start?

krystof_bartos (08:10.77)
Yeah. Yeah.

krystof_bartos (08:15.13)
I just I just asked, right. So it was just and basically, yeah, yeah, that's it, right. And just from now on, from that point, I was like, every time I will do it, actually, what I need to came up back with more was asking for the fees as well, right? Because then if you get just equity, and the equity is not in the company that is kind of making enough profit, so you

jon_stoddard (08:19.45)
Yeah, well, that's a start, right? You gotta ask.

krystof_bartos (08:45.75)
combination with. Yeah, exactly. Exactly. Right. So, and it kind of started, actually, because that guy didn't want to give me a bunch of bunch of equity, just a little bit. And he was like, then I can kind of pay you. So we kind of combine a little bit of equity with basically a piece of the revenue, actually, which was which was nice. And then it started. And then the second one company, the construction, it's actually how I came up with the

jon_stoddard (08:47.93)
Yeah, you still have to pay your bills. Yes.

krystof_bartos (09:14.97)
the fund. And it's like a terrible story, but a long story about set up the farm to buy more companies because it was complete scam. Basically, somebody approached me and say like, Hey, we have bunch of raised a bunch of money. And we want to deploy it in the real estate and I need financial financial officer basically to help navigate that right. The money never existed. But at some point, I was so worried that we lost the money of the investor that I not even asked about these

krystof_bartos (09:45.71)
there. But basically, at that time, I just said, Hey, I want that part of the business and some fees and because it wasn't real, kind of real, right? It was like, obvious, I can give it to you. But the nice part was then basically, I was like, okay, we have that money and that guy cannot take care of that money even in the real estate. And at some point part, I was like, how we can actually use that money for buying more businesses because at the start, I was more like on the

zero out of pocket kind of deals, right? But there's still a bunch of like a good companies, especially from retiring business owners that I think now I believe they should get paid, right? Especially if it brings so much value to you, which I can tell like one deal can take over the whole of your income, right? And everything, so it's so life changing for everybody that at some point I was like,

jon_stoddard (10:37.774)
Yeah.

krystof_bartos (10:44.99)
the fund and we are in the process of doing that. It's not done but we have a little bit of that.

jon_stoddard (10:50.21)
Yeah, let me let me go back to that consulting for equity or are you asking for equity because you're not really making any Unless you ask for a percentage of the cash flow You don't realize your gains unless there's some kind of exit Did you ask for an exit to say hey at five years? I want to be able to Sell my shares back You can be have the first right or if there's an exit like you sell to a bigger company or go public or something like that

krystof_bartos (11:12.294)
Yep.

krystof_bartos (11:19.31)
Yeah. Yeah. So actually with the first company, the financial one, I basically sold it like year after back to the original owner. I was like, Hey, now it's not. Not it's not. But it was like, Yeah, I don't even remember the reasons. But basically, I was like, Okay, buy me out. I didn't see a lot of upside, right? It was the first deal. So I was like, if you want to give me an equity, and then I can break about I have done

jon_stoddard (11:20.634)
How did you know that we're?

krystof_bartos (11:49.51)
So I was like, I wouldn't do that deal right now, I can tell you that. Yeah, but no. Yeah, f-

jon_stoddard (11:51.37)
Thank you. Bye.

you don't make any gains, you can't see it on it's on paper and it doesn't mean anything. It's not there's no currency in it, right?

krystof_bartos (11:59.03)
Yeah, but still from zero to one is a big step, right? Like it's so big. Yeah, it's major, right? So I saw that. And right now, basically, I have that same partner. We have another kind of company that I'm still keeping. But from the first one, I'm getting basically just fees and helping them out. Moving forward.

jon_stoddard (12:05.93)
Yeah, that's right. It's the experience.

jon_stoddard (12:22.29)
Yeah, was there a cure? So was there any dividend set up or anything?

krystof_bartos (12:25.09)
No, it wasn't even a company that would make enough profits. Right. So it was kind of like, so I would do it again. Disclaimer, now we are more focusing on basically buying businesses, right? A whole other percent. Because one thing that I can tell when we are talking about consulting for equity, what I found and I don't like about that part is, and I'm a huge fan of Tony Robbins. And he says that every problem

jon_stoddard (12:29.89)
Oh, okay.

jon_stoddard (12:40.25)
the whole 100% of the business, right? Yeah.

krystof_bartos (12:55.81)
is either business owner strategy or mindset, right? And when you think about it, if you buy a piece of the business, but the original owner is still there, all the mindset and strategy is there, right? And you need to not fight necessary, but argue about a lot of stuff. And maybe I'm just egocentric or whatever, but at some point I'm like, I don't want to fight. I want to do whatever I want and then pay the price

jon_stoddard (13:06.93)
You're not gonna solve anything.

jon_stoddard (13:18.131)
You know, that's a great point.

krystof_bartos (13:25.05)
if I made a bad decision or reap the rewards if I made...

jon_stoddard (13:30.31)
That is the perfect fork in the road decision right there because it doesn't make sense to do consulting for equity unless you're for just equity unless you're getting some kind of dividend or percentage of profits because Like you said you come in there and say To grow this bit you got 20% of the business to grow this business We need to do this this and this but the guy just sits there and goes no We're not gonna do it. We're only gonna do 50% of that

krystof_bartos (13:40.73)
Yeah, that's one thing.

krystof_bartos (13:56.092)
Yeah.

jon_stoddard (13:59.97)
that you're gonna sell back anyway, right?

krystof_bartos (14:01.05)
That's right. That's the part. So right now I more like the idea of buying, buying businesses and working on like, to be able to buy more, right? That just just like my feedback, like experience from that. But one more thing about that, if like we can stick there, but if you want to move, that's fine. But one thing that I want to say is, I we would do it right now. We actually propose deal like that to another marketing company

jon_stoddard (14:11.372)
This is where, you know that...

jon_stoddard (14:16.633)
Yeah.

krystof_bartos (14:31.73)
or the original owner or the owner, she wants to be more in the on the sales side, right? And we have a great CEO in our company that we bought, right? We have the financial stuff, we have a great CFO. So we were like, okay, we can provide all those resources that you are missing right now and focus on the sales and then you will have bigger boat and kind of like you can

krystof_bartos (15:01.17)
at the start, I was like, let's ask for 20%. Right. And then my partner was like, think about it. And he was like, we need to ask for 50, at least because basically, I would provide myself, my business partner, our CEO that is making 100,000 plus, right for your company that is making like 100,000 profit for 20%, for 20,000, like digress, the focus on all of us for somebody else, like, there's like, we will be the cheapest

that they can hire, right? So don't do it. It makes no sense, especially if you have other things that you can focus on. I would do it for the first deal, for example, and just going from the zero to one is a huge, huge thing. But then be careful and really make sure that it's worth it at the start. So I would really look at, okay, if I'm getting 20%, if it's business that is making 100,000,

jon_stoddard (15:34.714)
Yeah.

jon_stoddard (15:48.05)
Yeah, it's an experience. Yeah.

krystof_bartos (16:01.23)
thousand dividends or whatever and do it.

jon_stoddard (16:03.77)
Yeah, I want to make one more point of that. There was a show with Marcus Lamonis where, you know, even though he'd buy a minority part of the company that showed the profit, he would always make a point of having it on camera saying, look, I'm only buying 5-20% of the company, but I am 100% in charge. And make sure that he's looking in the other person's eyes, and they said, yes, you are. Right.

krystof_bartos (16:23.17)
Yeah, okay.

krystof_bartos (16:30.31)
Oh, so even this adding this layer, so then from now on they understand what's the structure of decision making.

jon_stoddard (16:37.333)
Right.

Right. Yeah, that was a great show. I wish that was still I don't know if it's still on or not. So let's go back to the Tell me about this partner you set up is your partner from check two or is he from united states or yeah?

krystof_bartos (16:43.26)
Yeah, that's interesting.

krystof_bartos (16:52.391)
No, he's in the US, he's in Cincinnati, that kind of even help us doing this deal because it was SBA Finance, so obviously I cannot use that. And we just kind of, the partnership is excellent. And it was basically in the hybrid club, that was the start of my journey. They have something that the more experienced member kind of helped for a couple of weeks.

jon_stoddard (17:04.354)
Yeah.

krystof_bartos (17:20.49)
new guys, and I run that mastermind for a while and we met there. And he's starting to have basically a couple of deals and he always asked me about how would you structure it? Can you help me out? Right. And that time I was luck and check not being able to travel to us. And at some point I was like, Hey, I'm trying to do this. You are trying to do basically the same thing. I have this, you have that. Why about we start to doing it

krystof_bartos (17:50.831)
A year and a half ago we decided we will do it together. I think we made offers on three or maybe four deals and this was the one that we have done.

jon_stoddard (18:01.99)
Yeah, let me ask you about your split. Was it 50-50?

krystof_bartos (18:06.171)
Yeah, in terms of in terms of in terms of yeah, I cannot I cannot own that much. So I own more allows but that's like because of SBA restrictions of guarantees and stuff. But yeah.

jon_stoddard (18:10.65)
Yeah.

jon_stoddard (18:16.375)
Yeah.

Oh, right, right. I mean, you're not a US citizen, so that kind of makes it difficult to get an SBA loan, right? Yeah.

krystof_bartos (18:24.274)
Yeah, so I kind of need to be need to be.

jon_stoddard (18:28.15)
So what was he doing? Was he in the, I know you bought a marketing company. I saw your press release. Was he in the marketing business or was he doing something else?

krystof_bartos (18:34.103)
Yeah. Yep. Nice.

Yeah, yeah, he has done he have been in the marketing he says from day two because his dad was a commercial photographer actually. So he's saying like, I've been in the marketing, so to speak from my second day of being, being alive. So and then he had done done bunch. So he brought that part. But but he's great. And kind of, I don't know, let me ask you that. But

Sometimes with having those conversations, sometimes I'm that person that kind of poke into the holes of why this number is that and why the number is that, right? And I think having somebody on the team that is kind of just a relationship and just talking, it kind of helped to offset that tough part of discussing those details, right? So just that way that I can be kind of like a bad cop, so to speak, at some point, and it can be the good guy.

jon_stoddard (19:36.871)
No, no, it's uh...

krystof_bartos (19:37.35)
It just fits great and as I said, we have done two offers on two other marketing companies already and hopefully we'll buy one or two next year before the year ends.

jon_stoddard (19:50.05)
Yeah, no, I know what you're getting. I mean, the financial guys look at this and go, they say no a lot more than they're gonna say yes. And even a yes is sorta like, yeah, maybe it's worth looking into a next level. But a marketing sales guy would go, you know, that's okay, that number's okay. And you go, why is it okay? Is it because I've been in this industry for 20 years and I can go reach out to 20 people and sign them up for this. And it mitigates the risk.

krystof_bartos (19:56.594)
Yeah.

krystof_bartos (20:19.094)
Yeah.

jon_stoddard (20:21.371)
It's like somebody buying a software company where two of the clients are 100% of the revenue. That's a risk to a financial buyer, but a strategic buyer would just go, well, we already have 100 clients and it's just going to be 2% of our revenue now. So it makes sense.

krystof_bartos (20:29.372)
Yeah.

krystof_bartos (20:37.75)
Yeah.

And it changes from right now when we are looking on the bolt on acquisition. As you say right now, the view is changing a little bit, right? Because basically you can look at the, just a couple of resources that you really need. It doesn't have to necessarily be profits that you are looking to buy. Right. But for the first company, especially in the sector that you don't want to manage that company and be just an owner investor, not operator, like you need a first company to be, and you will be looking at it from every single sector.

jon_stoddard (20:57.773)
Right.

krystof_bartos (21:10.39)
company being solid, profitable, ideally with a good person that can run the company and multiple companies moving forward. So it's kind of changing where you are in the journey even when you bought the company.

jon_stoddard (21:22.37)
Right, you gotta buy the good bones first. I like pointing out Neil Patel because he's got his digital marketing company, it's doing $100 million, and then he went off and bought Uber Suggest and then Answer the Public, which just drives traffic right to his site.

krystof_bartos (21:35.292)
Yeah.

krystof_bartos (21:38.95)
Yeah, actually, we are looking to buy some even some media potentially to basically get the exposure, right? And it will be for the profit, it will just be about buying the right audience that we want to target, right? Business owners and, and stuff. So, so it definitely it's different. And, but I just want to so it doesn't sound bad. But like, my partner will not tell that like he's on our side, it just more like, I can be I can be sometimes I can be a little bit hard.

jon_stoddard (21:41.195)
No.

jon_stoddard (21:54.605)
Right.

krystof_bartos (22:08.97)
in terms of discussing the numbers and him being more on the soft side and kind of negate that bad part. It's great because then there's still the report and everything. So when you ask about what's good about that partnership, even those things that are basically soft, they are not like hard skills and he has a bunch of hard skills, don't take me wrong, but even those smaller

jon_stoddard (22:19.97)
Good job, bad job.

Yeah.

krystof_bartos (22:39.31)
in terms of a personality and being able to speak with different people. For example, in terms of we are at some point, we are looking to buy some manufacturing companies as well. And for example, I know we need somebody that is actually engineer because those guys just speak different language that so to speak. Right. So that's kind of important to think about when you want to do it or want to do it on the next level.

jon_stoddard (22:59.251)
Yeah. Let me-

krystof_bartos (23:09.03)
those things that kind of help you out to offset the weaknesses. It's the same with any other business, right? But I just enjoy it.

jon_stoddard (23:19.11)
Yeah, let me ask you about the deal, Jeremy Harbor. I know Jeremy Harbor spends a lot of money on looking for distress companies and teaching people how to buy distress companies. Was this company that you purchased distressed or was it just a good, profitable ongoing operation?

krystof_bartos (23:34.61)
No, it was excellent. Actually, the last year was the great year of the company as well. But it was set up, the company was set up when I was seven years old, which is kind of great. I can start a business at that point. Even my son has some businesses than me, but it will be tough. So it's long, for a long time, a little bit over a million dollars of revenue, 25 to 30% profit margins.

jon_stoddard (23:47.853)
Yeah, yeah.

krystof_bartos (24:04.81)
great cash flow, 90% is rekewing revenue from basically marketing services, right? So really great. And there was Charles, if he's listening, hi and thanks. At some point he's great and he basically helped to run the company for last 10 years and he stays with us as a CEO and he will be able to help us to

krystof_bartos (24:34.55)
companies, marketing companies when we had that. So it was just a perfect deal that set us on the journey to why more.

jon_stoddard (24:44.67)
So why did he sell? I mean, if he's still in that spot, it's always like, okay, I'll stay on and help you do this, but I just don't wanna own it anymore. What was the motivation for selling?

krystof_bartos (24:53.094)
Yep.

Yeah, so it was like husband and wife combo and they look for retirement, right? So they are getting close to that age. But actually with David, with the owner, the husband, he's staying with us on the business development side. So and I hopefully he will not be angry at me. But I think that's interesting from the mindset of business sellers. And that's

when we bought the business on one more client, he basically just bring the client in and do some copywriting work, right. And on the launch, he mentioned like, that was great. I just bring the client in and just do the copywriting. That's why I started the agency in the first place, not necessarily doing the management side, right. So and I know, I think Jeremy said something, or Carl, I don't know, something about they bought

basically car repair shop, and the guy was selling the company and he was like, I will sell it to you only if I can keep repairing the cars as long as I want, right? But I don't want to deal with owner of it with employees with the clients, nothing, I just want to repair the cars. That's why I started and now I need to do taxes and accounting and I don't I don't want to understand it right and clients and employees and

rate or whatever, right? So I believe that's a huge like a mindset think of especially like a

jon_stoddard (26:33.77)
Right, because the alternative is they go home and die because he didn't have anything to do. Yeah.

krystof_bartos (26:38.09)
Yeah, exactly. So he's staying with us. We had some transition period with both of them, but basically he was the main business development person. So as we are taking, Charles is taking, the CEO is taking over the operation. We onboard a fractional CFO to help me out in terms of the finances and adding extra layers to that because I have like a high level of finance,

and the stock of the companies on the market and understanding what to do to make it better. But I'm not accountant, I'm not tax guy, right? So we need that support on that end. David, the owner can just do business development.

jon_stoddard (27:23.63)
Yeah, I have to ask you about how you knew that your partner, you could trust your partner because that's ultimately, it's easy to say, hey, you know, you join this group on Facebook and there's 5,000 other people's in this business buying you say, let's partner up and you partner up and you don't really know a lot about the other person you may not have met in person and you've never been through rough seas to know if you can trust them. How do you know that?

krystof_bartos (27:49.33)
Yeah. Yeah, that's great. So a couple of thoughts. First thought is, I think a great thing about being can doing these deals, right? We are not kind of, we didn't came up with the Apple in our garage and need to safeguard that nobody steals the idea, right? So I think there's different mindset that people

have and they want to do those deals, even business owners when they want to buy other companies to grow, right? The mindset needs to shift a bit about protecting everything and be scary, scared about something can go wrong and you can make more risks, right? So to speak, right? So that was one part that I would just say from the mindset standpoint. The second thing is if you join venture with somebody doing deals and you make offers on three deals and you

negotiate, and then you one offer is accepted, and then you go through financing, and there is a lot of headaches and issues. I would say you can learn about you can know that person better than most of your family, so to speak, because it's raw. It's raw. It's real. It's raw. It's real. It's I think somebody saying it right, like you can spend meat over coffee

jon_stoddard (29:09.413)
Yeah, go to the SBA classes.

krystof_bartos (29:19.33)
or you can go skydiving with for five minutes with somebody. And the relationship with that person that you just have a five minutes of something super special will be stronger, the bond will be stronger than with somebody that you are just meeting for a coffee once a month. And I believe it's true. And obviously then there's some legal that you can do that kind of protects that part

krystof_bartos (29:52.425)
and I don't know.

jon_stoddard (29:53.91)
What about, let me ask you about the process. So how much to get an SBA loan to purchase this? You made an offer at this marketing company. You know, it's a good, it's gotta be a reasonable offer because they're just not gonna underwrite it or finance it unless it's right in their numbers, right? So you make an offer on this and how much does your partner own of that to get the SBA loan? Because my partner's from Czech

krystof_bartos (30:02.172)
Yep.

krystof_bartos (30:10.55)
Yep. Yep.

jon_stoddard (30:25.164)
What does that look like?

krystof_bartos (30:25.353)
Yeah. Yeah. So so in terms of like, in terms of the combination of international and US are more like

jon_stoddard (30:32.65)
Yeah, he goes like SBA goes like SBA looks into you. It's a financial proctology. I mean, they look into you and go, OK, your other partners from the check, how do we check him? Yeah, how do we do a background check on Kristoff?

krystof_bartos (30:42.09)
Yeah, yeah. Yeah, that's right. So there's, I would not necessarily want to discuss Pacifica how we have it, but I will tell you, right? Yeah, that's fine. So basically, and that might be valuable for your audience, if somebody's like me and wants to do it. So basically, the US citizen needs to own at least 51% of the deal every single time, right, or

jon_stoddard (30:53.073)
No, no, no specifics, but yeah.

krystof_bartos (31:12.01)
more than 19% of the company needs to guarantee the law, even if you are, you are not US citizen, right. And then your decision is one, do I want to guarantee the law so I can have 49% maximum, right? And go with that struggle, which is basically the international rabbit hole of all those credit checking and

Or you can kind of stay under that 90% rate there and then it's easy and it's more basically one person is buying it and then I guess you can make some agreements how to change it once the SBA loan is gone potentially, I don't know, right? But that's kind of what are the options for people that even want to do it and are not in the US.

jon_stoddard (31:58.792)
Yeah.

krystof_bartos (32:11.95)
want to kind of do it in the US and they have...

jon_stoddard (32:15.93)
Well, I mean, look, we're right next to Canada and a lot of people sign up for courses in Canada. So it's not like we have to, you know, it's not like thinking it's going to be in China or, you know, Europe. The EU could be just right over in Canada. Yeah.

krystof_bartos (32:20.692)
Yeah.

krystof_bartos (32:26.11)
Yep. Yep.

Yeah, yeah. And just maybe just a word of caution, one hiccup that we had in terms of the getting the loan was that at first, bank told us that, like, because I'm not US citizen not having green card, I can own more than 90% and still not guaranteed alone. And we set up the whole the holding structure and stuff, right. And then, and then basically, basically, then

later learn it's not the case. So just from the experience if some bankers or sales guy for the banker told you that you can probably own more than 90% and not guaranteed the loan and not do the background check and stuff, from my experience it's not the case which delayed the deal about for like three weeks.

jon_stoddard (33:18.733)
Yeah.

jon_stoddard (33:21.97)
Well, I will say this, sometimes you talk to these banks and there's this couple layers. The first guy is the salesperson and they'll say, oh yeah, we'll do the loan. And oh yeah, you can set it up like this. But when it gets to underwriting and they still doing the due diligence background checks, it's like, no, that's enough. Or the underwriters go, no, we don't like that industry. We don't like the numbers. We don't like the cash flow ratios, working capital, whatever it is. Yeah.

krystof_bartos (33:39.01)
Yeah, and leave the world unclosed.

krystof_bartos (33:48.33)
Yeah. Yeah. And actually like, like just getting that loan was, was kind of the headache and there was a lot of hiccups, but at the end, we thought it was like a super long. And now my business partner, Mark, he, uh, he started coming to some like MNA networking events in his, in his area and telling them that we completed the deal over six in six months from the first discussion to closing and SBL loan took like four months.

Five months. So it was five months actually with the negotiation. So it was a little bit longer. But everybody says like, how did you have done it that fast? So actually, it wasn't that bad at all. We are kind of, it seems like we kind of set up some good record about how fast to do the SBA alone. But we actually thought it was terrible and it took a while. We have to postpone the date of closing multiple times. And big shout out to...

jon_stoddard (34:46.234)
Why did you have to postpone the date of closing?

krystof_bartos (34:47.45)
Yeah, just because underwriting wasn't ready. And then it was another, another this hiccup that I mentioned, right, with the structure of that. And then just this bank didn't particularly very great in terms of

jon_stoddard (35:02.03)
Well, who is the bank that you got your SBA loan from?

krystof_bartos (35:04.69)
Yeah, I don't know whether I should say it right now after I said everything right. But yeah, we're good.

jon_stoddard (35:10.87)
I know, I mean everybody's gonna have their own experience with it and there's Live Oak, Bank, there's all kinds of people out there.

krystof_bartos (35:13.43)
Yeah, yeah, yeah, it was Bay first bank. But at the end, like they solve everything and next year we will finance with them probably again, right? So I think back again, and when something was bad, they kind of figured that out, right? But at the end, it seems like we still

jon_stoddard (35:28.212)
Yeah.

krystof_bartos (35:43.45)
life for, for example, better. That just what I, what I heard that they are more, maybe a little bit more organic.

jon_stoddard (35:47.391)
Yeah.

Yeah, so was the seller happy? I mean, it took six months, but was the seller happy now?

krystof_bartos (35:56.051)
You need to ask him not me, but I hope so.

jon_stoddard (35:59.25)
Well, he stayed in the job, right? I mean, as far as you know, can you take his temperature? Go look, man, you got to be transparent.

krystof_bartos (36:05.151)
Yeah, I would say when the original owner introduced you to their employees and said that after everything good and bad, obviously there's a bunch of tough discussions and it's just not like everybody will want to be different. And he says like they are part of my family basically right now. I think that's just a good reference, I would say.

So then you take over the business, you do a lot of changing of the bank ownership. It's not easy. That's terrible as well. So then after closing, you still do a lot of stuff and still a little bit of negotiating about how it will be done, the transition and stuff. But we are a good spot right now and it's about to get easier. So I think from my end, I think we are great and he's happy and we are happy.

jon_stoddard (36:54.55)
Yeah, how, how, how transparent were you?

krystof_bartos (37:03.41)
grow to the next level with us. It feels like everybody is happy. That's my belief, but you need to ask them more than me, right? That's just my...

jon_stoddard (37:15.031)
Yeah, did you make any changes, operations, personnel, anything first hundreds, days, six months or any number like that?

krystof_bartos (37:24.71)
Yeah. So most of the changes, most of the changes are on the financial side. So basically a couple of points, the actual level finance, so to speak, right. So we had we have like seven, maybe 7580% is just rekewing monthly, monthly revenue, right. And most of the clients for now, they paid by checks, right. So we kind of setting up right now. Yeah,

jon_stoddard (37:52.731)
My mail a check they write a check and mail it. Okay.

krystof_bartos (37:54.83)
for the rate filling revenue. So that doesn't make that much sense. So we are changing that, we'll offer them some auto pay options so they can pay it easier, faster. So we kind of optimize even the accounts receivables and cash flow. And there are some clients that pay a little bit late, but I wouldn't blame them, I would blame the checks. So we want to make it easier for them to

krystof_bartos (38:24.69)
do it if you can do it in your business, do it my recommendation every time make it easy for guys to pay you right. And that's the biggest, biggest change. So we are kind of starting to setting up in the process of setting up some automation tools that kind of help you to streamline streamlined accounts receivables and accounts payables and these type of things. This is the most of the change obviously one change was from somebody that was that was running the

but but get get that guy to see overall that was change. It was a hard change that was but it was a change. But he's just crushing it right now. Doing great amazing job. So really happy about that.

jon_stoddard (39:11.47)
he has more of his time to spend on copywriting and managing, yeah.

krystof_bartos (39:14.03)
No, I mean the CEO, which was basically the second employee, second strongest employee or the strongest employee in the company, so to speak. And he was already running a lot of the business, right. And we basically promote him to the CEO and president. So he steps in and he's the top guy. We are not running the business day to day.

jon_stoddard (39:36.15)
Yeah, did you offer him any equity shares?

krystof_bartos (39:38.11)
Yeah, so we have basically some some bonuses linked to that. And also we invite him basically as a part of our buying group for the for the when we buy another marketing companies, right. And he will take over the the operation of that of them, he will, he will be part of our buying group, which he's super excited about it, because that's basically offering the life changing think of buying businesses to somebody that wasn't thinking about it, right, by basically just and he can

and we take over the negotiating deals and financing and finance and finding those deals. And he's doing what he allows, which is managing those businesses, right? So we offer that and he has some options how to get piece of that business that we bought kind of as well.

jon_stoddard (40:25.45)
Yeah, let me ask you what his opinion is on. So they do, you do a lot of copywriting. What is the thought on chat GPT or Jasper and AI about this copywriting trend of, really makes it 10 times faster. I mean, I use Jasper.ai to help me write the descriptions, the headlines, my new emails. I still have to massage it a lot, but it writes the structure for me a lot faster that are keyword strong.

krystof_bartos (40:40.55)
Yeah.

krystof_bartos (40:50.472)
Yeah.

krystof_bartos (40:54.91)
Yeah, that's right. So video copywriting, obviously, as a part of doing websites and then the ongoing marketing. And yeah, the I believe right now, we have Jasper, then also like a GPT. And there's other people that can do the copywriting. And I believe I'm not that in those weeds that much. But I know we are using it as a just to help us the same way as you are using

jon_stoddard (41:18.87)
Thanks for watching!

krystof_bartos (41:25.03)
we are doing that. And actually, I know today Google announced more AI for Google Workplace, and it will help you to write emails. Just like today, and I think Microsoft will announce something this week as well. It can start help you to create presentation. And what was interesting is if you receive a huge threat of emails, maybe if you are financing some deals, and you just

huge threat of back and forth, you can ask, summarize the threat for me, and it will summarize the whole email and give you just the, basically catch you up. And then also you can just reply and create a presentation. So I'm just excited about it. I used to the GPT to try to do some LinkedIn posts for last like two weeks or so. So it's great. I just like that. And in terms of the marketing agencies,

I think it's a lot of marketing agencies right now basically have copywriters and then for example, Jesper and they A-B test the results. And my belief right now is that often the AI wins because it can take over the...

jon_stoddard (42:43.571)
Well, it's ten times faster. I mean, it's a Let me ask you about

krystof_bartos (42:48.253)
Even from the conversion stuff, I think because it can kind of take in the conversion rates and some metrics other than a person can, it can kind of optimize for better click rates and stuff. So even on...

jon_stoddard (43:02.53)
Well, yeah, there's no emotional damage to use. Like, oh, I'm going to write this thing and throw it out there in front of a million people and see what the conversion ratio is. Like, oh, god darn it. I thought that was going to work. It didn't work. You just got to keep testing. And then if you just, like Jasper AI, you can ask for 100 results. And you just take the copy and just test it. There's no emotional decision into it. It's metrics and math. Yeah.

krystof_bartos (43:30.391)
Really? Like we are using it in the marketing company, but I haven't tried so you can say like right until you have 100 leads for me and it will change the language and test it out.

jon_stoddard (43:42.451)
It'll give you options like a headline. I want a headline and I'll ask for like the best headline responding headline And you say I want ten results and then it'll just give you ten different headlines about the subject you put in. Yeah. Yeah

krystof_bartos (43:44.034)
Okay.

krystof_bartos (43:52.13)
Well, yeah, okay. I thought you can ask for amount of leads and it'll A-B test until it gives you what you need, which would be cool. But I know you can do a bunch of things.

jon_stoddard (44:02.25)
Yeah, no, it's a my guess is I bet just chat GPT could do that because it's pretty smart at some point, right?

krystof_bartos (44:09.65)
So basically, yeah, that's how I test Chai GPT, was I say, give me 10 topics about growing business cash flow profit and revenue. And it gave me 10 topics. And then I just copy and paste and say, write me LinkedIn posts and this and this and this and this and that. And I have like 15 posts on LinkedIn in five minutes. It's like,

jon_stoddard (44:33.45)
Yeah, that's awesome. Isn't it? But I need to ask you about our, we have a mutual friend, Andrew Longcore. Did he do the legal work for you guys on this?

krystof_bartos (44:39.872)
Yeah.

Yeah, we have done the legal and multiple times he saved the deal in terms of the banks and the financing and stuff and helped navigate through the closing. So he's just amazing.

jon_stoddard (44:58.91)
Yeah, he's bought some courses from me. So I like him in my network. Yeah, yeah. So let me ask you about your, the mentor, because you, I looked on your LinkedIn page and you talk about Tony Robbins a lot. Now, what do you think? Could you summarize what he's done for you is education? I also know that you work on the foundation for him too, right?

krystof_bartos (45:00.331)
Oh nice, I didn't know that. Let's go.

krystof_bartos (45:20.35)
Yeah, so I basically support his events. And one was for his foundation, which is basically his version of his seminars for kids, for teens, right? And I was basically captain there. So it was virtual, so managing the Zoom. So that was my help for the foundation. And then I am senior leader for his events, which is basically after some training, you can basically support these events.

to any event that Tony has for business, personal, whatever, and basically support the people that are attending. And to be able to get there, you basically do everything that he offers, which wasn't the reason I just wanted to. And I think from my end, I started with him when I wasn't in a good spot, so to speak. And he helped me a lot in terms of buying businesses

jon_stoddard (46:08.675)
Yeah.

krystof_bartos (46:20.55)
Like he is doing like 7 billion revenue right now and has like 150 companies.

jon_stoddard (46:26.45)
Yeah, so it's a he's acquired minority shares or full shares of 100 businesses. Yes.

krystof_bartos (46:30.67)
Yeah, right. So he knows how to do business. So just him talking about how to do business and he has this unique, like from the mindset and so like, psychology and stuff, it that's a lot of layers to deal making and just owning the business. And you and I met like, for example, Keith Cunningham there, which is one of my like a financial mentor. Yeah. Yeah. He's great. All of

jon_stoddard (46:53.27)
Keith Cunningham has got some great books. I love Keith Cunningham's The Ultimate Blueprint book.

krystof_bartos (47:00.57)
books and he's, I think he's, Keith Cunningham has a couple of his courses right now, but other, but then he speaks at Tony Robbins business mastery events, like a guest speaker about the finances and stuff. So part of the financial background, I definitely own to business mastery and Keith Cunningham and just making finances simple. There's a bunch of simple books if people want to kind of get grasp on it. One

this great book for finance. So I kind of come back. That's how I kind of work. I want to do something, I realize what I don't know. And then basically, I look for people that has done it, not necessarily universities or anything, find a course and anything. And you can learn what you actually need and apply it. So I have done it in the finance that I needed,

jon_stoddard (47:46.81)
Modeling success, man. Yeah.

krystof_bartos (48:00.61)
kind of thing. And stuff right? Actually, when we are talking about Tony Robbins, one of the one of the stories that I don't know about whether you know it. But he has done consulting for equity, he even haven't not knew about it does the thing that way. But in the before dot com bubble, and he basically I believe it is like a mindset, mindset and psychology strategy how he helped to navigate some merger, billion dollar mergers,

of the business because of he was able to talk with these guys, right, and use his this like an LP and other stuff, right. And he get the piece of the business then it went public and he made like 400 million overnight. But based on that, and then he stopped me thought about this story, I was like, I need to learn his strategy how to do these things as well. If you can just talk with people better, and do kind of those kind of deals

great. I know that then dot com bubble hits and all the 400 million was gone next day. So but it's still fun, right. But like, there's a couple of things that you can learn from it. And and I like to support it one because obviously I can go back at any time. And it's kind of kind of good balance in terms of just being in the business and doing all kinds of business, you

jon_stoddard (49:30.391)
Yeah.

krystof_bartos (49:31.01)
be healthy, have a good relationship, and make sure that it's not just about business and money and all the areas are covered. All the areas are covered. I work with one of his coaches on a weekly basis as well. So he's a big part of, let's call it, the success that he bought the business and the changes that we are making can part of that. So I would say Jeremy Carl, Anthony Robbins,

jon_stoddard (49:40.57)
and give them back, right? Yeah.

jon_stoddard (49:59.614)
Good.

krystof_bartos (50:00.67)
kind of my trial of people that helped me out. And then Andrew is supporting it. Thank you. Thank you. It was a pleasure. Thanks for having me and hope somebody can take something from it and be valuable. Thank you.

jon_stoddard (50:06.53)
Well, thank you for watching. Kristoff, we're already up on an hour, and I want to thank you for being a guest on my show.