Summary

In this conversation, Mike Finger shares his journey through multiple business exits and the lessons learned along the way. He discusses the importance of mindset in preparing a business for sale, the challenges faced by small business owners, and the need for realistic expectations in the acquisition process. Mike emphasizes the significance of understanding what makes a business sellable and the relationship between buyers and sellers. He also highlights the common pitfalls of acquisition entrepreneurs and the overwhelming messaging in the M&A space. In this conversation, Mike Finger discusses the misconceptions surrounding acquisition entrepreneurship, particularly the unrealistic narratives propagated by media and 'guru' figures. He emphasizes the importance of understanding the true nature of deal flow in private equity and the reality that most small businesses are sold to individuals who will actively run them. Finger critiques the prevalent messaging that encourages aspiring entrepreneurs to seek shortcuts, such as buying businesses with no money down, and highlights the challenges of running a profitable business post-acquisition. He calls for a more grounded approach to entrepreneurship that values long-term commitment and community contribution.

Takeaways

Mike Finger started his first business in the mid-90s.
The journey to selling a business often requires a mindset shift.
Just having employees does not equate to business value.
Understanding buyer needs is crucial for a successful sale.
The process of selling a business can take years of preparation.
Cash businesses come with unique risks and challenges.
Exit Oasis focuses on preparing businesses for sale effectively.
Sellability and ownability are interconnected concepts.
Business owners often need to change their approach to succeed.
Realism in business expectations is essential for success. There's a false buyer narrative about how many deals are happening.
Most small business owners will never see more than $5 million in revenue.
The majority of small businesses are sold to individuals who will work in them.
Acquisition entrepreneurs often regurgitate misleading information from gurus.
Buying a business is an act of spending money, not making it.
The messaging around acquisition entrepreneurship often ignores operational realities.
Chasing mythical opportunities can destroy real-world acquisition chances.
Building a business should focus on attracting the most likely buyers.
Shortcuts in business acquisition can lead to missed opportunities.
Community contribution is vital for small business owners.

 

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Transcript:

Jon Stoddard (00:01.248)
M&A entrepreneurs today my guest is Mike Finger. Mike has been involved in four exits and now he runs a business called Exit Oasis. Welcome to the show, Mike.

Mike Finger (00:13.75)
Hey John, thanks for the invitation.

Jon Stoddard (00:16.008)
Let's go back to your ordinary world before you got into exits and acquisitions. But tell me about this first exit that you did. Was that a startup or is it a company you bought? What was that?

Mike Finger (00:28.758)
No, it was a startup. My wife and I started a business in the mid-90s, cut our dining room table in half to make two desks and started serving clients out of our living room. I was a bit of a growth junkie, right? I don't know if they can see me tap in my vein here, but it was always the next client and the next employee and the next and the next, and grew that business to 50 full-time employees over the course of a decade.

looked in the mirror, saw a burnt out piece of toast and thought it's time to do something else. And that's when I had my first moment of, what do you mean I can't sell my business? That journey to that point was, I mean, all the cliches, right? 18 hour days, da da, but got to a place where...

Jon Stoddard (01:09.449)
Yeah.

Mike Finger (01:23.202)
When I reached out to the brokers, they told me two owner dependent, not enough cash flow, all of these traditional reasons why you can't sell a business.

Jon Stoddard (01:34.1)
which is that they're saying, hey, I can't sell this fast. So, and I'm not gonna make a lot of money on it. So yeah.

Mike Finger (01:37.982)
Yeah, that's right. That's right. Fix this and this, and then give me a call in three years, buddy, right? I mean, it was a two by five.

Jon Stoddard (01:45.728)
Yeah.

Jon Stoddard (01:49.184)
What was it? What was it selling? What were you selling or making? Yeah.

Mike Finger (01:53.334)
The kind of business? Yeah, we provided back office and support services to schools, nonprofits, and associations. So everything, I think at the end, I employed 25 or 30 accountants. We did financial management, compliance, executive director kind of work. So it was professional services in support of those kinds of organizations.

Jon Stoddard (02:17.64)
Yeah, that sounds very valuable. People need that.

Mike Finger (02:22.455)
The need was there, the knowledge on my part of what it meant to create a business you could sell was not at the time. Five years later, the business was identically sized and we successfully sold the business. So it was that journey, that professional pivot that kind of educated the rest of what I have ever done professionally.

Jon Stoddard (02:30.675)
Uh-huh.

Jon Stoddard (02:46.048)
So did you educate yourself on what was a good business to sell and then implement those, uh, tactics or strategies in place? Like, Hey, in owner, uh, to owner dependent or cashflow, not good.

Mike Finger (03:02.538)
Yeah, exactly. It was, and again, it sounds so freaking simple when you're sitting on the other side of the table or if you're a buyer looking at a business, which I've been a couple times myself, you're looking to say, well, how can the seller not see this? How can they not understand that I need X, Y, and Z? But as the owner at the time, I didn't look at that stuff and that's pretty common for owners. And...

So for me, it was about changing my perspective, putting on those buyer glasses and saying, what does this business need to look like to be attractive to a potential buyer?

Jon Stoddard (03:41.092)
Yeah. And five years later, when you did sell it, how did you go through that? Did you go through a broker? Did you get the multiple you were looking for? Uh, how'd the negotiation that story around that go?

Mike Finger (03:54.962)
Yeah, went through a broker. If I recall thinking back, from signing the listing agreement to sale, I think it was about a year. I was done with the business. I mean, mentally I had checked out some time earlier, probably five years earlier in fact, when you consider that I got to that place of I gotta get out of here. But...

Jon Stoddard (04:21.832)
Yeah, how did you find gas in the tank for another five years?

Mike Finger (04:25.226)
Well, I mean, what choice do you have? I mean, that's the hard part for so many small business owners. They think, I'm going to get to that place if I want to sell, and I'll just flip the switch and it'll sell. And they learn that's not the case. And as you pointed out, you realize my tank is empty, and I've got three to five years of work to do here. Not just.

Jon Stoddard (04:28.532)
You don't, right?

Mike Finger (04:51.818)
work to do. It's not just maintaining, right? You got to change the business. And that is hard stuff to do. And if your tank is empty, it's difficult. It was hard, John. It's one of the biggest challenges professionally I've ever had.

Jon Stoddard (05:02.944)
Yeah.

Jon Stoddard (05:07.476)
Yeah. Let me, let me dive into that because this is a lot about mindset. I don't, you know, what everybody else says, the stack takes a strategy. But this is mindset right here. What did you and your wife sit down and realize and then put into place and believe and faith and everything to go, okay, we got to be able to fix this to be able to sell it, to get out of it. What was that? I mean, news.

Mike Finger (05:36.282)
It was a mix of desperation, right? Again, the what choice do I have? Fear, right? Am I really going to have done this 10 hours, this 10 years of work for nothing? And then the hope, right? I mean, I still had that entrepreneurial hope that, you know, I can do this, I can fix it. But it was, again, it was that change of perspective about

what the process of making a transitioning a business really is. And it's about the relationship between buyer's needs, seller's needs and wants and how those can and should align. But again, so much of what we did up to that point was driven by an assumption. I thought it was informed assumption, but as I painfully found out that wasn't the case.

Jon Stoddard (06:09.866)
Yeah.

Mike Finger (06:33.25)
Just having 50 employees doesn't give your business value. Just surviving a decade doesn't give your business value. Certainly not transferable value.

Jon Stoddard (06:45.096)
Yeah, yeah. Yeah, are you familiar with the author Joseph Campbell here with the Thousand Faces, where he talks about everybody goes through this hero's journey? And you're a part of that hero's journey was you met Darth Vader and you battled him, you came out transformed. How did this change you this, turning this business to a sellable business and then understanding what that looks like?

for future does. How were you transformed?

Mike Finger (07:15.27)
Oh, it was the biggest professional pivot of my life. I sold the business, took a little time to recover, went to work as a broker for a year, helping others buy and sell, loved part of that, hated part of that, learned a ton. Went and ran an incubator for three years, helping startup companies start up and grow faster. Loved that, caught the bug, went out and bought, turned around and sold.

to other businesses, I think primarily to prove to myself that what I learned the first time through wasn't a fluke. And so

Jon Stoddard (07:52.756)
Yeah, I love that because it's the practice of business. If you wanna get good and master business, you have to practice doing it. Like get up to bat and see if you can hit the guy's pitch. Yes or no? Right.

Mike Finger (08:02.506)
Right. Yes, I agree with you, but I also recognize that that's not how most of us in business do it. And I'm not even sure, and I think we'll talk about this a little bit more as we go on, I'm not even sure that's how most people in business should do it. But for me, having gotten out and gone on to that next challenge and started to realize what the mechanics needed to be,

Jon Stoddard (08:21.108)
Yeah.

Mike Finger (08:30.658)
dramatically informed my ability to do it a second and a third time much faster and more successfully than I had done it in that first 15 year journey. So yeah, huge learn for me. Huge learn.

Jon Stoddard (08:41.609)
Yeah.

Jon Stoddard (08:45.404)
Yeah. What's a, what kind of businesses were they? These second and third ones that you bought and then sold.

Mike Finger (08:52.607)
I went from a model of heavy client involvement and service to as simple of a model as I could find. So I was buying and selling car washes and laundromats and some of those more traditional vending machine model businesses and loved the simplicity of the business and found that what I had developed and learned

admittedly more sophisticated business, gave me great ability to create some good results in those simpler models. So they were much more straightforward.

Jon Stoddard (09:28.309)
Yeah, yeah.

Jon Stoddard (09:32.496)
I have to ask you a question about this because I get a lot of students come to me with their first choice of business they'd like to purchase is, I'd like to purchase a laundromat, a coin operated laundromat. What's your opinion on that now that you've owned one?

Mike Finger (09:43.766)
Yep.

Mike Finger (09:47.918)
I liked the business. I enjoyed it. It was a, it ultimately turned out to me to be a win because of the function of how I found it and how I bought it. And we could spend an hour talking about that story. But I liked the business model. It is...

It's an expensive one in many cases because of the value of the equipment. If you find the right one, it can be a good, but finding the right one can be a challenge.

Jon Stoddard (10:22.004)
Now the right one, and I'm going to guess, is one that's just changed out all the machines, or the machines are fairly new and good quality versus a coin operator laundromat where the machines are 15 years old.

Mike Finger (10:36.834)
I am unapologetically, I'm a cash flow buyer. To me, a good one is one where the cash flow generated by the business is in some real world relationship with the value and price that they want for the business.

Jon Stoddard (10:42.218)
Yeah.

Jon Stoddard (10:56.2)
Yeah. And what's your opinion on this is one of the, the risk involved with buying a coin opulated because it's a cash business where somebody may not record all the cash they earn with the IRS. What's the risk there?

Mike Finger (11:11.308)
Yep.

good luck selling it, right? Wink, wink, nudge, hey, but I mean, I've had that, John, I've had the guy say, okay, now that the brokers left, why don't you come back to the condo with me and I'll show you the second set of books. And the ironic thing about that is he got done showing me the second set of books and then said, and I'm not making this up, not only that, I think the numbers are better than this because I think my brother is

Jon Stoddard (11:16.192)
hahahaha

Jon Stoddard (11:29.673)
That's exactly what I'm talking about.

Mike Finger (11:43.486)
is stealing from us. So, right? So it's like, hey, I'm lying to the IRS, but you should trust me and write me a big check because I'm an honest guy. I mean, it's just, it's such a bizarre scenario to play out, but I've run into that over and over in that space. Run the business the way it's supposed to be run, and you can reasonably expect.

a smooth path to exit. One of the core questions I ask owners I work with is, can you document your results? If you can't, they didn't happen, period. No cake and eat it too.

Jon Stoddard (12:20.136)
Right. So, so you're saying, so you're saying, you know, in a month's time, all the quarters they take in, can you document that that's coming in and that has to match with the IRS?

Mike Finger (12:32.638)
Yeah, what your tax return says is what I get to bring to the bank, right? So if you can't document it, if you want me to believe, and I've got them, right? I've got the financials where the handwritten notes on the side show me how much more they actually took in. You know, here's the financials that informed the tax returns, but here's what it really was. What am I supposed to do with that? All I can take from that is you are not an honest owner.

And what else that you've told me shouldn't I trust?

Jon Stoddard (13:06.144)
Yeah, exactly. You start off with, what is it called? Fruit of the poisonous tree. It's never gonna get better, right? So.

Mike Finger (13:11.79)
That's right. Yep. I'll lie to an agency that can put me in jail, but I won't lie to you, John.

Jon Stoddard (13:21.536)
That's right. Okay. All right. So that fourth business, what was that? And what's the story on that?

Mike Finger (13:34.118)
Same sort of model, a service center. That one had multiple car wash bays and a laundromat.

Jon Stoddard (13:43.848)
Yeah. And you really like those. Do you put people in those and just say, Hey, here's the first five things you should look for before you buy these or what?

Mike Finger (13:53.874)
I'm not, I am not big on the buyer side anymore. I don't do a lot of coaching or engagement on the buyer side. I'm almost exclusively on the seller side. So I work with owners.

Jon Stoddard (14:07.049)
So when did you start to exit Oasis?

Mike Finger (14:11.478)
We've been operating here for five or six years now. For me, that was after the last sale. I came to realize I loved the space, but I didn't... I carry ownership pretty heavy. I'm the wake up at four o'clock in the morning, drive to the shop kind of guy. And I didn't feel the compelling need to do that anymore, but I still wanted to be in the space and active. I love the...

Jon Stoddard (14:32.297)
Uh huh.

Mike Finger (14:40.918)
I love the transaction. I love that transition that owners go through, but it's really cool to deal with that stuff and then close my eyes at the end of the day and go to sleep right away. So.

Jon Stoddard (14:50.7)
Right, right.

Yeah. Well, so what's different about Exis Oasis with the type of sellers that come to you? What do you, what do you, is it Mike Finger or is it some other proprietary program to get the best price at the shortest time?

Mike Finger (15:10.73)
Yeah, no, I've got a focused curriculum, but it's me. This is a, I'm not building a huge, you know, coaching empire here. This is, I love the engagement with the small business owners. I love, I enjoy doing what I do. And so this puts me in a place where I get to do it and results have been great. I am, I'm not a deal guy, John. I'm just going to admit that upfront.

And what I mean by that is what I do is about helping create the environment that allows a seller to make one of two choices, to keep the business forever or to sell it tomorrow, right? To be in a place where the business is giving me as the owner what I want from it. And it's freaking magical what that creates in terms of the opportunity to sell.

So for me, and when we get there and we're ready and the owner says I wanna sell, then we'll bring a broker on to walk alongside or we'll engage the expertise that we need to make the actual transaction happen. But all of that happens as a result of the preparation of the business and the owner for sale.

Jon Stoddard (16:29.692)
Yeah. So what do you do for you? If I, if I was a 55 year old CPA and I came to you and said, I'm, I'm ready to go, you know, my last kid's out of college. Uh, and I just want to slow down. What, what does that look like?

Mike Finger (16:48.579)
It's a function of defining a very simple but complicated to answer question, and that is what do you want? What's my exit goal? When do I want to exit? What do I want to see in terms of proceeds? We reverse engineer from that to what the business is today and the path to get from where we are today.

to what the business needs to look like to give you the exit you want, that's what we're doing. That's the journey we're walking. And hopefully along the way we're doing it in a way that the owner can start to enjoy that engagement more. Again, I don't work on commission because I've had the experience too many times whereas we are prepping for sale, an owner falls back in love with their business and decides they wanna keep it and that is a wonderful outcome.

as long as the business has given you as an owner what it is you want. So it's looking at

Jon Stoddard (17:43.872)
Yeah, but leaving you out to dry. Yeah.

Mike Finger (17:46.51)
Well, if I'm if I'm commission based, absolutely. Right. And so that's the that's the idea is let's build a business that gives its owner what it wants, whether you're the owner or the buyer is the owner. Right. Because sellability is own ability. Those two things go hand in hand, even though we sometimes think they don't.

Jon Stoddard (18:08.608)
Can you expound upon that sellability is ownability? What do you mean?

Mike Finger (18:15.114)
All right, so when I sit down with an owner, and let's take just a quick step back. One of the things I realized from my own experience and when I started looking at building a curriculum for Exit Oasis is the reality that this entire space is defined by complexity, right? If I look at the professionals who earn their living in mergers and acquisitions, what do they do?

their accountants, their attorneys, their brokers, they're the ones that know the technical aspect of page 27 of the, it's all of this complexity stuff, right? That's, and that's the messaging that we get. Hey, you better pay attention to this new SBA program on line seven, all of this complexity. But the truth of the matter is, is if you look at it, most owners who fail to sell, fail to sell because of something simple. And so I started whittling away and I came up with three basic questions.

Are your results desirable? Can a buyer duplicate your results? And can you document your results? If you can give me a strong yes to those three questions, we are well on our way towards selling that business. If you're giving me no on any of those questions, we have a huge problem, and that's where we need to focus our time and energy.

Jon Stoddard (19:31.196)
Yeah, because the new owner can't duplicate that. If you don't have those in place, if they don't have the favorable answers, he can't duplicate that and he goes like, Oh, what am I going to do? Like.

Mike Finger (19:34.262)
That's right. That's right.

Mike Finger (19:41.13)
Hey, you've got great results, but it's all because of who you are and what you do during the day and a new one. You're not replaceable. Who cares how good the results are, right? I mean, these are basic things, but I propose that those three questions kill 99 deals for every one that fails because of some technicality. Those are the folks that don't even get to the broker. They're getting rejected nine out of 10 by the business brokers.

Jon Stoddard (19:50.25)
Yeah.

Mike Finger (20:08.63)
Because the brokers don't want to waste the time on a business they can't sell, right? So it's those basic, simple, foundational elements that most business owners need to spend their time on. Then when they're ready, let's engage somebody who's got that technicality stuff dialed in, and we're off to the races.

Jon Stoddard (20:21.952)
Yeah.

Jon Stoddard (20:30.3)
Now, do you, when you ask these and they don't come with the right answer, is that a customer potential or is that somebody that, uh, where do they come in? What are you looking for? A negative answer or a false positive? Yeah.

Mike Finger (20:46.026)
Well, it's almost always some combination of both. We've got two yeses and a no. We've got a weak no, a strong no, and a strong yes. It all depends. And in most cases, most owners are in a place where the business isn't ready for sale. So we look to make that alignment between the owner's desire for exit.

and what the market is likely to do. So a simple example, if I want to sell my business for $2 million and I'm kicking $70,000 to sellers' discretionary earnings, I've got a gap, a fairly substantial one in most cases. So it's, OK, how do we change the business? How do we grow the business? How do we increase the profitability? Let's get that dialed in so we can create that exit that you're looking for.

Jon Stoddard (21:36.828)
Yeah. I have to touch on this is one of the hardest things is getting the managers, the owners to delegate to somebody else, like giving responsibility and to give it to somebody else. To me, if you said, Hey, we got to do these three things, bring in more customers, get them to buy more and get them to buy more frequently is pretty easily. It's usually the management, like you need to bring somebody else in to replace you. Like how, how do you deal with that?

Hahaha

Mike Finger (22:07.567)
It's a pragmatic problem that usually has a pragmatic answer. And I'll give you a real simple example. I'm on the phone the other day with the son of the owner. The son works in the shop, runs the shop. The owner does 1,500 things like owners do. And he's telling me the story about dad's on the forklift. Well, guess what? Your new job.

is every time you see dad on the forklift, you're kicking him off the forklift so that he can do these other things that we've been... It's creating that vacuum that sucks the owner into what they're supposed to be doing. And we do that by filling in from the other way. But that's part of it. And it's funny, I heard a story the other day about a guy who owned a business that did electrical installations on roofs.

What he did for himself is he allowed himself to install on Thursday, because he loved to do it. He didn't need to do it. He had guys to do it. But he scheduled some time to do installations on Thursday. And then the rest of the week, he ran the business. But it was concrete. It was intentional. And that's what we did instead of him hopping out. So it's that kind of stuff, actually talking about why we do it and what we need to do.

Jon Stoddard (23:25.524)
Yeah, I-

Jon Stoddard (23:29.788)
Yeah, I agree with that because I read, I don't know if there's comparisons here, but comedians, they'll say, Hey, you really want to get good at listening to the feedback of the audience. You've got to go back into those small improv centers and do your bit to work on that, to make sure you know how it feels to be the people that are working for you.

Mike Finger (23:49.578)
Yeah, yeah, absolutely. I mean, how common is that owner responsive? Well, no one works as hard as I do. No one cares as much as I do. And that's a real feeling, but guess how we change that. And part of it is you stepping back and creating the space for them to do more and care more. And it is hard. I've lived it and I've helped other owners do it, but if we don't make that transition in terms of approach,

We don't get to answer yes to that second question, can a buyer duplicate my results?

Jon Stoddard (24:24.36)
Yeah. So this is where the hero's journey comes in because it talks about, uh, you're the transformation you went through the ordeal, uh, you know, working 18 hours a day and trying to figure out what was going on. And you take this mess and that's your message to everybody else. Go look, I get you. How many hours are you working per day? And they say 12. Well, how would you like, how would it feel to you work in one and you have more time with your family?

Mike Finger (24:33.847)
Yep.

Mike Finger (24:52.534)
Yep, yep, how do I get from, yep, right, right. And it's, again, it wasn't easy for me, it's not easy for others, but it's that it's walking that journey together that where I get the most fulfillment from what I do.

Jon Stoddard (24:53.864)
Like, much better. How do I do it?

Jon Stoddard (25:11.196)
Yeah. And you've been doing this, I think LinkedIn, like six, seven years going on eight. How many clients have you worked on in that?

Mike Finger (25:18.028)
Yep.

Mike Finger (25:23.214)
During that time period, I don't know, probably 40 or 50. Clients right now are selling at about a rate of 25% of year are exiting, which is just about perfect, right? Because if you and I sit down for the first time, there's a good chance we're looking at a three to five year journey, depending on the position of your business right now. Given the fact that...

Jon Stoddard (25:28.834)
Audio 50.

Jon Stoddard (25:48.404)
And do you work for them for three to five years? Or is it, what does that look like? Yeah.

Mike Finger (25:51.79)
Often, yep, often that relationship lasts that long.

Jon Stoddard (25:56.74)
Yeah. And what do they call you? It's like, if somebody says, Hey, who's this Mike finger on the books, this payment going to, and what do they call you? You are a exit advisor. I'm a coach. Okay.

Mike Finger (26:06.086)
I'm a coach. I'm a coach. Yeah, I'm a business coach. I use that title intentionally. I'm not a consultant. I'm not going to come in and spend, you know, 80 hours this month and charge you a bazillion dollars to do X. We are, I'm a firm believer that it's the owner that changes the business. And so we do that work together, we work on how the owner needs to change their approach to the business so it can change.

Jon Stoddard (26:34.216)
Yeah. And how much of the mindset coaching, the kind of Tony Robbins kind of coaching, do you come in and say, to be able to see, you found gas in your tank to go another five years to exit your 50 employee company. What is the story you tell them? It's like, I want to exit the company now. Well, no, you've got about two to three more years. You got to find some more gas in the tank. What's that message?

Mike Finger (27:05.166)
The first meeting we do is a deep dive intake where I learn about the business and the owner and their intentions. The second one is where we walk through, it's not a valuation process because I'm not a valuation guy, but it's a process where we figure out what a buyer can pay you for this business. And when we look at that, when we create that reality, when we talk about what the market can do for you,

That's usually where that moment happens, right? Where it's like, I want something different than this. How do I get it? And so from a mindset perspective, I wanna be very clear. This is not, I don't do a be like me kind of thing because I think there's a hundred different ways to walk this journey as an owner, but I am convinced it starts with you asking yourself, and I've heard John, you talk about goal setting before. What do you want?

I want to exit in five years at this valuation. OK, fabulous. Now let's work backwards from that to figure out what the business needs to look like to realistically give that to you. Does that mean you have to list the business? I don't care. List the business for five times that amount if you think that there's a guy out there that's going to pay for it. But let's have a business that reasonably produces the outcome that hits our goal. Let's do that.

And then let's work from that floor up.

Jon Stoddard (28:32.064)
Yeah.

Have you had any clients where you just crushed it? You said, hey, they came to you, what do you want? You said, let's work backwards. You designed these and I'm probably, I'm guessing it's also kind of flexible too because things, events change, product services add, maybe you bought a company to add to it and it just killed the goals that, you know, three, five years, you exit it much bigger than they wanted to.

Mike Finger (29:04.214)
I've got clients where we've gone, where we start at an $800,000 revenue level and they really aspire to get to 2 million. And 18 months later, the goal is now 5 to 7 million because we're already at 4. That's a lot of fun because again, part of that is that perspective change. And like I alluded to, 4, part of that's hope, intention, and part of that's fear because it's like...

This outcome, this path you're telling me I'm currently on is not the path I want to be on. How do we get there? I, John, I do, I do 3% of it, right? The client, the owner is the one who changes the business. So I've worked with some owners who have created remarkable results. And so that's been a lot of fun to ride alongside with.

Jon Stoddard (29:55.56)
Yeah, but it's great to have, if you're in a dark forest in Minneapolis or Minnesota, and your goal is to get to the other side, it's great to have somebody with a flashlight that knows where the path is.

Mike Finger (30:06.862)
That's right. Hey, I've walked this before. And yeah, especially when we start to get closer to the deal, where we can talk about some of the realities that they should expect from that process. And I start planting those seeds as much as a year in advance. Well, keep in mind that when this happens, it's going to blah, blah. And that negates the shock and pain that can happen when a deal falls through. Or why is this taking so long? Or.

some of those sorts of things. Realism in this space is, in my experience, in short supply. And so I don't try to be a deal guy, I try to be a real guy when it comes to this stuff.

Jon Stoddard (30:42.517)
Yeah it is.

Jon Stoddard (30:47.264)
Yeah. Like, Hey man, it's, it is what it is. If you've got a hundred buyers, possibly it's going to probably going to happen fast and a lot more cash, but if you've only got two or three buyers, you know, could take longer. I don't know. Yeah. So, uh, I want to ask you a question. You and I had exchanged emails before this, and we talked about, uh, a subject, the problem with acquisition entrepreneurs. And that was a great topic because I want to hear what you're going to tell me about.

Mike Finger (30:58.73)
Right, right, absolutely.

Mike Finger (31:12.0)
Uh oh.

Jon Stoddard (31:16.82)
what you've seen over the last years and your personal experience. What is that?

Mike Finger (31:21.778)
Yeah, well, thank you. I have problems with acquisition entrepreneurs.

Mike Finger (31:34.698)
I'll talk through a couple things, but let me give a little context. And I've alluded to some of it already. I am solely on the seller side. That's who I represent, and that's the work that I do. And so from that framework, I don't like bad buyers. And I think some of what we'll talk about will point to the fact that some of this acquisition entrepreneurial content.

creates some bad buyers. And so framework, the other thing, I'm unapologetically small business. The numbers tell us that somewhere in the neighborhood of 95% of small business owners will never earn more than $5 million a year in annual revenue. That's the majority of the marketplace, but we hear about M&A and I call it M&A porn. It's the, I sold my business for 100 and.

I sold my business for $100 million in three months, and you can do it too kind of stuff. You know, it's, and so I want to keep, I want to help small business owners avoid that journey that I had. So let's talk specifics. Couple problems I have with acquisition entrepreneurs. One of them is that I think that the messaging in terms of volume is overwhelming the reality

Jon Stoddard (32:37.696)
Yeah.

Mike Finger (33:02.002)
of deal flow. What I mean by that is I think there's a false buyer narrative out there about how many deals are happening this way, but it also happens in all the other categories. Let's talk about private equity for a second. How many times do we see an article, John, where private equity is up 17% this quarter and you think, wow, that's fabulous. Think of all the deals.

And then you look at the deal count and you realize that private equity might do 7,000 deals a year total in the entire country. And you go, well, tell me more about those deals. And they're doing 100 million dollar deals and 75 million dollar deals. And you realize that this whole volume of content that we consume as small business owners is completely unrelated to the reality we'll ever live.

Jon Stoddard (33:34.988)
Total. Yeah.

Mike Finger (33:56.978)
And so when I see that happening in that acquisition entrepreneur space, I get concerned that we're miseducating small business owners about who their likely buyer is and how they prepare for that potential deal. The most likely buyer for a small business is another individual who looks an awful lot like the individual who owns the business now.

Jon Stoddard (33:57.439)
Yeah.

Mike Finger (34:25.134)
They're going to work full time in the business. That's the most likely deal. If I'm going to sell my, if I'm a small business owner sitting and listening to this, the most likely buyer for my business is another individual who looks like me. So let's build our business in a way that can satisfy the needs of that potential buyer, that most likely buyer, and then we can worry about whether or not we're going to qualify as a private equity target. So I'll stop babbling about that one for a minute and see what your thoughts are.

Jon Stoddard (34:53.876)
Yeah, I don't disagree with you there. I had a client that was looking to buy a veterinary in Texas. And we got with his broker and the broker, we had this conversation and we asked for the balance sheets and he said, well, you know, I've done 200 of these deals in his Texas draw and I've never had anybody ask me for a balance sheets. And I go, well, who.

Who have you been selling these veterinarians to? Other veterinarians. So they never asked for balance sheets. And I agree with you, that was like, what was really happening, right? Yeah, it's not, somebody's not gonna be a financial buyer and a veterinarian because you're gonna be in the business. Yeah.

Mike Finger (35:32.782)
Right? Right.

Mike Finger (35:40.106)
Right, right. And again, the stories that get told, even the ones that are true, the volume is so loud and impacts the market and such. I mean, John, you and I are gonna see 100 articles about Google's next purchase, and it has absolutely nothing to do with what the majority of small business owners are gonna experience in terms of how they sell their business. And so to me,

I love to see the content that actually applies to what the average small business owner is going to experience. What's the likely multiple? How's a deal going to happen? What is the buyer going to need relative to their meager walk to their banker and say, I'd like to buy this business? Well, what does he got to be able to hand them to get the deal done? Let's talk about that kind of stuff more, because that's what's the reality for most small business owners.

Jon Stoddard (36:39.86)
Yeah. Are you referring to the noise of the content out there? Uh, or just, I'm trying to understand. And I don't disagree with you because there's a lot of noise where people think as buyers, they can walk in and buy a business for no money down. Like I can get it to a hundred percent seller financing. I go.

Mike Finger (37:04.414)
You're alluding to my second point, John. You're stealing my thunder.

Jon Stoddard (37:07.356)
Yeah, like, yeah, that's, there's not an, yeah, there is not a profitable business on the planet that's going to give you somebody they don't know a hundred percent keys to their business and finance in it because of they trust you. That just doesn't happen. Yeah.

Mike Finger (37:22.23)
That's right. That's my second concern is that far too many acquisition entrepreneurs are simply regurgitating guru gunk. They're just spitting out this stuff. This is the buy a business for no money down message. This is the buy a business in an industry you don't know because then you can bring creativity in a new approach to that industry.

And I hear that stuff and my brain just explodes a little bit because I also go, okay, who's going to remind them that certification process that they need to do annually, that if they don't do it, they're going to get shut. I mean, I've been in enough industries and learned the lesson, the hard way and seen the cost of doing that. And again, can you do it? Sure. But from my perspective, there's.

a lot of bad messaging out there. And I've seen your content where you're calling it out too, right, the buy a business for no money deal is probably the best example, right? We see the pitch, I can spend $997 on the program, but if I really want the secret information, I gotta upgrade to 2000. It's brutal when I see somebody spend their...

a good portion of their down payment savings on this kind of stuff. And then they spend their time searching for that no money down opportunity. And lo and behold, they can't find a business to buy. That's troubling to me.

Jon Stoddard (39:03.484)
Yeah. I don't disagree with you. It's a, it's selling a dream or an illusion. It is an illusion because it's, it, it may be possible, but it's going to be rare. If it is possible, it's usually a distressed business. Yeah.

Mike Finger (39:17.802)
Right, right, right. It's something where you're, yeah. If I'm taking on a half million dollars of debt, even though I'm not writing a check, I don't know that we can fairly say that's a zero-down business purchase, right? It's not pretty.

Jon Stoddard (39:33.472)
Yeah. You know, there was another concept. I had a student that was trying to buy a business. You know those business

Mike Finger (40:48.298)
Yep, absolutely. It's funny, somebody said this to me the first time I was exposed to this concept. And he said, if you don't have a strong enough handle on your personal finances to save some money for a down payment, why in the world would I trust you enough with my business? If you don't have that connection to what it takes to build up.

dollars or dollars and they get away from us. I have respect for somebody who says, hey, I can't do the full down payment, but I've got X saved. I'm working towards that. The zero down shortcut is, yeah, it's gunky in my mind. So yeah.

Mike Finger (41:55.254)
Yep. Absolutely.

Mike Finger (42:15.23)
Right. Yeah, absolutely. That's a great point. And part of it for me is in this pursuit of a shortcut, we lose sight of some tried and true methods where I can come to you and say, John, I love your business. I'm really interested. I don't have what I need for a down payment right now, but I'd love to come to work for you.

and let me show you, let me learn from you, let me show you what I got. And yeah, you think, oh, six, 12 months, boy, what a huge way. Think about what you learned. Think about the impact. Think about the relationship building. There are ways to get this stuff done. But if I'm bouncing from shortcut to shortcut to shortcut, what are the, it's discouraging to me. So, number three, I've got a third one, if you're ready for it.

Um...

Mike Finger (43:20.867)
That's right.

Mike Finger (43:29.07)
Too many acquisition entrepreneurs regurgitate guru junk. That's what, there's too much of that. I, yep, exactly, exactly. Number three, I think too much of the content, too much of the messaging in this space ignores the difficult reality of running a profitable business. They focus purely on the acquisition. And let me make a controversial statement.

No one has ever made money by buying a business. You can buy a business and then make money running it profitably. You can buy a business and then turn around and sell it. But the simple act of buying is almost always an act of spending money, not making money. And so the idea that we enter and then that's the game, that ain't the game. That gives us

an opportunity to play the game. And so for me, I struggle with the over-emphasis messaging on the acquiring and not on the operating.

Mike Finger (44:58.402)
Right, right. And I'm guessing they don't tell stories like mine where you hire that person, they do a great job for nine months, and then their husband gets transferred to Kansas City to a new job and they're going with. Or you hire somebody and they're doing a good job and then they fall in love and move to Alaska. There are methods you can use to extract yourself from a business.

But depending on the size of the business, you are only ever a simple email away from getting sucked back in for the next six months. The bigger the business, the more separation you can have, but that is the reality of running a business, of owning a small business. If that's not a reality you're aware of.

educated about and able to do, you better be thinking seriously before you walk through that front door. And that isn't a message I hear a lot when it comes to that we don't hear about operating. And again, to be fair, if I'm doing a let me teach you how to buy a business program, granted, that's not what I'm selling, right? I'm not this isn't a yeah.

Mike Finger (46:24.294)
I'm showing the recording button still flashing. I don't know about your side.

Mike Finger (47:14.414)
Well that's a bummer.

Mike Finger (48:01.03)
at all? Or just did stop?

Jon Stoddard (48:50.657)
All right, I'm back in. It's recording me now. So I may have to do some editing in the back end and take, I don't know how much, where I stopped here.

Mike Finger (48:54.126)
Okay.

Mike Finger (48:59.434)
Did it? Yeah, I guess that was my question.

Jon Stoddard (49:08.233)
So let's just do this. Can we just go back to where I asked you the, I don't know where it stopped, but if we just do it over again, if you have time.

Mike Finger (49:18.114)
Yep, hit me.

Jon Stoddard (49:19.745)
Okay, so Mike, you and I talked a little bit before on this email about you had a topic you wanted to talk about. One, it was the problem with acquisition entrepreneurs and you have three problems there. Let's talk about that. Four problems, okay.

Mike Finger (49:37.206)
I actually have four problems. I've got four problems, John. Let's do it. Problem number, well, let me start with a little framing first. And I am primarily on the seller's side in this. I coach small business owners who are interested in preparing for sales. So I know that a number of your listeners are on the buy side. So some of this is going to run counter to that.

Jon Stoddard (49:49.054)
Yeah.

Mike Finger (50:07.034)
I'm comfortable with that. I'm unapologetically small business. What I mean by that is if you look at the numbers, 95% of small business owners that exist will never see more than $5 million a year in revenue, most substantially less than that. And so that is the most.

Jon Stoddard (50:26.397)
I think the numbers like only 7% get to $1 million.

Mike Finger (50:29.822)
Yeah, it's crazy. And I mean, when you look at how it climbs up from there. So that is the marketplace. It's defined by that. And so I like to keep that in mind when we talk about mergers and acquisition. But yet, you and I both know that most mergers and acquisitions content is what I call M&A porn. It is a.

It's the, I sold my business for $100 million on Tuesday, and you can do it too. I bought 57 businesses last month. Let me tell you how. And I get the clickbait stuff of that, and I don't have a problem with that, but that is the majority of the content. We're gonna hear exponentially more about Google's acquisition than we are about the average sale that might impact a small business.

Jon Stoddard (51:04.801)
hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahah

Mike Finger (51:23.822)
and it skews how we think.

Jon Stoddard (51:24.049)
Yeah. So I have to, I had one of those individuals in my Sphere network that said I did 105 acquisitions. And for crying out loud, I just couldn't find any company that wrote like a tombstone or a press release or anything about this. Like, wow, how are you doing this? What kind of companies are these? What is it?

Mike Finger (51:46.222)
Hehehehe

Mike Finger (51:54.346)
Right, right. And yeah, no, don't get me started. So again, there's the basic framing. And so when we talk about, we talk about my problems with acquisition entrepreneurs, let's start here. And it's about the messaging and it's about the content. And it's around the fact that too many speak like this is how a lot of deals get done.

Jon Stoddard (52:01.309)
Yeah, yeah.

Mike Finger (52:22.846)
I think a false buyer narrative gets created. What do I mean by that? And we don't have to pick on acquisition entrepreneurs. Let's talk about private equity for a second. I can show you article after article about how private equity is up 17% this year. And that's really exciting, right? But then we look at the deal count and we realize that accounts for 8,000 purchases over the entire country.

Jon Stoddard (52:27.381)
Yeah.

Jon Stoddard (52:50.757)
Yeah, quadrillions of equity, black powder ready to imp- ex- yeah.

Mike Finger (52:52.271)
Oh, yeah, exactly, exactly.

Yeah, that's just it, John. And it's like, wow, that's amazing. And nobody should care about it because the majority of small business owners are never gonna pass even the initial sniff test of private equity. A small deal for private equity is larger than most small business owners will ever get to. So it's like, why do we care? Why are we told we're supposed to care?

Jon Stoddard (53:03.797)
Yeah.

Mike Finger (53:20.95)
But that is the majority of the content. We can talk about family offices or venture capital or any of these other things, and they're just minuscule portions. What does get a deal done? Who is the buyer? Most small businesses that sell successfully are going to sell to another individual who is going to come and work full-time in the business that they purchase. Now that might not be as sexy as private equity.

But that's how deals get done. And so you'd better be building a business that's going to be attractive to your most likely buyer if you actually want to exit. Which means you'd better be, go ahead.

Jon Stoddard (54:02.708)
Who was-

But that looks exactly like you, somewhat like you. Yeah.

Mike Finger (54:08.162)
Yeah, right, exactly. And so you go, well, why is that important? Well, what would I need if I was gonna buy a business? Well, I'd need to earn an income and I'd need to service the debt I incurred to buy the business, right? I'd have to do at least those two things. Well, if I can't do those two things when I buy a business, I can't buy the business. But yet we're talking about private equity, we're talking about these other issues. So my concern number one,

Problem number one is that the content that's out there around this space speaks too loudly to how important this acquisition entrepreneurism is.

Jon Stoddard (54:47.589)
It makes it seems like the noise makes it seems like there's more happening than actually is. And I got to tell you, I spent time in the VC world. I've raised money for VC companies. It does not happen as frequently as you think. Less than like 1% of the businesses get funded by a venture capital firm. It is so rare. Yeah.

Mike Finger (55:06.354)
Right. It is extremely rare, but the noise is so loud and the people in that space want it to be loud, right? Because private equity wants people chasing their money. They want deal flow. They want to see opportunities. They don't talk about the fact that I have a conversation with a private equity guy who tells me, my role is to look at three to five deals a week, and I'll be lucky if we'll do one of those deals a year.

Jon Stoddard (55:14.889)
Yeah.

Mike Finger (55:36.01)
And you think, how do those, that number might work for them and help them meet their goals, but it doesn't inform educator healthy average small business owner. So that's problem number one. Problem number, hit me.

Jon Stoddard (55:46.993)
Yeah. Let me, let me, uh, let me bring up another, uh, point here. Uh, anecdotal point was that I came across this also, uh, when I had a client, a student looking at a veterinarian business in Texas, and we talked to the broker and, uh, we asked him, can we have the balance sheet? And he goes, well, I've been over 300 deals and you know, I've never had anybody ask for a balance sheet. And so you, well,

who's buying these businesses then? He goes, other veterinarians. I go, okay, all right, it's not a financial buyer. It's another veterinarian that's gonna come in, graduate from veterinarian school, buy it, work 10 years, 15 hours a day, and then sell it to the next veterinarian.

Mike Finger (56:21.07)
Sure.

Mike Finger (56:34.902)
Yep, absolutely, absolutely. And so it's like, if I'm a buyer and I look, it's a great example, if I look at that, I'm like, oh, well, normal is this, but that's not the story they tell, right? The messaging, the content, I think it misinforms the majority of the audience. And I have a problem with that. So problem number two, problem number two, far too many.

Jon Stoddard (56:57.213)
Yeah. All right. So number two. Yeah.

Mike Finger (57:02.142)
Acquisition entrepreneurs are regurgitating guru junk. That is what the presentation about acquisition entrepreneurials turns into too many times. And I've heard you speak about this before. I think the biggest culprit there is the buy a business with no money down. That dream, that shortcut, that sell.

Jon Stoddard (57:25.13)
Yeah.

Mike Finger (57:30.398)
Boy, it's really sexy and attractive. If I'm an aspiring business owner that doesn't have any money, I can scrape together 10 grand for the program and learn some secret. And John, how often does that type of deal get done?

Jon Stoddard (57:47.837)
I would say very, very rarely, and I'll give you a story. I.

When you do a lot of podcasts, a lot of people are attracted to you and they reach out to you and they ask you questions. And I had somebody from Belgium reach out to me and say, can you help me buy a business? And I said, well, what kind of money do you have? Like, well, I don't have any money. And I go, well, how did you think you were gonna buy a business in the United States? He goes, well, I heard about this no money down. Everybody's buying no money down in the United States. Like, well, that's not true.

Mike Finger (58:23.141)
Ha ha ha.

Jon Stoddard (58:23.557)
It doesn't happen and if it does happen, it's extremely rare that somebody as a profitable business is going to give it to you and then they're going to finance 100% of it.

Mike Finger (58:36.022)
Right? It doesn't... Is it hypothetically possible? Of course it is. Has it probably happened? Yes. But it is such a rare bird that the idea that has the prominence that it does... And I've seen it. I've had aspiring buyers tell me that they have spent X portion of their down payment savings on these kinds of...

Jon Stoddard (58:37.205)
to you, right?

Mike Finger (59:04.862)
programs where they're learning this stuff, hoping for a shortcut, when in fact what it does is it kills their opportunity. The best answer, the best response I ever had from someone when they talked about this was, if you're so bad at managing your personal finances that you can't save a little money for a down payment, why would I ever trust you with my main asset? Why would I ever trust you?

that you have the financial management skills to run my business, add a profit that will allow you to actually pay me as we go. It's, there's such a disconnect there, but that is messaging. And that's some of that guru gunk. And that's not the only one, right? That no money down. One of them that's a pet peeve for me is the messaging that, hey, you should try and buy a business in a completely different industry.

Jon Stoddard (59:42.603)
Yeah.

Mike Finger (59:58.998)
because then you'll be able to bring a new approach and be more creative than that industry than the people who have been doing it forever. And again, hypothetically possible, sure, but I have experienced myself and I have seen others experience what happens when you get crushed by a lack of knowledge with a new business. What do you mean I had to do that certification? Exactly. What do you mean I can't do this way? Exactly.

Jon Stoddard (01:00:22.033)
Yeah, it usually goes the other way. Yeah. It's more and more likely to go the other way. Yeah. I had a, I had another story about this. I did have a student that was younger and he had a little bit of money down and he tried to buy this business where it takes the old computers to separate some and sells the chips or the boards on eBay. But I said like, this is probably going to be a deal.

Mike Finger (01:00:28.559)
It's brutal, so.

Jon Stoddard (01:00:51.733)
that won't happen because you're too young. The guy that's selling is like 72 and he's looking for his peer to turn it over to. You're just an unknown, you know, seller is gonna sell to peers.

Mike Finger (01:01:05.194)
Absolutely, absolutely, especially if there's any component of seller financing in there, right? That I have to trust you to do it. I'm reminded of a business that I looked at in an industry I didn't know. And as I dug deeper, I started talking to people with knowledge in that industry and they said, well, did you check out X filing? And so I go and I look at this filing and it doesn't make much sense to me, but I show non-compliance.

And so I show this to somebody who knows this industry, and I say, what does this mean? And they say, it means you're going to spend $150,000 replacing that thing sometime in the next year or two. And it's like, boom, the deal just blew up because I didn't know something. I didn't know to check that thing. And how close did I get to signing a piece of paper because of the lack, that would have created a real problem for me because I didn't know. So.

Jon Stoddard (01:02:03.369)
Yeah, you're going to pay now or pay later. And usually a pain later is going to destroy the company.

Mike Finger (01:02:05.058)
That's right.

Mike Finger (01:02:08.586)
All right, problem number three. I think too many in this space ignore or undersell the difficult reality of running a profitable business. And let me say something that might be a little controversial. No one has ever made money simply buying a business.

I'm gonna let that sit for a minute. People have made money buying a business and then running it and showing a profit. People have made money buying a business and then selling it for more and showing a profit. But the simple act of buying a business is almost always a function of spending money, creating debt, putting out. And the fact that we hear so much in this space about the acquisition and the buy and how to do that,

I want to know what happens next because the acquisition is simply an open door to actually play the game. It is not the game in and of itself. And I think too often the messaging in this space forgets about the other shoe that has to drop, which is I show up on day one and I start running that business.

Jon Stoddard (01:03:20.861)
Yeah, if you look at the numbers, what I just said, only 7% make it to $1 million. So all 93% of companies are gonna be run by the owner. And if you don't have that experience to run that business, it's probably not gonna be around in a year because I could tell you the numbers, if you don't, over 50% are gone within five years.

Mike Finger (01:03:47.195)
Yep. But John, can't I just hire a manager to run it for me?

Jon Stoddard (01:03:54.381)
Yeah, and this is another thing. A lot of the gurus will tell you, buy a business, work above the business, put somebody in that role. Really? If you've never done that before, is that difficult? And I'm being sarcastically.

Mike Finger (01:04:03.939)
That's right.

Mike Finger (01:04:10.666)
Yeah, it is difficult, it's possible, I've done it. But I've also done it, and then nine months later got notice that the person's husband got transferred to Kansas City, and they're going with him. And I've done it, and I've found out that the person fell in love and is moving to Alaska. You are only ever an email away from being sucked back into that business you own for three months, or six months, or whatever it takes you to find a replacement.

Now, if your life is set up to deal with that reality, fabulous, buy the business, hire a manager, that can be a great model. But I've seen people who are working a full-time job buy a business on the side with that concept and suddenly find that on day one, two people quit. Well, now what do I do? I got a job and I've got this business and it's like, how did you not know that was likely to happen?

Jon Stoddard (01:05:10.401)
It's real that's a bro that the broker told me. Or the guru told me.

Mike Finger (01:05:10.522)
That, exactly, that's right. Well, I was supposed to, and again, if you've got a team of 12 people surrounding you and they're your management group, and fabulous, that's a great model, and you've got flexibility and you can plug people in and do that stuff, but the messaging when it comes to actually running a profitable business is lacking from my perspective.

Jon Stoddard (01:05:33.577)
Yeah, I agree with you there. And it's rare to find a business that, you know, you're only putting in an hour in it. I mean, those are out there, but it's rare, very rare.

Mike Finger (01:05:43.518)
Yep. Here's my last one. And for me, it's probably the biggest one, but it's also the squishiest one. Ultimately, I worry that too many who are in the acquisition entrepreneurial space aspire to be business gigolos, not small business owners. What do I mean by that? I mean, you know what? There was a time when I aspired to be M&A cool, right? I f-----.

was never able to pull it off. I've owned eight businesses, I've sold four successfully, but all I ever did was sell my small business. I never got into deals.

Mike Finger (01:06:25.626)
Our communities are built on small business owners. They're the contributors, they're the builders, they're the employers, they're the ones that do the things that allow us to grow and develop. And too often when I see this space, I see somebody who wants to do the wham bam thank you ma'am. And you know what? It's legal, I don't have a problem with that.

but don't ask me to look up to it, right? Because I'm afraid that if we spend too much time glorifying that in terms of business ownership, that we lose the owners who are in the community donating to the local high school band every year, who are the sponsors for such and such, who are investing in employees for the next 10 years because they plan to be there owning the place in 10 years.

not somebody who's gonna buy and sell the thing over an 18 month period. Again, I've done those deals. I liked it, it was fun, there was money to be made, it was a good thing. I don't have a problem with someone who does that. But collectively, if we all do business that way, we've got a serious problem. That 93% of small business owners who do small businesses, the 95% who are slightly, you know,

the additional 2% that are slightly bigger, that's what our communities are built around. And I'm afraid that the acquisition entrepreneur messaging can get twisted to create aspirations that take us away from those kinds of small business owners.

Jon Stoddard (01:08:15.345)
Yeah, maybe it's the online type of generation where you think you just could put time into online and it's going to all do it for you.

Mike Finger (01:08:27.506)
It's the mini Gordon Gekko, right? We've been seeing this stuff forever, but now we're to a place where it's trickled down. And again, I'm not saying that there's anything wrong with buying a business and fixing it and selling it. I've done that. But what I discovered after looking at that business and how I ran it is I ran it differently than the business that I was building and plan to own forever.

Jon Stoddard (01:08:45.845)
Yeah.

Mike Finger (01:08:57.646)
And the investments I made in my people and the investments I made in the community and the things that I did were different when it was a quick in and out. And that is, I think that's something that's worth considering, worth talking about in this acquisition entrepreneur community.

Jon Stoddard (01:09:16.394)
Relationships.

Mike Finger (01:09:17.706)
relationships, foundation, contribution, community, how do those things live? How do I support them as an owner if I don't plan to be here for more than 18 months?

Jon Stoddard (01:09:34.461)
Yeah, yeah. Well, I think that works better in a smaller level. Let's say if you buy a content site and it's just a domain name and a potential service, it's 5,000 bucks and you fix up the content, you affiliate it and then you move it. That's fine. But if you're thinking about doing that where the people are, you're actually working with people and then flipping it.

Mike Finger (01:09:55.682)
Bye!

Jon Stoddard (01:10:03.395)
That's kind of hard. You don't want to be a chainsaw owl, let's say, right?

Mike Finger (01:10:06.882)
That's right, that's right. That's a great reference and example. I see some of these clusters out there supporting, encouraging, and incubating that type of approach. And I think that's troubling.

Jon Stoddard (01:10:24.797)
Yeah. Well, Mike, let's, let's.

Mike Finger (01:10:26.806)
So those are my four problems with acquisition entrepreneurs.

Jon Stoddard (01:10:30.885)
Yeah. Well, thank you so much. And I, uh, I really greatly appreciate your time on this and I want to wish you the best success with exit Oasis. And it's Mike Finger, not fingers. So don't add that S on it.

Mike Finger (01:10:41.87)
Very good.

Mike Finger (01:10:46.545)
Check me out on LinkedIn. I love connecting with folks in the space there, and I'm pretty active there. So thank you again for the opportunity, John.

Jon Stoddard (01:10:53.077)
Yeah, this is a lot of realism here in this splash of cold water. I got, and I'll tell you, I have people coming to me that buy my course on how to buy a business who have had it up to here with trying to chase a business with no money down. I said, it's just, it's really rare. It's not gonna happen. You should really work on your personal balance sheet.

or raising capital with investors and bringing partners on. I was told myself that when I tried to buy a really profitable business, even though I had a high net worth, like I was an accredited investor, that I needed to bring somebody else in to strengthen the balance sheet, to purchase the business. Yeah.

Mike Finger (01:11:38.926)
Sure. John, that is such an important point. And just very quickly, the biggest cost of this stuff that we've talked about is that it destroys real world exits and real world acquisitions. People who are chasing this mythical stuff kill their ability to actually get it.

Jon Stoddard (01:12:00.797)
Yeah. Are there unicorns out there?

Mike Finger (01:12:06.614)
Yes, yes, yes.

Jon Stoddard (01:12:09.635)
Yeah. Well, Mike, thank you so much for being on Top M&A Entrepreneurs. I really appreciate it.

Mike Finger (01:12:15.458)
Been my pleasure.