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Episode 68: Understanding Valuation When Buying and Selling a Business with Phillip Ramsey and Bryan Dewhurst
152 Plays5 years ago
Working for someone else, you might ask the question: Is my hard work paying off? The Uncommon Path often involves business ownership in one form or another. We see it over and over again that when you own a business, your hard work is rewarded. There will be ups and downs for sure, but the rewards outweigh the challenges.
In this episode, we are exploring what it takes to buy and sell a business. How do you know—whatever side of the transaction you are on—whether you are getting your money’s worth?
That’s why we wanted to explore different ways of valuation of a company, and also different ways for a buyer to purchase a company. Should you just buy the business with 100% cash? Should you opt for seller financing, or something in between.
We love helping people find the right answers for them, and if you are looking to buy or sell a business, that’s what we want to do for you in this episode.
what you will learn in this episode:- Why 2020 might be a great time to buy a business
- Why there are multiple ways to value a business
- How funding a business is like a teeter-totter
- The advantages and restrictions on rolling an IRA into your business 401(k)
- Learning the “net take” method of business valuation
- Why a business seller might not want to take a lump-sum payment for the business
- The double-edged sword as a business owner of protecting your money from taxation and valuation when you go to sell
- Understanding the percentage of revenue model of business valuation
- What types of businesses are the best fit for different valuation methods
Recommended
Transcript
Introduction to the Uncommon Life Project
00:00:02
Speaker
Everyone dreams about living an uncommon life, but how we define that dream is very different for each of us. And for most, it's a lifelong pursuit. Welcome to the Uncommon Life Project podcast. We're going to introduce you to people who are living that life or enjoying the journey to get there. We're going to also give you some tools, tricks, and tips for starting or accelerating your own efforts to live an uncommon life.
00:00:27
Speaker
A life worth celebrating and savoring. Please welcome your hosts, Brian Dewhurst and Philip Ramsey.
00:00:34
Speaker
Hello, everybody, and welcome to another episode of the Uncommon Life Project, where I am your host, Phillip Ramsey. And I am Brian Dewhurst. Thanks for tuning in. And we finally got through the election. We finally got through the voting. We are here. We actually aren't. We are shooting this a little bit earlier, but congratulations for getting through. Welcome back to your TV so you don't have to watch any more commercials about this.
00:00:58
Speaker
We're glad you got here. And I'll just like to point out there's only one more month left in 2020. If we could have a crowd cheering right now, I think we would with our sound banner tape parade.
00:01:13
Speaker
Airplanes with banners, everything. Hang out the flag. Holy buckets. We got here, but we had some trials, and trials produce endurance and character. So that's good. But also, let's don't do that again. I don't know if you're with us, but we're glad you're listening to
Roles and Perspectives of Financial Advisors
00:01:32
Speaker
us. Again, we're financial advisors.
00:01:34
Speaker
Again, I hate saying that, but we'll have an uncommon view of the world and of their finances. And ideally, we'd like you to love your life every day and use your gifts that God's given to you and maximize those for your potential, for your happiness, enjoyment, but also other people's. So you can impact more people.
00:01:55
Speaker
We are going to talk, it's Brian and I today. What are we talking about? We're going to talk about different ways to fund your uncommon lifestyle. If you want to be an entrepreneur, if you want to take that plunge, different ways you can finance it or pay for it or capitalize it, whatever you want to call it.
00:02:15
Speaker
Right. And I'd say right now we have a very interesting time. This is the best time in Brian and I's career to turn to the uncommon path. So if you've ever had an idea or ever had an inkling to try this strategy or try this uncommon path, this is the year we're going to talk about why it's the year. And yeah, give you some
00:02:36
Speaker
I'd say encouragement on going that direction and just having somebody walk beside you and doing that. It could be Brian and I, it could be somebody else.
Funding an Entrepreneurial Lifestyle
00:02:45
Speaker
We just want as many people down this path as possible. One, because it's fulfilling.
00:02:52
Speaker
life-changing like it is completely joy of joy filled also with trials but uh i was i heard this statistic today of uh people were being asked if they thought their hard work paid off and i i got to thinking about that because i think a lot of people that are working for somebody else question if their hard work gets paid off because they want to make sure their manager notices
00:03:18
Speaker
or for whatever reason, there's sometimes where their hard work doesn't get noticed. That's frustrating. When you're on this uncommon path, I'm telling you hard work is noticed and you see.
00:03:30
Speaker
the direct results of hard work. You get to see the successes, you get to see the benefits of that. I would say in the entrepreneurial space, in the uncommon path, your hard work is not only like valuable, but it is rewarded. And so I don't know if we, it's probably way off on a tangent and we're just like three minutes into this thing. But I think it's interesting to say like,
00:03:53
Speaker
Man, hard work has never been more rewarded, especially now and resilience. I think there's a, there's something to be said about that with 2020, but, uh, okay. So let's talk about this whole uncommon path. Why is it so good? I think also interest rates would be fun to talk about what the ramifications are to having low interest rates just in the economy in general from an uncommon perspective. Um, and we can get into a lot and we've got on a lot of rabbit holes, but all right. So rain me back. Be dog. Where are we going?
00:04:23
Speaker
Well, I think it'd be good to talk about different ways to fund a business.
Evaluating Business Deals
00:04:29
Speaker
You know, we recently met with a couple evaluating a business purchase, kind of walked through almost six different ways they could fund or pay for that business purchase. And I think interest rates play into a lot of that, several of those scenarios. So I think we should start there.
00:04:48
Speaker
All right, let's do it. So this couple had an opportunity to buy a business and they came to us and said, how do we evaluate if we're getting a good deal or not? And
00:05:01
Speaker
that really prompted Brian and I to like, how do we help this couple see there's not only one way to value a business, there's multiple. And at the end of the day, it's probably going to be a range of what's acceptable or what, what you want to talk about, but you want to go into these conversations with some knowledge and some education rather than going into a business ready to buy it without any kind of understanding of how to value a business. So,
00:05:29
Speaker
Let's go through one option. I think we should probably corral this or put kind of end gaps on it. So we'll do one option, then we'll do the opposite one, and then we'll kind of start working in from there. So what's the first option? The first option was, I think this is timely for 2020 and what we've been talking about, essentially, potentially you could cash out an IRA for the down payment. This business wasn't super expensive.
00:05:57
Speaker
And so with the CARES Act in response to all of this stuff going on in 2020, the government has removed the 10% penalty for taking an IRA withdrawal before 59 and a half. And that's a limit up to $100,000, I believe. So we were
00:06:17
Speaker
you know, well under that number. So that was kind of option one. And I think, you know, for lots of different people and entrepreneurs, even if you needed cash or if you're trying to launch something, having that 10 percent penalty removed is very helpful. Right. And the amount would still count as ordinary income. But to have that penalty removed is a big deal.
00:06:39
Speaker
which then bodes well of why it's so such a good time to step into this uncommon path. Cause you don't have to pay that 10
Financing Options Explained
00:06:46
Speaker
% penalty. So a lot of people, that's like an uncommon wealth loophole right now, loophole. Yeah. And I think we talk about it in the, you know, to give you like a word picture.
00:06:58
Speaker
If you think about your money like a teeter totter, most people that we encounter, you know, if you remember being on the playground and you never wanted to be was all the way at the top, you know, or all the way at the bottom, you kind of wanted to be in the middle there with your feet on the ground.
00:07:14
Speaker
But when you think about it in terms of people's money, I mean, most people that we meet have, you know, 80, 70, 80, 90% of their net worth in a 401k. So when you're starting a business, you'd actually have it, like to have it the other way around. And so sometimes, you know, if you're going to launch a business, it does make sense, can make sense to harvest a part of that retirement fund. So you're paying cash for capital costs in the business.
00:07:43
Speaker
Right. So that's I'd say the one first option is buying the business 100% with your cash. Now how we decide the best way to do that, you can do the cash in your bank, you can pull out of your 401k right now, and maybe even in the future, but we'd have to really walk through what are the tax ramifications of that.
00:08:04
Speaker
But that's the first option is just pay cash for it. I'd say the last option, maybe the sixth option if we're going to go through all of these is finance the business completely 100%. So like there's your two kind of like ditches, if you will. And then we can work through obviously like financing. Let's go to option six 100%. You can do that with the individual you're buying it from.
00:08:27
Speaker
you can do it as partnering should be called seller financing, right? Seller financing, or you could take a loan out from a bank. So there's options there, but I think just having those ditches of cash or a hundred percent financing are your two, you know, ditches. Definitely. And if you finance with the bank, um, you know, right now,
00:08:51
Speaker
Things are actually a little tougher to get lending from what we're hearing in a traditional bank commercial loan. And you definitely have to put a down payment in typically 25 to 30% of the value of the business.
00:09:08
Speaker
And if it's a franchise, that helps too. I mean, franchises are a little easier to finance than standalone businesses because there's typically a proven formula. There's multiple locations, more predictable cash flow, those types of things, but not always the case.
00:09:25
Speaker
Okay, there's so many ways to carve this up. So let's go to option two instead of option one. So this is gonna be more leaning on the cash side of things. It's option two. Option two is kind of unique as well. This one's better to the more expensive of businesses because there's some fees attached and that we can kind of compare that to just paying cash and taking the penalty from like an IRA.
00:09:54
Speaker
Essentially, what you can do is you can roll your IRA and set up a new 401k retirement plan in the new business or the new entity that you're going to use to facilitate the business. Roll your old employer plan or IRA balance into that 401k. And then instead of buying mutual funds, the 401k or your account within the 401k purchases company stock.
00:10:22
Speaker
And in doing that, it essentially kind of brings that IRA cash balance into the business bank account because now the business has traded stock for cash and now the 401k has traded stock or cash for stock. And so now the money that was in your IRA is now in your business account without paying taxes and without paying any penalties.
00:10:49
Speaker
it is rather expensive to set this up it's like five grand up front to set this up so you know if you're gonna take out fifty thousand from an ira and pre cares act you would have paid a ten percent penalty it would cost you five grand to do that plus current income so this you're paying the five grand in administration fees because it's a little complex
00:11:09
Speaker
but you're not paying current income you know like you would if you took it out of an ira so i think really once you get beyond you know the fifty thousand this makes more sense than paying cash cashing an ira.
00:11:22
Speaker
when you look at the fees and everything. And there's some restrictions, because before the CARES Act, for the uncommon wealth partners, we could reference this and do this, and we did this often. I wouldn't say often, but we've done this. But there's some restrictions as well with doing that. What are the restrictions of that? Let's talk
Seller Financing Benefits
00:11:42
Speaker
about some. You can't use the money that's now in the business account. You can't use that to essentially enrich yourself.
00:11:49
Speaker
Meaning you can't pay yourself a salary from that balance and you can't use that money to fund a... I can't think of the term off the top of my head, but let's just say you owned a real estate building that your other business was in and your
00:12:04
Speaker
your main business is paying your real estate company rent. You can't use the money if that is a connected transaction. Really, it is great for franchises because what it mainly is for is to pay franchise fees, inventory fees, upfront startup expenses. All of that is a legitimate expense, which often is a lot of it.
00:12:26
Speaker
You just can't use it to pay yourself payroll. So those are the main restrictions in the company that we partner with to execute those as well-versed and all that.
00:12:38
Speaker
They handle that and audit that for you, for us, so that you stay in compliance. But this is a part of the IRS tax code. This isn't anything sketchy. It's been in the IRS tax code for nearly 40 years. So it's been a predominant way of funding a lot of the franchise world here in the United States.
00:12:59
Speaker
Okay. So we've talked about option one cash option six is financing. We'll kind of work our way up. What is option three option two would be doing this like 401k stock option idea. What's option three?
00:13:14
Speaker
I think it would be a hybrid of one or six or I would just call it like seller financing where you're giving some money upfront to the business owner, what percentage that is, depends on where they're at.
00:13:31
Speaker
And i'd say the complexity of the business you know we've helped a gentleman sell business that was i would say too complex but had a crew you know multiple employees been in business for twenty years
00:13:46
Speaker
And the gentleman buying it wanted one year of the business owner's time and expertise in the business. So structuring the deal where he got a large portion of the money upfront, but there's some incentives for the business owner to stay on a year, transition clients, transition.
00:14:04
Speaker
the employees transition all of that business processes to make sure they're successful. So the business owner is financing some of the business by not taking the money all up front. And there was salary involved with him staying on and then there's kind of some performance kickers. If the revenue was so good, there was a bonus. And so
00:14:26
Speaker
structuring a deal with incentives and the business owner so that all of the cash isn't needed upfront to buy the business. Right. There's a lot of ways that this is good for the business owner selling and also there's definitely some risks involved. So normally what happens with this option three is you spend more money
00:14:53
Speaker
at the end of the day, because you're giving this person more of a buyout structure, and that has an interest rate involved. So just like if you borrow that money from the bank, there'd be some interest rate that you would have to pay the bank. Well, now you're just paying it back to the individual. So let's say for easy numbers,
00:15:12
Speaker
You bought the business for $500,000. You give the upfront of maybe $200,000. Then like Brian said, to make sure that for your incentive that you're buying, all the customers or clients stay on. You give them another $200,000 at the end of the year and then you finance the $100,000. You might end up paying more for the business like $560,000 by the time it's all said and done.
00:15:37
Speaker
but the longer you can pay or push out the payments seems like it's a little less risky on your behalf buying the business because cash is king in business and when things don't go your way if you're sitting on a lot of cash you have a longer time span to make sure you can get things back on track.
00:15:57
Speaker
Because you have cash so i think that's something to be noted sometimes also for tax purposes it's it's i would say. Better for the person that selling the business so they don't get hit with this huge number up front in one year but they can kind of diverse that over a couple years for tax hit.
00:16:18
Speaker
That's definitely an option. All this is depending on the person who's selling it if they're going to accept it or not. Now granted, if you don't make the payments, obviously there's risk there for the person that's selling. But anyway, so I think it's worth noting.
00:16:36
Speaker
Yeah, this is a huge point on structuring the payment. So let's go back to the 500,000.
Methods for Evaluating Businesses
00:16:41
Speaker
You're buying the business for 500,000. It benefits the existing business owner to break that payment up, you know, because when you sell a business, typically we're not tax accountants, but you're going to pay capital gains tax on the perceived profit of selling your business versus what the perceived costs you have into your business.
00:17:00
Speaker
Breaking that up pushes the tax liability into separate years. So instead of getting 500,000 in one year and paying all that tax at once, you could split it up to where you're getting 250,000, let's just say like April 1st, and then January 2nd, you're gonna get another 250,000, the business owner who's selling. What that does is it pushes the tax liability into the following April.
00:17:28
Speaker
It would be really tough on a business owner to sell and take a lump sum. Like if you were to get 500,000, you close on December 31st. Well, now the taxes are due right around the corner in April. So you don't get the benefit of that money very long before you got to pay the piper. So structuring the payments over multiple years pushes your tax liability out and allows you to keep your
00:17:52
Speaker
you know, manage your tax bracket a little bit more with your accountant so you can recoup and retain more of that money and the value created in your business. Right. Okay. So do you want to go through the other three options? Because they are all just kind of hybrids of
00:18:07
Speaker
what we've been talking about. Cash or borrowing money or loans, right? Yeah. So I think what we need to do is go back to how do you value a business and what are the ways that you can go about if you get an opportunity and you see something or you hear of something, how in the world do you know what to pay
00:18:29
Speaker
in a quick manner without involving a lot of people. And it might be wise to invest in somebody who's going to value it for you in a way, maybe a market that you don't understand. For our market, for financial advisors, there's a company that comes in and kind of does it all for you.
00:18:47
Speaker
And that would be a wise investment in our perspective just to make sure that we're not seeing it in the wrong way. So we're not saying not do that, but maybe just to do it in your head quickly. Here are ways to evaluate another business if you hear about an opportunity. So let's go through the first one. Yeah, we have several.
00:19:09
Speaker
I like the franchise or just stay on the franchise model. The beautiful thing about buying a franchise is it's a package. You're kind of buying like a business in a box. And they're very clear at what that cost is. Now you can be savvy and negotiate with the franchise. I actually knew a family that was really savvy, owned several franchises in one business, started a new business and took a lot of that knowledge and was able to strip out a lot of the cost
00:19:37
Speaker
that that new franchise was projecting it would take to build out one of their businesses. So those things aren't set in stone, but they typically give you a range of it's going to cost you between $100,000 or $200,000 to start one of these. And all franchises are different. But I think if you're getting into a business, it's easy to look at a parallel if there's a franchise
00:20:00
Speaker
you know if you're gonna start your own sandwich shop you could go and say what is this gonna cost me you could say well what does i'm gonna go buy an existing sandwich shop what would it cost me to start a jimmy johns you know so you could get a pretty good market estimate of you know what a good existing franchise would cost you to get started so that's kind of one way to establish a baseline.
00:20:25
Speaker
The option two, which is kind of the one that I more prefer to get down to brass tacks, I kind of call it just the net take method. What you're really buying in a business is a predictability of future cashflow. What system or mousetrap or value do they have that is going to predictably produce cashflow into the future?
00:20:49
Speaker
And the more predictable that is and the more loyal the client base and all those different things, the more people are willing to pay for it. But the net take method basically looks at what do the owners, if it's a single owner business or multiple owner business, what are the owners pulling out of that business from salary,
00:21:08
Speaker
from deferred compensation from health benefits retirement benefits intangible benefits whatever. What is the total stream of cash flow that those people are taking out of the business on an annual basis and taking that number and multiplying it by a multiple depending on how
00:21:26
Speaker
successful and predictable that future cashflow is. And so a good multiple to start with is two times or three times, somewhere in there. The best businesses in our business, everything's buttoned up, really good staff, loyal customers, been in business a long time. Residual income would get three times that type of number, that type of residual income.
00:21:55
Speaker
And so that's a great place to start. I think especially if you're looking for a single owned business, if you're going to go buy a franchise or you're going to start something that you're not going to really own with somebody else, that's a really easy valuation metric to look at and get a good baseline.
00:22:14
Speaker
And it's pretty easy for that seller to step into that, just what you're getting. I'll do that for the next two years. Ta-da. We're done. And one comment on that really quick. This is where when you do as a business owner, if you get into accounting and you're trying to minimize your income or hide your income and deducting all these different things, that's where it kind of, um, you know, obfuscates the value of what the business is worth. Cause you're trying to hide the value of the business from the IRS, but now you want someone to pay a premium.
00:22:44
Speaker
for the value that you created but you've been accounting for it in a way that's very hard or maybe not as transparent to see the full value of what the business owner is taking out of the business. So from there and you get into the tax complexities of all that and you're trying to hide cash, then it's going to be harder to charge a premium to someone buying it too because it's hard for them to see what's actually going on here.
00:23:08
Speaker
So that's a double-edged sword as you're building your business and trying to protect your money versus when you're trying to exit your business and get the full value. Right. Great point.
00:23:20
Speaker
Okay. And like, like we said before, like these are to give you ranges. If we give you four ways to evaluate a business, chances are there's going to be somewhere around there. And what we've found when someone is going to sell their business, it ends up that they want, they see more value in their business than probably is warranted. Would you not agree with that? A hundred percent.
00:23:46
Speaker
So anyway, it's just something to kind of work through. All right. So we've got two options there. What's the third option on a percentage of revenue? The percentage of revenue model is, it actually works out pretty close to the net take model, but essentially you take the revenue.
00:24:02
Speaker
previous
Emotional Aspects of Business Valuation
00:24:03
Speaker
12 months revenue, and you subtract cost of goods sold. So we're in a business that doesn't have cost of goods sold. It's not something like we're buying a mutual fund or something and then reselling it. So we don't really deal with the cost of goods sold in our business, but a lot of businesses do. They have inventory or they have products or services that have input costs.
00:24:24
Speaker
So there's a cost of goods sold. Trying to actually sell the widget, it costs them to buy the widget first and resell it. So that inherent cost is the cost of goods sold. So when I look at that method of percentage of revenue, it's taking the top line revenue and then subtracting out the cost of goods sold because that new person buying your business is going to have to keep buying that stuff too. It's not like value you necessarily created. Now, if you've created your own products,
00:24:54
Speaker
and all of that that's a different story and if you have patents and intellectual property around your products that's that's a different deal but looking at it largely that there isn't that in place you know you're buying more of a commodity and doing something and then reselling it.
00:25:09
Speaker
So pulling out that cost of goods sold as part of the valuation metric, then pulling out the owner's compensation and paying that number typically actually works out to be pretty close to a similar valuation as the net take model when you double the person's salary or financial gain from the business. So we've done this on a couple of deals and they've worked out to be pretty close, 10%, 15% depending on the value of the business.
00:25:39
Speaker
But the bigger the business, I think the more this is the better option to go. The more kind of self-employed single owner business is better with a net take model. It's less complex and it's more true of what's actually going on. The bigger the business, the more employees and the more of an ongoing concern is kind of the term used with the business. The more I think this percentage of revenue is the better way to value the business.
00:26:09
Speaker
And so that's kind of what it is. And then really, if you're gonna apply some sort of discount or multiple to that number that's created from pulling out cost of goods sold and the owner's compensation, you're just pulling out one year of owner's compensation. So you're not like doubling or doing anything like that. And so then you're gonna get some sort of valuation. And that's where you, you know, with COVID, I mean, that's where you could say, hey, this is a really shaky time.
00:26:36
Speaker
you know, we're filming this show the day after Biden's Democratic National Convention speech, and he said we will have, if he's elected, a national mandate of mass January 1st. Well, man, that's a long time. He's not saying he's going to shut things down, but
00:26:52
Speaker
COVID appears to be coming with us into 2021. So those are the different things that you'd have to factor in in valuing a business. And are you going to discount that as part of the valuation? Are you comfortable with that risk? And so working through those things with the seller.
00:27:11
Speaker
Yeah, for sure. Working things through with the seller is kind of, it's a concert for sure. And the more I'd say the upfront honest we can be with the seller or the buyer and everybody's on the same page, obviously it's going to go better. Uh, but the fourth one is probably the quickest and the fast, the quick, I don't know, maybe the fastest, I would say is what the seller wants to sell it for is what they see in their head as what their value of their business is.
00:27:39
Speaker
What I would say, too, on that is we've we've we help people with this. So, I mean, we help people evaluate purchasing businesses, selling businesses. You know, we run financial models. We can look into the numbers. It's something that we do and we're good at. I think people value.
00:27:54
Speaker
We've been a part of several deals now and it's been refreshing honestly the last couple deals we've worked on. I feel like the seller had a very fair valuation for their business. And in one instance, we were almost saying like, I think you're undervaluing your business being sold. But obviously, every person's in a different situation with COVID and everything like that.
00:28:15
Speaker
you know, circumstances are a little bit different than maybe normal, but it makes it a lot easier when the business owner has a more realistic view of what their business is worth. And it's an emotional thing. I mean, very emotional. You're talking about something you've put your blood, sweat and tears into multiple decades potentially. And putting a price on that and ending that is a difficult process. So.
00:28:40
Speaker
Right, and then I think the biggest thing for me as a tip is no matter what they value their business as, asking them why they value their business in such a manner at that price is valuable to me. Just getting as much data as you can, why they came up with that number, and chances are it's somewhat similar of the first three options or some option that they had. They've gotta be some way of why they're valuing that business.
00:29:07
Speaker
So, there's that to try to find and ask good questions and lean in and understand. Brian and I had an opportunity to buy a business. This is earlier in our career and we stepped into it. They wanted, I don't know, let's say 500,000. It's three using that number.
00:29:25
Speaker
Um, and when, when we started evaluating the business, they didn't have things buttoned up. They didn't have things that were actually valuable to a next person that's going to buy it. And we said, I think Brian said, listen, I'll be super generous and we'll give you two 75. I'm trying to figure out percentages quickly. Not that guy, but two 75. And they were like,
00:29:49
Speaker
I would say pissed. Like they, they valued their house at X and you just, you know, don't, don't mock me, you know, don't disrespect me in that way. Well, later they got an evaluation. What was it like 225 or something? Like even like from the professionals came in and like, no, you're not evaluating this correctly. And there's no way somebody should step in and buy that from you. So it was interesting.
00:30:11
Speaker
Yeah, I've been watching that The Last Dance with Michael Jordan. And it's just hard to know when to go out. And if you got something left in the tank or not, and then when you see a price tag put on something you've put a lot of effort and energy into, it can be insulting, it can be life changing, it can be rewarding, all those different things. And just so much that goes into these things. And I think that's the other side of it is that we'd say is this is a process.
Conclusion and Encouragement
00:30:40
Speaker
takes time, depending on how motivated the seller is and their personal circumstances and financial position. But it takes a lot of patience and openness and conversation. And I think we help facilitate that and covering looking at blind spots and different things that people should be thinking about. And it's a fun, it's probably one of my most fun things that we do and help people with because
00:31:07
Speaker
You know, you just don't do that every day. You know, people don't go out and buy businesses every day or sell businesses every day. And, and there's a lot that goes into it. Right. So, I mean, I really think, and let's go kind of circle all this back, try to land the plane, Ramsey. Here we go. I think this is such an amazing opportunity to go uncommon for many reasons. One, if you are an employee, do you really control your future? You know, or can they say all of a sudden like, Hey, we're downsizing you're out.
00:31:36
Speaker
I think there's a lot of people that understand that point right now very quickly. And they understand that because it happened to them. They thought they were in a safe job. And then all of a sudden, WAMO, even with a big company, I think even more so as we keep going on with this COVID, bigger companies don't care about the stigma anymore. They're just going to let people go, which is super sad.
00:31:55
Speaker
But all right, so that's reason number one. The reason number two, and the reason why we're talking about valuations and buying businesses is because the age demographic of people that own businesses are getting older. And a lot of them do not have an exit plan. So they're looking for people to buy and step into their business that they've created. So there's an opportunity there of just age of businesses and business owners to step into that.
00:32:21
Speaker
And the third reason I think, and there's probably way more, but I'm biased, is interest rates. Interest rates to borrow money right now is historically low. Now, you might have to jump through some hoops to get that, but knowing that with all those three reasons,
00:32:40
Speaker
it's a really good time to go in common. And if you've ever had an idea or you stumble upon an opportunity to buy a business, it's, I think it'd be worth time of yours to try to evaluate it and see if it's the right step for you. We would love to be a part of that. We don't have to be. But if you like what you hear in this last podcast, you can go see all the information that we have at www.uncommonwealth.com.
00:33:07
Speaker
We own a RIA, so we can help people with securities, we can help people with their life insurance, we can help people evaluate businesses. We wanna be that advisor that actually helps you get to where you wanna go faster. So again, try to reach out to us, do the 15-minute consultation to see if you're on the right path and just get encouraged that this uncommon path is one, it can be daunting, but it also can be super rewarding. And Brian and I wanna do what we can to get as many people down this road as possible.
00:33:35
Speaker
So thank you for listening. You've been listening to The Uncommon Life Project. I've been your host, Phillip Ramsey. And I am Brian Dewhurst. And for now, we're signing off. Go be uncommon. Thanks. Goodbye. That's all for this episode of The Uncommon Life Project, brought to you by Uncommon Wealth Partners. Be sure to visit uncommonwealth.com to learn more about our services. Don't miss an episode as we introduce you to inspiring people who are actively pursuing an uncommon life.