Royce Yudkoff

And as Roy says, it is application of the same idea, whether it's veterinary services, concierge medicine, or apparently automotive repair, or HVAC. What you're doing is allowing enough specialization for management talent to bloom.

And as Roy says, it is application of the same idea, whether it's veterinary services, concierge medicine, or apparently automotive repair, or HVAC. What you're doing is allowing enough specialization for management talent to bloom.

I always focus on the ability of getting the deal done because no company is very good if you can't actually get a transaction completed. And for me, the biggest red flag is multiple owners. If you have an owner in the 70s and another one in the 50s and the owner in the 70s has been working on the sale,

I always focus on the ability of getting the deal done because no company is very good if you can't actually get a transaction completed. And for me, the biggest red flag is multiple owners. If you have an owner in the 70s and another one in the 50s and the owner in the 70s has been working on the sale,

There's just an unbearable probability that when the person in their 50s finds out or understands what the transaction really means, they're not going to sign. And you can go months and spend money on QV and attorneys and write asset purchase agreements and feel like everything's gone. That's great because you're only communicating with the partner who wants to sell.

There's just an unbearable probability that when the person in their 50s finds out or understands what the transaction really means, they're not going to sign. And you can go months and spend money on QV and attorneys and write asset purchase agreements and feel like everything's gone. That's great because you're only communicating with the partner who wants to sell.

Everything's gone real well until it just never closes. That's a great one. I hate that. Committed sellers are at least as hard to find as good companies. So you really, really need to pay attention. to why people are selling and whether they really are selling. And if you have more owners, you have more places where you can fall off. Here's another one.

Everything's gone real well until it just never closes. That's a great one. I hate that. Committed sellers are at least as hard to find as good companies. So you really, really need to pay attention. to why people are selling and whether they really are selling. And if you have more owners, you have more places where you can fall off. Here's another one.

You need to have a meeting. I like to have them on Wednesdays. The reason I like to have them on Wednesdays is you get Monday and Tuesday to cram to get the stuff that you promised last Wednesday done.

You need to have a meeting. I like to have them on Wednesdays. The reason I like to have them on Wednesdays is you get Monday and Tuesday to cram to get the stuff that you promised last Wednesday done.

And so does the seller. And the Thursday and Friday, I actually do it in an orderly fashion. So I love Wednesday meetings, but you need to have a Wednesday meeting where you say, what's going on? Where are we at? You were going to do this. I needed that last week. The banker needs this. The lawyer needs that, whatever that is. So that's really helpful.

And so does the seller. And the Thursday and Friday, I actually do it in an orderly fashion. So I love Wednesday meetings, but you need to have a Wednesday meeting where you say, what's going on? Where are we at? You were going to do this. I needed that last week. The banker needs this. The lawyer needs that, whatever that is. So that's really helpful.

The other thing, though, that's really, I think, important is, and this is so hard, what I'm about to say, is you want to pay a price first. that allows you some margin of safety for due diligence surprises. Because in a lot of small firms, Royce's example was the owner perhaps being a little bit nefarious. But sometimes the owners are not nefarious. They just don't really know.

The other thing, though, that's really, I think, important is, and this is so hard, what I'm about to say, is you want to pay a price first. that allows you some margin of safety for due diligence surprises. Because in a lot of small firms, Royce's example was the owner perhaps being a little bit nefarious. But sometimes the owners are not nefarious. They just don't really know.

They think they have contracts and they don't really have contracts. They think they have what we would call contractually recurring revenue and they don't. They think they have all the documents. They think they have all the licenses. They think they've been paying all their sales tax.

They think they have contracts and they don't really have contracts. They think they have what we would call contractually recurring revenue and they don't. They think they have all the documents. They think they have all the licenses. They think they've been paying all their sales tax.

And as you dig in, a lot of those things, the broker talks to the owner, the broker writes down what the owner says, puts it in fancy language with some pictures and produces a sim. You bid on that SIM.

And as you dig in, a lot of those things, the broker talks to the owner, the broker writes down what the owner says, puts it in fancy language with some pictures and produces a sim. You bid on that SIM.

If you bid a full price based on that SIM and then discover maybe revenue quality isn't as high or they've been underinsured and you have to have some higher insurance or that employees haven't had raises in five years or there's a bunch of accrued bonus that needs to be paid. If you've paid a full price, then your only choice is to go back and say, we need to readjust this price.

If you bid a full price based on that SIM and then discover maybe revenue quality isn't as high or they've been underinsured and you have to have some higher insurance or that employees haven't had raises in five years or there's a bunch of accrued bonus that needs to be paid. If you've paid a full price, then your only choice is to go back and say, we need to readjust this price.