Link To Guest Website: https://www.sunbeltnetwork.com/
Title: “Buying & Selling Small Businesses In Today’s Market”
Guest: Sanjay Ahuja – Sunbelt Business Brokers
Interviewer: Jeffrey Davis – MAGE LLC
Click here to read the transcript
Welcome back to Radio Entrepreneurs, and we continue to stream stories of entrepreneurship and leadership throughout this economy and how people are adapting. Our next guest is Sanjay Ahuja he is president of Sunbelt Business Advisors. Welcome.
Thank you, Jeffrey. Always a pleasure being with you. You guys are doing a great job for small businesses. Keep it up.
Thank you very much. I heard that you been on this show before, but during one of my absentee moments, you met my business partner from my consulting firm, Jonathan Friedman. But this is my first experience with you. Can you tell us a little bit about Sunbelt?
Sure. Yeah. So Sunbelt Business Brokers is a network of offices. I think there are about 250 offices across north America, mostly in the us. We’re also a big player in Canada and then some across Latin America, we specialize in helping clients buy or sell businesses. And these are generally small to low mid market businesses. So what I mean by that is businesses under $20 million in valuation, somewhere in that range, we, we sometimes to get involved in deals that are larger than $20 million, but those are far and few, the sweet spot really is deals in the $20 million.
Sanjay (1m 30s):
Where what we’ve seen is there’s not enough professional representation available in the marketplace, investment banking, even boutique firms, you know, don’t want to play at anything under a hundred million dollars. And so there’s a huge gap. And if, you know, you know, maybe 98, 90 9% of businesses are small businesses that are in that range. And there was a big vacuum in the market Sunbelt. And some other similar institutions realize that there is an opportunity and got into this business 30 years ago. And we’ve been growing since then. And you know, about two 50 offices.
Sanjay (2m 11s):
Now we do roughly 3000 transactions in a year.
Jeffrey (2m 16s):
Oh, that’s a lot of transactions for, you know, especially when you consider them small business. And I guess you must have a formula for dealing with such volume and a formula for marketing. Can we talk a little bit about that?
Sanjay (2m 29s):
Yeah. So the formula is no different from any other MNA transaction. It’s just that there are bigger volumes and the numbers are smaller, but you still have to go through all the same steps, which start first of all, with valuation, getting to an understanding of what can be expected as part of the business. And then secondly, putting marketing plans. So which could be a combination of targeted marketing. We have a huge database of buyers that we have accumulated over the last 30 years.
Sanjay (3m 14s):
So to our CRM systems, we can tell who is interested in what sort of acquisitions and reach out to them whenever there is an opportunity, or we could even cast net wide by advertising on internet platforms that specialize in small business transactions. And so the second step is the marketing process is to put the plan together as to execute the plan and get it all moving. And of course, supporting that is the creation of all the collateral and the documentation that will be required. So generally you require an offering offering memorandum.
Sanjay (3m 54s):
It’s known by various different names, confidential business review package, or confidential information memorandum, depending on the complexity of the business that could run anywhere between 2030 pages to 300 pages. So that requires a lot of groundwork, which is what we do initially with the client. And then when it’s out in the market, we, you know, find buyer prospects one way or the other start engaging with them, negotiating helping them through the due diligence. If financing is required, SBA loans, we will provide them as much support as they can connect them, introduce them to other professional advisors as needed and quarterback the whole process until the deal gets closed.
Sanjay (4m 43s):
So that, you know, is the formula. Give me a little bit about your background. I started off in digital computers. I hope that was not my phone. So I started off probably 25, 30 years ago in the world of business with digital, which got acquired by Compaq. And then HP, towards the end of my career, I was focused on acquisitions. We were acquiring small companies to improve and enhance our capabilities.
Sanjay (5m 24s):
Of course we wouldn’t buy anything under $30 million. We were not allowed to. So that was a different world. So to say, but I enjoyed, you know, being in that role and decided that if I do go out and my goal was to get out at 50 and do something that I enjoy. And, you know, I didn’t enjoy staring at spreadsheets and setting in forecast calls. And so I got to a point where the targets that I’ve set for myself in terms of network, in terms of age, you know, I hit, when I hit those goals, I said, okay, it’s time now to go out and do something that I really liked doing.
Sanjay (6m 5s):
That’s when I started looking around, fortunately, and that was <em></em> that Sunbelt. They had an office in Boston, which wasn’t performing too well. And they were looking to replace the office owner with another one. And we happened to get introduced, started talking, one thing led to another. And I said, okay, yeah, this is a great second, I think for me.
Jeffrey (6m 36s):
So I know you state that, that Sunbelt is the largest world’s largest seller of private companies. Can you give us some background and specifics to that because that’s quite a claim.
Sanjay (6m 50s):
Yeah. So a bell in terms of number of offices, we have the largest presence and not Americas, no other company in that space has that many offices. There was a recent internal study done. In fact, it was just looking at it last week and we generated $76 million in annual commissions in 2020, which is roughly twice a little less than twice the next two players put together.
Jeffrey (7m 27s):
Yeah. Well, that’s quite an impressive track list. And are there any industries, did you think are more suited for selling at this particular time than any other,
Sanjay (7m 38s):
You know, at this particular time, of course, any industry which was in remarkably, I mean, everybody was affected by COVID, but if any industry was not remarkably affected by COVID, then it’s as good a time for them to sell as any. But if, if the industry and like, for example, travel, leisure entertainment, those industries are very hard hit by COVID and they’re just about starting to recover. Now there, I think it would make more sense for sellers to hold on, but rebuild their business back to where it was pre COVID.
Sanjay (8m 18s):
And then think about going to the market.
Jeffrey (8m 21s):
Interesting Sanjay. If somebody is looking clearly, you don’t need our help for Sunbelt Business advisers, how would they find the company?
Sanjay (8m 30s):
How would they appointed a company
Jeffrey (8m 32s):
If they’re looking to contact you or the comp of the company?
Sanjay (8m 36s):
Yeah, so they, of course they can call me on my cell phone, always available (508) 868-8189. They could call or text, doesn’t have to be a transaction related. You know, I like bouncing off ideas. So if anyone has anything where I could be of help, they could reach me by my cell phone or a email Boston, M a M as in Massachusetts at Sunbelt dot com. And we have a website, sifted Googled, Sunbelt Business Brokers, positive note, find our website.
Jeffrey (9m 9s):
I want to thank you for coming in and being a returning guest on Radio Entrepreneurs, all new to me, quite an impressive business. You’ve built it, but I want to remind our listeners, this is Radio Entrepreneurs.
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