The Scale of the Opportunity

     Welcome back in the Conscious Wealth  

     Studios. Today we have Andrew Olsen. And  

     in case you've missed the previous  

     videos, 10,000 baby boomers are retiring  

     each day. 51% of all businesses are  

     owned by baby boomers. And it's millions  

     of dollars of assets. And that is by far  

     in many of those families the largest  

     asset they own. And those assets will  

     change hands. The question is when and  

     how? And to talk to us about that today,  

     Andrew Olsen, conscious wealth manager.  

     Great to have you.  

     No, thanks for having me. Yeah. No. So,  

Who the Buyers Are

     we've spent some time talking about the  

     seller. Now, let's talk about the buyer,  

     the other side of the table.  

     What does the buyer look like out there?  

     What a lot of people don't realize is  

     there's really three types of buyers.  

     Yep.  

     In this market, there's the next  

     generation and internal management.  

     There's private equity and there's  

     millennials who are pursuing  

     entrepreneurship through acquisition. So  

     let's start with the first one. So the  

     first buyer is really our like you said  

     nextgen buyer, right? And this is often  

     management too. So you're thinking you  

     know children who their parents own the  

     business or you know employees who are  

     part of a management team or any kind of  

     you know key employee that's going to be  

     in the business and operating on a  

     day-to-day basis. And so this buyer is  

     often going to have one key struggle and  

     that's going to be liquidity, right? So  

     these are huge transactions and uh the  

     average management team may not be able  

     to afford it on their own. So they have  

     to get creative. Um and there's some  

     really creative ways that we'll talk  

     about in a bit to to kind of purchase  

     these. But oftentimes the first buyer in  

Selling to Internal Teams

     the room is actually someone who's  

     already in the building.  

     Well, let's talk about it now. How can  

     you sell to the people in your company?  

     Yeah. Yeah. It's a great question. And  

     so I'm from a small town. The way that  

     small town businesses have kind of, you  

     know, at least from what I've seen,  

     operated  

     Yeah.  

     all the time has been through like  

     seller notes, right? And you know, maybe  

     it wasn't called that, but a management  

     team or a NextGen family member or  

     someone uh who's going to take over the  

     business, you know, the owner knows that  

     they don't have the liquidity to maybe  

     meet those needs. And so what the owner  

     does is acts as the bank. So the owner  

     is going to actually lend them the money  

     the same way that you know Capital One  

     or Chase would lend you the money. And  

     what they're going to do is kind of be  

     aligned in that transaction, right? So  

     they're going to be able to maintain  

     their legacy. They're going to be able  

     to continue coaching management if if  

     there's anything that they need in this  

     big transition. Um but they're also  

     going to receive their cash flow from  

     exit via helping the operations team be  

     able to pay them essentially. So, this  

     sounds like something that would be  

     valuable if you want to uh if you want  

     to continuity.  

     Yeah.  

     Willing to stay on a little bit longer  

     or be involved. You don't want to  

     completely walk away. And then you  

     you're willing to not have one injection  

     of cash, but an installment sale over  

     time, which will pay you the company  

     plus the loan plus the interest.  

     Yeah. Yeah, that's exactly right. And  

     so, you know, you'll see oftentimes  

     different incentives within the loan. If  

     the business does really well, both  

     parties, you know, make more money. But  

     like Brandon said, the core part of this  

     is you're going to receive legacy um  

     commitment from your current employees.  

     You're going to have continuity between  

     the transition. Yeah. You know, say  

     there's three levels of employees. Well,  

     the bottom two levels against the  

     management team are not going to feel  

     totally undercut. They're not going to  

     not know who's in the building with  

     them. They know these people. They've  

     worked for these people for a while. So,  

     you get that continuity. And I suspect  

     that this is popular in small towns  

     because you want to go to get dinner  

     after church or whatever on Sunday  

     morning and not have everybody staring  

     at you saying, "This guy sold sold out  

     this company. I don't like the way the  

     company went. Nobody Everybody's losing  

     their jobs."  

     Yeah, that's exactly right. I mean, you  

     it would literally be such huge town  

     gossip if the local tire shop sold to a  

     big box chain, you know, and uh Yeah,  

     that's why people do it, you it keeps  

     the leg and and a lot of times these  

     communities are kind of, you know, maybe  

Private Equity and Aligned Buyers

     just like under capitalized in general  

     and so this is just the way that things  

     operate.  

     Uh so the second option is private  

     equity. If I'm a millennial buyer, I can  

     align myself with a private equity firm.  

     Yeah. And there's a lot of good private  

     equity out there. And here's what these  

     firms are doing.  

     A lot of times it's people who took an  

     institutional track and worked their way  

     through a maybe a bigger private equity  

     firm and then you know afterwards they  

     took their liquidity and became owners  

     themselves or operators. Yeah. Um and a  

     lot of these firms are kind of popping  

     up. It's a whole new breed of private  

     equity and it's really cool to see. And  

     so you can see people who want to be  

     operators or maybe want to purchase a  

     business that don't have like we're  

     talking about the liquidity align with  

     these private equity groups. And so you  

     have an aligned operator, you have an  

     aligned funer. And what's really cool  

     about that is the fact that, you know,  

     the buyer, the seller rather, is going  

     to have a much better experience working  

     with those buyers who are aligned and on  

     a smaller scale than maybe traditional  

     PE.  

     Yeah. And if I'm a buyer, I'm just  

     looking for alignment. Am I getting the  

     right incentives? How much capital do I  

     have to put up? Maybe I don't have to  

     buy the whole business, but they're  

     going to want something. What does that  

     look like?  

     Um, and it's it's an option that's  

Millennial Buyers and Acquisition

     available.  

     Yeah. Uh and then the third option,  

     yeah, the third option is kind of a  

     hybrid of the first two, which is  

     millennial operators and this kind of  

     entrepreneurship through acquisition  

     movement that that's going on right now.  

     This is again where creative financing  

     comes in. But there's a lot of under  

     capitalized uh let's say millennial  

     operators out there. And what's really  

     cool about that generation, this kind of  

     buyer generation specifically, is um  

     they are kind they're tech-savvy. they  

     have a lot of experience like funding  

     different things. And so what you see  

     happen is kind of there's this financial  

     toolkit, you know, there's there's SBA  

     lending, there's seller notes like we've  

     talked about, there's going to private  

     equity groups. And so, you know, a  

     combination of these, you know, and it's  

     really cool to see uh a generation that  

     kind of maybe doesn't have the capital,  

     but knows how to structure things and  

     knows how to fund raise um purchasing  

     purchasing businesses.  

     I wish I was a millennial again. Yeah.  

     Yeah. Well, I mean, here what what's  

     really cool about the entrepreneurship  

     through acquisition movement is it it is  

     people it's MBAs. It's people who want  

     to be operators but aren't operators  

     yet. It's people who are ex corporate.  

     That's a huge thing. People are doing  

     math and they're saying, "Yeah, I could  

     own four car washes and make what I make  

     in corporate America and I could work  

     for myself." And so the question is, how  

     do you buy four car washes, right? And  

     that's where the creativity comes in.  

     That's where having a team, having  

     consultations and things like this make  

The Role of the Advisor

     way more sense and can help you take the  

     next step.  

     Andrew, what's the So, you as an advisor  

     with conscious wealth, how can you help  

     the buyer or the seller? What's your  

     role in this?  

     Yeah. Yeah. So, I an advisor role is  

     very simple. We just talked about a lot  

     of complex ways to finance different  

     deals, when to go, where, like our role  

     is is kind of as an orchestrator, like  

     you tell me the end goal that you're  

     trying to get to.  

     Let's find out where you're starting and  

     like let's thread what's in between.  

     Yeah. That's really the advisor's role.  

     Yeah. So, everyone's in a different  

     position. Everyone's in a different, you  

     know, stage of life and that means they  

     have totally different options  

     and create clarity on the tradeoffs.  

     I've seen you do this create, well, you  

     could go this route, but long term these  

     are your trade-offs,  

     right? Adjusting expectations, too, is  

     is is a big part of what we do, right? I  

     mean, we get unrealistic expectations  

     sometimes. Let's, you know, be totally  

     honest. And, um, they're they're not  

     unrealistic in the sense that it's never  

     going to happen. It's just not the same  

     path to get to where you're going,  

     right? And so that's on the seller and  

     the buyer side. So often times buyers  

     think you can print money out of thin  

     air  

     and sellers think you can receive money  

     out of thin air, right? And so these  

     kind of valuation adjustments or time  

     horizon adjustments. Uh that's super  

     important to have, you know, someone  

     who's done it before, who's facilitated  

     a transaction like this in a in a couple  

     of different ways, uh be able to advise  

     you which route to go.  

     It's an exciting time for um millennials  

     because that's what we're talking about  

     today. Yeah. What is the encouragement  

Why This Moment Matters

     you would or words of wisdom or anything  

     you would tell them on on our way out?  

     If you're a millennial, this could  

     totally change the course of your  

     career.  

     Yeah.  

     You may have seen yourself doing the  

     nineto-ive forever and this could be a  

     whole new way to experience life as an  

     operator, as an owner. And that's really  

     encouraging. That's it's a whole new  

     world. ownership. Entrepreneurship.  

     Entrepreneurship.  

     If you're made for it, it's great.  

     Yeah. Yeah. That's for sure. Yeah.  

     Yeah. It's the best. And it's still  

     hard.  

     Yeah.  

     But if you're not made for it, don't try  

     it.  

     Yeah. That's great advice.  

     Yeah. But that's a bad advice. That's  

     like I'm being negative. So positive is  

     this is a wonderful opportunity. There's  

     never been another time like this in  

     history. Or this is I don't want to say  

     unique time.  

     This is a really unique time.  

     Yeah.  

     And unlike any time it been in my  

     history. Uh, and um, it's an opportunity  

     to create agency. Agency in your life, a  

     sense of control to build something.  

     That's fun.  

     Yeah, it's really great.  

     Cool. Well, thanks for coming in,  

     talking about the trends around buyers,  

     exitings, millennials, the silver  

     tsunami. We'll see you back here soon.  

     Yeah, thanks for having me.

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