John Ahlberg WINs By Using a Defined M&A Process

John Ahlberg, the founder and CEO of Waident Technology Solutions, recently joined Carrie Richardson on the podcast WIN - What's Important Now? to discuss his company's growth through mergers and acquisitions (M&A). Celebrating its 20th anniversary, Waident has about 30 employees and over $7 million in annual recurring revenue, making them an elite managed IT services provider in the top 15% of US based MSPs.

Mr. Ahlberg shared insights into how he evaluates potential acquisitions, emphasizing the importance of cultural alignment over financial details in the early stages.

Waident's approach to vetting organizations is more art than science, focusing initially on culture rather than finances or tools. John believes that understanding the mindset and practices of a potential acquisition can reveal much about their client relationships and team dynamics. This cultural compatibility is crucial for a smooth transition post-acquisition.

Waident's M&A strategy involves a detailed 10-page protocol document developed after their second or third acquisition. This document guides the team through the process, ensuring they ask the right questions at the right time and avoid wasting time on unsuitable opportunities.

John Ahlberg advises smaller MSPs looking to be acquired to get their finances in order, ensure client profitability, and maintain thorough documentation. These steps make a company more attractive to buyers and facilitate a smoother transition.

Looking ahead to acquisition number six, John humorously notes that he's open to opportunities in warm locations like the U.S. Virgin Islands or Phoenix, aside from Chicago and Milwaukee where Waident already has a presence. He acknowledges that while they target companies with revenues between $500,000 and $2 million, the right opportunity could come from anywhere, provided the numbers make sense and there's a solid business plan in place.

In closing, Alberg emphasizes the importance of having a clear business plan and goals, both for the company and individually for team members. This forward-thinking approach not only drives growth but also ensures that Waident remains a well-structured and profitable business, ready for future opportunities.

A special thank you to Natalia Kapustina, the marketing expert who helped us pull together several great content pieces for educating

Carrie Richardson and Ian Richardson host the WIN Podcast - What's Important Now?

Serial entrepreneurs, life partners and business partners, they have successfully exited from multiple businesses (IT, call center, real estate, marketing) and they help other business owners create their own versions of success.

Ian is certified in Eagle Center For Leadership Making A Difference, Paterson StratOp, and LifePlan.

Carrie has helped create and execute successful outbound sales strategies for over 1200 technology-focused businesses including MSPs, manufacturers, distributors and SaaS firms.

Learn more at www.foxcrowgroup.com

Book time with either of them here: https://randr.consulting/connect

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Transcript

[00:00:00] Carrie Richardson: Good morning, everyone. My name is Carrie Richardson. I'm a partner at Richardson and Richardson. And today I am your host for WIN- What's Important Now? With me today is John Alberg, who is the founder and CEO of Waident Technology Solutions in Chicago.

[00:00:16] Carrie Richardson: Waident is celebrating their 20th anniversary. They have about 30 employees and over 7 million in annual recurring revenue. I got a little sneak peek by reading a recent article in ChannelPro Network. So thanks so much for agreeing to be on WIN today, John, how are you doing?

[00:00:33] John Ahlberg: Good. Thanks for having me. 

[00:00:35] Carrie Richardson: We had a little conversation about this prior to our podcast you have successfully completed five acquisitions, so Waident technology solutions has grown organically, and through M and A -wanted to learn a little bit about how you vet the organizations that you're considering acquiring. 

[00:00:54] It's a bit of an art, at least on my side. The good thing is I have a, I [00:01:00] already had a team in place .

[00:01:01] John Ahlberg: When I run into an opportunity, it's usually a friend of a friend or someone I run into, at least they've all been that way. And I sit down with the business owner and I really just do a culture talk. How are they think, what are they doing? That goes a long way to determine what clients they have and how their clients are and how the team is.

[00:01:23] John Ahlberg: I have the easy part in the whole thing. I chit chat for an hour or two about culture and what they're doing and what they're looking for. And I tell them, look, I don't care about the finance talk that happens later with my CFO. Okay. I don't care about the tools and everything that happens later with somebody else.

[00:01:38] John Ahlberg: Right now. It's just a meet and greet. Do we like each other? Does it make sense that, what I do is the same thing they're doing or it's augmentation of it. So it's really just a culture talk. And then from that, if that sounds good, then I hand it off to the finance side and they'll talk broad numbers.

[00:01:56] John Ahlberg: If that passes, then it goes into, [00:02:00] deeper detail. 

[00:02:00] John Ahlberg: We have a 10 page protocol document that we follow. We did that on our second or third acquisition. We realized there's lots of moving parts, takes a long time. I think the shortest acquisition was like three months.

[00:02:13] John Ahlberg: The longest was like nine. It takes a long time . We document what to ask for, when to ask for it, what to discuss. So we have a good idea if, it doesn't make sense to move forward. We don't want to waste our time. We don't want to waste their time.

[00:02:26] John Ahlberg: So let's just get this stuff out of the way at the beginning to make sure we're thinking alike and we're on the same page and then we can start digging into it. 

[00:02:36] Carrie Richardson: Thinking back to the first one, which led to, some documentation and some process changes on number two what didn't go as well as you would have liked?

[00:02:46] John Ahlberg: That one pretty much went okay. It was a bit different. It was a friend of a friend. They started MSP ran it for two years and they just weren't making money [00:03:00] that a handful of clients. There's two people there. And the business owner. I just want to find someone I can hand my clients over that will take good care of them, and the one employee, can fold in your organization.

[00:03:15] John Ahlberg: I just want to make sure everyone's being taken care of, because I'm, losing little money every single month and just couldn't get to where it needs to be. That was the 1st one again, when the opportunity came, we discussed it and said, okay, let's talk about it. And it made sense.

[00:03:29] John Ahlberg: He wanted to exit, the space and go do something else. And again, it was culture at 1st, so we met with the perspective employee. We did hire him and he's been here 14 years . So he's been here a long time, worked out great. We went through the client list and most of the clients came over at the beginning.

[00:03:48] John Ahlberg: That was one thing that, you're just not sure on. And I had no idea, I, I. Naively expected they're all coming over. Why would they not come over? We're gonna treat them well and inevitably there's always some they're [00:04:00] just like, yeah, I don't know you and that's okay You know i'm leaving there's other ones going well, I really wasn't super happy and I just want to leave so they weren't leaving for constructive reasons It was just you know, okay I like the old owner.

[00:04:14] John Ahlberg: He's out. You're out. But we brought him on and we still have some of those clients to this day. Some of them, of course, didn't work out, but there wasn't a, there wasn't a big we should have done something different moment. Those kind of happened later on, when you're doing bigger ones there's more things to think about or worry about.

[00:04:35] Carrie Richardson: So it was a good one to cut your teeth on. 

[00:04:38] John Ahlberg: Yeah, I was the perfect, the only annoyance was I was on vacation, visiting my family in Montana in a cabin while I had to do, phone calls back then, had to do conference calls to discuss some of the details because it was far enough down the line.

[00:04:53] John Ahlberg: We wanted to close. That was just painful. I'm like, okay, I'm going to be locked over here for a little while making calls. [00:05:00] People are in the cabin doing fun stuff. But again, you can't control that. I could have said, Hey, let's put on a hold a week or two until I come back.

[00:05:06] John Ahlberg: But that wasn't fair for my organization or him or anyone. So we just took care of it, but you can't control that. 

[00:05:15] Carrie Richardson: How long after your first acquisition, did you pursue your second acquisition? 

[00:05:20] John Ahlberg: That was probably two years later after the first one it came into our growth strategy.

[00:05:27] John Ahlberg: Okay, we're going to grow, by referrals and marketing and other stuff, but we're also going to grow by acquisition. So it was officially on the radar. It was one of those. Okay. How do we find people to talk to? We weren't thrilled about trying to go through broker. So we just hit the network and said, Hey we're looking to acquire or merge with someone if you know anyone.

[00:05:48] John Ahlberg: And that, which I'd never done in the past, it was actually helpful because I'm out networking and I talked to a bunch of people, but they never think, or usually never think, Hey, I know this company who wants to sell, you should talk [00:06:00] to John. But if you tell them we're actually looking, then it's a bit more top of mind.

[00:06:05] John Ahlberg: When I said that and people were like, Oh, you should go talk to these other ones. The second one was a little bit different. We started working with a new finance client and the CFO was like, I like my old MSP. I just don't think they're big enough, but we need a bigger organization.

[00:06:22] John Ahlberg: As it turned out, their old MSP was 1 or 2 users. And we were. Dozen at that point. So we took over .The other MSP was, run by a woman that was super nice. Once we took the client over I sent her an email and I'm like, hey, sorry, this happens to all of us.

[00:06:39] John Ahlberg: I just want you to know they spoke very highly of you. And I'm like, if I can ever help you, Or work together, do something, let me know and didn't get a response at all. A year later she reached out to me and said, Hey, I always remember that email. I thought that was really nice.

[00:06:55] John Ahlberg: Could we go out to lunch? 

[00:06:56] John Ahlberg: We went to lunch and she's I've been doing this for 20 plus years and my heart's not in it [00:07:00] anymore. And it's just her at that point. She's I really don't want to grow it and it's fine right now, but I just don't want to be here. And I'm like, okay, so you're looking to sell merge and she's yeah so that's what we ended up doing, again. We do an asset purchase, we're not buying the company, we're buying the assets, we're hiring the people taking the clients over and, we get the laptops and equipment and other assets.

[00:07:25] John Ahlberg: So we worked out a deal with her and the way we normally do it, on a high level is again, the finances are what the finances are. At least that's the way I look at it. You're not going to find one person that's going to pay 10 times more than another person. It's all in the same realm,. The way we usually do it is. Okay, here's some cash. Okay, here's, usually some sort of built in note. You're giving me your business.

[00:07:49] John Ahlberg: I want you motivated for the next year to make sure that they don't fire me. And then we build some upside in that. They're probably only doing 300, we know we're not going to get 300.

[00:07:57] John Ahlberg: It's going to be more like 250. So [00:08:00] we build something in there going, okay, great. If we hit the two 50 mark, you make all the money, but if we go over that, great. It's a win. It's more profit for us.

[00:08:08] John Ahlberg: We'll split the profit with you, give you, 10 or 20 percent of the profit, whatever it is. It's a good transition. On that end, I think that was the one that we really started digging into the agreement paperwork side. The 1stone 1, it was just like, oh, you're small.

[00:08:25] John Ahlberg: We're friends. Okay. We're at a couple page document and we bought and then it was done. 

[00:08:30] John Ahlberg: But then the2nd,one, it was like, all right, we need to treat this a little bit more seriously. And that was all right. We're interested. Here's a letter of intent and that lays out. This is about what we pay, depending on what we find out and, terms and such and that's signed.

[00:08:44] John Ahlberg: And then when it was done, we were a bit more complex on it. So we, then wrote up the actual agreements and there's 2 or 3 agreements on that. Just based upon my CFO used to. Work in finance and he acquired a bunch of companies [00:09:00] and he's I got templates. We used to do this.

[00:09:01] John Ahlberg: It's not a problem. So that's how that one did, as it turned out the thing we learned on that one is, we hired the woman she was great. We really liked her, but what we found out was it was a little bit of concern, but we just didn't know was okay,

[00:09:18] John Ahlberg: you've been working for yourself . Not holding yourself, to any kind of standard, because it's just you. How's it going to work that now you're working for another company and we have some rules around it. And again, she started with her heart wasn't into it, but she wanted to give it a shot.

[00:09:33] John Ahlberg: And it just turned into the. Simple things, all our techs have to track their time and put in notes in the system. She hadn't done that in years because it was just her. She didn't have to, all our techs have to document. We document.

[00:09:45] John Ahlberg: So again, our take on it isn't, this isn't working go away. It's okay. What resources you need to help because she wasn't entering time because she never had to it. After several months, there's frustrations on both sides and she's [00:10:00] I just really want out and move to Arizona.

[00:10:02] John Ahlberg: I'm like, all right, good luck. She was super nice. And, we paid her everything that, we promised to pay her. So everyone was whole. But it's one of those now. I understand, even myself, I'd be a crappy employee if I had to go work from someone else.

[00:10:15] John Ahlberg: Not that, I'd be crappy. It's just, I'm not used to other people's rules. 

[00:10:19] Carrie Richardson: You want me to come to work every day. 

[00:10:22] John Ahlberg: Yeah, 

[00:10:22] Carrie Richardson: every day. 

[00:10:25] John Ahlberg: Yeah. Yeah. Wait a minute. Yeah, and then I have, certain number of vacation days or, I can't just take off.

[00:10:32] John Ahlberg: But that's where, culture wise when we merge clients and we're hiring people I internally give the culture of as much freedom as possible and, act like your a business owner. When I bring in other business owners I basically tell them, you don't have to report into me.

[00:10:48] John Ahlberg: You don't have to do any of that. Have the freedom you want. And if it doesn't work well, it doesn't work for a business reason, then we can have a discussion on it. So it works out really well, if the business owners looking to merge in and they still wanna be a part of it.[00:11:00] And those are some of the conversations I've had where it works out where a tech starts, the MSP, and they're not really a business person and it's growing.

[00:11:08] John Ahlberg: But they, just running the business is a pain and you're in operations. You really want to be a tech or like the company CIO and not do all this other stuff. And, if you're too small, it's hard to manage. I've had conversations with those, and that's where the merge works out well, because I go, okay, you worked here yourself for, four years, you haven't hit that threshold and you're getting frustrated.

[00:11:29] John Ahlberg: If you merge in now you got a bigger team. You got more resources. You can actually say, this is what I want to do. And I don't have to do all that other crap. It's okay, great. And no, one's going to be like, where are you today? How come you're not in the office? You're not going to get any of that.

[00:11:43] John Ahlberg: So it works out pretty well. You know what I found when I talk to other MSPs about it, usually, and again, it's me on the culture side, Usually it stops there because too many people have a poor Idea [00:12:00] of what the company value is, I just talked to another one that I want to do they're in the u. s. Virgin islands. I'm like, hey, there's my summer office. The person Running that company You know was proudly saying, oh I do about two hundred thousand dollars with the business And then he said I fully expect to get a million plus out of this and i'm like Okay, that's a lot of multiples for random work. 

[00:12:24] John Ahlberg: I run into that a lot, where I talked to someone and it's the, I've been doing this for 10 years and, I just made it to a million and I know within the next two years, I'm going to be up to 10 million. 

[00:12:34] John Ahlberg: Okay. How are you going to suddenly do that?

[00:12:36] John Ahlberg: I don't know. But my is valued at where we're going to be in two or three years at 10 million. So that's where it ends a lot of times.

[00:12:42] John Ahlberg: We look to buy companies through brokers sometimes. So we're already talking about valuations and internally evaluate ourselves and our own metrics.

[00:12:50] John Ahlberg: Just so we know. 

[00:12:51] John Ahlberg: But it's just getting that person where they get it. You're going to pair a fair price and I can work for you. My life is just that much better. I never have to worry about [00:13:00] payroll. I never have to worry about managing anyone. I have to worry about paying the bills and I can do this role and I got like a whole bunch of techs with me to do it.

[00:13:09] John Ahlberg: It's hard to find that person who gets all the big pictures and the moving parts and go, Oh my God, this is a good thing for me compared to do what I'm doing. So that's the big hurdle when I talk to people. 

[00:13:21] Carrie Richardson: And then acquisitions three through five, were they more challenging?

[00:13:25] John Ahlberg: I think it was number three or four we ended up running into a person who built an MSP in Milwaukee. So that's why we have a Milwaukee location. We weren't looking to go out there. We just ran into it.

[00:13:36] John Ahlberg: Met with the business owner. He was all about, treating clients well and responsiveness and communicating. So we had we were on the same level on all that. We got along. 

[00:13:46] John Ahlberg: We got finance involved. There were several sticky points. 

[00:13:49] John Ahlberg: The guy was not a business person. So the way he handled his finances were all over the place. He would resell antivirus and we would look at it per client and go, why are you making [00:14:00] 50 percent on this client, negative 10 percent on this client, 20 percent on this client.

[00:14:04] John Ahlberg: And he's I don't know. I just picked a number. And. But overall with all my clients, I'm making 20 percent and I'm like that's not how we do things, but we can manage for that afterwards. So that was a big headache. He had a team of six or seven people looking at them before we said, okay, who's this guy and what's his role and what's he's doing.

[00:14:24] John Ahlberg: And the answer was, I don't know. He just does stuff around here. So we're like. Okay he's gonna have to go again when we do this. This is not private equity where it's like drop in, pay money, fire people and just, increase profitability. The only way it works is, if the cultures aligned and everything's good in the book of business is good and the finance work, but it's also important that employees come over, it's all plus.

[00:14:48] John Ahlberg: Everyone we've done the employees end up making more money because we just fold them in and go. I know what you were making, but that's not what we pay. So therefore, now you're getting more money in a bonus. So it [00:15:00] usually works out. I know we may have more benefits. As employees go, there's rarely a negative to it.

[00:15:06] John Ahlberg: It's usually upside. And that isn't quote by design. It's just if I think it's fair, you're not going to have a team of techs, you're paying them all, but then, hey, you got some cheap ones because you acquired the company. I just don't do that. Let's bring them all up to the same standard.

[00:15:19] John Ahlberg: So that one, it was the finance and running the business. That took months and months just to get it into control and merge it together. Systems wasn't a problem.

[00:15:29] John Ahlberg: We document everything. We're process oriented. We have all documentation, we'll bring in clients and we'll say, okay, tech team, who's now working with us, where's all the documentation.

[00:15:39] John Ahlberg: And it's I got one thing written over here, and now we don't have anything for them, and it turns into a mess. So the next hurdle on that is now my team needs to have free time to basically onboard them, just like we would onboard new clients. Might not have the client interaction side, but at least we're looking through and documenting and, doing everything that we need to do.[00:16:00] 

[00:16:00] John Ahlberg: And that's just time consuming. We don't have resources sitting around going. I wish I had something to do. So it's like, how do you take people with full time jobs and give them another one? The way we manage that is twofold. We say, okay, great. I think with that one, there was like 40 clients with that one.

[00:16:16] John Ahlberg: We said, okay, over the next year, we're going to onboard them, so let's now gauge which ones we need to onboard sooner rather than later. And usually the bigger is more complex. And then we assign. Double resources to it but the I. T. People that are now working with us. You keep on working with those clients to minimize the change impact, until they're on boarded.

[00:16:36] John Ahlberg: And when it's on boarded, then we can throw anyone at it and they can answer it. Look it up and and deal with it. So it's a year long transition. And I'm talking year long, even if our RMM tool is the same as theirs. And you think, great, this should be a piece of cake. You just point them at each other and say, go, it takes forever.

[00:16:57] John Ahlberg: And there's cleanup and there's all data. It's not a fun, [00:17:00] fun thing. So I learned about that. 

[00:17:02] John Ahlberg: The next one I figured going into it going, okay, there's seven people, one's not going to go the other six, there's always one or two that just isn't going to work out to at least you go into it knowing that .

[00:17:12] John Ahlberg: The first one was a bit painful, was their lead head, senior tech, nice guy and everything. The problem is he had the, I'm a senior tech ego, meaning, wait a minute, I'm not doing that. I'm more important than that. 

[00:17:28] John Ahlberg: We just don't do that here. 

[00:17:29] John Ahlberg: We don't if the front line's busy, you'll see senior people doing basic, let me, help change your password tickets, cause they have more flexibility to move their schedule around so that person, even telling him all this just couldn't accept that. So we're like that's just not going to work. It's here's your, warning shot. Here's your double secret probation. You need to start, playing nice with the rest of the team.

[00:17:53] John Ahlberg: Couldn't do it. So we let him go, and then we found out that, oh, a couple of clients of his that they really liked then left. So that was [00:18:00] one of the things, but the rest of the tech stayed, some stayed a long time, some not very long, depending on different things. The challenge is we don't know anything about their home lives or what they're doing outside of work that can affect and once you start working with them, that kind of enters the picture after six months.

[00:18:17] John Ahlberg: So we had one of those that way to manage through, but the most painful part was there weren't run like a business. So that's really hard for someone buying them. If someone comes to us, we meet monthly on finance. So it's here we go. We know our. KPIs, we know our profit.

[00:18:34] John Ahlberg: We know our profit by client. 

[00:18:36] John Ahlberg: We know our metrics. We know everything so if anyone approaches us we can go literally Here's your answers, you know right away because we're on top of it. i'm not a finance Person, I'm a business degree, but I hated accounting.

[00:18:48] John Ahlberg: It still doesn't make sense to me. But day one, when I started the company, I said, I need someone who can do accounting because I can't do it. So I literally hit my network and then brought in accounting for and then our outsource [00:19:00] CFO now is someone I've known for 30 years. He's been working on us for 15, 16 years.

[00:19:05] Carrie Richardson: You're acquiring MSPs that are well below the threshold of what, say, private equity or an empire builder would consider at this time, you gave some really good advice around Hey, make sure your finances are in order. People can't buy you if your finances are a mess, make sure that you're aligned with the culture of the company that you're evaluating.

[00:19:29] Carrie Richardson: What else would you say would be important for a company that's under a million dollars where the owner is just like, you know what, this isn't for me. I don't want to be a business owner. I miss working with technology and I want to go back to that. Or I want to be in sales. I don't want to run the business day to day anymore.

[00:19:45] John Ahlberg: They need to start, getting your ducks in a row. 

[00:19:48] John Ahlberg: So as a buyer, a part of it is I'm going to see your finances and they should be able to provide that. On our tech side, show me your documentation, because if you have no documentation, I don't know what I'm buying and [00:20:00] it's going to be a mess.

[00:20:00] John Ahlberg: As a small MSP, I didn't have to deal with it because it was already my head from day one. But if they're not on top of it, Start doing it.

[00:20:08] John Ahlberg: I think the mistake is they go "oh my god, I have all these clients You know how much effort it's going to take my team has enough time. It's too hard!" 

[00:20:15] John Ahlberg: You need to get that out of your head and say all right. I need to do this I'm going to give myself two years to do it. So you have a nice long time frame and then you can say okay great once a month, we'll do one client. How many hours is that going to take? Okay.

[00:20:27] John Ahlberg: There's your time over a period of time You start doing it and then you realize, okay maybe it's not that time consuming. It's not really that hard So you end up doing more but you give yourself a reasonably long time frame because it's better To advance what you're doing in your own business because it's gonna look good if you ever sell but it's just good for your own business and you're more profitable that way so you just give yourself some reasonable expectations And you just do it.

[00:20:53] John Ahlberg: And then as you're doing it, that gets baked in your culture a little bit. We have the culture of documentation. We have a teams channel that's all about [00:21:00] documentation and people proudly go. I just documented this for a client and other people go. I need this documented who can help and other people drop in and help documenting, so they're proud when they document.

[00:21:10] John Ahlberg: And, we have no problem going. How come you didn't document this? I hate you. We call them out on it. And it's usually oh, I'm so sorry. I'll go do it now. We're proud of the documentation. 

[00:21:19] John Ahlberg: With the Milwaukee acquisition, we went through all their expenses and we're like, what are these, what's this and what's this? And what's this? And a lot of them were like, Oh, we don't need that. We don't need that. We don't need that. And it's like, why have you been paying for it if you don't need it?

[00:21:32] John Ahlberg: We do an audit every year of what third party platforms and systems are using, because inevitably you end up going, Oh, we bought this over here. And we bought this over here. Three people in the team know about it and the other 10 don't, so we consciously go through and clean that up.

[00:21:46] John Ahlberg: On the client side, make sure that your clients are profitable. That's what the buyer is going to look for. At first it's what's your top number and where the, where's the revenue going, but then just going to go into the clients, you should be able to. Go to them and [00:22:00] say, okay, I have a managed service client and I'm charging them for a grand a month, and, I'm profitable on it. 

[00:22:05] John Ahlberg: You can't say why I think I am. You should be able to say, here's how I track my profitability. Here's my profitability margin. Here's what I'm doing, on our end for managed service clients. The gross. Yeah, our gross profitability metric is like 55 percent 60 percent which seems high, but then it drastically drops when you had all the, the fixed expenses and everything around it with marketing and sales and rent and everything else.

[00:22:32] John Ahlberg: But at the end of the day, the goal is okay. Our net margin should be around 15 percent 15 to 20. No, totally get it. We had some of them that we work it on. We're, big client paying us. 20 grand a month and you're like, okay, this is good cashflow. This is great. And, I usually create a profitability zone in a sense, not just a line.

[00:22:51] John Ahlberg: And as long as they maintain in the zone, they might be on the lower end of the zone, but it's still justified because they're still in the profitability. If not, then we need to figure out what do we [00:23:00] need to do to charge them more? 

[00:23:01] John Ahlberg: As a buyer, you'll be way more valuable to me if you can go, look, here's my clients.

[00:23:07] John Ahlberg: Here's the profitability. This is why. Here's my finances. Look, I'm really proud of all my documentation. All that stuff just makes the transition easier and the buyers more willing to pay more money for that. So just manage it like a company rather than, just doing it stuff. 

[00:23:24] Carrie Richardson: And for acquisition number six, what are you looking for?

[00:23:28] John Ahlberg: It depends. Again right now. I'm talking to the U. S. Virgin Islands because I would love to go there by in the winter. 

[00:23:33] Carrie Richardson: We're looking for somewhere warm. Everyone is listening. We want a warm location. 

[00:23:37] John Ahlberg: Yeah, it's actually true because last year it was on the radar going. Okay, let's find another company and I said, look, my only mandate is either. It needs to be in Chicago because we're here. It needs to be in Milwaukee. That just makes life easier or it needs to be someplace warm because that's where I want to go. We all laughed about it. We're like, yeah, that kind of makes sense. We looked at an opportunity in Phoenix and I'm like, okay, Phoenix should be good.

[00:23:59] John Ahlberg: That didn't [00:24:00] work out. Most of the time. The one time it was, Oh, I'm doing this much in business. And they wanted like a 12, 14 multiple. And we're like, no, one's, no, one's going to give you that.

[00:24:09] John Ahlberg: No one. We just moved off another one. When we started digging into our business, it was very intriguing, but then we found out that like almost none of her clients are profitable. She's like break even all the time. And we're like that's going to be really hard to walk into all your clients and go

[00:24:27] John Ahlberg: you need to pay us more. 

[00:24:28] John Ahlberg: we don't like to do that. We want to roll in and go. You're getting way more services. You're not paying anymore for it. If at all possible.

[00:24:35] John Ahlberg: Our targets kind of the 500 to 2, 000, 000 anything bigger than that. It's just hard on the finance side when you go to a bank.

[00:24:42] John Ahlberg: We're not that big that they'll be like, sure, I'll give you millions of dollars. 

[00:24:46] John Ahlberg: But if the number's right, then you have the SBA loans that you can do. And then again, you can structure it with, cash up front and a note and, you're paying off an SBA loan. And on the finance side, we just run the numbers on it and say, [00:25:00] okay, here's the numbers.

[00:25:00] John Ahlberg: Here's the revenue. Here's what we think we're going to make and lose. And, when's the payoff time. 

[00:25:04] John Ahlberg: And that's helps us determine what we think the value is for, or it needs to match the value of what we think the value is for you need to have your business plan, in there.

[00:25:14] John Ahlberg: Annually we do a business plan. We do an annual meeting where we go over metrics, we proudly talk about the clients that we won and the clients that we lost, it's important to me to say, we lost this one because they were sold.

[00:25:26] John Ahlberg: We lost this one because we failed on these five things. We're never going to do it again. We lost this one because they went out of business. So we go over all that. We have company goals and everyone has their own individual goals. That's important.

[00:25:38] John Ahlberg: If you're not consciously going "i'm here today, and here's where I want to be tomorrow," You never make it. And then a year later i'm where I was at before You know, but next year i'm going to do whatever and it's not documented. There's no plan there's nothing to get there and then you're there another year and you're like I'm still not there.

[00:25:55] John Ahlberg: As a buyer, it's important because you're like, here's my business plan. Here's where I'm going. Here's my five year outlook [00:26:00] plan. So they know they're buying, good book of business. 

[00:26:05] Carrie Richardson: I think that's a great place to stop today.

[00:26:08] Carrie Richardson: I learned a lot. Thank you very much. I appreciate you being a guest today and I wish you much success in acquisition six and onwards. 

[00:26:15] John Ahlberg: Yep. Thanks. 

[00:26:17] Carrie Richardson: Thanks, John. 

[00:26:18] John Ahlberg: All right. Bye.