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Capitalist Sage: How Barter Can Help Small Business During COVID19- Pandemic [Podcast]

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how can barter help small businesses

An age-old tradition of bartering between businesses is still alive and well thanks to the Southern Barter Club and founder Laurie Sossa, our guest on today’s episode of the Capitalist Sage. Learn how your business can barter and the benefits of working with SBC. Join Rico Figliolini and Karl Barham as they chat with Laurie about how SBC works, the benefits of barter, and exactly how to make bartering a part of your business.

Resources:

SBC Website: SouthernBarterClub.com
Global Website: SBCGlobalBarter.com
Phone Number: 678-547-0900

“We are here for the community. So, you know this is a time, more than ever, that we have to really just be a resource to one another… So definitely, what I’m hoping that everybody gets out of this more than anything is even if they don’t work with Southern Barter club, start slowly even with just leveraging what you have, your time, your resources, your assets, and don’t be afraid to approach another business owner you want to do business with. That’s your neighbor or colleague or someone you’ve always worked with… So if anything, we hope there’s awareness to bartering and trading.”

Laurie Sossa

Show Notes:

[00:00:30] – Intro
[00:03:17] – Laurie’s History with Barter
[00:05:42] – How Barter Works
[00:07:09] – Typical Trades
[00:14:29] – Businesses That Could Benefit
[00:18:28] – Pricing Concerns
[00:26:41] – Why Doesn’t Everyone Barter?
[00:29:23] – Business Expenses
[00:32:13] – Closing

Podcast Transcript

Karl: [00:00:30] Welcome to the Capitalist Sage Podcast. We’re here to bring you advice and tips from seasoned pros and experts to help you improve your business. I’m Karl Barham with Transworld Business Advisors, and my co host is Rico Figliolini with Mighty Rockets Digital Marketing and the publisher of the Peachtree Corners Magazine. Hey Rico, how are you doing today?

Rico: [00:00:47] It’s a beautiful day, Karl. Glad to be out here.

Karl: [00:00:50] Absolutely. Things are opening up. And little by little, I see activity happening throughout. So, we’re here doing this virtually, as we continue with the COVID-19 pandemic, but today… Innovative ways for, that folks are handling business during the pandemic. Let’s start off with our sponsors Rico.

Rico: [00:01:15] Sure. Well, let me introduce the sponsor, our lead sponsor in the family of podcasts, is Hargray Fiber. They’re a very large Southeastern based fiber cable company that provides solutions both to small businesses and large enterprise businesses. When it comes to internet connection and working online, teleworking and providing the bandwidth as well as fiber to these companies to be able to do what needs to be done across the Southeast. They’re not your cable guy, they are right in your community. They’re involved in the community and they’re there in quick notice to be able to help you do what you need to do. They’ve upscaled to be able to meet the challenges during this pandemic. So great place. They are offering all sorts of tools for free to be able to do online work, they’re HargrayFiber.com so this is, see how things can work for you.

Karl: [00:02:13] That’s fabulous. Well, today we’ve got an interesting topic. We wanted to, a couple of weeks ago, Rico and I were having a conversation as we were talking about how business people are figuring out ways to navigate some of the economic restrictions that have been put on businesses. And the topic of Barter came up. And for those of you that may not know much about Barter throughout the history and the present of it, we’ve got a fabulous guest here today. Laurie Sossa is the founder of the Southern Barter Club, and today we’re honored to have her on to help educate us a little bit around how Barter has been used and is being used by business owners to help them, not just today, during these economic times, but also how we can help people in their business, in particular, conserve cashflow. Hi, Laurie, how are you doing today?

Laurie: [00:03:11] Hey, good afternoon, and I’m doing well as well as can be. Thank you for having me as a guest today.

Karl: [00:03:17] No, we appreciate it. Why don’t we jump right in and start off by telling us a little bit about yourself and what led you down the path to discover and Barter as a business.

Laurie: [00:03:30] Well, my background is marketing, research and advertising. And we’ve worked with businesses that had products and services, and we were involved from the
beginning to the point where we helped them with marketing implications and recommendations and product launches and distribution. And we realized early on, especially manufacturer, everybody has their own costs of doing business. So there’s a lot of opportunity for leveraging. And so we realized early on that, you know, especially a business that’s just launching. That they could actually provide a marketing budget and expand it because if they leveraged something that they had the ability to earn at their costs of doing business, but yield the spending in the value of whole retail, it’s really a game changer. So early on, this is back in the nineties, we facilitated a lot of direct one-on-one trading, and I love the opportunity of being a resource to entrepreneurs and startups. Creating our own little ecosystem. But what we did realize is that there’s always a challenge. Have either, I don’t know if either of you or anyone you know, has ever done some type of barter. So that’s, that’s an interesting question because sometimes there’s a challenge of two people being interested in what the other person has to have to begin with, right? And also the value of being there. And so when we started seeing that, that’s when I decided, you know, I want to be a resource to entrepreneurs and to, you know, businesses, nonprofits that are cash strapped and take out of the equation, we call it the incidence of coincidence. You know, that’s when people actually have something that each other wants and that the value is there. And so we created our very own barter system, and 11 years later, it’s strong. And it’s not just here in the Southeast and Atlanta, but we actually have, several thousand throughout the state of Georgia and several thousand throughout the country. And we have reciprocation of 50,000 businesses around the world, that by itself…

Karl: [00:05:42] Wow. So I’m curious, how does Barter work typically? I’m a business owner and I need something in my business.

Laurie: [00:05:54] Well, the starting point is that we actually have what’s called a trade dollar, and it’s equivalent to what a US dollar is. And it is taxable. So in other words, the IRS sees the value of it. Our role as a barter organization and in the industry we’re called a trade exchange, by the way, the official terms in this $12 billion industry. And so we are the third party record keeper. So we manage all the debits, all the credits, and we utilize a trade dollar equivalent to what a cash dollar is. So a member is any type of business that has goods, services, resources, any type of underutilized asset that they otherwise don’t have a buyer for the cash. Or they have downtime and seasons and maybe not budgets but full cash. So it makes sense for them to bring it to a trade thing, such as SBC, Southern Barter Club where we’ll map the buyers and the sellers. So simply the people who participate are business owners. They’ve identified what services, resources, or assets that they want to make available and accept another form of currency in lieu of cash, in trade dollars.

Karl: [00:07:09] Got it. At a time like this where folks have been challenged with finding revenues and customers, can you give me an example of a typical trade that might happen?

Laurie: [00:07:25] Absolutely. Well for starters, we have what’s called a online platform. So just like all of us use day to day online banking, so you’re not going to go through the drive through right? Of the dry cleaners, or a fast food if, unless you’ve checked your balance right in your
online banking account. So we haven’t, this is a little house on an online sophisticated, but very easy to use platform where members keep up with their trade dollars that they’ve earned. So the members simply just move past except what’s called these trade dollars. And they bank them and they may have something very specific in mind that they want to spend them on. Or they just bank them knowing that when the rainy day comes such as right now, unfortunately during this pandemic, that they’ve already been earning and building up and have this alternative currency in their account that they can tap into to offset spending cash to help grow their business. I did want to ask if we could put the slide up to show the model of how it works.

Karl: [00:08:28] Okay.

Laurie: [00:08:30] Okay, wonderful. So with that, how it works, it shows the SBC in the middle, so that’s our currency equivalent to one cash dollar is the trade dollar. And so a dentist can be contacted by SBC broker and tell the dentist, we have an automotive company that does car repairs and they want to be able to send one of their employees to get some dental work. And so the dentist may say, Oh, well, I don’t have any need. My son owns an auto repair service, so I don’t have any need for auto repair. That doesn’t end there. What he does say is, but I will accept your trade dollars. And so the automobile company now has to provide automobile repair maybe to the hotel owner or maybe to a restaurant owner, somebody else in the network that would want and need auto repair, and he accepts in lieu of cash, for the labor only not the product. He accepts in lieu of cash, trade dollars for the labor, puts it in this online account. Let’s say as an example he earned 1,000 trade dollars for labor on a transmission, let’s say for the restaurant owner. The restaurant owner already earned their trade dollars by letting the landscaper, the plumber and the hairstylist eat at their restaurants and in lieu of cash accepted trade dollars. So they’ve already banked their trades dollars. So now the restaurant owner goes to the automobile shop, thanks to SBCs directory and brokering services and says, we’d like to get $1,000 worth of transmission repair. Not the actual, you know, transmission, but the labor and the services. And so they’ve accept whats called trade dollars. For facilitating that SBC charges a 6% cash transaction fee. So now the restaurant has provided a thousand dollars worth of dining. But at a core restaurant their cost of doing business is maybe 28 to 30 cents on the dollar. I know you know that as a business advisor and a business coach and business consultant, everybody has their own cost of doing business, but the restaurant, it’s 28 cents to 30 cents on the dollar. So for them to provide $1,000 of gift certificates and $20 increments, that’s could be resold over time. In reality to fulfill it, it’s only going to cost them tops $300. Okay. But at the same time, they just say, thank you, SBC for bringing me that thousand dollars sale. Here’s your $60 cash fee processing fees 6% okay. And now they earned that 1,000 trade dollars in their virtual account. It cost them $60. In hard costs, it may have cost them over time to fulfill each time the person was using the gift certificate. It perhaps cost them that $300 let’s say for food. You know, but other than that, what’s happening is the pasta is boiling, right? The water is on, in the pot, the pasta is boiling. The lights and electricity are on. The waitstaff is there. We don’t want them twiddling their thumbs. So if we could identify for the restaurant certain times of the week, certain times of the month, that is good. Monday nights, it’s dead. Monday through Thursday during lunchtime, we don’t have a lunch crowd. We would like to
accept those certificates during those times. But we really don’t want to barter on Friday, Saturday, Sunday cause we’re jam packed, our tables are filled. But we would welcome, you know, not having empty tables Monday through Thursday. And so we’ll take barter for currency. And so there’s a lot of things happening there in bartering. They earned more power bar currency. Now they have a thousand dollars they wouldn’t have had otherwise of spending power, not cash, but barter trade dollars. But now they also have filled, you know, open tables in the restaurant. Their wait staff is going to earn their 20% cash tip because it’s tipping as always. Now, here’s the best part. Let’s say it was an attorney that purchased a gift certificate and took one of their clients to the restaurant. Well, we know what happens when there’s a job well done and a fantastic experience, right? They’re going to come back. They’re going to remember the great experience. And so what happens is word of mouth advertising naturally just happens. And the person or the business contact that the attorney had brought in for the meal, they don’t know if it’s participating in a barter system. They don’t know was paid with alternative currency. They just know that they were taken by their attorney to this restaurant and it was a great experience. And they’re going to come back. And so barter, at the end of the day, does help with word of mouth, advertising, marketing, branding, filling, you know, empty tables, helping get tips, you know, and some business for the staff that’s on hand, and filling their barter account with spending power. So now they’ve earned, and now they say, my employee needs dental work, or my employee needs a new transmission. So I’m going to spend that thousand dollars I just earned, and I’m going to go ahead and maybe go to the dentist or maybe go to the automobile company and get the repair done and use the barter dollars. So let’s say it’s only $500 in barter, simply a 6% transaction fee, $30 in cash, $500 in dental work, or the automobile repair. And now they still have left over $500 from their initial earning of the thousand barter dollars.

Karl: [00:14:11] So I’ve got a question for businesses today…

Laurie: [00:14:23] So how are businesses today using the barter during pandemic?

Karl: [00:14:29] What types of businesses? Services? What types of businesses would most benefit from this?

Laurie: [00:14:35] We have a directory that literally is A to Z. So anything from an art gallery, accommodations, acupuncturist, all the way to theater tickets, yoga, zoo tickets. So it’s literally an A to Z directory. Every business has capacity. So if there’s a dentist or a plastic surgeon or an eyelash extension company, massage therapist that has appointment times, if they’re not at full capacity, you know, if they have an eight hour day that they’re open and they have time slots that are empty, they can simply either call or alert, SBC Wednesdays pretty low, in us filling our bookings. Can you please send a blast out to your network and let them know that we’ll accept some clients and accept the barter currency. And sometimes it may not be that they reached out to us and that’s what our businesses love. It may be that we answer the phone and it may be the plumber who all along for the past several years, it’s his business model. He’ll, except when he has downtime at his convenience, when it works for him, you know, clients we wouldn’t have
had otherwise. Yes, I’ll perform the plumming. Banks online, this barter currency, and uses it as a spending power for when the needs come up. So it may be six months later when he realizes, Oh, you know, I need to go to the dentist, or, Oh, I need to, you know, reward my employees as a retention tool and give them tickets to a concert, or send a gift basket to a client. So this actually becomes a spending account. So it could become an account for business expenses. Some of our clients actually have stretched their marketing dollars, and have used their barter funds that they have received and been building up. And when it comes to, you know, some type of a marketing campaign, they will tap into their, their barter currency, get on a billboard without paying cash, use radio stations.

Karl: [00:16:31] I wonder if that’s something that folks can do today. If they don’t have the capacity, whether it’s a restaurant or massage parlour, in exchange currency for future services, or gift certificates to employees. They may be able to get marketing help, or accounting help from somebody else. Which would lower an expense that they would normally have for that.

Laurie: [00:16:59] Absolutely. It absolutely, it really is just business as usual, you know, provide your services, but just accept the help of an agency that is going to drum up the business for you. And it’s a different form of currency. You know, more than ever. We, I’ve never seen business like this before. I’ve been, we’ve owned Southern Barter Club, SBC Global Barter for 11 years. We’ve been running on seven days with brokering our clients. So we have, with the initial outbreak now things are the supply chains, a little bit improved, but we were getting panicked phone calls where, you know, we need hand sanitizer, we need free, you know, toilet paper and we need masks, facial masks, you know? You know, all these types of things that, because they would go to their supermarket, you know, and the shelves were bare. Okay. And they’d have to wait. And so we have done thousands, probably 10, 20,000 or more, you know, worth of transactions of our clients that we’re picking up and buying un-inflated prices. Very necessary, supplies. Hand sanitizer, facial masks, toilet paper, paper towels, things like that. That they otherwise maybe couldn’t even tap into back in March, by the way.

Rico: [00:18:28] Let me ask you, since you brought that up, about the, the price, because that’s always been a concern of mine with when it comes to barter. Two things, how do you sort of vet the members to make sure that they’re doing the right thing. And how do you make sure that these members, you know, if it’s a $1,400 transmission job, let’s say, that they don’t say it’s a $2,000 transmission job. Because I’ve seen that in other organizations sometimes where the price doesn’t make sense, and it’s still cheaper to go pay cash for it. So how do you protect the membership from those types of things that might happen.

Laurie: [00:19:08] That’s a good concern. And unfortunately, the reality is that there are people who attempt to do that. People are who they are in the cash world. If that’s who they are, and that’s how they do business, they’re that way in the barter world. What we do is we establish ethics where it’s according to the fair MSRP. So if there’s a business out there and you know, their price on the menu is established price on the menu. When you go with dine in that restaurant, that’s the established price. But if you’re going to hire a contractor. In the cash world,
you’re going to hire a contractor and they’re going to come to your home or your business and gives you a price to paint your home, and they tell you it’s $2,000. It wouldn’t be really prudent and really just, you wouldn’t be a good consumer if the first person you just called randomly, you’re going to say, yes, I’m going to pay you $2,000 cash to come paint my house. So there’s an obligation that goes back on the buyer to do their due diligence themselves. We’re a directory, just like the yellow pages has always been for those of us who remember the yellow pages, it was delivered. So we house the directory and we do all we can. We do actually employ, since that’s my background, mystery shopping. So if somebody calls with a concern that like this dry cleaner, this happened actually, we had a dry cleaner in Buckhead that was for years clients of ours. And everybody was happy with their services, but it did take one client that out of there, for whatever reason, out of their little area that they, that they lived in, out by Toko Hills decided that they needed to go into Buckhead. And so they looked in the directory and they went to a dry cleaner in Buckhead. And they came back and they were astonished and they said, what? I’m paying, you know, such and such for my dry cleaning. And why is it so much more expensive there and they’re using the barter system? So we hear what our clients say and we don’t just leave it at that. So what we did was we sent a mystery shopper. So we sent someone who actually went in and they said, Oh, I’m new to the area and I’m going, you know, and I would like to be using for my husband’s shirts. You know, apples to apples, you know, what it was going to be was laundering and dry cleaning of shirts. And, you know, we’re interested in knowing what your prices are and I just wanted to introduce myself. Can you write it down for me? And it was right on his, he also happened to own a gym. And he had some, like trifles or whatever for the gym, can you write it down for me? And he wrote it right down on there. And we found out that the prices were exactly what the prices were. He was Buckhead rent, so the prices were a lot more expensive than the Toco Hills area where he was getting his shirts done. However, I do want to say that several years later, a different company, the same exact thing, a concern happened in Buckhead. And we would, we were actually, well maybe it’s the same thing. It’s Buckhead rent, but three different people brought it up. We sent somebody and sure enough, they had pricing written on the board, you know, behind the counter. And it was like 50 something cents more. And so they were changing the prices and we told them that he needed to do fair trading. And he had all the reasons why he felt justified. And we just said, well, we can’t bring you new clients. We’ll help you spend out your account and close your account. And that’s what we did. So when it’s brought to our attention, we don’t ignore it. But the only way that we can fix the problem is if it’s brought to our attention. So we have a rating system. So when you have done a transaction, finished a transaction at a rate, the person that you just traded with at one to five star. And you know, accountability is a big thing. Knowing that you know the person. I do want to give one other example. We had a Mexican restaurant in Lawrenceville, Gwinnett County that wanted to have the vestibule built and they had received cash prices because again, we always tell everybody. Don’t just go with the first price that somebody puts you in barter, like do your due diligence and get several quotes, you know? So if I’m going to get my house painted or I’m going to build a vestibule, I’m going to get at least three quotes. And if it’s too low? Hmm. Something to think about, right. If it’s too high, well, I don’t want to be taken advantage of. But if it’s right in the middle and it sounds right then that may be. And you have to take into other considerations is, are they using contractors? Are they using
employees? Do they have a warranty with their work? So this Mexican restaurant had, actually, picked up day labor and that’s how they wound up getting their, their vestibule built. So it was different people that were working on it different days, and there was no warranty. And it wasn’t apples to apples when they compared the price that was maybe double the price, but it was with an established company that had employees and it did have a warranty. So, we just have to put the responsibility back on the buyer. Just business as usual in cash business. I’m not going to just go with the first quote. I’m going to get two or three and be an informed consumer.

Rico: [00:24:21] And I like the fact that you have reviews on there and the star rating because transparency, right? Because everyone knows it’s not like, just it’s like there’s the company name attached to the account. So if there’s good transparency, so they’re getting a review and it’s a bad review, whoever is saying it is standing by it. If it’s a great review, they’re standing by it.

Laurie: [00:24:48] Absolutely. One of the things I did want to manage expectations, and I think it’s a simple, very simple illustration, but I think it really does hit home is, if anyone has ever gone into Macy’s as an example with their mindset, I want a size large, Navy Ralph Lauren sweater. Right? They can go into Macy’s or any retail store, and if they’re going to pay full retail, they’ll get a very big variety of sizes, brands, and available options, right? Different experience if I head over to the clearance rack. I still want the Navy blue, Ralph Lauren size large sweater, but it’s only $20 it’s discounted patch. And I’m looking on that rack and I see black, not blue, but then again, it’s$20, it’s on the clearance rack. I’m not paying a hundred retail or I see Calvin Klein, not Ralph Lauren, but it is Navy blue and large and it’s $20 so that’s how I like to manage expectations in our network is we are a clearing house. So it would be unreasonable to think that I’m going to get something on barter when cash is king and it will always be king. You know, it’s an incremental opportunity to hold onto your cash, minimize your cash outlay, and you’ve earned it the same way. So wouldn’t be fair for a hotel owner as an example to say, no, we’re not going to barter on 4th of July and let you book it six months in advance. They wait to the very last minute when they realize that otherwise goes unsold for cash because that becomes perishable, right?

Rico: [00:26:33] As long as you’re setting expectations, that makes sense. People should understand that.

Laurie: [00:26:38] Yes, absolutely.

Karl: [00:26:41] So I’ve got a question. What are the challenges of people? Why don’t more people do this nowadays? I mean, obviously cash, but what do you see as some of the reasons why people don’t find ways to barter more?

Laurie: [00:26:55] I think the biggest, the two biggest things is number one, not knowing that they even have the ability to do it within a structured professional setting. So, you know, somebody could say that, I want you to build me a website and I’ll give you haircuts. And
oftentimes they’ll go ahead and build a website and then the place goes out of business and they’re stuck without payment, you know. And they got the short end of the sick. It also could be the situation where they don’t need a haircut, their daughter owns a salon. So I think most of the time there’s a brick wall when it comes to barter, where they don’t, where most consumers and business owners don’t realize that everybody has capacity. Everybody has something that they really could leverage. Time, talent, resources, something that’s even sitting, collecting dust or locked up in a storage or basement. So even though we’re a barter network for businesses, everybody has their core business that they provide and something in there. Not everything, by the way, like I haven’t in Buckhead, we have a center that will do laser hair removal and tattoo removal and weight loss. But they’re very clear that they do a hundred percent barter. They list everything in the directory, and we will recommend those services on a hundred percent barter. So everybody has to provide something at a hundred percent barter. However, they don’t have to provide everything at a hundred percent barter. So they list that we do. If you go to my website, you’ll see we do Botox and other types of services, but we’re not going to do Juvederm and Botox on barter. Now, if we don’t have that otherwise available on barter, and someone says, Oh, I see that that’s what they do, but I want it on a hundred percent barter. We could let them know that look, anything else that they do on a hundred percent barter or take advantage of it, they’re playing by the rules because they offer all these things on a hundred percent barter. If we can’t source it for you on a hundred percent barter, you can make an offer and ask them, can I do it with 50% with my barter currency, and then at least compensate you since you didn’t enter this in your profile as an offering. Can I, you know, can you accept 50% in cash? And so that’s not our practice, but it does happen on occasion and we’re fine with that when they’re already offering something else on full barter.

Karl: [00:29:23] One of the things I think that I, that I think that I’m hearing, I want to highlight that business owners today that might be struggling with what fundamentally is demand for customers, but they have capacity. Is this something where they can at least for a period of time, offer up some of that excess capacity, bank up barter dollars that as things return to normal. They may back up how much, you know, their capacities are to fill up, but they have barter dollars that they can use to fulfill other expenses in their business. Is something like that possible?

Laurie: [00:30:02] Absolutely Karl. So right off the bat, anyone that needs help in whatever way, so they need clients that, you know, maybe they have their brick and mortar, that everything has always been done brick and mortar. Maybe it’s an, I don’t know, but let’s say it was a some type of a yoga exercise class and now they can’t do that okay? So if they were in the barter system, and they have no barter dollars, and they now realize, wow, I have to figure this out, I have to adapt and integrate a new way of doing business. So now we can say to them, well maybe you have something here where you can now offer your yoga classes online. So let me introduce you to a company that can build an app for you. Let me introduce you to a company. That could, you know, build your website or produce your videos for you. You know, and now advertising that you can have on the radio that’s saying that, you know, we have virtual yoga classes, and they could just cash out them and to have entrance to be able to, now, you know, all do this
together. I’m again, just thinking a little bit outside the box, trying to make it an example, but if she doesn’t have barter dollars she’s already earned, that’s okay. We at, during this pandemic, we’re giving lines of credit. So during this pandemic, she could now say, you know, if I need $5,000 SBC, we can give them a line of credit for $5,000 and how are they going to pay me back? Well, they’re doing virtual classes for yoga, then let us promote it. And if you have capacity for 12 people online to be on your yoga class and they’re paying you cash to be in that yoga class, can you take two people that will pay you in barter dollars? And we’ll fill that class up with the two people on barter. And then when things settle and to the new norm, and there’s other ways that she can earn the barter, we’ll help her come up with the ways of paying back, you know, that. And she could think outside the box and say, well, you know what? Yoga is my business that’s struggling. I need to get that up and running. But, you know, I also sell Mary Kay cosmetics. You know, I also, you know, can do tutoring. Like we’ll help them think outside the box and tap into and leverage resources.

Karl: [00:32:13] That’s fabulous. Well, we’re coming to the end of our time and I just wanted to ask if people have questions or wanted to learn more, how can they reach you?

Laurie: [00:32:24] So our website is SouthernBarterClub.com and SBCGlobalBarter.com. And so they could email us from there. Our office number is 678-547-0900. And so they can call, send a message and set up a complimentary consultation. And we are here for the community. So, you know, if this is a time, more than ever, that we have to really just be a resource to one another. We also, you know, I mentioned to you, we’ll give lines of credit, but we’re also, with the membership fee, we’re doing it at 50%, so it’s normally 299. But they said we had created a code called, CSage and yes, thank you. And so that’s 149 instead of the 299. So definitely, what I’m hoping that everybody gets out of this more than anything is even if they don’t work with Southern Barter club, start slowly even with just leveraging what you have, your time, your resources, your assets, and don’t be afraid to approach another business owner you want to do business with. That’s your neighbor or colleague or someone you’ve always worked with. Because no commerce at all is, you know, a big difference from, well, look, I could give you this or I could, you know, and there’s some activity going on and you’re not stuck and staying in stuff. So if anything, we hope there’s an awareness to bartering and trading.

Karl: [00:33:56] Sure. Well, I want to, I want to thank you very much, Laurie, for joining us. It’s Laurie Sossa the founder of the Southern Barter Club. Just exploring different ways that businesses can pivot and find ways to use their capacity and skills to earn a different type of dollar, barter dollar that they can use in other ways going forward in their business. So keep their employees engaged, find ways to reward people. And I liked the example you gave, you know, maybe building out a new capability on online sales now for future exchange of services where you could use the barter dollars for something else to cover an expense in the future. So really good tips and just wanted to let people know there’s so many different options in how to navigate and pivot through this pandemic. Thank you very much for that.

Laurie: [00:34:54] Absolutely. Thank you for having me on as a guest.

Karl: [00:34:58] You’re absolutely welcome. I’d like to say I’m Karl Barham with Transworld Business Advisors of Atlanta Peachtree. We’re here to help business owners figure out ways to improve the value of their business so they can successfully exit it when the time is right. We help with selling and buying businesses. Rico, why don’t you tell us a little bit about what you have coming up and going on?

Rico: [00:35:20] Sure. So I publish Peachtree Corners magazine and you’ll, we are in the midst of writing stories for this upcoming June – July issue. That’s going to be out, hitting the post office on June the fifth. So it’ll be out for that June, July. Good solid run issue. Similar to what we did last issue. We’re still printing, we’re still mailing 18,800 copies every household, in the city of Peachtree Corners, and then some are like Norcross. So some good stories we’re working on about how people are handling this situation, how they’re opening up their business and some of the stories as well in there. So we’re doing that. And I’ve quite frankly, I’ve been busy too, Mighty Rockets, my company that does digital marketing, and we’ve been been picking up several company Facebook pages, LinkedIn pages to manage. We’ve been doing a lot of video work through these video chats. And creating good, some good quality video content for companies, even doing it online like this. So it’s worked out really well. So I’ve been busy. I am thank thankful, for the way it is and thankful for all the other people working in this stuff so that we can all stay busy.

Karl: [00:36:34] Yeah, absolutely. Well, I’m just impressed while people are working together to get through this. So continue doing that. Stay safe, everyone and I think as you take some of these advice and tips, find ways to pivot your business, stay successful. Thank you. Have a great day.

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Pets & Their People: Giveaway results

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Pets. They are the members of the family that love the deepest, smile the brightest and enjoy life to the fullest. One positive side effect to the call the stay close to home has been spending more time with our furry loved ones, or those with tails, scales and other fun features.

So now seems as good a time as any to celebrate the pets of Peachtree Corners. We had an open call for our Pets & Their People giveaway, in which local people sent in photos with their pets having family time and adventures. We’ve included a select number of the submitted photos on our pages. Three submissions were chosen at random to receive prizes.

The Pets & Their People giveaway was a great success, and we heartily thank everyone who sent in photos. We especially want to thank our wonderful sponsors, Pet Suites of America Norcross, and The Ark Pet Spa & Hotel Doraville who provided gift cards. Peachtree Corners Magazine supplied Visa gift cards.

To see the full submission gallery, visit livinginpeachtreecorners.com/petsandtheirpeoplegiveaway2020/

Winners of our Giveaway

Laura Lucas received the Grand Prize, a $150 gift card for Pet Suites of America and $125 Visa gift card (pictured the Purdins with Kodiak (Kodi))
Michelle Wilson got the Second Prize, a $150 gift card for The Ark Pet Spa & Hotel and a $100 Visa gift card (pictured Michelle & Bear, a 5 year old rescue from Angels Among Us Pet Rescue)
Andrea Z. Dubsky took the Third Prize, a $100 gift card for Pet Suites of America and a $75 Visa gift card (pictured Andrea and Aubryn)

This year’s Giveaway Sponsors

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How to increase the value of your business, grow it and sell it, with Andrew Cagnetta

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Transworld Business Advisors - Andrew Cagnetta

Andrew R. Cagnetta Jr., CEO of Transworld Business Advisors shares his insights on how to increase the value of your business, fatal mistakes sellers make, expansion through acquisition and franchising – and why it’s important to do charity work. Cagnetta joins Karl Barham and Rico Figliolini on the Capitalist Sage podcast. Recorded socially safe from City of Peachtree Corners, Georgia

Related links:
https://www.facebook.com/AndyCagnetta
https://www.linkedin.com/in/acagnetta/
https://twitter.com/acags

Finding the topic in the show via Timestamp:
[00:00:30] – Intro
[00:02:43] – About Andy and Transworld
[00:04:21] – Challenges of DIY
[00:05:27] – Impacts in the Value of Businesses
[00:10:07] – Growing through Acquisition
[00:13:11] – Buying Businesses
[00:16:54] – Funding Acquisitions
[00:20:02] – Supporting the Community
[00:21:57] – Diversity in Business
[00:34:41] – Predictions for 2021
[00:36:51] – Recommended Media
[00:38:42] – Closing

“I mean the perfect way to describe business brokerage is like a realtor. You hire someone to
help market and sell your house and deal with the buyers and take the whole process from start
to finish. We’re a lot like that. We come into a business owners world. When they think about
selling their business, we help them understand what they have to offer the marketplace and
what they might get in the marketplace.”

Andrew Cagnetta

Podcast Transcript:

Karl: [00:00:30] Welcome to the Capitalist Sage Podcast. We’re here to bring you advice and

tips from seasoned pros and experts and help you improve your business. I’m Karl Barham with

Transworld Business Advisors. My cohost is Rico Figliolini with Mighty Rockets, Digital

marketing and the publisher of the Peachtree Corners Magazine. Hey Rico, how’re you doing?

Rico: [00:00:47] Hey, Karl. Good, thanks. Hope you’re well.

Karl: [00:00:51] Well, why don’t you introduce our sponsor before we get started?

Rico: [00:00:55] Sure. Our lead sponsor is Hargray Fiber. They’re a major Southeast company

that is involved in fiber optics and IT. They’re involved in the communities that they are in

completely. Like in Peachtree Corners, for example, they’ve been involved with Curiosity Lab at

Peachtree Corners, the Smart City activity that we do, and the work that people need to be able

to keep working. Whether you’re distance working like teleworking, or you’re bringing your team

together at your office and such. So anytime you need IT work, fiber optics, smart tools to be

able to do your work, fiber optics and all that, that should come from Hargray Fiber. They’re not

your typical cable company. You can find them at HargrayFiber.com/Business. Check them out,

they have a promo going on. It’s a thousand dollar gift card for those companies that qualify and

become clients of theirs. So great people. We appreciate them sponsoring us.

Karl: [00:01:51] Thank you very much for introducing Hargray Fiber. As we’ve all gone digital

this year, schools, work from home, having high speed internet at home is really super critical.

And we’re just glad we have great partners in the community that can help with that. Today’s

guest, welcome to the bring in Andy Cagnetta who’s the CEO of Transworld Business Advisors.

One of the world’s largest business brokerage firms and has been around for over 40 years and

built a great fabulous business. But the treat of today is, he’s here to help talk about how

COVID-19 and how small business owners can think about the value of their business, their

options on when they’re ready to exit for the business going into the future. Hey, Andy, how are

you doing?

Andrew: [00:02:40] I’m doing great. How are you both doing? Thanks for having me.

Karl: [00:02:43] Thank you so much for joining us today. I want to start off, why don’t you tell us

a little bit about yourself and how you got to be in this business brokerage industry?

Andrew: [00:02:53] I got to be in this business brokerage industry a lot the way other people

have gotten involved is they were in business for themselves. So I’ve had several businesses

and I’ve started a couple. I bought one and I sold one. And so when I decided to move to

Florida, my wife wanted to raise her family where she grew up, we decided to buy a business.

And through that process, I met Transworld and was asked to be on the staff and kind of the

rest is history. I bought the company two years later.

Karl: [00:03:22] Well, this, you’ve been doing this for quite a long time, and you’ve seen several

ups and downs in the industry in general. Why don’t we start off by talking about what is

business brokerage and what types of people benefit from their service. And we can talk about

how the economic impacts like we’re having in 2020 impacts those business owners.

Andrew: [00:03:46] Yeah. I mean the perfect way to describe business brokerage is like a

realtor. You hire someone to help market and sell your house and deal with the buyers and take

the whole process from start to finish. We’re a lot like that. We come into a business owners

world. When they think about selling their business, we help them understand what they have to

offer the marketplace and what they might get in the marketplace, as far as value is concerned.

We package up that business. We advertise it. We deal with the inquiries, we put meetings

together, and eventually we get a deal done and we earn a commission from that.

Karl: [00:04:21] Fabulous. So historically, if somebody were trying to sell the business

themselves, there’s some challenges to do that. What would be some of the typical challenges

people do when you’ve seen them try to do it themselves?

Andrew: [00:04:33] They don’t have the capabilities to do it in knowledge, right? So they really

don’t know what they’re doing. And it’s certainly not a time when you have your, maybe your

biggest financial transaction of your life at stake to experiment on yourself. You know, it’s kind of

like doing heart surgery on yourself. You really don’t want to do that. You know, one wrong step

with the right buyer. You’re not going to get a deal done. The second thing, the big thing that

business owners need to focus on, and we talked a lot about this in, you know, valuing your

business. They don’t have the time to do this. And if they take time away from their business

and focus on trying to get a deal done. The value of their business decreases very, very quickly

and they won’t get a deal done or, you know, they won’t get as much as they could have if they

would have focused on their business.

Karl: [00:05:27] Got it, got it. So this year, a lot of business owners have gone under, have

been under a lot of stress. COVID-19 hit, and the year 2019 was a great year for selling

businesses, for doing businesses. People were generating record revenues, profit, and then a

year like this happens. To the average business owner that took, you know, has been impacted

in this and is starting to come out, how does a year like this impact the value of their business?

Andrew: [00:05:59] So the, you know, the horrible news is right, this crisis has really hurt a lot of

businesses. And the only thing that I can urge business owners out there to do is try to survive.

Because if we get to the other side of this, if we get to a point where there is no COVID around

and business returns to somewhat normal. But let’s say it turns to 2018, 2019 levels, or even

less than that. You know, a little bit less than that. The values of our businesses will immediately

return. Because a business is worth what a buyer will make in the future. And if we could point

to the first three months of 2020, or even now, you know, like some restaurants are now

opening for the first time in a hundred percent capacity. So if they recover now, their business

will immediately be worth as much or even more. You know, I could see that the restaurants that

are better survive this and everybody starts to go back out once the vaccine comes along, I

think it will be, you’ll have a hard time getting a table at a restaurant. And they might even be

worth more. So, you know, the number one thing is you got to hang in there, right? And if you

hang in there, you know, the COVID crisis is like a lot of it. It’s a blip, you know, it’s a quick

downturn there will be recovery, or at least somewhat of a w. But, if they can hang in there, the

business value should return.

Karl: [00:07:30] That that’s a good point you’re making around hanging in there. But when

businesses have this lower period of demand, like over the month, if they’re not, what are some

things that business owners can do to make their business more valued when the clients and

the customers come back? What are things that they may not have had time to work on in the

past, but now they may have time to do? What would be some things that would help that

value?

Andrew: [00:07:55] Well, you know, we always say, I have this talk and we don’t have time for it

today, but the 12 ways to increase the value of your business. And three of them is to keep

better books and records. So if you did not, before this COVID crisis hit. This is a great time to

get your inventory into an inventory system, to get a point of sale system implemented. I was

just talking to a listing that I have now, for a restaurant that didn’t have a point of sale system.

And he’s like, maybe it’s time I do it. Yeah, maybe while it’s slow and you get all your menu

items onto a point of sales system, then you’re going to have great books and records. And

great books and records will help your business sell much easier. So it is a time to kind of

structure your business and get that inventory system or that project management system or

that POS going right now.

Karl: [00:08:53] One of the other things I think is often a chance is when people stay really busy,

they don’t focus on the people in their business, their managers, supervisors, and so on. Can

you comment on the value of having a really good Lieutenant or someone that can continue to

drive the business once you exit it from the perspective of a buyer?

Andrew: [00:09:14] Yeah. I mean, you certainly don’t want to be the chief cook and bottle

washer because if you’ve ever read the E-Myth book, what you want to do is you want to have

that systems in place that is going to continue to bring in that money and those earnings.

Businesses are based on value of earnings. And the buyer is only going to pay a multiple of the

earnings if they think it’s you gonna stick around. Well if you’re the whole reason why the

business goes. And you’re the, you know, you’re the marketing officer and you’re the person

who’s the sales person and you’re the operations person. Then buyers are going to be very

hesitant to take over that job. If you have good people in place where all a buyer has to do is

come in and basically be a management person and oversee a system that is, you know,

running like clockwork. That’s going to increase the value of your business immensely.

Karl: [00:10:07] I’ve been talking to a couple of business owners that’s doing something

counterintuitive. During this year they’re actually growing and they’re growing through

acquisition. We see a lot of businesses that are consolidating and struggling. What are some of

your thoughts of those that are able to grow through acquiring other businesses during this time

or be beginning to scale? How does that impact the value in the future of the business?

Andrew: [00:10:32] Well, listen, you know and I know that businesses are valued based on their

quality and quantity of their earnings. So as a business earns more money, it’s worth a higher

multiple. So if a business earns a hundred thousand dollars, it may be worth two or three times.

If a business earns a million dollars, it could be worth three, four, five, maybe even six times. So

as the business grows, if you start acquiring people, and you get a hundred thousand dollars

here and $200,000 of earnings here. And you get those economies of scale and you get a

business that’s earning a million dollars, you’re going to make four or five times more. So this is

a great time to go around. And even, you know, I though that would be much more opportunity

for buyers, because I thought there would be a bigger COVID discount out there. I’m not seeing

it yet. I mean, you know, obviously earnings are down and prices may be down. But if the

business is currently making even 80% of what they used to do, or even, you know, 70%, those

businesses were still selling for, you know, good price.

Rico: [00:11:45] Let me ask you something. As you were talking about multiples and

acquisitions, what hit me was, does it, is it more, is it easier? Is it a better investment to

purchase multiple franchises let’s say if the, obviously of the same business in a variety of areas

than it is for a company that’s a sole owner looking out for similar types of companies to bring

them in under their fold. So, you know, if you’re a franchise owner buying more or if you’re a

single, you know, dry cleaners looking for other neighborhood dry cleaners. I mean, where

would the best investment be?

Andrew: [00:12:22] Well I, you know, listen I, the franchise system usually is a good system

because you know, what we try to do at Transworld is we’re building out infrastructure so people

don’t have to build it out themselves. So if you could buy a multi franchise units, you know, that’s

a great investment, right? So, you know, you always want to spread out your risk. So if you have

one unit that makes a lot of money, you know, it could be inherently risky. I mean, something

could go wrong in that town. Something could go wrong on that road. I mean, I’ve seen

businesses being on a road and they’d decide to redo the road and it’s you know, it’s closed or

almost closed for six months and it just ruins the business. So, multiple locations in any

business might be a better risk, so you can spread out that risk.

Karl: [00:13:11] I want to flip over to the buyer side. If you’re a person out there, maybe you

were in corporate America, maybe you’ve got an entrepreneurial itch that you want to scratch.

What would be some advice you’d give to folks when they’re looking for business so that they

actually get to the closing table and get the deal done?

Andrew: [00:13:29] You know, don’t have paralysis by analysis. And it’s, you know, you could

dive into these things, try to set up eight billion spreadsheets, and you could try to figure out

what the exact value of a business is. But I always laugh. The value of the business is going to

be determined by the sellers you know, factor of how bad they want to get out, right? I, you

know, I spoke to a seller yesterday. They had a business that’s earning $350,000 and we told

them, our franchisee told them that it was worth 700 and he says, get 450 and get me out quick.

Some buyer is going to get a great deal on that business. And so it’s always a factor of what the

seller will take to leave. But you know, if you’re going out there to buy a business, I would just

say, you’ve got to go do it. And number two is you’re not going to find the perfect business. If

you’re looking for that perfect business, that dots all the I’s and crosses all the T’s, you’re not

going to. As I say, it gets an ‘A’ on it’s report card in every single subject. That’s not going to

happen. There’s no perfect business out there. So, you know, what you want to do is you want

to buy a good business at a great price and make it great by bringing your talent to it.

Karl: [00:14:44] I’m talking to a lot of private equity and family and all these different types of

investor groups that are looking at business. And one of the things that’s always a challenge, I

could literally guess what they’re going to ask for in their business. They send the sheet in and

they’re looking for something with X amount of cashflow. They want it to be pretty much

absency run. There’s this laundry list of stuff, but they’re industry agnostic and they don’t have

an industry that they care about. What advice would you give to those types of folks to be more

successful in their search? Often they’re searching for three, four years and no deals have been

done.

Andrew: [00:15:25] Yeah. I mean, you know, I’ve talked to some private equity groups and they

told me they look at it, and I think it was on our podcast they were talking about, they look at, it

was something ridiculous, like 1,200 deals a year or two thousands of deals a year. And they

transact on two. You know, they’re very picky. I would tell them that they need to be less picky.

We had a, you know, there’s these guys who come out of very smart business schools, Ivy

league and things, and they start these pledge funds where they get their friends, families, and

people they’ve met along the way. And even bankers that like these MBAs coming out of these

high end schools and say, if you find a deal, we’ll back you. Well, we did a deal with these guys

who they bought a painting company that was earning over a million dollars a year, almost $2

million a year. But what private equity group do you know, would buy a painting contractor? Not

many. So these two young kids, one of them, Harvard grad, I forget where the other one

graduated. Bought a painting contractor almost $2 million. And I think they bought it for like less

than 6 million. So here’s a great deal, but it’s going to be a little bit. You know, it’s not going to

be the easiest business to run. And that’s be their first deal. You’re know, then they’ll go into

something else I’m sure. So if you’re a family office that just got their money because you’re

patriarch or matriarch of your family died, you’re not going to be able to be that picky.

Karl: [00:16:54] I’m curious this year, there’s been a lot of stress on the lending and banking

with SBA between the CARES act, PPP, EIDL Loan, they got backed up. How are you seeing it

now for acquiring funding to purchase business and what should business owners now start

thinking about as options to fund acquisitions if lending isn’t as readily available?

Andrew: [00:17:19] Yeah. We saw this in 2009, in 2010, when we’re in Florida, we did, you

know, we were doing about 20% of our deals with SBA lending and then the next year, which

equated to about 50 deals, 40 deals. The next year we did two deals with SBA lending out of

hundreds. So the problem with that is the banks get scared of course. They’re not going to fund

the business that has falling revenues and profits. They’re going to want to see it be able to turn

around. I think it’s a little different this time. In the fact that we really didn’t know when the 2009,

2010 economic downturn would end. This one there’s a little bit more certainty. I know there’s

uncertainty, but we all believe that this is going to go away by mid next year or even 2022. So I

think if a business can show and everybody’s asking for the latest financials, don’t talk to me

about March and April. Show me you’ve done this summer. Show me what you did this last

quarter through September 30th. If they can show that they’ve somehow pivoted, recovered,

you know, right-sized the ship so they have earnings, I think you could get financing. But if you

can’t, which is going to be the majority of the businesses, you’re going to have to have seller

financing and earn outs. And you know, that’s a bad word to sellers, but it’s just the reality.

Karl: [00:18:46] For those that may not know the difference between a seller finance or an

earnout, can you share what that is for business owners that may not?

Andrew: [00:18:55] Sure. A promissory note or, you know, seller financing is a certain amount of

money. Say I got, you know, I got $500,000 or a million dollars for my business with half down,

or half and the rest of it in promissory note. The promissory note would say, when you get your

payments, how much the payments are, and you know how long the note is. If you get an

earnout, the earnout it’s going to be contingent upon the business metric. Whether it be sales,

earnings, gross profit, we like gross profit. And we can talk about that someday. But so, but it

can be variable. And a lot of times this works for sellers and buyers, because if there’s this

inherent risk in the marketplace and the seller’s like, listen, if I just had more cash then I could

get to 2022, this business is going to take off again. I really deserve more value. Well, okay.

Well, if you’re right in 2022, it’s 2023 and even 2021, if it’s going to go up, I’ll tell you what, I’ll

give you 25% of the profits, you know, based on this. So it’s variable and it can not happen at

all.

Karl: [00:20:02] There’s so many creative ways to construct a deal that could work for both

buyer and seller. If I could ask you a little bit, one of the things that you shared with, with Ann

and I is, as a small business owner in the business, you’re in being involved in the community

and getting involved with different organizations and that. Can you talk a little bit around some of

the things that business owners can do to help support their community, especially in a year like

this?

Andrew: [00:20:33] Yeah, I mean, listen, the great, one of the greatest things I ever did was sign

up to join the board of the local soup kitchen called LifeNet for families. And it’s literally changed

my life. And what people want to see in a person to do business with, people want to do

business with people they can trust and that they like. And to show that you’re trustworthy and

show that you’re a good person and become a trusted advisor in your community on anything,

people are gonna do business with people that do good. And I think that joining a board or

volunteering for a board or getting involved in whatever, you know, whatever cause you want to

get involved, it can really show the community that you’re willing to be a good partner. And I’ve

certainly chosen who I’ve done business with based on their nonprofit activities and them

helping, you know, be a good part of the community. So, yes, I’ve been involved with the junior

achievement and the United Way most recently, I was just rolled off as the chair of the United

Way. And it’s been an honor and I’ve learned so much from it. I have so many great friends and

I’ve gotten really good business and I didn’t start by saying, Hey, I need to give back to my

community because I want to do more business. That wasn’t the start, but it certainly has been

very valuable to us.

Karl: [00:21:57] This year I know, there’s a lot going on when it comes to diversity and social

justice issues out there in the community. I’m curious from your vantage point of looking at

business brokerage and so on, I’ve noticed that there’s a lot of brokerage firms that don’t have a

lot of diversity, a lot of women in it and so on. What are some of the things that are, that

might’ve been driving that and what are things that can be done to help improve that going into

the future?

Andrew: [00:22:27] It comes down to education and opportunity and giving people opportunity. I

have a great partnership with a friend. He’s the president of Broward college here, which is one

of the top community colleges. And he has a thing called Broward up and he realizes that, you

know, as a young man and he grew up in New York, he didn’t hear about college until he was

like in high school. And you know, other kids grow up knowing about college and other kids

grow up knowing about entrepreneurship and investing. And I think the big thing that we can do

is try to, you know, encourage those communities, give those, encouraging those communities,

exposure to our you know, exposure to our marketplace and opportunities out there and show

them out to do it and encourage them to do it. And there are going to be, I think, opportunities

moving forward for people. I think this is a great awakening of our society to say that, you know,

not everybody had an equal leg up. Part of why I’m involved in charity is because I do believe I

had privilege. My college was paid for, I was, you know, I was never discriminated against really

in my life. I mean, and so I want to be able to give those opportunities other. And I think that

Transworld, you know, we already have models of it, right? Just think about the immigrant

populations and what they do. They’re buying the convenience stores, they’re buying the hair

salons, they’re buying these small mom and pop businesses. Maybe, what we need to do is go

in show others that they can do that, even people who aren’t immigrants, and teach them how to

grow and multiply those businesses. Perhaps like we were talking about earlier franchising.

Karl: [00:24:17] Absolutely. I think that’s a great point. I think giving access to opportunity and

knowledge about the option is a great point to start at. But then even continuing that further. You

described several things people need to know to acquire a business, how to get a loan, what

comes first in your search, what you can look for. Outreach to different groups of people with

that knowledge could self close the gap. But I think we’ve got 20 years in which people have

gotten more education, people of color, women, graduating with degrees, graduating from the

Harvards and the Yales of the world. They’ve worked in corporate America for 20, 25 years.

They’ve accumulated some capital, but that last leap of jumping into entrepreneurship might be

the next step. And sometimes it may take mentorship or sponsorship or just someone that can

guide them down the path a little bit further if we could do it. If there was one thing you can

magically do to help really drive that change in society. What would it be? Where would you

start?

Andrew: [00:25:19] You know, think about all the things that have been successful. Like pell

grants and getting people small business loans and minority statuses for businesses. I think we

need to take all those things and we’ve got to multiply them by 10, right? I mean, and you just

said it, you know, there’s been opportunities over the last 20 years for some people to break

through that we have to take those examples and we have to multiply by 10 and we have to give

awareness. You know, I’ve been on, one of the things that I want to do moving forward for

Transworld is be a part of that. Be a part of that, you know, fight against structural racism and

understand how do we beat that? How do we help those communities, you know, become

entrepreneurs? You know, there’s all these things, you know, that your success has a lot to do

with what your zip code is. I mean, just crazy things, and your color, as far as opportunities,

what your name is when you put your resume in. All these things we have to battle. And I think

at Transworld, we can be a part of showing people how to take opportunity. Educate them.

Because I think still, as we talked about earlier, growing your business through acquisition or

becoming an entrepreneur is still one of the best kept secrets. And one of the best investments

you can make, that’s really, people don’t even understand.

Karl: [00:26:45] I was on a conference call, go ahead Rico.

Rico: [00:26:47] I was going to say, I wanted to build a little bit about what your, what you were

saying before too about immigrant population buying into small businesses, about teaching and

mentoring. You know, my father came from Italy and he bought his own business. He worked

hard. But he worked hard before he bought that business, right? And I’m thinking, what people

need maybe is a little bit more, not just education, but that mentoring part, almost that

handholding, if you will. Because you find that in a variety of ethnic communities, right? I know

several friends in the Asian community where they help others within their community, actually

walk them through buying or setting up their own business, getting their finance for that

business and actually walking them through the whole process. And then bang, they open the

door. I mean…

Andrew: [00:27:38] You think about some of the ethnic communities that have come into certain

businesses and done well and you see that. And sometimes it’s a lot of businesses that people

don’t want to be in. The carwash, and sometimes it’s out of necessity. There’s you know, there’s

all kinds of studies about food deserts and things like that. But you think about those under

served communities, right? And you think about people like Magic Johnson going into those and

opening Starbucks and opening movie theaters and giving opportunities. But you think those

places needed small markets. So you know, out of necessity people can’t get jobs. People can’t

get food. They’re starting these small little businesses and we need to give them power. We

need to give them the ability to go to a better neighborhood and open up another business like it

and do well. You know, just think of all the, you know, the food and the service businesses and

you know, that they can do well. And you see pockets of that and we need to multiply those

efforts. And you’re right, Rico, my you know, my grandfather came from Italy as well, was an ice

and pole man. He had his own truck. And they worked really hard, but you know, I do think that

there was a difference. You know, we’ve been able to blend into the community and I, you

know, sometimes black and brown people do not have that opportunity, as we did.

Rico: [00:29:05] For sure. And I think also when you’re facing discrimination. It’s easier, I think if

you had your own business and empowered that way. Because you’re already past that point,

right? You don’t have to worry about discrimination and someone’s going to promote you or give

you more money for your job. Maybe you’re being paid less than the guy or girl next to you, for

whatever reason. But you’re making it on your own, right? You’re empowered to be able to,

based on the hard work you do and how smart you are.

Andrew: [00:29:36] I mean, here’s the really good news. I think, the really good news. I think it’s

easier to become an entrepreneur than ever. Just think of all the gig economy jobs that are out

there. And I just saw an article that somebody emailed me because of one of my, I had 20

predictions for the 2020, the next decade. I did not predict the CoronaVirus, but one of the

things I did predict is that the gig economy would eventually start selling their businesses. That

you know, that an influencer on Instagram could eventually sell her business or, you know,

somebody on tik tok will be able to sell their business. And, you know, I think that we have to,

we have to embrace that too. Right? And it has to start in elementary school and colleges. We

have to embrace, we have to teach people how to become entrepreneurs.

Rico: [00:30:36] For sure.

Karl: [00:30:38] I think you’re raising a good point. One of the things that I’d add to that, a

mentorship helps. The other thing is eliminating barriers. There are so many things structurally

in place that prevents people, whether it’s lending and getting SBA loans, whether it’s finding

and sourcing deals. When a good deal comes up, you have to know someone that knows about

the deals, make friends with a broker. So he’s going to follow him near his good deal. There’s

people that have that access to talent. Good employees. Good systems. And then there’s also,

there’s community too, sometime it’s the business associations, chambers of commerce, where

they network and a lot of information is shared. And access is given. And opening that up so

more people are welcomed or brought into those things so those opportunities are shared

among a lot more. So there’s definitely a lot of work to do, but I love that I’m starting to see

people become awakened to that. I see leaders like yourself, Rico. We’ve done several

podcasts about justice in the community and you did a fabulous job with the Peachtree Corners

magazine talking about diversity in Peachtree Corners. And we’re starting to talk about it.

People are starting to behave differently and reach out and start understanding people

differently. And I’d share with you an interesting opportunity that came through. And a business

owner came into my office. And didn’t know if his business had any value. And we did an

analysis and I said, you know what? He was contemplating shutting it down and retiring. 66

years old, ready to retire. He’s going to send out a letter to his customers and say that he’s

going to head out, you know, retire. But instead we said, you know, this business has value, it

generates a cashflow. And it’s a good, it’s a gig business, a gig economy business that he built.

And he only worked maybe four to five hours a week in the business. It sounded pretty good.

We helped him put it on the market and guess what? We got a couple of offers on it, but the

person that purchased it was a person of color. In the corporate, works for a corporation, but is

starting to think about that entrepreneurship. And helping navigate him through the path. We

ended up closing on that he’s able to own the business. But the interesting thing when they

came back, the two of them, one gentleman was black and they became good friends talking

afterward during the transition. And this is the first business this gentleman’s going to buy. He’s

going to buy others over time. And that’s sometime, it’s getting that first one under your belt.

Learning from the process and then being able to replicate that. And the best part is at the

closing, I got a picture of the buyer and seller, the buyers kids were there. So he’s setting the

example for his kids about entrepreneurship. And more of that needs to happen. We just need it

to happen faster.

Andrew: [00:33:31] Yeah. I mean, I think that’s exactly it. We have to multiply that by thousands.

And so I, you know, and so I think it’s kind of like what Broward college is doing instead of

expecting people to come to college, they need to go into the communities and bring the college

to them. And I think we as business brokerage community and as entrepreneurs need to bring

those opportunities to those neighborhoods. I mean, whether it’s talking at high schools,

whether it’s having buyer seminars, seller seminars. I mean, but just giving people those

opportunities, you know, right where they live. So…

Karl: [00:34:10] Well, I know in our community, both Transworld and business brokerage in

general, we have a lot of people out there that have the knowledge and skill. It’d be great to see

as more get involved in their community organizations. How can we help bring more people to

the table as part of that? So that’s going to be an interesting challenge that we could take on

and help this bigger picture as a country. So thank you for that.

Andrew: [00:34:39] Yeah, no, I agree.

Karl: [00:34:41] So predictions for 2021, Andy. If you were a business owner right now, when do

you start planning on selling your business and what are the things you should be doing fourth

quarter of this year, assuming that this will, this period of the world’s history will pass and we get

a vaccine and businesses start opening up. What are some of the things you think folks should

do this quarter to be ready for 2021?

Andrew: [00:35:11] You know, if I was wanting to sell my business in 2021, I would do

everything I could to acquire new customers. And you know, it is an opportune time. Just think,

you know, say again in the restaurant business, I would do anything I could to acquire new

customers. And I think you can, because if 20 or 30% of the restaurants that are closed right

now are never going to reopen, that means that there’s people out there and they’re finally

coming out of their houses. So I would immediately do anything I could to get those people and

get those revenues and earnings up. I mean, we have a restaurant for sale right now that’s

doing better than before the COVID crisis, because he has been marketing and doing a lot of

takeout and did the right thing. So I think there’s opportunities for any business owner to

continue to get more business. So number one, get more business and number two, have the

capacity to bring on more business in 2021. Because again, we’ll want to buy on the upswing

and no better time to have an upswing than when you had it. Well, you know, the chart can look

good over the next. I mean, if March and April were disaster for you, the rest of the year could

look good. And then into 2021 could look great. And that’s what I highly urge people to do. Like

Rico was saying earlier, you know, it might be a time to hire. It might be a time to hire that new

person that’s going to put you on social media for the first time ever. You know, it’s time to have

growth strategies. Certainly not to put the brakes on and put your head in the sand.

Karl: [00:36:51] You mentioned earlier the book, ‘The E-Myth’. Are there any other books you’d

recommend for business owners as they’re going through the journey? Especially if they’re

thinking about exiting in the next three to five years.

Andrew: [00:37:03] You know, I have my favorite negotiating book, which is ‘Never Split the

Difference’ by Chris Voss. And I like his style because if you think about selling your business

and you think it’s this high powered, ridiculous back and forth, you know, bloody negotiation, it

can’t be. I mean, it takes a long time to sell your business. It’s your baby. You’re selling it to

somebody else who wants it to be their baby. You can’t beat each other up through the process.

And we’re there to kind of referee that. So that’s one book I would suggest that they read. So

they don’t have that mindset that it needs to be this hard fought. It needs to be a good deal for

people.

Karl: [00:37:43] Oh, fabulous. If you wanted to learn more online, is there, how can folks learn

more about this process and just, you know, buying and selling businesses in general for folks

on either side of that equation?

Andrew: [00:37:58] Yeah, sure. There’s a lot of stuff out there. I mean, you know, I know we’d

like to plug our podcast too, The Deal Board. We have almost a hundred episodes now and, you

know, it’s a great place to learn the ins and outs of buying a business. Obviously our website as

well, and you know, I’ll just throw it out there that we’re willing to sit down with people. We,

again, we want to be trusted. We’re here for the long term in your communities. We’re not here

just for transactions. We’re here to watch people be successful and help them be successful. So

just include us in your plans. Let us sit down with your investment advisor and your accountant

and your attorney and let’s plan out how we’re going to exit you over the next two, three years.

Karl: [00:38:42] Excellent. Well, Andy, I want to thank you so much for sharing a lot of great

wisdom. We covered a lot of terrain in this conversation today and, just really good to have

someone like you give your perspective and insight into what’s happening this year. And if I take

anything away, I think people should be optimistic about it. I think we’ve navigated the toughest

part of this, as a country, as a world. And if you own a business, it’s about putting your head

down, grinding, getting customers back, building your business into the future. And for those

that may, you know, be struggling or may not be able to open up. It’s a great time to find a new

business to buy or to invest in if they could. So I want to thank you for that. What do you have

going on? Do you have anything going on in this fourth quarter as we’re rounding out the year?

What’s keeping you busy?

Andrew: [00:39:35] Well, I, you know, I do have our big charity events, so my wife does one

called Peace Rocks. And so we have a kickoff for that. And again, we’re, I think this year we

usually have wide bands. So I think we’re doing a drive in theater this week. And tonight at the

same time, as that kicks off, I have my pasta dinner meeting, which usually happens in the first

quarter. We had a thousand people last year, we raised $268,000 for the soup kitchen. And

we’re just trying to decide how we’re going to do it next year. But you know, we’re going to do it

and we’ll figure out a way. And looking forward to that night. I just want to give you kudos, Karl. I

mean, the amazing thing that I had through my business journey is for great people to partner

with us. And I’m honored to have you and join in our franchise and, you know, amazing and take

what we believe is, you know, doing good deals for good people to other communities. So thank

you Karl, for being a great part of that and Rico, thanks for having me on. I appreciate it.

Karl: [00:40:36] If folks wanted to reach you Andy, what’s the best way to reach you?

Andrew: [00:40:41] Just at TWorld.com or AC@TWorld.com. It’s that simple. I’m all over the

place. So I’m sure you could find me. But, happy to talk to anybody.

Karl: [00:40:51] Well thank you again for joining us today. So that’s Andy Cagnetta. He’s the

CEO of Transworld Business Advisors, one of the world’s largest business brokerage firms, and

for over 40 years been doing good deals for good people. And just wanted to share insight on

what business owners can start thinking about as they’re going into 2021. Positioning

themselves for a successful exit, if they’re ready or even if they’re ready, acquire more and

become bigger and get that multiple up on their business. So thank you for that. I’m Karl

Barham with Transworld Business Advisors of Atlanta Peachtree. Our business is here to help

people, consult with them, help them figure out how to exit the business when the time is right.

And if you’re looking to improve or grow or through acquisition, feel free to reach out to myself or

anyone on my team. KBarham@TWorld.com is the best email, but also find us

www.TWorld.com/AtlantaPeachtree. And Rico, why don’t you tell us a little bit about what you’ve

got coming up?

Rico: [00:41:54] Sure. First I want to say thank you for bringing on Andy because dealing with,

you know, talking with you as a cohost on the show for what 50, almost 50 episodes. About 47,

48. I’ve learned a lot. So, and I’ve even adjusted my business a little bit because of what we talk

about on a weekly basis. So all good stuff. As far as what’s going on with Peachtree Corners

Magazine, we’re at deadline. We’re working through this deadline this week. It goes to the

printer on Monday. So we have quite a few articles and there’s some major stuff on backyard,

great backyard retreats, pets and their people. We just finished the giveaway we just had. So

we were going to be announcing the three winners on that. And we have a feature in there

about, thankful things. Things, people are thankful for. Messages from a lot of students, a lot of

parents in Peachtree Corners, that’s going to be a cool thing. Then, you know, we’re planning

the next few podcasts, certainly with Capitalist Sage and, city manager, and Peachtree Corners

Life. So there’s that. And of course, if anyone needs marketing, digital marketing, online content,

videos, you know, product videos, podcast production. Feel free to reach out to me. You can

reach me at Rico@MightyRockets.com or check out Rico figliolini if you could spell that on

LinkedIn. I’m sure you’ll, if you search it on Google, you can’t miss me. It’ll pop up somewhere

I’m sure. But LivinginPeachtreeCorners.com is the magazine website. You can find all the

podcasts there as well and everything about Peachtree Corners. So this is the place to go. And I

want to thank you again, Hargray Fiber for being a lead sponsor with us.

Karl: [00:43:32] Thank you everybody for tuning in. We got more great episodes coming up. Be

safe out there and get ready for the fall. It’s here. Take care everyone.

Rico: [00:43:42] Bye everyone

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Business

First Package Store in Peachtree Corners Officially Opens

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The Corners Fine Wines & Spirits celebrates with ribbon-cutting. Some things are worth waiting for, even if they do require jumping through multiple hoops. That surely was the case for the three business partners of Corners Fine Wine and Spirits. Sept. 16 was the day they finally cut the ribbon to celebrate the official opening of their long-awaited new retail package store.

The occasion also marked the very first such store to open in Peachtree Corners. The new city was just getting settled in as Gwinnett County’s newest city in 2012 when Gerald Davidson and his partners Stuart Cross and John Curry began formulating their plans. The first order of business was to secure enough signatures from residents so that a referendum allowing a package store could be presented to voters. The referendum vote in 2014 easily passed 1,394 to 492 in favor of allowing the city to issue permits for retail package stores in its city limits.

Then came scouting for a location. The first choice on Peachtree Parkway near what would become the Town Center wasn’t viable. Their second choice, located about 2 miles south was doable, but developing the site would take time. A new road had to be cut into a hill and the building site prepared.

On that September day, their patience and perseverance paid off as they celebrated the official opening of the 12,000 square-foot Corners Fine Wines & Spirits store surrounded by friends, family and supporters.

The celebration also included remembering business partner John Curry, who passed away earlier this year. The remaining owners, along with John’s widow, Libby, installed a plaque near the entrance to ensure he would always be remembered “as the heart and soul of this establishment.”

“These three businessmen are to be commended for their persistence,” said Mayor Mike Mason. “We applaud their efforts in following through the process. It’s taken a few years, but looking around the store, it was well worth the wait. We wish them great success.”

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