The Dropship Unlocked Podcast

Sell Your E-Commerce Store for £10M With Jason Somerville (Episode 76)

• Lewis Smith & James Eardley • Season 1 • Episode 76

Share episode

📞 Ready to Take the Next Step? https://dropshipunlocked.com/training-watch-apply?el=podcast-76-investors-guide-jason-somerville

Email Jason to find out how he can help you and your business ➡️ jason@gw.partners

Check out GW Partners Growth Consultants ➡️ https://www.gw.partners/ 

🗣In this episode of the Dropship Unlocked Podcast, hosts Lewis Smith and James Eardley welcome Jason Somerville, an expert in investment banking and strategic advisory. 

Jason shares his insights on scaling eCommerce businesses, capital markets, and Mergers and Acquisitions (M&A). Join us as we explore how strategic planning can elevate eCommerce brands to their full potential.

👉 Prefer to watch this on Youtube? Check it out here  ➡️ https://youtu.be/6C0ISk7U1zg

---------------------------------------------------------

Topics Discussed:

★ Understanding Financial Terms: Learn the definitions and importance of capital markets, M&A, and strategic advisory in the context of eCommerce.

★ Strategic Advisory's Role: Discover how strategic advisors drive growth and prepare eCommerce brands for significant transitions like mergers and acquisitions.

★ Scaling Strategies: Jason shares foundational strategies for building and increasing the value of eCommerce businesses.

---------------------------------------------------------

Links and Resources Mentioned:

Pick up a copy of Lewis’ book: https://htabook.com 

Get Shopify for £1 a month for 3 months: https://www.dropshipunlocked.com/shopify 

Get a free trial with a professional phone line: https://www.dropshipunlocked.com/circle 

---------------------------------------------------------

Key Takeaways:

★ Decoding Key Financial Terms: Explanation of capital markets, M&A, and strategic advisory, and their relevance to scaling eCommerce businesses.

★ Role of Strategic Advisory: How strategic advisors contribute to the growth and transition of eCommerce brands, preparing them for mergers and acquisitions.

★ Strategies for Scaling: Foundational strategies for building strong eCommerce brands and increasing their market value.

---------------------------------------------------------

FOLLOW:

Thank you for listening to the Dropship Unlocked Podcast! Don't forget to subscribe and leave a review on your favourite podcast platform.

---------------------------------------------------------

★★★Dropship Unlocked - Lewis Smith★★★

🌏Watch Our Free Training ➽ https://www.dropshipunlocked.com/training?el=podcast-76-investors-guide-jason-somerville

Remember that the insights you've shared today could very well be the catalyst for transforming your business's trajectory down the line. Today, he will shed light on what it takes to build your business into an attractive acquisition target for a buyer. We still were very large, we did 30 billion a deals in six years. The commerce business owners even if we're just getting started, how can we look at it as an asset and really rise the value of that asset? You know, there are a lot of companies that I've seen that I would call them really good product companies, but I wouldn't call them brands. Some of the strategies that Jason shares today could be the things that increase the multiple that you're able to sell your business for down the line. Welcome to the dropship unlocked Podcast. I'm Louis Smith, the founder of dropship unlocked and with me is our Client Success Coach James Adly. Now when we're not recording the podcast episodes, we're running our own e commerce businesses and helping aspiring entrepreneurs launch their own high ticket dropshipping businesses, keen to build your own six or even seven figure business. My book, the home turf advantage is your blueprint for launching a profitable online store. Grab your copy and HTA book.com To date, and let's get you started. Now sit back, relax, and let's unlock your potential with the dropship unlocked podcast. In today's episode, it's a pleasure to welcome Jason Somerville an expert in scaling ecommerce businesses strategically for the most lucrative possible exit. Jason brings nearly two decades of experience in guiding companies through increasing their asset to value mergers, acquisitions and beyond. Absolutely this really fascinating conversation that we're sharing now with Jason, because his involvement in developing strategies to prepare businesses for high value exits, makes this conversation I think essential for any e commerce entrepreneur that ever toyed with the idea of selling their business for a large multiple at the end of their journey on their ecommerce journey. So today, he will shed light on what it takes to build your business into an attractive acquisition target for a buyer, and how to maximize your company's valuation in a competitive market. And it's not just about growing your business either. I love the way that Jason talks today about strategically scaling your business with an eye towards eventually selling your business down the line. So as we dive into this discussion, remember that the insights shared today could very well be the catalyst for transforming your business's trajectory down the line. So even if you think I'm not ready to exit my business yet, or to sell my business, pay close attention, because some of the strategies that Jason shares today could be the things that increase the multiple that you're able to sell your business for down the line, to get ready to explore deep into the strategies that make a business irresistible to investors. Let's jump into it. So today we're delighted to be joined by Jason Somerville, who is an entrepreneur and an expert in investment banking, known for his strategic prowess in terms of capital markets, and mergers and acquisitions. So Jason, first of all, thank you for joining us today, and sharing your insights on scaling ecommerce businesses to their full potential. Thanks, James. Happy to be here, man. Appreciate it. Awesome. Let's dive into this very excited about this conversation. First of all, nice broad question to introduce yourself to everyone listening in and watching. Let us know a little bit about your journey and how you've now got yourself to this place working with GW partners. Sure, man, yeah, it might be a three hour podcast if I go to long hair. So I'll give you the short version. You know, I've had I've had a 2020 year career right in, in basically investment banking, and being an entrepreneur and kind of in various forms. I started as a traditional institutional investment banker, you know, worked for Bank of America, right after college. So got started doing, you know, very large capital markets transactions for Fortune 500 companies, then moved to actually to run capital markets for a hedge fund in Miami, did that for about seven years. And then, you know, became an entrepreneur. And I think that my, my sort of career has gotten increasingly entrepreneurial as it has gone along, starting in the large corporate bank, and then working my way to being my own business owner. And so I left I kind of left finance, like, for a few years just to be a business owner, operator entrepreneur. And then we kind of about seven years ago, combined those worlds of being an entrepreneur with being an investment banker and starting our firm GW partners, to help founders. Basically think about planning for and execute on On exits of their companies, amazing, I think that is gonna be incredibly valuable today speaking to founders, and soon to be founders on this episode about how we can make the most of the assets that were building these e commerce businesses. And so yeah, I'm just fascinated by that combination of incredibly corporate style job in the finance world to then jumping out and doing things on your own. Did you have that itch inside you to become an entrepreneur while you were in these jobs? Well, I used to I didn't have it in the beginning. I mean, I think first of all, I think anybody who goes into investment banking kind of naturally is a little bit entrepreneurial. I didn't come from an entrepreneurial family, nobody in my family was business owner, everyone was just kind of normal employees their whole lives. So I didn't really have that exposure. It would be I wish I did, you know, now in the past, but you know, I won't, you know, write to family members and blame them for not starting businesses and, and, you know, maybe slowing down my, my timeline. But yeah, I mean, I think, as I got into that large corporate world, pretty soon after there, I kind of decided this wasn't really, for me, I didn't really enjoy that environment that much. I knew I didn't want to do that my whole life. And so I started to, you know, inched my way towards that entrepreneurial, you know, kind of line in a hedge fund and moving from a large company, public traded bank to a hedge fund, which is a private, we still were very large, we did 30 billion deals in six years, but kind of one step towards that. And then after that, I was like, Okay, now I feel really good, maybe going on my own, and becoming my own boss, and being, you know, being a business owner. So, yeah, it's gotten more and more, I'd say prevalent as, as those first, you know, what was that about 10 years of my career went on. And I was completely ready. Like when when I left, that that hedge fund position, I was ready to go, for sure. I bet you're just watching all day, these big brand owners and founders exiting and selling their businesses, that probably give you an idea of the potential of having your own thing, your own business, creating your own asset. So well, you're always involved in the final stage of businesses was that when you'd always get involved in those jobs initially, in the investment banking in the hedge fund that you're working for, not always final stage. I mean, sometimes what we were doing was just, like I said, more capital markets oriented. So we were raising capital, either through debt or equity issuance. So a lot of times that's more related to just ongoing capital needs. Sometimes it's part of a, you know, a merger, like, for example, or a leveraged buyout. So that was pretty, pretty common in what we were doing to for example, I mean, your audience may or may not be aware that in a leveraged buyout, it's really just, you know, I'm buying a company for $1,000. And I'm gonna put up, you know, to 200 of equity, I'm gonna borrow 800, you know, in debt, that's a very leveraged, you know, purchase of that business, we would be responsible a lot of times for raising that debt for those buyouts. So, but yeah, so it was kind of a combination. But then, you know, again, as I got sort of closer to that line of wanting to go out on my own, that was very much what I was was targeting, I was like, I believe I can either start or acquire businesses, grow them and make them much more valuable and sell them. And that was sort of the basic idea. And that's kind of been the theme of what I've been doing now, for the last really, I guess, going on 11 years, at this point, amazing, a very, very valuable skills to have in terms of knowing the ground rules, or the sort of principles that you always apply to businesses to increase them in value. So we'd love to dive into that today. So we can understand us as ecommerce business owners, even if we're just getting started, how can we look at it as an asset and really rise the value of that asset? So we'll start off just defining some terms, I think, just to really understand what we're talking about today. We use terms like capital markets, m&a, strategic advisory board, all these sorts of topics. Could you delve into sort of a split, especially mergers and acquisition? And the final stage? Where business? Can you dive into the specifics of those sort of terms? Sure. Yeah. I think when what so starting with just mergers and acquisitions, right, I think, more often than not, in the world of business, you see acquisitions much more than you see merger. So let's just kind of let's let's sort of break those two apart from but they tend to be in the same general category, because usually it involves, you know, a business or a buyer acquiring a an entire business or two businesses that exist separately becoming one business, right? That's a merger and acquisition would be either a company or an individual purchasing an entire, you know, business, that would be an acquisition. So to keep it super simple there. But the idea is, you know, when you're looking at a business and you start looking at the fundamentals, well what is a business? Like, first of all, like what even is right? So if you ask somebody that question, you might get a lot of different answers. I mean, in one way a business is a Easily established, you know, entity or operation. But then we start to say, Well, what makes up a business? What are the components of a business? Right? It's the people, it's the products, it's the intellectual property, you know, it's the, it's the customers and the ability to access, essentially, from a financial standpoint, cash flow by offering goods or services to an end customer, you know, so that, that sort of is a business. And then, you know, when you look at, well, how would you value that thing? That thing we're calling a business, right? And why would I want to buy that thing? We're calling a business? And how do I figure out what's a good price for that thing? I'm calling a business and, and so that's really what what mergers and acquisitions are all about is really that it's sort of looking at this thing, we're calling a business, breaking it down into its fundamental components, understanding it and then predicting its future. Right. That's, that's really, and that's probably the last thing is the biggest part of it is, anytime someone's wanting to buy a business or looking to merge, they're trying to predict the future. And they're saying, I think the future is going to look a certain way, and therefore I'm willing to pay a certain price to own that future. Does that make sense? It does, it does, you almost have to be a bit of a fortune teller in a way that you've got to see the future. But you're able to read the future, I guess, from experience of seeing similar businesses are understanding where the market is going, is that how you inform where the future is going? Yeah, I think it's a, it's a combination of a lot of those things, right? First of all, you know, when someone is acquiring a business, and they're trying to value it, or try to predict its future, you don't necessarily have to have a lot of experience with that particular market, if you have a lot of experience understanding business and how to analyze a particular company and analyze its market, and be able to look at available data to then use to try to project its future. But it does definitely help. So what you see more often than not, is when you have an acquisition, the company or person buying the business has real experience in that market, and is therefore very well equipped to try and project the future. And, as we all know, there's not really any substitute for experience. I mean, intelligence can help you a lot if you don't have experience. But it definitely can be a true substitute for it. Exactly. You've seen things before. And you understand that certain patterns will play out again, no doubt when you're trying to value a business. So to bring us up to date with GW partners, I think your role, you see, is it a consulting role that you do now alongside businesses that are looking to exit? Is that right? We do. Yeah, so all our business is always built around, it has always built been built around this idea of of the future sale as kind of the ultimate goal. So when when company owners work with us, that is always part of the equation. Now, we can get involved, one year, two years away from when that event might occur. And it's, you know, we will be sitting there beside the founder, helping them design the plan for how to get to their, you know, get to their goal. So if we can keep it super simple here. Let's say I have a company that I want to sell for $10 million in two years. That's my goal, right? What do I do to create that I you know, if maybe I've maybe I started three years ago, and it's at a certain level now, what do I need to do to get there? And then our job is to because we always say we have the answers to the test. Right? That's, that's our, one of the things we bring to the table is, given all of our experience, we can look at a company and say, here are the things that that acquirer is going to, like, here are the things and acquire is not going to lie. How do we enhance the things they're going to like? And how do we maybe either completely get rid of or, you know, reduce to things they don't like? And then in the context wrapped, and all that, of course, is the reality of operating that particular business. So I mean, anybody can go to a whiteboard and put a wish list on the whiteboard. That may not really reflect what's reality for a particular company. See, obviously has to be you know, couched in that. But yeah, that's what we do. And then we lead that founder through that process, and then ultimately, through the sale process. So anybody that in, you know, in the audience that happens to have some experience with I'd say, like middle market and institutional m&a processes, like what an investment banker does, and how they market a business. That's very much how we market a business. So, you know, there's a very sort of, I'd say, tried and true approach that you know, the best institutions best investment banks use when trying to market a business. That's the approach we use. Okay, fantastic. So yeah, I can see how much value that would provide to a founder especially there They're brand new, and they've never sold a business before. I mean, selling a business isn't isn't necessarily common for people, but it is a goal often. So I'd love to play this out, then Jason together, because it's I've got my primary e commerce business. Sounds like what you described there. So I've been running it now for about three years, and say, I decided, okay, we're at a position now, where they're about 600k revenue last year, about 50k a month consistently, the higher months, certain times of year up to 70k. And say, I came to you, Jason, with the aim, look, let's try and get this business to a point where it's a saleable asset in two years, for 10 million pounds or dollars. What sort of questions would you be asking me? Or where would you see the biggest opportunities for, for growing that value? Yeah, so the first thing we would do, we'd probably start with the idea. So a lot of people would think we'd start with the numbers. We actually we don't, right, I think the first thing we start with would be, what is it that you're offering in the market? You know, what is your I'd say, unique kind of proposition? What is the value that you're bringing? You know, what we always say? What's the, why do you have a reason to exist? Right? What's your reason to exist? are you solving a problem? Are you bringing a new angle to, again, a product or service? You know, ultimately, what is it that your customers really like about what you do? Right? So that that tends to be the DNA of any business and any successful business is, there's something there that they're doing that some part of the world appreciates, and values? That's why they have customers? Right? So then we start with, well, how do we take that and, you know, scale it? And is there? Is there a kind of a really a big enough addressable market? For you to scale into? Like, is the niche so small, that it would be very hard to scale it right? Or is there enough of a potential mark? So that's usually where we start, right? Just more of that conceptually. What's the seat? What's the special sauce? Got it? Got it? And just just to dive into that, because it's the first question you asked, it's, it's interesting, because I went immediately to the numbers. And I thought you'd be asking me all about numbers, total addressable market, email, this size, those sort of things. So why is it so important that you that the founder is very clear on the exact value that they bring to the market? Well, I think there's two reasons. One, I think, operationally, it is what keeps you I think laser focused and pointed in the right direction, right. Because, as a founder owner, it's very hard to get distracted with day to day, just like because you're wearing 1000 hats and I got you know, and you're just trying to, you know, operate a lot of times, you're just trying to run the hamster wheel, right, and just keep it going. But that becomes really your north star of how you navigate, right, and everything should be honest, informed, right by that poor principle. And if you don't think you're building something that has some of that in it, then I would say one of two things is going to happen. Either you're going to build a business that maybe maybe has a decent cash flow, but probably isn't going to be very sellable, right, or you're going to build a business that will will ultimately fail at some point, right? Because any business that doesn't really have, I'd say a some unique, you know, approach. It may exist for a while, but usually it will cease to exist at some point, right. And that's just the natural business cycle, you know, that most things because, you know, to your point you made earlier, you know, sell it, if anyone who sells a company, like 90% of those people will only sell one company, and 98% of all businesses that get started will never sell. So you got to remember, like, it's a button now there's millions and millions and millions of businesses that get started. Right. So if you want to be in that sort of group, what we're talking about here is is very key to that. And as we get more into, like what acquires really value? That's, that's a big part of it. Right? What, what's my special sauce here? And how can I scale that? Amazing, it's amazing how value can be literally added, like in terms of the hundreds of 1000s Millions? And beyond that to just the words and the key value and the brand that you've built? Because I think I immediately would go logical side of thinking it how many sales are you making? What's the total addressable market? And it's always very number base. But yeah, we're just interested in so it's actually quite qualitative in terms of Have you got a clear brand identity. And so just digging into that main point that we've raised there, but for people that are getting started, and perhaps they haven't quite figured out what their unique selling point would be? Do they need to speak to more customers or how would you advise a brand get really clear on what their unique point is? Yeah, well, I would first of all, I would advise you know, to just when you're when you're doing your research in the beginning when you have your idea, because a lot of times with founders, it'll be a spark, right? It'll be something that comes to them. They're either they're exposed to, or you know, and all of a sudden, like, oh, wait a minute. Here's, here's something that I think might really work like, this seems like there's something there. Right? That's I've noticed that that over the years working with so many entrepreneurs is the sparks come from sometimes the strangest places, right, you just you're not, you know, you don't know. So then in when you take that spark, and you're trying to form a real business plan around it, this is an area that you want to spend a lot of time before sort of diving into right into going ahead and starting the business. So I would say a lot of it is research oriented upfront, like if the market you're planning to go into really go to school on it, before you really decide to move forward and make sure that your business plan as you're building it has this at the sort of center of it. And if it doesn't, like I said, I listen, I've met a lot of entrepreneurs over the years that have built businesses that actually they cashflow pretty well, they do they they support their lifestyle, they enjoy the business. And that's great. It just likely, though some a lot of those won't be they just won't be sellable. They'll just be nice, you know, cash flowing businesses got it. So if somebody has the goal of a nice cash flow business, then that's okay. And they can just run that all the time. But if they have the goal in their mind of having a saleable asset, then I guess you have to look at your business differently, especially when you're first starting out what point would you say that people need to start thinking about how they set up their company? Is it something that you need to do from day one? So start with the end in mind? Or? Or can it come down the line, that the recommendation would always be start with the end in mind, right, for sure. But I also understand that you know, it, I've had this experience myself, a lot of times, you can have a very well laid plan. And things just take twists, and you know, they take twists and turns like you find you aren't quite a quart weren't quite expecting what what happened, and then you had to pivot and you had to adapt. So ideally, you would begin, like in a perfect world, you build your business plan, your goal in the business plan is to sell the company and X amount of years, the whole plan is built leading up to that event. And it all goes exactly as you laid out, right. However, the chances that that's gonna happen, exactly are not very high. So you know, we we definitely work with people all the time that didn't start thinking about this until well into their journey. And look, is it the end of the world? Of course not. I mean, we you know, you can come in, it just means though, you might need a little bit longer if you need to sort of steer the ship a little, maybe clean up the whether it's legal, or how you have done accounting, or how you set up your company structure and how you set up your ownership, there can be some cleanup stuff that has to happen that would, you know, need be needed in order to make a sale really possible. And you just may need a little extra time, you know, in order to fix it in order to bring things back. Yeah. So some things. Yeah, for people that are getting started and very new, and they're in a great position because they can potentially build their business with the idea of selling it in the future. Are there some key things that they should be doing in terms of the structure like getting accountants on board earlier? Are there some things that come to your mind straightaway that you'd advise people do from the start? Absolutely. Yeah, I would say first of all, again, we'll start with legal structure, be very thoughtful about how you're setting your company up. And if you have multiple owners, you know how, you know the ownership structure is created, your operating agreement that you put in place, you know, needs to be, you know, very, very well thought through, it needs to have, you know, all the typical contingencies and eventualities that would normally be structured in there. That's really important. So number one, number two, I'll give you a good example. So here in the US, we have this thing called a it's called a qualified, you know, it's Q SBS is is the qualified Small Business exemption. And so, but it only if you sell, it's up to 20 million, I think now, so if you for a sale up to 20 million, you get, you can have the sale be free of capital gains tax, right. However, the only way you can get that as if you have a C Corp. So you have to structure your cover. So if you're if you're wanting to take advantage of that tax benefit, you need to establish your company as a C Corp. If you don't, and you do it later, there's a five year minimum period where you have to be a C Corp. I've seen people do that all the time where they're like, oh, wait a minute there. They want to exit in the next one to two years they find out about this tax benefit they didn't know about. They were established. An LLC, and they're like, oh, man, I can convert to a C Corp, but then I gotta wait five years now. So that's like a nice little, I'd say, example there. So all of that, you know, operating agreement Corp structure, all of that needs to be really well thought out in the beginning. Again, books and records accounting, I think it's something people overlook a lot. They just assume I'll just do it once a year, when it's time to do my taxes or whatever. No, you know, it's really, especially in E commerce, it's not expensive to have a good, good bookkeeper, just make sure your accounts are very, very tidy and well structured, is going to be very important. So those are, you know, kind of some of the real foundational things. Also, I mean, I've told this to so many entrepreneurs, I learned this lesson the hard way myself, which is, however much capital you think you're going to need, you're going to need more, I promise. So, you know, like, Whatever, whatever you think the plan is, I mean, it's a little we have a joke here in the US where if someone like a contractor who's going to build you a house, whatever amount of time they tell you, you just double it, just what it's it. So three months, okay, it'll be six months, same kind of thing I have that same general rule with with entrepreneurs, which is how much capital you think you're going to need double it. Right. So because you need access to that capital, right. It's lifeblood to the business. Exactly. Yeah. It's similar. Over here in the UK, with our contractors, perhaps it's a global thing, where you just need to expect things to cost twice as much and take twice as much time as what you're initially quoted. Interesting. So for people that are building e commerce businesses, because I know you advise people, I assume you advise different types of companies. And there's certain rules around e commerce where if you were if an E commerce business owner, like myself came to you and asked about scaling my business to be ready for for an exit one day? Is there certain things that you'd say to an E commerce business owner that might not apply to other businesses? Or is it is it quite general for every business type? Yeah, I think if we're talking about a product business with an E commerce Yeah, I think there are a few right, I think one is, let's talk first about product. Right? I think, from a product, we'll call it sourcing and development perspective, I think one, you want to be very thoughtful about your, your sourcing and how you're protected from from an intellectual property perspective, right? And are you just taking kind of, you know, product off the shelf from, you know, a manufacturer, maybe making a couple mods to it. And really, you know, there's nothing really protecting your business. I think a lot of times with E commerce companies, product companies, when they start, it feels a little bit daunting to want to go that route of whether it's getting patents or doing specific product design to just want to get started, you know, it's cheaper to just, you know, work with a supplier and maybe take something they've already developed. I just would say what what I've seen too many times is, you know, people didn't actually plan to be successful. So if you plan to be successful, and you grow your company, one of the main things that a buyer is going to look at with an E commerce businesses, what is unique about your products, and what is going to stop a supplier from just selling your products themselves or selling them to a different brand. And then all of a sudden, there's really nothing different about what you're offering versus what someone else is offering. That's happened a lot where they got really successful on the back of something that is very hard, there's no real moat around it. So I think that's, that's one thing I would offer. I think another thing I would offer is, you know, when you think about building your customer acquisition strategy, I'd say especially in today's environment, and that's something in ecommerce that's so it's changing so rapidly all the time, that I think people kind of dive in, whether it's kind of, hey, I'll just go the meta route. Or if I'm on Amazon, you know, obviously, I can just do traditional kind of PPC just you know, put put money there and just be pretty good at that. I think that you should plan on trying to drive as much organic traffic as you possibly can. Because that is where a lot of value, you know, kind of the owned media earned media type of traffic is is much much more valued by acquirers than paid media. So on an acquisition cost per acquisition basis. Of course you want scale and a lot of times look meta is still one of the best place ways to scale an E commerce business right with meta ads. I'm not saying don't do it. What I am saying though, is what I see a lot of ecommerce businesses now trying to having to deal with this. They build their business entirely on the back of meta. And they're trying to now pivot because their acquisition costs OSS have gotten out of control. And they're trying to build a more organic strategy. And it's very hard to do when you're already in the middle of it. Right? So I would say begin with that in mind to be very thoughtful about how you're going to build your funnels and how you're going to build your traffic. Especially if you want to sell your company, right, because it will pay off in spades later. If you build a really good, you know, multi funnel traffic strategy, as opposed to being very dependent on one channel, I give you 100 more, but I don't want to bore you. So you also I'll pause there for that for now. That's perfect. Yeah, no, these are great criteria in terms of to what extent are we on the scales of exclusivity with suppliers? Or how diverse is your acquisition channels? And am I right in thinking? It's not a case of? Yes, you've got a diverse marketing strategy, therefore you can sell? And if not, you can't, it's more. So to what extent are you diverse? And the more you are, the more valuable the business? So it's like, it's like a scale that would increase the value? Yeah, it's not binary. Yes, that's correct. It's, it's really a scale. And I mean, look, one thing I probably should have said at the beginning is, you know, we're always working from the idea of how do I optimize a sale? You know, to the very top, right, how do I create the most valuable exit? And then you sort of work backwards, right? And so that doesn't mean there isn't? You know, let's say in a particular situation, like, Okay, well, that's not going to be a top of the market exit, doesn't mean there still wouldn't be an exit or even a nice exit, right? We're always working from that point of view and saying, Well, what would what would get us to the top of the market top, we use a phrase a lot called we just say top quartile a lot. Like, that's what were y'all we were shooting for? How do we get into the top quartile. So we're up there in that top 25% of of exits when it comes to, you know, value among up here that are fantastic. So we'd love to be able to businesses that are going to be in the top quartile sounds like we're aligned with your your vision as well. So we've talked about a nice diverse marketing strategy with lots of different ways to acquire customers, primarily organic being a stronger base than if you were purely going from pay channels. And then also with the type of businesses that we run ecommerce, we partner with multiple suppliers, who will also partner with other brands. So if we can sign exclusivity deals with with these suppliers, and again, that's going to put us in a in a higher position. So those are the first two criteria, there are probably 100 that you say, Jason, but are there any more criteria as well as the sourcing, and the and the acquisition channels, other ways that we can really think about, like the real criteria that makes a big difference to the value? Yeah, I mean, I think, you know, the, I would say right now, probably the biggest one is this idea of brand. Right? And, you know, there are a lot of companies that I've seen that I would call them really good product companies. But I wouldn't call them brands, right? And again, going back to this idea of top quartile. You know, brand, it's funny, because the word brand is a subjective word. Right? If you ask 10 people, what does it mean? What is the word brand mean? You're gonna get 10 answers. I would say that brand, the way the way we define brand is, you have earned the right to have the second third fourth conversation with the customer. That is the that is sort of the best way to define brand is not the only way I think it's the most objective way. And I think there's also a little bit of unfortunately, this isn't going to be all that helpful, but it is the truth, which is a brand a little bit about brands, you kind of know it when you see it. Right. It's it's are you have you established some kind of connection with a certain group of people, where they what you're doing really resonates with them. It doesn't have to be that there's some larger mission that people are getting, I mean, that's one way, but it's really being able to establish a connection with a group of people that says, You know what, I really liked this company, not just because I think their products are great, but I just I like what they stand for. I like I like their I like their vibe, you know, I like who they are. They seem like you know, either maybe they're like me or maybe they're just people that seem like people I want to support with my with my with my money, you know? And, and that's what, that's what acquirers also are really, really looking for. And in E commerce. It's it's, it's, it's not the easiest thing to do. Especially if you're just trying to chase your scale early, right because it's a little bit easier to scale if you just focus purely on product. A lot of times brand building is it It's a longer term, it can be expensive, you don't get immediate return on your investment. And so it's very easy to fall more into that kind of product execution trap, then and sort of neglect the idea of building brands. Yeah, but but brands that they're sticky on there, that is the sort of thing that that stays around longer than how well your ads are performing. If people resonate with your brand, there's something that's going to stick. So I'm putting myself in the shoes of an acquirer of a business, they'd want to know that what they're buying into is something that's sticky, and it's going to stick around. So is that why brand is so important, because of the longevity that it provides? It is yeah, it's the longevity. And it's also that like said the stickiness of the of the consumer base that supports it, right. And also, that's going to tell their friends, you know, and you're gonna get, you know, you're gonna get that sort of organic kind of grassroots type support, which, you know, every company, especially consumer product company, ultimately needs right to become, you know, a lot larger, I mean, you, you, at some point need your customers to be selling your products for you, at least, you know, on a large scale, they like and telling their friends, hey, I, I bought this thing from this really cool company, you should definitely try it. And as you know, that, that that sort of multiplies exponentially, the longer you go on, and the better you're able to actually execute on that kind of brand mission. Absolutely. So in terms of a company, perhaps they're early on in their journey, but they know that an exit strategy would be their ideal exit from a business and ice lump sum at the end for the work they've put in over the years. How would or what should they expect from that process? Is it is it going to be a case of months and years, we're putting things together to expect an acquisition to go through? Or? Or is there certain ways that we can reduce that time from you mean from startup or from when they start thinking about potentially selling, which, which starting point. So from when they've already up and running, they've already clearly got market fit? Because they're profitable, and that they've generated some money, but they want to put things in place to sell at that stage? Yeah, yeah, I would know, I would say that, you know, the typical process, like if a company is, I'd say, ready to be put to market. And there's not a lot of work to do to sort of get it ready. That's usually a four or five, six month type process, right from start to finish. Now, if there's, you know, if there is some stuff, you know, that needs to be cleaned up, or maybe the company right now wouldn't be valued at a level where the where the owner would be willing to sell, then yeah, I would say, you know, one to two years out from that, I think, the minimum amount of time that we would say you should, if you're gonna think about exiting within two years, once you're in that two year window, is when you really need to start focusing on all things related to that sale, and what might need to be done to prepare. So I would say that's a good rule of thumb, is kind of two years is is a good timeline. And if you're, if you don't think for whatever reason, as an owner, if you're like, well, this feels like something maybe in five years, or 10 years, or 15 years, I would, I would argue, look, good to begin with the end in mind. But also, you should just be focused on building a good business, right? I mean, you should have an advisor, you know, that sort of helping you understand, like, if you're gonna go in a certain direction, it may be better or worse for an acquisition almost just like, but more like a little bit of a coach, but not super, super intense, at that point, just focus on building a really good business. And then when you're maybe two years out, then you really start to, like, get intense with somebody say, like us who comes alongside you and, and starts to put in a plan that's going to lead to that sale, like a very, very specific focus plan. Fantastic. And when when you put a business to market, quite keen to hear how that works, do you go on to a stoke broker platform? Or how does that work? Where do you put a business up for sale? Essentially? Yeah, I think with us, you know, our process being I'd say, pretty traditional from an investment banking standpoint, you know, you kind of we build our target lists as part of our kind of upfront work. So what we're doing is we're targeting normally, on a typical deal for us, it would be a few 100 acquirers that would be the best fit or a particular business. And then what you would do is you would start to socialize that opportunity early. Well, especially with maybe the I'll call it almost like the 40 or 50 that are bull's eye, you know, private, very, very, very best, most likely buyers, and then we would just start to have conversations, you know, provide teaser information, let them know we have the deal. Coming, kind of start to build the market that way build the excitement for the opportunity. And then when we launch, you know, the processes, it's fairly auction style, right, we give people time to do their work with materials, and then we have bid dates, and you sort of generate a lot of competition for the, for the, for the business. And then ultimately, you know, that process leads to a loi that leads to due diligence, and that ultimately leads to closing. So that's the process, I think, you know, some with some smaller companies, you know, I think it likely is more appropriate to use maybe more platforms, you know, out there that might be, you know, kind of broader, almost like marketplaces, you know, for digital, especially digital businesses, that that works, I think pretty well for, I'd say businesses, maybe under a million dollars in value, I'd say, once you start getting over a million, I think you really want to have a pretty dedicated process to, to your sale. Amazing. Fantastic. Jason has been fascinating to learn about the acquisition process, and what we can do as founders to really maximize the value of our businesses. And if somebody wants to speak more with you and learn more about the process of selling an E commerce business, where would you recommend that they go? Yeah, honestly, just having contact me, man, I'm always happy to, you know, kind of talk to entrepreneurs and founders and, you know, give them a good idea and set them in the right direction of what they might need to do. Whether or not they become clients of the firm. You know, great if they do if they don't, that's also fine. And we just, you know, as I think I told you early on that before we started the show, we started our firm, because we felt like, we wanted to bring a better level of service to founders in this space than they were getting before. And so our passion is just trying to help founders as much as we possibly can. So I mean, my email is Jason at GW dot partners. Our website is www.or, DW dot partners, and not.com dot partners. It's one of those. But yeah, have them contact me. And I'll be happy to answer questions and hopefully, provide some good advice. Amazing. That's incredible. Thank you very much for that agenda of software. I'll make sure to put the links in the description then for people to get in touch with you, Jason. Thanks again for your time today. Thanks, James. Appreciate it, man. Well, that was a great exploration into the intricacies of strategic business scaling, and preparing for a lucrative exit Jason's perspective on building businesses, not only to operate them, but to actually thrive and attract substantial investor interest has been incredibly enlightening. Yeah, it's an amazing conversation. And I think Jason's approach to combining operations with strategic market positioning is something every ecommerce owner, no matter how far you are on your journey should be very strongly considering integrating into their approach. Rather than just focusing on growth. It's about preparing your business to meet the standards and expectations of serious investors. That's where the huge amounts of life changing wealth can come into the picture later on. Exactly, it was great to really get into the shoes of a buyer so you can understand how to make your business attractive for them. And for people listening, and if you're interested in selling your business, and this conversation wasn't just theoretical, we've got practical strategies that he shared for you to work on your business to get it ready for an exit. And it will make a difference to how you approach your business operations and strategic planning for the future. So I think he's clear it's about laying that solid foundation, no matter what stage of your journey you're at with an E commerce business, always having in mind, what will make it appeal to obviously customers, but also to a potential acquirer down the line? Yeah, absolutely. And if you're ready to take these strategies to heart and really integrate them into your business model, remember to check out the support available at GW partners, as Jason mentioned. And also, don't forget that you can enhance your strategy with a comprehensive guide. In my book, the home turf advantage, which is available at HTA book.com. So together, these resources provide a really powerful toolkit for any business owner, aiming for the top of their industry. Enjoying the podcast, we'd love to hear from you leave a comment or a review, and we might just feature it on an upcoming episode. Also, for detailed show notes and resources, head to dropship unlocked.com. Forward slash podcast. If you found value from any episode of this podcast, please take just 10 seconds to leave us a quick five star review on your podcast app of choice. It helps us more than you could imagine. And who knows, you might just hear your comments on the show. Thanks for being part of our community. Your support helps us keep delivering a new episode every week. Now it's time to answer a question that we've had in from a listener of the podcast. Remember, if you have a question and you want it to be answered by either Louis or I, what we need to do is comment beneath a YouTube video version of an episode. So this question is coming from Benjamin cherry eight, one double O and B that's the ask to quit origin for me this time, so I'll hand over the question to you loose to ask this one. Yeah, Rosa, reverse today. Right. So here's Benjamin's question. He said, a quick question I have for you, James, did you ever face any resistance or challenges from suppliers due to your lack of experience and being young? I feel like a once they pick up the phone and hear my younger voice, they'll write me off and not take me seriously. Did you experience this? Thank you for your question, Benjamin. And I remember before I got started, I was worried as well, whether I'd be disadvantaged by my age. So I started with the business that I still running now when I was 23 years old. And when I got started, I first I personally have never felt disadvantaged by my age. Firstly, reason why I think this is because suppliers are often not able to really tell your age through phone calls or emails, they might get a feel for it. But they've never made that explicit to me when I've spoke to them or even didn't done video calls with them as well. What truly matters to them is whether you can serve them as a profitable sales channel for their business. Ultimately, they're in this industry to improve the sales, improve their business. And I think that is more important to them than the age of the person. As long as you get across that professionalism. That's really key. So my experience has definitely shown that suppliers are really just focusing on the business potential, and less on the personal attributes of the people that are offering the service to them. And age comes into that bracket. So yeah, contrary to facing resistance, in fact, I think by youth as occasionally been viewed positively by suppliers, who sort of commend the initiative, and commend the the attitude that you've got a young age, I think that'd be the same for you, as well, Benjamin, and it can often be seen as actually a sign of somebody that's really driven, and an innovative, which are qualities that I wouldn't be admired by a potential new business partner. So somebody that really helped me, even at a young age, when I got started, was that I had strong knowledge and mentorship in drop shipping, because that ensures that you are well prepared and confident in your interactions with suppliers, if the only way that will come across as an inexperienced, or a person that's too young to do business with is if you're you've not prepared yourself, if you don't feel like you're ready to go. And if you haven't got the right training around you, then you might get exploited for not knowing what you should know. And then it might be related back to age. So it's important that you really get yourself prepared. So that if we aren't going to face anyone that is going to discriminate by age, then you overcome that with your professionalism and knowing exactly what you want to talk about. So when you go into a niche, let a little bit about the language of the niche, learn about the you know, drop shipping and the business model that you are putting in. And then when you have that conversation, you will enjoy it. And you won't get discriminated against at all. Eight. As I say the overarching message from this for you, Benjamin, and anyone at a young age looking to get started is that suppliers and partners that you'll work with with your business are primarily interested in results. So ultimately, what suppliers are looking for, and this is my message throughout my answer here is that they're looking primarily for the results that you can bring them. And by having effective mentorship in place, will give you the confidence to speak with them confidently no matter what age you are, so that you can deliver those results and have great partnerships with suppliers. Thanks, James a great question. And yet don't let those doubts hold you back, Benjamin. Exactly. Don't hold yourself back. So it's time now to highlight a recent review that we've had in from a listener of the podcast. And a big thank you to Danielle Jackson, for 6x Four for the YouTube comment. So thank you, Danielle. She has said great information. I had to pause halfway through the video to go away and work on some of the tips before watching more. Thank you very much. Thanks very much for the review, Danielle. And before we go, I just have one tiny favor that I'd appreciate if you could help me with. Have you left us a review yet? If not, please do. Leave us a review. Wherever you're listening to this. It should take you about 10 seconds. But it does wonders for us. And it's a big part of what drives us. So if you'd like us to continue with the podcast, and you haven't left us a review yet, please take a moment to do so now. And hopefully we can read out for you on the next episode. Thanks for joining us on this episode of the dropship unlocked podcast. We hope you're walking away with insights and inspiration. to kickstart your E commerce journey. Grab a copy of my book The home of turf advantage at a book.com is a distilled guide are based on real experience to help you build your E commerce venture. Don't forget to hit the subscribe button for more strategies and success stories. If you like what you heard a five star review would mean the world to us and you might just get a shout out on an upcoming episode. And finally, thank you for deciding to spend your time with us today. We can't wait to bring you more insights on the next episode of the dropship unlocked podcast.