Brad Scoffin on Why Baby Boomer Business Owners Are Running Out of Time to Plan Their Exit

Anthony Codispoti (00:01)
Welcome to another edition of the inspired stories podcast where leaders share their experiences so we can learn from their successes and be inspired by how they’ve overcome adversity. My name is Anthony Codaspote and today’s guest is E. Brad Schoffen, principal and business broker with advanced business brokers. Headquartered in Portage, Michigan, the firm guides owners in Michigan, Indiana, Ohio, and California.

through the sale or purchase of companies earning between one and $100 million. Their services cover exit planning, business valuation, and full service M &A support. Founded in 2016, Advanced Business Brokers has quickly become the trusted partner for sellers in manufacturing, distribution, IT, retail, and franchise resales. Brad is currently the president of the West Chapter of the Michigan Brokers Association.

Before joining the brokerage world, he built skills in financial advisory and commercial real estate and served as state president for the Michigan Association of Health Underwriters. His mix of valuation know-how and community networking has earned him more than a dozen LinkedIn recommendations and a reputation as steady guide through complex transitions. Now, before we get into all that good stuff, today’s episode is brought to you by my company, Ad Back Benefits Agency.

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E. Brad Scoffin (02:23)
Well, thanks for having me, Tony. I appreciate it.

Anthony Codispoti (02:26)
So let’s talk about the bow tie. For folks that are just on the audio version, you gotta run over to YouTube or to our website to see the video. This is Brad’s signature. It’s on his LinkedIn profile. Everywhere he goes, he’s got a bow tie on. How’d this get started?

E. Brad Scoffin (02:41)
You know, the world I grew up in in financial services grew up, know, wearing ties, sport coat and ties, suit and ties, depending on what’s firm. And when I moved into this world on the business brokerage, the clientele that I’m working with, typically the owners are, you know, manufacturing, don’t want to see a guy in a suit and tie. But I like being dressed up. So the bow tie kind of works in both camps. I get to look professional and having a professional attire, get a bit of whimsy.

When I walk into Home Depot even, the people always say, I love the bow tie. I never got comments like that when I just wore a regular tie. But with the bow tie, it kind of breaks down barriers, yet still has a professional look. So I started that about 10 years ago, and it is my signature look. And as you kind of ⁓ alluded to, I’ve now got the nickname of Bow Tie Brad.

Anthony Codispoti (03:33)
That’s great. And I understand that you’ve locked down a domain name and an email address that are associated with this branding,

E. Brad Scoffin (03:41)
Yeah, I had a guy that was a, you know, a creative ⁓ marketing guy that showed me this one. said, Hey, bowtiebrad.com is available. If you don’t buy it, I will and I’ll come back and sell it to you. So yeah, I locked that down. And now I have an email of brad at bowtiebrad.com and people that look that up can it goes back to my regular website.

Anthony Codispoti (04:02)
That’s good. So yeah, let’s talk about this diverse background that you’ve got because, you know, before we kind of get into the business brokerage world, you were previously a financial advisor at Morgan Stanley, then got into insurance with Colonial Life, then TPA work, third party administrator work with CoreSource. What first kind of attracted you into the insurance space?

E. Brad Scoffin (04:10)
Yeah.

Well, so I’ve always been in financial services sales, but I like working business to business. that’s where my, so even at Morgan Stanley, I did a lot of stock options, stock purchase, pension work. And then I had a friend recruit me away from that, that was on the health and welfare side of benefits. And that was my world and colonial life. And then again, the TPA was large group self-funded insurance plans. So worked in that realm, worked with business owners. So.

I always like working with business owners and finding solutions to help them navigate whatever world that they were trying to navigate in. And the employee benefit world was a wonderful place to be because it was kind of a win for both sides.

Anthony Codispoti (05:08)
So.

How long did you stay in that space before you kind of migrated into what you’re doing now?

E. Brad Scoffin (05:16)
I was at Morgan Stanley for 10 years and then in the health and welfare side of benefits insurance for various carriers for 15 or close to 15. Yeah.

Anthony Codispoti (05:26)
It’s a long time.

What did you love so much about the space?

E. Brad Scoffin (05:30)
Well, so in my world, in working that world, ⁓ I always liked, ⁓ again, one, residual income’s a great thing. So I liked building up a book of business where I could then work with clients that wasn’t about just, I need to sell something to survive. I’ve got other income coming in so I could do right solutions with people. And then in my move from Morgan Stanley to the insurance side of employee benefits, I learned fast that we

used to call it the split is the win. So collaborating with others and a lot of my work happened through other insurance agents. So I was more on the carrier side, helping bring solutions to their clients. And that, again, that relationship and working collaborative was a lot of fun for me. So it wasn’t that I had to just smile and dial kind of thing. I actually built relationships with other trusted advisors to bring solutions to their clients. So that to me was fun.

Anthony Codispoti (06:26)
The split is that how’d you put that? What was the?

E. Brad Scoffin (06:28)
Splits

the wind so if I can help you bring a solution to your client ⁓ And I get paid on it, but you also get paid on it, too We’re splitting, you revenue streams if you will but providing solutions and then splitting the revenue stream It’s a win-win done, you know for both of us can’t think it’s actually a win-win-win if we’re doing something right for the client

Anthony Codispoti (06:50)
Now, before we get into the business brokerage work that you’re doing now, I’d be curious to hear about a challenging work experience that took place before that taught you a lesson that you still carry with you today,

E. Brad Scoffin (06:53)
Yeah.

Huh, you know, there’s been, obviously there’s been so many, you know, a couple right off the bat. When I first got, I worked for Morgan Stanley right out of college. ⁓ And so being young and things like that, it was a wonderful experience, but I had to get over, hey, you’re just young. I don’t want to trust you with my money. And so I learned early in life to build those relationships with trusted advisors ⁓ and.

work that route. It was definitely a slower route to building that business. ⁓ But getting to know different attorneys, CPAs, bankers, things like that, that could help me overcome that. Because again, somebody who’s young and 20 and I’m talking to somebody who’s got $5, $10 million to have me control that, how do you find to give yourself credibility right away? And that’s carried me through all of my career paths.

I’ve always built my businesses on relationships with other trusted advisors. ⁓ so that’s, yeah, because it was a struggle right away to build business. when I left Morgan Stanley, ⁓ I had about 300 million under management. A lot of it was pension work. ⁓ And it was definitely hard to leave, but it was the right thing to do. I don’t regret it at all. ⁓ And it allowed me to open up other avenues.

tricks.

Anthony Codispoti (08:34)
Is that why you say it was the right thing to do? Because it opened a better, bigger door for you?

E. Brad Scoffin (08:40)
Yeah, just the opportunities that it opened up and it allowed me to, ⁓ again, I probably should have left Morgan Stanley ⁓ a few years earlier. Maybe I would still be in financial services in that realm. ⁓ I wanted to be out of that corporate ⁓ structure, the way that they had, and be in the box that they needed me to be. Not that it’s a bad company, it’s a great company.

But I like the freedom and flexibility of building my own business. And so it was kind of a stepping stone. Morgan Stanley was still, I got to run it my way within the W2 world. Then I went more 1099 building my own structure for a corporation. And then the last chapter where I’m at now, it’s completely my own. ⁓ And it’s all been about the same because it’s all self-employed from the way the income comes in.

Anthony Codispoti (09:35)
So let’s talk about why you’ve made that most recent transition. Because you were in the insurance space for years. You’d built up lots of relationships, good book of business, domain expertise. What was behind the decision to go into something new?

E. Brad Scoffin (09:50)
Well, it was actually a forced transition. ⁓ Again, this is one of those things with corporate. I was part of a group where I was in outside sales covering three different states. And they decided to change from, we had four of us in several states covering large territories. And they went from outside sales to inside sales, basically waiting for the phone to ring. They since changed back.

But they eliminated the sales force, ⁓ the outside salespeople. so that was a great company as far as they gave me a great transition package to figure out what I was doing next. And then I was being coordinated by payroll companies, financial services companies, other insurance companies. And a friend introduced me to my partner, Larry, who’s been doing business valuations and brokerage for several years before that. But he was a one man show.

my heart and again, my faith, God just opened up the doors and it was the right place for me to go. Cause I’ve always been entrepreneurial in the way that I run things. And so it was a, a definitely a leap of faith because here I’m going from all these other jobs and had some benefits packages, things like that. And at that time in my life I had just gone through, unfortunately divorce and

I needed stability and yet what am I going to do? I’m going to go and do something where it’s like, know, there’s no guarantee of a paycheck. And it’s the best decision I ever made.

Anthony Codispoti (11:25)
It’s interesting. mean, it’s not totally foreign. You had a lot of experience in wealth management. You had experience in insurance. And I don’t know the depth of the insurance products that you’re in, but sometimes those are treated as financial instruments. But business brokerage in particular, what drew you to that space? I get that you’re entrepreneurial, and so doing your own thing was really attractive. But what specifically about brokering businesses?

E. Brad Scoffin (11:51)
Well, again, I always liked working with business owners and finding solutions. ⁓ with this world of business brokerage, especially now, the people that are baby boomers and they’re calling it the silver tsunami, if you’ve ever heard that term, it’s amazing how many get to the end and haven’t done anything to plan. And so just being able to help a lot of these small business owners, and small is a relative term. ⁓

But they get there and this is everything that they put all their blood, sweat, and tears in. It’s their retirement nest egg, or it’s a large portion of that. again, I have a passion for just getting the word out so that they make better decisions, so that they can actually have better outcomes, better success, and a better transition. And so with that, when I did my research, again, it was scary to go work with Larry because the other offers that were coming in had a little bit more stability to it.

But I just could see where this was going. ⁓ One of the things that I’ve done some leadership training, I’ve done the Gallup Strength Finders test and one of my biggest strengths that I score on is strategic. So I can see three or four steps down the road a lot of the times. And I just knew where this was going and where my heart was taking me. ⁓ And yeah, it’s just, it’s a wonderful place to be, to be able to talk to business owners and be on a soft sell approach.

I’m not here to force anybody to sell their business, but if I can help educate them and then they find me to be a valuable resource and add value to what they’re trying to accomplish, that’s just so rewarding.

Anthony Codispoti (13:31)
So let’s hear more about what it is you guys do. Because advanced business brokers, obviously you’re brokering businesses, you’re helping folks sell their businesses. ⁓ But what you’re talking about in terms of clients need to really plan years in advance for whatever that transition is, whether they’re going to sell the business, whether they’re going to pass it on to family members. It sounds like you guys are getting a lot more.

into advisory roles rather than just like, yep, here, let me list your business for you.

E. Brad Scoffin (14:03)
So we are very transactional just to take a step back from that. But I like identifying where they need to be and how they can get there. And then I have lots of people that I have connections with, other trusted advisors, that will do that consulting and help them achieve those, putting in the right management team, growing certain things, putting in process development, ⁓ and putting in all the pieces to make them more ⁓ transferable. we’ve looked.

at bringing that in-house and really we stuck to, hey, we’ll help them with establishing where there’s value, where there’s holes, tell them where they can go get it fixed. And then when they’re ready, we’ll help them then create that buying pool. For us, the best client, when they’re ready to sell, it’s not, hey, I want to sell this as fast as I can for the most money. Making bad decisions when those are the two drivers versus the client that says,

hey, I’m ready to retire. I want to make sure my employees are taken care of. want to make sure our clients are well taken care of and there’s a positive impact or neutral impact in the community. And I want a fair price. That’s a wonderful client. And so if we can help just bring that awareness and that’s what I love. I’m not here to pressure anybody to sell. am, you know, it always breaks my heart when I have to tell them their baby’s ugly because they’re ready to sell and they haven’t done anything to make it better.

But there’s just so much that can be done. It’s amazing. The little work, the biggest thing that’s required in making that work worthwhile is time. can’t, you know, it’s not like selling a house where you can slap a new coat of paint on, clean up the yard, maybe spruce up the bathroom and you get top dollar. With a business, it’s about cleaning up the books. That’s their curb appeal. It’s about putting in structure as far as processes and having a team.

And that’s the two things that drive the value of a business down is the owner is usually too big a part of the business. It’s okay to make the decisions and control business. But when daily operations are dependent upon the owner and the owner’s got their hand in everything, it makes it harder to transition and, and or to sell for top dollar. And then the other one is just clean books and we can get into, I’m not talking about, you know, that they’re doing things illegal, but there are things that can be done.

in the way that you run a business on the books that I get it, small business owners don’t want to pay taxes, but it’s not necessary running a business to be tax efficient versus to build wealth and to build ⁓ an exit. They’re at odds with each other more often than

Anthony Codispoti (16:46)
So I think what you’re saying in that last part there, Brad, is sometimes very rarely a small business owner is going to put something as a business expense that maybe wasn’t, just to be more tax efficient there. And when you do that, yes, it does save you on taxes now, but the valuation of the business is going to be based on those tax returns, the net income that you showed on those tax returns. so taking that right off now is going to affect your valuation.

E. Brad Scoffin (17:12)
Right.

Right, it’s absolutely that way. Cash flow and what’s your profitability on tax returns is the starting point. Now, everybody wants it to be a simple math formula. What’s my multiple? And I multiply this number by this number. That’s not really how it works. Because you could take, again, I like using houses as an example, because we all understand it. You can take two houses in the same neighborhood, same square footage. Maybe it was the same design exactly. And yet, one will sell for 30 % more than the other one.

Because, on the inside, it’s got all new windows and all new floors, and it’s clean and whatnot. The other one, you go inside, and it’s got holes in the wall and mold growing. There’s different things. So from the outside, they might look the same. So just looking at the financial statement is just a starting point. But you’re right. We’ll get business owners that will buy lots of equipment to be able to depreciate it vastly, because they get to the end of the year and they have this big tax burden.

Account for not any bad but the client says I don’t know pay taxes. Well, here’s how you can do that. Buy some more equipment depreciate it Well, but if you don’t need that equipment as a buyer, I don’t know So buyers are gonna look at it through a different lens And so if there’s just ways to clean those books up and yeah There are sometimes where we get some creative accounting where things might even not have been ⁓ reasonable to put through but

it lessens that tax burden.

Anthony Codispoti (18:46)
So, okay, clean books, ⁓ setting it up so it’s not so reliant on the owner going forward. Those are two big ones. What are some other low-hanging fruit that folks should do as they prepare for a transition?

E. Brad Scoffin (18:59)
Well, the things that drive the value of a business, ⁓ really it comes down to two things, cash flow, profitability. So anything you can do to improve profits, you can do that sum with cost savings, and or just growing the business through growth. And the other item, which is a big catch all is risk. And most business owners don’t think there’s any risk in their business. And risk, just like consequences, can be a positive or a negative. There can be positive risks. You’re in an industry that’s exploding

and growing, AI or managed IT is just growing exponentially right now. But risks can be also negative and sometimes there are things that you can control and sometimes not. COVID created a lot of risk, especially for restaurants and things like that. So a buyer or somebody that’s going to operate a business net is going to look at it, what are the risks? Again, one of those just that we went through was the business owner is too big a part of the business.

If the business owner wants to just turn over the keys and leave next week and all that institutional knowledge leaves with him, all the relationships leaves with them, that’s a huge risk for me, the buyer. So I have to, I have to mitigate or have to protect against that risk. Some of it will be done through structure. Some of it is based on, Hey, it’s the only way to protect on them is price. So all of that stuff gets factored in, but most business owners I talked to never think there’s any risk in their business.

And just in small business world, those that are under 10 million in revenue, just being small has lots of risks, whether, hey, if you lose a couple of key employees or if you lose a key client. So de-risking the business, look at your customer base. Do you have customers, two or three of them that are more than 50 % of your business? Doesn’t mean get rid of them or shrink them, but you got to grow the others because that concentration issue or…

Do you have concentration issues? Do you have one employee that you rely on that fixes everything but nobody else knows how because he’s got the magic sauce? Well, what happens when he wants or she wants to retire? So you’ve got to have redundancies or again, it’s all about how do you make it less risky and for the business owner having a great management team I have a business right now guys 78 years old and he’s got about hundred employees, but he makes all the decisions

hiring, firing, he’s got all the vendor relationships. And he wants to talk about doing an ESOP, which is an employee ownership type program, or franchise it, or what he can do to transition. like, it doesn’t matter whether it’s ESOP, franchise, or how you run now, you need a management. So there has to be an entity that runs this business. And right now it was just him. And so.

That’s the thing is if his kids don’t want the business, well, they don’t want all the work that he puts in because he puts it 80 hours a week. But if he went out and hired a CEO, CFO, a COO or whatever titles you want to give him, it cost him and he’d actually make a little less money. He makes about close to $2 million a year in net profit. It cost him that and it would bring that down, but it would double the value of his company. Because now it’s transferable because

Anthony Codispoti (22:18)
Mm.

E. Brad Scoffin (22:22)
He’s not needed. It can run without him.

Anthony Codispoti (22:26)
How long if he were decide to go that route, how long do you think it would take him to get? ⁓ Even just two of those positions call it a CEO and a CFO into place and trained to where he could step back

E. Brad Scoffin (22:40)
Well, before, where he could step back and realize all the potential value, two to three years. You can hire him. Finding people, I know everybody complains that that’s the challenge right now, but it’s not as hard as you think. You’ve got to set the right parameters and people and roles can be filled. And some of that, depending on size of the business, a CFO, you don’t have to necessarily hire a full-time CFO. There’s plenty of fractional CFOs. ⁓

that are great and you do need that once you get to a certain size because the CFO will be able to help you be more strategic. ⁓ Instead of just filling out the boxes so your taxes go well, they actually can help you forecast, plan and utilize your financial statements as tools to run the business better. So they’re worth their weight in gold but it can be done fractionally for those smaller businesses.

Anthony Codispoti (23:33)
So Brad, talk to us about who your ideal client is, whether it’s geography, industry, or size.

E. Brad Scoffin (23:40)
Yeah, great question. So I do have a heart for small business ⁓ and I do a lot of volunteer work with small business associations. So we actually did create a platform for the really small. We call it Mom and Pop Main Street. Business is doing under a million. ⁓ They need the most help, no question. They also take the most time, unfortunately. ⁓ And they’re the most fee conscious and that’s okay. They have less to deal with. So we had to create a platform that worked in service then and we do. have an assisted service model.

and that can work all over the country, but hyper-focused right now with those in the Midwest, meaning Michigan, Indiana, Ohio. And then Larry and I, our bread and butter where we started and where we focus our efforts, and most of our team is focused in this area, are the companies that in that, that’s deemed the small market, the one to 10 million space. And then I do have an &A advisor that’s certified.

that works in the 10 to 100 million space. In the 10 to 100 million space, he works all over the country, has some in Florida and Texas and one in Michigan right now. But on the other ones, I like to meet people in person. I like to visit the place. And they just can’t afford to fly me around for a $2 million business for the expenses. So those we’re typically looking at in Michigan, Indiana, Ohio. And then industry-wise, we’re really

industry agnostic because small business is small business. However, there are some that we just can’t add value to. If they’re not profitable or they’re struggling, it’s really hard because the emotional tide they have, hey, this business could be worth something someday. Well, OK, but nobody’s going to pay you for what it could be worth. They’re going to pay you for what it’s doing now. And often, that’s a disconnect. I want my 10 million, but you’re worth a fraction of that.

and helping them bridge that if they’re realistic, we can help. But it does come down to profitability. We don’t really work on bars and restaurants that are struggling. We have sold several that are run like a business. But you have to look at who’s the ideal buyer. Are they buying it because they want to run the same business? Or you’re wanting to sell this to the guy that wants to then change the concept to run a different restaurant. If they’re buying it to run it the way it’s run and it’s a business model, they’re

we add value to that. And then we don’t do a lot of professional services like doctors, dentists. I do have people in the industry that specialize in those. So what we do work on is a lot of service-based businesses, manufacturing, distribution, logistics, IT. And then we do work in the healthcare space, but not the doctors and dentists, but the PT practices, the ⁓ therapy practices, ⁓ home health care agencies, things like that. And those are…

really hot right

Anthony Codispoti (26:35)
interesting. Why do you think those are so hot?

E. Brad Scoffin (26:38)
Service-based businesses, if they’ve scaled up and are running well enough, there’s a lot of consolidators in every space. ⁓ And then for us, my goal and job with working with a business owner is to help them find the best fit. I was just talking with a gentleman on how we do this, because it’s not just about, hey, I want to sell my business and who can give me the most money. And if that’s it, that’s fine. There’s ways to do that. But really, it’s about culture.

especially somebody that’s built up a practice and they have four or five locations. And they want to make sure that it’s turned over to somebody that fits that model. And I have one right now where, you know, we went through a large buying pool and narrowed it down to a handful of buyers that actually fit the culture. ⁓ And it’s been a great fit. And that’s in the home health care space. And so it’s really about that buyer that they want the legacy to continue.

what they’ve built. know that they’re ready to retire or they’re ready to hand it over to somebody else. But they don’t want to just, know, a lot of sellers fear that, have to give this and then somebody’s going to come in with that action, you know, get rid of employees or service my community because it’s community based differently. And then it, it’s just, they want to see their, they want to see their baby grow up and, and, and graduate.

Anthony Codispoti (28:02)
How do you source your deals, Brad?

E. Brad Scoffin (28:04)
⁓ Again, that’s through the trusted advisor networks. ⁓ My biggest source.

Anthony Codispoti (28:07)
Okay, that’s you’re still

employing that same thing that you did back when in your insurance days. Yep.

E. Brad Scoffin (28:12)
Absolutely. We do hire marketing teams to do that. And we’ve seen a huge uptick in people that find us through ⁓ Google ⁓ and LinkedIn. So our marketing team’s job’s working. They’re doing a great job on that. But still, the vast majority come through ⁓ banking relationships, trusted advisors like wealth managers, ⁓ insurance ⁓ agents at time, and then attorneys, CPAs. ⁓

other business consultants that work with business owners. So anybody that’s a trusted advisor in the business owner world, we work.

Anthony Codispoti (28:50)
Are some of these the same folks that you had relationships with in your insurance days and your wealth management days or were you having to form a whole new network as you got into business?

E. Brad Scoffin (29:01)
So yes and yes. So yeah, I mean, any relationships that I had and when my partner and I started, we had ⁓ probably 2000 names in our contact database. Now we’re at about 112,000 and growing. So the network just keeps growing and growing and growing. And we start off with just the two of us and now we have 12 people on the team ⁓ in the four states you mentioned. ⁓

Anthony Codispoti (29:03)
Okay, a little bit of both.

E. Brad Scoffin (29:30)
looking to add a couple more here in the next six months.

Anthony Codispoti (29:34)
112,000 people in your networking database. ⁓ I guess I understand why people call you a professional rock star for your networking leadership. Can you tell us about some of the events you do like barrels, bottles and brews?

E. Brad Scoffin (29:49)
So that I’ve turned over, I did that as a give back to the community, in the area that I lived in, networking was kind of ebb and flowing and there wasn’t a lot of good networking. And then we kept it going through COVID and then it’s still going now. it’s a, Barrels, Bars and Brews was a, ⁓ hey, we’re gonna get together as a social drinking group, support a local business and sometimes business happens in that order. It was very casual, get together. ⁓

Right before COVID, we used to get ⁓ 100 to 120 people that would get together once a month. Now it’s about 40 or 50, because there’s just so many other opportunities. And I’m a big fan of networking. I teach a class at the local university on networking to college students. ⁓ And networking is about just building relationships and making friends. And it’s just funny, because at the college level, the college students are

It’s like, oh, I’m scared of networking. It’s like, unless you don’t have any friends and you’ve never had a girlfriend or a boyfriend and things like that, you already know how to network. You just need to know how to apply it in the business world. And so we go through that. And again, the best networkers are the ones that it’s about helping people connect. And then if you help people, they want to help you back. And so it’s not going in and finding somebody to buy for me or sell for me or, you

What can you do for me?

Anthony Codispoti (31:17)
So say more about that because I think you’ve hit on something here that a lot of people feel that networking is icky. It feels very transactional. I’m uncomfortable doing it, but you’ve got a different approach in mind. Can you go into that in a little bit more detail?

E. Brad Scoffin (31:27)
Right.

Yeah, so it just depends on where you’re networking. you should, if your job, especially sales, requires you to build relationships, you should always be networking. But you should never feel like you’re networking and the people around you should not feel like you’re trying to network with them. But whether it’s at a family reunion or, you know, 60th birthday party, just talking and having a genuine interest with your fellow human beings. And then at business networking events, it’s the same thing.

The goal there is just to find the people in the room and you can’t ⁓ build a relationship with all 60 of them all at once. So even if you meet all 60 of them, pick one or two to follow up with and have a cup of coffee and just get to know people. Instead of starting off like, this is what my business is and do you know any business owners that want to sell? No. What do you do? Hey, this is what I do. just get to know the person as a person. You’ll find more common interests. And I’ve found a lot.

of ⁓ stuff through faith. There’s a lot of business groups where we just tell, again, that vulnerability and being able to share stories and talk and just be support for each other. And guess what? Then they just wanna, hey, by the way, what is it you do? Now that part of that building a relationship, i.e. the family reunion, if your family members don’t know what you do, then they’re never gonna help you. So you’ve gotta weave that into the conversation.

It’s got to be from a non-salesy approach. That’s at least my world is just build relationships, let people know, and then also find out what they do so that you can find a network of resources. Because if I run into the best networker, when I was at Morgan Stanley, if I had clients calling me, ask me, hey, do know anybody in town that does landscape or window washing or that does this? I know I’m a trusted advisor when they’re asking me for recommendations or other things.

⁓ And so if I can help them connect then when they have a need that I can service they’re more apt to come back

Anthony Codispoti (33:38)
I think what I’m hearing you say boils down to be a human first, right? Not a sales guy, just be a human being, connect with folks and get to know them on a personal level. Start there. And that’s a great foundation to build from. And I think I also heard you hint at this, how can I add value? Can I make introductions for you? Can it be helpful to you and your business? ⁓

E. Brad Scoffin (33:44)
Yes.

Yep, absolutely.

Yeah.

Yeah. And

so when I ran barrels, bottles and brews, that’s what I would do. I’d see people that were new. Hey, you’re new here. What do you do? you you probably like to meet people that are in, you know, salons or people that are real estate agents or people that are bankers. And I would, you know, walk them over to somebody I knew in that world and introduce them and then walk away. you know, expecting nothing in return, but that old adage is that, you know, what you put out there, you get that tenfold is so true.

Versus if you’re just a taker, everybody knows those people in the room where the person that walks in and the energy level just goes down three notches and the person’s coming in and passing their card out to everybody in the room. ⁓

Anthony Codispoti (34:42)
not even make an eye contact, just this is a transaction.

How many people can I touch here? Yeah.

E. Brad Scoffin (34:47)
And then they become a card collector and they have a stack of six inches worth of business cards and not one of them knows really who they are and they don’t know any of them in that stack.

Anthony Codispoti (34:58)
Yeah, it’s not really networking on an effective level for sure. So, Brad, for someone who’s on the fence about selling, what do you find is the biggest mental or emotional hurdle in taking that next step?

E. Brad Scoffin (35:13)
⁓ great question. There’s so many, because it is a very emotional time. And I totally get that. And very much respectful of business owners. They’ve done a great work at building a business, creating a lifestyle for themselves and their employees. ⁓ The first step is just starting to carve out a path and knowing what you need and what you want to see happen. What is the legacy? And if it’s that you’ve sat down with your financial planner and they say, hey, when you retire, you’re going to need an extra

three million dollars or two million or whatever you’re gonna need, ⁓ start early so that you can say, well, is my business gonna be worth that? How can I get it there? Because if you need 10 million or want that because you wanna be philanthropic and wanna be able to give money back and do lots of good, ⁓ all too often I get business owners that they say, well, I want $7 million for my business is because I want, need and think I deserve that or.

I need that for validation because I want to know what I’ve done is a good thing. And then somebody comes along ⁓ that gives them the honest truth that, in today’s market, you probably sell for $3 million. They think that’s offensive. And I’m not trying to be offensive. I just want to help them have the right expectations. And the market sets the price. I don’t. And I’m just going to tell them where the market’s going to see them. And then they also have to talk about

who and what that legacy is for the transition. Because if they want to sell it to an individual, I had one just happen this way, that they wanted to sell to an individual financial buyer, somebody coming out of corporate that wants to run a family business, start building their empire. It’s just a different vibe. And I totally get that versus sell to a strategic buyer, somebody who’s competition, who’s buying market share. Well, a strategic might see a higher value.

because their synergies, their savings, and there’s reasons. this business was worth about $3 million based upon cash flow to an individual because that’s about all they’re to be able to finance from a bank. ⁓ that’s, so 3.2 is about where they would be. Now, a strategic might see 3.5 to 4 million because of certain synergies. Well, our owner said, I don’t want to talk to anybody that I compete with because they’re going to, you know.

steal my ideas. It’s like, well, then if all you want to talk to is individuals, they’re restricted because of capital restraint. And the type of loan, they have to get an SBA loan, which is a little more expensive versus somebody who may already have enough capital and be able to get better terms or pay cash. yeah, just prepare in advance to know what did you need and why and what are you looking for? there’s ⁓

an entity called the Exit Planning Institute. They put out great research. right now, the last one from 2025, it’s just scary the statistics that are out there. Of all business owners interviewed, more than 50 % would like to transition their business to an employee or a family member. Employees are kind of like family, so I love those all together. That still only happens about 20 % of time.

All the business owners out there they see their path as selling it on the open market That’s about 30 % interviews say that’s what I want with you. It still only happens 10 % of the time So what happens all the rest of those times people end up having to run their business or they end up? Even some try to sell it to you know somebody and they get fatigued and they end up over 40 % of the time closing the business

Anthony Codispoti (38:55)
Wow, that’s a huge stat. And these are businesses that would ostensibly have some kind of sale value.

E. Brad Scoffin (38:57)
Yeah, it’s, yeah.

Yes. Now, closing the doors doesn’t mean they didn’t get any value out of it. They may have closed the doors and looked if they had capital equipped. But some of them, if you’re a service-based business and you close the doors, yeah, there is zero value unless they own their real estate and then they sell off the real estate. But yeah, every business that is running profitably has value. Now, again, sometimes I had an excavation company and the guy was only making less than $100,000 in

in what he took in his pocket. But all his equipment over the years that he built up still had value of over three million. Making 100 grand doesn’t support a three million dollar price tag. So his path was easy. Find a liquidator that will auction off all this equipment and it’s fast and easy. But more often than not, the pieces sold off separately are worth less than the business as a whole. So if it’s running and it’s profitable, we’ll just see what that value is.

Because I don’t want see businesses close then jobs are lost then the community loses and it’s just it’s a bad thing so And then there’s the other one said hey, I’ll just work here until I die and it’s like, know What that’s a fabulous exit strategy and it does work very well for you the only for everybody else. It’s absolute chaos for your ⁓ Family members for your employees for your clients the day that happens. It puts everybody into a tailspin

Anthony Codispoti (40:34)
So that 40 % of businesses that you say don’t sell, what’s the one biggest thing that was missing? What could those businesses have done differently?

E. Brad Scoffin (40:43)
Yeah, it’s 40 % close the doors. The ones that try to sell, it’s even worse. Only 20 to 30 % actually sell that try to sell. ⁓ But anyway, the ones that try to sell and don’t sell, a lot of it is just it’s that emotion gets in the way. So they don’t understand. They think they’re being low-balled. And somebody’s trying to give me a low price. And it’s like, no, this is what the numbers in the math support.

Anthony Codispoti (40:52)
Okay.

E. Brad Scoffin (41:10)
You got to look at it when somebody’s buying a business, especially a smaller one, where it’s in it you’re selling to an individual. Again, different thought process when you’re selling to private equity or family offices and strategic buyers and we work with all. But when you’re selling to an individual, they’re going to have a big loan payment. So they got debt to service and they need to get a fair wage to, you know, cause why would I leave a $60,000 a year job to take a $30,000 a year job with all sorts of risk or

100,000, whatever number you want to plug in there. But they need to make a fair salary, they need to pay back that debt, and then the business still has to make money so that it can grow and do other things or if there’s capital expenditures. And a lot of business owners, the sellers, they just say, that’s the next buyer’s problem. And it’s like, no, that’s your problem because they’re going to only give you an offer that allows for that to happen, not the number that you think you want, and deserve.

It’s the number that the math can support. And that’s where it’s at. A lot of times it’s just, I get it. You’ve spent more time at your workplace than with your family. And so you need that to pay off somehow. if you have been running it because you were good at something, but not like a business, there’s nothing wrong with that. It’s been a great job or a great owner operated business for you, but it’s not going to equate to, hey, if you make a…

a half a million dollars a year, it’s not going to equate to a $10 million retirement mistake. The math just doesn’t match up.

Anthony Codispoti (42:45)
curious, Brad, if you stay in touch with any of your customers post exit, because everybody thinks an exit is going to be Nirvana. And for some folks, it is for other folks, it feels quite different.

E. Brad Scoffin (42:51)
We would like

Yeah, we touch base with a handful of them. A lot of them, once they get to retirement, ⁓ they’ve left or gone, moved to Florida ⁓ or in a different world. But we do keep in touch because we do have clients that want to talk to past clients as far as referral or just what their experience was. Some are great stories, you know, as far as the transition goes. And in the world that we try to, we try to really align ourselves with people that are looking for that.

that right buyer and best fit versus just the most money. We have dealt with people that want the most money and they’re usually the ⁓ most unhappy with the transaction. it is a tough thing because it isn’t like selling a house. ⁓ And I have a person that actually equated this very well to me. says, OK, let me put it in terms of selling a house. When you sell your house, you just hand over the keys, you’re gone. They take over and you move on to the next.

When you sell a business, it’s like selling your house to that person. When you close on the deal, that person then moves in with you for six months. You guys have to live together for six months and then you get to move out. ⁓ And so if you don’t like each other, so if the seller thinks they’re getting low ball, they’re not going to, they’re going to have friction or animosity. And if the buyer thinks they’re overpaid or the sellers being unreasonable in something, there’s going to be friction and animosity.

Anthony Codispoti (44:24)
You know, I’ve got a few exits under my belt. ⁓ And you talk about being a psychologist, you know, I don’t know how long you’re staying in touch with folks. Because in my personal experience, as well as you know, talking with lots of friends, ⁓ there’s this sense of loss that can oftentimes take place, right? It’s this thing that you have put your blood, sweat and tears into building, you’ve got a team that feels like family, you put a lot of effort into training them.

E. Brad Scoffin (44:26)
Yeah.

Anthony Codispoti (44:51)
and then all of a sudden one day that’s not your purpose anymore. Do you have experience kind of navigating this with folks?

E. Brad Scoffin (44:55)
Right.

We do. ⁓ And that’s one of the biggest things that we try to ⁓ gauge on the start of an engagement is does the person really know what they want to do next? Because if you don’t have that plan or that path for what’s next after wholesale, you will end up ⁓ dragging your feet, self-sabotaging, and just creating all sorts of challenges in the deal without you even knowing about it. It’s just you’re…

being less responsive as it gets closer. ⁓ And the challenge with that is if you truly do want to exit and it’s the right path for you, but yet psychologically you’re putting all these roadblocks up, you’ll eventually sell, but you won’t be happy with it because you, the things you’ve put as far as roadblocks have led to you being, they call it retraded where things get renegotiated closer to the end. And again, the buyer is looking at, things are changing or shifting. I’ve got to protect against that risk. ⁓

And so, or you maybe you blow up a deal and then you go back to the drawing board and find somebody else and they’re looking at it through a newer lens and you may get a lesser deal out of it. And so, and I get it that, you this is your sense of purpose. did have one that the only one in our 10 years where somebody pulled out of the deal right before close, but it was three days after all the attorneys had drafted everything, a full price offer.

Great fit buyer. He actually loved the buyer. But we always joke he didn’t want to be at home with his wife. And that’s not true. ⁓ But he didn’t want to he liked going and he worked on cars, high end specialty cars. And he liked going in and, you know, and hanging out with the guys and getting to, you know, tinker and do that. And he he just ⁓ eventually got cold feet and said this this is isn’t for me, even though

Again, we did everything he had asked us to and the buyer ended up actually buying another business through us that we worked with him on because he enjoyed the experience and things like that. And we do try to keep in touch with him.

Anthony Codispoti (47:07)
So Brad, in my experience behind every success story, there’s usually a chapter that almost broke someone. Can you talk about a serious challenge that you’ve gone through, how you got through it and what you learned in that process? Yeah, so…

⁓ For me, the serious challenge, unfortunately, was going through a divorce. ⁓ And, you know, I had three young kids and luckily post divorce, they thrived. So it’s been a great environment for them ⁓ and wonderful. But, ⁓ you know, it was tough because during that time, you know, I had a great job that, you know, so going through a divorce, had a great job that I was making serious six figures with all these benefits and wonderful.

And at the same time of the divorce, they decided to go from that outside sales force to the inside sales force. So I had both personal things going on, work things going on, and not knowing which way was going to be up. And so I really had to dig in. I wasn’t worried that I couldn’t get a job. I could find a job, and plenty of people look at it. what was going to be my next chapter as far as the lifestyle I wanted? ⁓ And for me, I had to dig into

allowed soul searching and my faith. And that’s where, again, I was introduced to my partner Larry, ⁓ great guy, ⁓ also strong in his faith. And that helped me really ⁓ do that soul searching of what I needed to do. And lately I’ve learned that the more vulnerable I can be, I’m not here to preachy or convert people, but

having whatever your faith is, having some strong conviction to that and being good humans and good stewards of the world and our local communities ⁓ has really led to opening up more doors for me and just being able to talk at a different level. And at first it was hard for me in the business world because you don’t talk politics and you don’t talk religion and things like that, but just being able to be open and vulnerable and God definitely opened those doors for me.

and really made it wonderful. And now I’ve got this great job. I’ve got a great wife. We’re now the modern day Brady Bunch. We’ve got six kids between us. There’s three boys, three girls, but it is two in one, one in two. ⁓ We do a mission trip down to Guatemala every year. And it’s just, it’s reinvigorated my life. So ⁓ I’d have to say that, you know, lots of things kind of perfect storm against me. And the way out for me was really getting vulnerable and grounded with

some people within ⁓ my world that were grounded in faith. Let’s talk a little bit more about that thing we’re not supposed to talk about, Right, yeah. So were you strong in your faith before the divorce? Did this try to push you further into exploring your faith? I would say I was not, was strong back, I brought up in the church with my family. And then ⁓ during my marriage,

It kind of was that, you know, on the periphery, kind of like way too many people, just, whether your faith is just having a good family unit or some greater spiritual purpose, I’m not here to define what it needs to be for you. ⁓ But we’ve gone away from that. mean, the studies are just staggering. know, 20 years ago, ⁓ 70 % of all Americans said they belonged to a church, not necessarily attended, just belonged.

to some kind of organized religion. And now it’s less than 30%, or I think it’s 30 or 40, but it’s less than half. And it’s just declining. so having that greater sense of community and purpose, I think definitely leads to just more doors being opened. And so yeah, it definitely was on the lesser end. And I leaned into that post-divorce.

people listening who are maybe going through similar life transitions now, what advice would you have for them?

You know, find a good mentor. Mentorship is so important. And again, I have several, but I have one that I meet once a month for a cup of coffee and we just talk about life. It’s not about trying to network or build business. It’s just that sounding board. It’s funny because I’ve done mentorship through SCORE and SBDC for businesses. I believe in mentorship. My wife and I now are very active with Big Brothers Big Sisters.

And so having people in your life that you can just share with, business owners need it more than anybody else, because a business owner can’t go home and share with their spouse. I’m not sure we can make payroll. I’m not sure. We just lost our biggest client. You don’t want to freak out your spouse, right? So it’s nice having somebody that you can have that vulnerability that can just either be that sounding board to listen to you or even give you, hey, I’ve been through that. Here’s where I go.

And you’d be surprised, there are so many different ways to find a good mentor. ⁓ And this gentleman, Jim, that I meet with, ⁓ he’s about 20 years older than me. And he says, you know, are you sure this is worth your while, ⁓ us getting together? He says, I feel like I get so much more out of this than you’re getting. Because I don’t know that. I said, no, Jim, it’s a two-way street. You’re giving me lots. And so mentors actually end up

getting just as much out of being the mentee. And so yeah, getting a mentor, and it doesn’t matter whether it’s personal or work or spiritual, ⁓ mentorship is wonderful. And that’s where I think strength comes. How can people find a mentor? It depends what you need. mean, on the spiritual side, I went to a few different groups or some here locally, Christian Mittens,

The Christian Business Men’s Connection is where I met Jim. And it’s just a group that gets together once a quarter that are business owners. ⁓ But there’s other things, whether it’s through your church, if you just want to have somebody to meet with coffee and things like that. ⁓ In work, there are local organizations. SCORE is one of them. ⁓ It’s funded through the SBA.

And it’s just business owners who have been there, done that, that volunteer their time to be mentors for small business owners at no cost. ⁓ Same with those groups called the Small Business Development Centers, SBDC. Every state changes it a little as far as what they’re called. But again, they’re mentors that are paid to be there for business owners, ⁓ you know, at no cost to the business owners. So why not at least tap into that resource you never know.

So those are a couple of different places. ⁓ But there’s just, if you just look around and just find people you can connect with and then stick to it. Mentorship only works if you set up some kind of regular cadence. ⁓ Whether in church ⁓ as a couple, you join a life group or small group or whatever you want, a Bible study group, or you have your own social circles. You get together.

women get together with a women’s group or couples get together with other couples and just have dinner once a month. But if you don’t do it on a regular basis and make time for it, ⁓ it’s not going to add as much value versus if you, whether it’s quarterly or monthly ⁓ or weekly, depending on what you need. You need consistency and you need the ability to be open and vulnerable. They can’t help you if you’re holding back.

the stuff that really needs to come out. And it’s a beautiful thing to see. So I belong to a couple of different mastermind groups where we get together once a month and just talk about challenges either with our own businesses or with clients ⁓ and share some more stories and things like that. And we started that ⁓ just after COVID and about a year and a half, two years in, the stuff that was being shared again was deep vulnerability.

Some people going through some really tough times, breaking down and crying in front of each other. And it’s made us all stronger, better humans and better business owners. And you’re right. So consistency, open and vulnerability, no judgment zone and have whatever your purpose is. It can be social. I mean, I think it’s healthy to get together. I like my Scotch. So we get together and do Scotch and bourbon tastings about every two months.

where we get a group of guys and girls, but we get a group of 20 of us together and sample different bottles and do a tasting to see what we like. What’s your superpower, Brad? So my I’ve been told that my spiritual gift is hospitality. So bringing people together. I’ve just got one more question for you today. Before I ask it, though, I want to do three quick things, Brad. First of all, to get in touch with Brad, ⁓

We’ve got his website, abb-businessbrokers.com, abb-businessbrokers.com, ⁓ his super fun email address that we talked about before, brad at bowtiebrad.com, brad at bowtiebrad.com, and we’ll have those in the show notes for folks. And if you’re enjoying the show today, a quick comment or review on your favorite podcast app goes a long way towards helping others discover our show. So thank you for taking a quick moment to do that right now.

And as a reminder, if you wanna be the hero advisor that shows your clients how to get their employees access to therapists, doctors, and prescription meds that as paradoxical as it seems, actually increases the company’s net profits, reach out to us at addbackbenefits.com. So last question for you, Brad, what is one very specific thing that you hope to be celebrating one year from today? One year from today. ⁓ There’s just so many good things

⁓ happening. ⁓ I’m hoping that I’m celebrating because right now we’re new at mentorship in the Big Brothers Big Sisters and we’re still waiting to get matched up. So my wife and I are going to do what’s called a big duo. We’re actually going to be that big aunt and uncle or grandparents to a in our local community. So I’m hoping to be able to celebrate ⁓ that a year from now being matched up with somebody in the community that just expands our family ⁓ in

Again, any parent in the audience knows you learn so much through seeing the world through your kid’s eyes. And I look forward to being able to see the world through another kid’s eyes. That’s not my own, but will be part of our family. Awesome. Bowtie Brad Schafflin from Advanced Business Brokers. I want to be the first to thank you for sharing both your time and your story with us today. And I really appreciate you being here. Well, thank you, Tony. I really appreciate it.

Folks, that’s a wrap on another episode of the Inspired Stories Podcast. Thanks for learning with us. And if one thing stood out, try putting that into action today.