Business Acquisition Advisor EXPOSES Why 99% of People Fail at Buying Businesses

Melissa Hostutler - Business Acquisition Advisor specializing in blue-collar businesses (construction, HVAC, plumbing, electrical, pool companies, etc.)

• Nearly 20 years of experience in business acquisitions
• Handles deals typically under $5M, with largest acquisition at $110M
• Website: BlueCollarBusinessAdvisors.com

The Reality of Business Acquisitions

• Business acquisitions are emotionally and financially demanding processes
• Deals can take up to 9 months to complete
• Recent example: A deal delayed 17 days due to poor communication and unprofessional handling

Personal Brand vs. Business Brand

• Build a business with assets, not just a personal brand
• Personal brands (like Tony Robbins) have no transferable value when the person dies
• Businesses with systems and assets are infinitely more valuable
• Clear separation between personal and business finances is crucial

Advice for Young Entrepreneurs

• Don't buy car washes, laundromats, or storage units (despite popular guru advice)
• These businesses have hidden costs: equipment depreciation, security issues, insurance complications
• Instead: Buy "a job" - small route-based businesses like landscaping or window washing
• Seller financing is often available for smaller acquisitions

Debunking Popular Myths

• Zero-down business purchases don't exist for legitimate, valuable businesses
• Avoid BizBuySell - "the Craigslist of business acquisitions"
• Don't rely on cold-calling scripts or AI tools for serious acquisitions
• Amazon FBA and e-commerce have high financial risks and liability

The Professional Process

• 95 questions should be asked during due diligence
• NDAs, proper contracts, and legal representation are essential
• SBA 7A loans (government-backed) typically require 10% down for deals under $5M
• Working capital considerations can significantly impact deal structure

Key Takeaways

1. Don't believe the hype - Business acquisition is complex and requires significant capital, time, and expertise
2. Avoid trendy "boring businesses" pushed by online gurus
3. Start with route-based businesses if you're young/new to acquisitions
4. Always use professionals - attorneys, brokers, proper due diligence
5. Focus on cash flow and systems, not just revenue numbers
6. Seller financing exists but still requires substantial down payments
7. Build relationships - Melissa's entire business runs on Facebook connections and referrals

Resources Mentioned

• BlueCollarBusinessAdvisors.com (includes free 95-question due diligence checklist)
• Better marketplace alternatives: Crexi and LoopNet
• Book recommendation: "Beyond the Hammer" by Brian

Warning Signs to Avoid

• Anyone promising zero-down acquisitions
• BizBuySell marketplace
• Credit card financing for business purchases
• Businesses in unstable neighborhoods (laundromats)
• Cash-heavy businesses that don't report accurate financials

This episode provides a realistic, no-nonsense perspective on business acquisitions that counters much of the "easy money" messaging found online. Melissa's experience-based insights are invaluable for anyone seriously considering buying a business.

Transcript

Rob Pene (00:01.294)
Okay, boy, do we have a treat today. Man, I've been seeing Melissa's stuff and she plays at a whole different level. So it's a privilege to have her expertise and just her on. Melissa Ho-Stuttler is a business broker. She brokers blue collar businesses. So that's like, you know, the construction, local home services types, but

whenever you think of anything to do with business, a mergers and acquisitions and business acquisitions, it's big time, 100 % big time. So it's a whole different space. I'm like, dude, let's get around. I've been following a lot of her stuff for a while now. And I'm very encouraged that she's here now to start the conversation. I have a question to ask you that's gonna mark everything else. Yeah, if you were to look back at...

Blue Collar Business Advisors - Melissa Hostutler (00:50.093)
Okay.

All right, let's go.

Rob Pene (00:58.088)
the last six to 12 months of your life, what would that Netflix special be? And what would you call it? If you were to turn your last six to 12 months into a Netflix special.

Blue Collar Business Advisors - Melissa Hostutler (01:09.389)
Okay.

Blue Collar Business Advisors - Melissa Hostutler (01:13.237)
I could definitely be one.

Rob Pene (01:14.982)
Yeah.

Blue Collar Business Advisors - Melissa Hostutler (01:18.189)
I don't know because this is like my life so I guess like I'm just being me and I'm just doing me and I get to interact with the most amazing people. I get to follow my passion. I get to live in my purpose and I also get to deal with a lot of crap that comes up on a regular basis. So example, I just closed the deal Monday. We don't even have to go back six months. It was basically the worst closer in the history of closers.

So the buyer was a 27 year old, his father put up the half a million dollars so they could buy a five million dollar business. And as a result of that, we went through the SBA 7A. So for those not familiar, because I'm throwing out terms some people might not be familiar with, I'm going to clarify. It's the government backed small business loan that is typically used in murders and acquisitions under the five million dollar threshold. And it requires 10 % down from the buyer.

In this particular case, we went through the due diligence. They were actually the third buyer. So buyer one and buyer two fell through. They were buyer three. They were not the highest in terms of coming in with an offer. But we go through everything and then at the end, they're like, okay, we need to push back closing because of all of these things. And I'm like, those things should have definitely been discussed in advance of even scheduling a closing.

Um, and then it just kept repeating. And so we were delayed 17 days because this lady did not read emails, did not communicate effectively, did not work eight to five. She worked like midnight to 3 a.m. At hours of the day, nobody was awake and then literally just expected it at 7 a.m. We were all going to be up and have all of her homework complete. Um, and I typically am not part of the closing process because the financial aspect is always on the buyer.

But in this particular case, I actually had to call the SBA. I had to call the SBA attorney, get their whole team involved, and we finally got to the finish line. And so it was very much a stressful situation for the buyer and seller. And this type of thing happens every day in this world. And it's very emotionally draining for a lot of people, but I've been doing this almost 20 years now. So the emotions we need to just redact.

Blue Collar Business Advisors - Melissa Hostutler (03:44.81)
and we need to focus on the finish line and that's ultimately what it comes down to.

Rob Pene (03:49.748)
How did you get into the business acquisition game?

Blue Collar Business Advisors - Melissa Hostutler (03:53.996)
So I had a client come to me that wanted to purchase my company and then I went under that and I ended up basically selling them a book of clients. Because it's really all that it was, there was no assets there. But then I got under a non-compete, which I did not realize was gonna be an actual issue because I just do what I do. So I had to go into a totally different direction, went into...

Rob Pene (04:13.459)
Listen.

Blue Collar Business Advisors - Melissa Hostutler (04:22.828)
Amazon Automation ended up selling that, bought some restaurants, up selling those, got into storage. Like I just went all over the place with different, I guess blue collar type businesses, ended up helping friends. Like it was really just a really awesome time to figure out how these negotiations were gonna go and then what all of the components of the negotiation were going to be.

Rob Pene (04:51.72)
That's a different mindset from running an actual business. So that's really interesting to me that you started something and then you're like, okay, sell it. When some people start, quit, start, do something else, right? But you start and sell was your thought process, very different.

Blue Collar Business Advisors - Melissa Hostutler (05:08.233)
Yeah, well, I mean, I think I was presented with the opportunity and I knew to take it. So I think a lot of people get presented with opportunities and they automatically just say like, if it's too good to be true, it must be too good to be true. And then they walk away from the opportunity they only had one shot at where I'm the type of person that I'm just like, all right, well, let's see if it's going to work out. And if it's going to work out, that's going to be in my favor. And if it's not going to work out, that's not going to be in my favor, but I'll figure out how to get through it because I'm a true at my core entrepreneur. So

I don't care what is thrown at me, it's ultimately going to have a solution at the end of the day.

Rob Pene (05:44.34)
Okay, so walk me through. who do you, do you work with the buyers or the sellers or I'm assuming both?

Blue Collar Business Advisors - Melissa Hostutler (05:52.241)
Mm-hmm. Yup. In this particular acquisition, both of those people were my clients. So I was really walking a very fine line. That's not always the case. So for buyers, I can find anything that a buyer wants to find, typically under five million, sometimes more. I'm out looking for something worth 15 million right now for a cash buyer. I'm dealing with a seller that's worth 300 million. I've the

biggest acquisition I've done is 110 million. So, I mean, it's all over the board, but I try to stick in this box of blue collar businesses only. So, we're not going to be doing like SaaS or tech or smoke shops or guns or anything of the churches, anything of this nature. So, I'm very strict about I do blue collar businesses. So, your HVAC, your plumbing, your electrical, fencing.

pool companies, barn companies, anything in that arena, asphalts. That's my game. That's my thing that I love to do.

Rob Pene (06:57.0)
Why did you choose that instead of like e-commerce or digital agencies or something?

Blue Collar Business Advisors - Melissa Hostutler (07:03.347)
Well, those are a lot harder to figure out the math equation on in terms of scalability systems and then viability to actually make it worth whatever someone is going to ask to buy it for. So I grew up in the blue collar field and my parents are both blue collar workers. They had the same careers for a very long time. I grew up in a town that did like a lot of labor jobs. And so I was just around that my whole entire.

life and it made sense to sort of narrow myself down to blue collar.

Rob Pene (07:37.864)
Yeah, something you got experience in. So walk me through your day. You wake up in the morning. I'm assuming there's so many relationships you have. Yeah, what's it look like, man? I'm fascinated.

Blue Collar Business Advisors - Melissa Hostutler (07:52.97)
Every day is totally different, Rob. So there are specific things that are the same, right? So I'm very routine OCD, like brushing teeth, all the beauty type of things that happen in the beginning, drinking water, whatever. So those things are very routine and not in as boring type of things. And then it goes to like the business component and you never really know what you're gonna get. So you could get people that wanna buy, people that wanna sell, people that wanna have a conversation, people that wanna have motivation, people.

Like there's nothing that I don't, like I don't run a calendar. So you were like, hey, let's meet at 2.15. I'm like, okay, I'm in. Like I don't run like scheduling like that. So the other day the buyer and seller were like, hey, you want to do lunch? I was like, yeah, let me drive three and a half hours north and let's do lunch. Like I'm just at a point in my career that I get to pick whatever I want to do every single day. And I don't have to run by the book or somebody else's schedule. And I don't have to worry about what

Rob Pene (08:27.7)
Yeah, I was just gonna-

Blue Collar Business Advisors - Melissa Hostutler (08:52.357)
you know, if I'm gonna be late for this, that, or the other thing.

Rob Pene (08:55.614)
So these are very wealthy people. How do they find you? How do you find them? Because there's gatekeepers, I'm assuming, and secretaries you gotta bypass, but it doesn't sound like you talk to them. You go directly to the main people. Wow.

Blue Collar Business Advisors - Melissa Hostutler (09:06.385)
Yeah, I don't talk to any of those people. So honestly, I don't run Facebook ads. I don't run any advertising. I don't have any other platform except Facebook. So I've also narrowed that down. So my platform is Facebook and I talk to whoever I'm friends with on Facebook. And these are my, these are my people. These are my clients. These are how people like get to know me.

Another fun fact is I don't keep my status with the blue check mark because I don't really care about verifying myself. A lot of people know that if they need verification, they can get it. I mean, I'm working with attorneys every day, so that's not going to be too hard to ask for. And the other thing is I don't leave my public or like my profile public. So if you want to know what I'm posting on my profile, you actually have to friend me and I actually have to accept it. So I'm very particular about who I accept. So I'm not going to be accepting people without profile pictures. I'm not going to be accepting people that

their spouse and them share a profile together or they have a very particular dialect that they talk in when their profile is public. So if I see like negative stuff or they're not in the blue collar field or a bunch of like things that I've sort of notated down to my audience, then I just want to accept their friend request.

Rob Pene (10:21.953)
Nice, that's cool. And no advertising whatsoever.

Blue Collar Business Advisors - Melissa Hostutler (10:25.509)
None. It's strictly referral and stories. So I would say the biggest thing for a lot of people needs to be stories. And I talk about this every day. It's like, I'm building a pool at my house right now. And I talked about how there were three contractors that bid the pool and contractor A happens to be my neighbor five houses down. And he just straight up said, like, I'm not going to build this pool because I just list that on my website, but I want easy money. I don't want to actually go get permits. I said, fine. So contractor B was like,

Hey, I'm on vacation. I'll call you back in 10 days. Well, I'm not waiting 10 days because I'm the type of person that I've already decided I'm building a pool. So this pool is going to get built. So you can do it or not do it, but I'm not waiting for your vacation. And contractor C was like, oh, I tried to buy contractor B. Now to give context to this, I live in Orlando. So there are probably millions of people out here running full businesses in Orlando. And all of these guys knew each other. And so

Contractor C was like, hey, I actually tried to buy Contractor B for 800 grand and the guy wouldn't do it. And I'm like, but Contractor B's just a guy. So the thing is if you are the guy, a guy running the show, and you're just saying, I'm gonna wait to bid until I get back from vacation, you are never going to get another offer for 800,000 or for any amount because you have no assets. Pool companies don't have assets.

Rob Pene (11:33.502)
Yeah

Rob Pene (11:47.933)
Hmm.

Blue Collar Business Advisors - Melissa Hostutler (11:50.088)
So the thing is like you need to be really, and this is what I'm talking about when I say once in a lifetime opportunities, like that was his shot and now he's not gonna get that again. So he didn't not just get the bid, he also didn't get the buyout. So you have to be very careful because the association that you make and the people that you surround yourself with, those people are generally going to be smarter and wealthier and.

Rob Pene (11:57.044)
Mmm.

Blue Collar Business Advisors - Melissa Hostutler (12:14.609)
have a different pathway than you're going. And so you can sort of merge your concepts and ideas together to become more successful.

Rob Pene (12:24.5)
What are your thoughts on personal brand? Because like that solo guy, he essentially is a personal brand per se, right? But with zero assets. So would you encourage people to build a personal brand or to build a business that has assets?

Blue Collar Business Advisors - Melissa Hostutler (12:42.299)
build a business that has assets. Now there's two ways you can go about this because then also people would say that I'm the brand. No, I'm the space behind the brand. So my brand is Blue Collar Business Advisors and we're actually advisors, not brokers. I'm not licensed to broker. I'm not licensed in real estate. Just to clarify that because it's a legal issue. But there are also people like Tommy Mello who a lot of people know his garage door company is over 300 million.

And A1 is the garage door company, but Tommy himself is the face and that's how he was able to get investors. So you can distinctly have a brand and you can have a face and you can merge them together when you are having conversations so that people have somebody that they can trust in a brand that has a reputation.

Rob Pene (13:34.588)
Which is more valuable? Probably the business,

Blue Collar Business Advisors - Melissa Hostutler (13:37.575)
100%, yes. So for example, let's just use Tony Robbins. This is not blue collar. What is his business worth? Absolutely nothing, because when he dies, guess what's gonna happen? Nobody is gonna be the world's best motivational speaker. Nobody's gonna be the hype man like Tony Robbins. No one's gonna carry the Tony Robbins brand. Like it's just not a thing. And I'm not against Tony Robbins or Les Brown or Deepak Chopra or any of those guys. But those are not brands. Those are names of...

people that have made a significant impact in the world. And then when they die, who is going to be that guy? No one is going to be that guy.

Rob Pene (14:11.668)
Mmm.

Boy, that's interesting, because a lot of people are peddling personal brand. Build your personal brand. Here's a course on this. Do this, right? Yeah. Don't do it. Bad move. Don't believe the hype. Yeah. Don't believe the hype. Wow. OK.

Blue Collar Business Advisors - Melissa Hostutler (14:20.57)
Yeah, don't do that. Do not do that.

Blue Collar Business Advisors - Melissa Hostutler (14:26.883)
Yeah, don't. It's terrible.

Blue Collar Business Advisors - Melissa Hostutler (14:31.61)
Well, it's the same thing like, okay, so let me give this example then, just because we're on personal stuff. So if you take personal money out of your business bank account, then the law basically says, now you've impeded your business. So the business ultimately is your personal cash, right? So.

you want to make sure that there's division between your personal money and your business money because the business money is going with the brand and the personal money is going with you as the person. So there always is this clear division of branding, but there's also clear division of how the IRS and how, you know, the states set up these laws to clarify what is a business and what is someone to just taking money out of their own account that's

done by providing services to another person.

Rob Pene (15:28.988)
Very interesting. So I have nieces and nephews that are learning entrepreneurship. They're very young. And they started watching Cody Sanchez and buying boring businesses. Right. And I want to believe that it is possible for a high schooler to do that. But from the expert, what would that process look like for them?

Blue Collar Business Advisors - Melissa Hostutler (15:38.019)
Okay.

Blue Collar Business Advisors - Melissa Hostutler (15:43.653)
Okay. Yeah.

Rob Pene (15:57.18)
Do they look for a blue collar business or a boring business? Or can they go like on Empire Flippers and buy an Amazon fulfillment?

Blue Collar Business Advisors - Melissa Hostutler (16:06.494)
Lord. So funny story just before this conversation of getting online here, I actually had the same conversation about the Amazon store with a very, very close friend. I said, don't do it. And here's why, because you're gonna have a lot of financial risk and a lot of financial liability when they just put your credit card on file and then the guy breaks the mirror upon delivery and you gotta pay for a new product or.

Rob Pene (16:11.028)
.

Blue Collar Business Advisors - Melissa Hostutler (16:30.816)
you have a lost product and you gotta pay for a new product or a customer returns a product and then you gotta pay for the product twice. So you need to think through, are you financially responsible enough and do you have enough risk tolerance to get into stuff like e-commerce? If you do, then do it. If you're willing to lose money, then do it. Now, there's obviously tons of good and bad with e-commerce and blue collar, right? So I think that blue collar provides a more stable

way of doing things now because you said Cody Sanchez, she's always harping about buying car washes, storage units, and laundry mats. No, do not buy these things at all. First of all, the car washes. The equipment cost alone is substantial. So unless your car wash is cash flowing and you're putting it on the taxes because most people just say like, you know, I just taking cash and I don't count it on my taxes. So

Rob Pene (17:06.962)
Yes. On your mat.

Blue Collar Business Advisors - Melissa Hostutler (17:28.302)
there's no way to know how much the car washes actually work. But then on the flip side of that, when this machinery goes down, are you somebody that knows how to fix commercial machinery and how long is that gonna take and where is that part coming from and how much is that gonna cost while your business is sitting in limbo not knowing any of these things? So unless you've already got stashed cash and you already have residual income, this is not the business for you. Same with laundry mats, they're cash.

Businesses, they don't put the cash on the taxes, laundromats. So for example, your commercial equipment, again, your washer dryers, those are only good for five years. They're depreciated off an IRS schedule. And when you use them every day, like they are used every day in a laundromat setting, five years, your fire protection and your insurance automatically goes up. A lot of people don't know that. They just think, okay, let's get a laundromat. Well.

You have to think about the other variables that go inside of leaving commercial equipment that is fire retardant in a place of business. Not to mention these laundry mats are oftentimes found in very unstable neighborhoods. So now what are you going to do about security? Are you going to be the security guy? Like, no, you're not. and then so car washes, laundry mats and storage units. Okay. So storage units.

What I see oftentimes with these businesses is that the people with money will build them and they'll be like, 10 % occupancy and brand new facility and state of the art climate control. That's all fantastic. But there's a few things that go into storage units. Now I'm talking because I own some. So your contract for these needs to be very, very clear.

you can't put in certain things. So for example, one of my guys put in six pallets of fireworks. Well, we're not trying to explode everybody else's stuff, right? So this not only affects other people's stuff, it also affects my insurance rates. So I need to make sure that anything explosive is removed immediately and done properly so that other people's stuff is not in, trouble as well. you need to make sure that you have security because again, anybody can come by these facilities, cut the lock and

Blue Collar Business Advisors - Melissa Hostutler (19:47.682)
someone's stuff is gone and what stuff is that? You don't know, right? So then you need cameras. So there's a lot of different variables that go into various different businesses that need to be taken into consideration before you even think of buying. And this is why I tell people, don't try to represent yourself because you're doing yourself a disservice when somebody has an extensive amount of knowledge, skills, and has done this over and over.

Rob Pene (19:51.038)
Mm-hmm.

Blue Collar Business Advisors - Melissa Hostutler (20:12.639)
for many years. They can help you and you should let them help you and you should pay for it because that's the value they're bringing to the table so that you can secure your assets. Now for your nieces and nephews because that's ultimately the question here, what should they do? I would say buy a job. So buy a job. So what I mean by that is buy the one guy show. The guy that has, I don't know, let's say 28 landscaping contracts. We're not going to call them contracts because

He just cuts 28 lawns, we'll just call it. But that gives them like a baseline. Like, okay, I have 28 different lawns that I can take care of or okay. Like there's some 16 year old kids that wash my windows. So I can buy, you know, a small window washing company that's run by one guy and I can have these contracts or neighborhoods really.

Rob Pene (20:45.39)
Yeah, yeah.

Blue Collar Business Advisors - Melissa Hostutler (21:12.098)
And these are like two different things. So the first thing is that you can oftentimes sell or finance these a lot easier and you don't need a lot of money down. So that's why I'm saying to do this because these are kids so they're not going to have a lot of money down. The second thing is you can sell or finance.

Rob Pene (21:30.824)
What does seller finance mean for these guys?

Blue Collar Business Advisors - Melissa Hostutler (21:36.119)
Yeah, so basically the person selling the business or routes or company, even though it's not a company, ultimately is going to provide what the bank would provide. So they're not sophisticated enough to ask for a background check, a credit check, assets, stuff like that. All they're saying is like, okay, I built up this route. I built up this, you know, these few landscaping jobs and I'm willing to sell it for X dollars and with

whatever amount down. So let me give you an example. So in Houston, Texas, I just did one of these seller financed deals and the guy owned a landscaping company and he bought a pool company. And basically the way it worked was he wanted to do an add-on service. So he would provide both services to his customers since he was already gonna be at their house anyway. And that made sense. So we negotiated with a seller who had no knowledge whatsoever.

Rob Pene (22:24.233)
Hey.

Blue Collar Business Advisors - Melissa Hostutler (22:34.626)
and hired a attorney, not an M &A attorney. So the attorney also was clueless. And we weren't able to put like in just a basic Microsoft document, like, okay, these are the terms, like, I'm gonna give you 20,000 right now, and then I'm gonna pay X amount of dollars. And sometimes, and in this case, the seller themselves just wanted to have a job, so they secured it like, you'll get paid $60,000 for the duration of the year.

And so now the buyer just has to put up the 20,000 and the seller is going to work because they don't have the skills of an entrepreneur. So they don't have the skills to put in the systems or to put in what needs to be put in to build an actual brand. So now this guy goes off, gets some new trucks, wraps them up with his pool company and his landscaping company, goes out running around the neighborhood branding, and automatically he's able to multiply what he already had. So it's a very good deal if you are in

Rob Pene (23:15.314)
Hmm.

Blue Collar Business Advisors - Melissa Hostutler (23:33.533)
a situation where you lack credit, where you lack capital, and where you are just looking for something of substance to get started.

Rob Pene (23:44.796)
Hmm. There's people that talk about, buy a business with zero down, with zero money.

Blue Collar Business Advisors - Melissa Hostutler (23:51.81)
God, Rob, you gotta hit them all today. Okay, no. No is the answer. There is no business that is worth real value and of real substance and has real employees payroll overhead and all this and is zero money down. That is not gonna happen.

Rob Pene (23:55.166)
Ha ha ha

Blue Collar Business Advisors - Melissa Hostutler (24:10.422)
Because the people that built these businesses know the value of their business, they're in it every day. So why the hell would they give it to you for zero money down and take all the risk and maybe get a reward? Maybe. They're better off investing in the stock market. They're better off gambling it in Las Vegas. I mean, they're just not gonna do that.

Rob Pene (24:30.376)
That's so funny. when going back to the buying the routes, so let's say they go, they do the seller finance, they're buying that person out where the landscaper actually leaves, takes the money and leaves and then they work it or can they buy it and have that person still work and then they manage and get more contracts? Is that?

Blue Collar Business Advisors - Melissa Hostutler (24:52.137)
It depends on how the terms are set up. So you can negotiate whatever terms you want. And by terms, I mean, you can negotiate how much money you're putting down. You can negotiate how long you're gonna take to do due diligence. You can negotiate how long the previous owner is staying to help out. You can negotiate basically anything you wanna negotiate. If they're gonna work, how much is their salary gonna be for how long? If you sell it during the duration that they're working, are they going to get a percentage of the next?

sale because you grew bigger. There's just a lot of terms that can be worked out during these. And again, the seller financing deals, the seller's not sophisticated. So it's a really good way for you to take advantage of a situation if you actually have money and pretend that you're naive.

Rob Pene (25:39.636)
Yeah, so what would be a good cash on hand to go start looking to buy something? Okay.

Blue Collar Business Advisors - Melissa Hostutler (25:42.067)
you

Blue Collar Business Advisors - Melissa Hostutler (25:49.694)
It's burnt.

So it depends on where you're at, right? Because California and Florida are totally different than like Iowa and Nebraska. It depends on what business you're looking at because landscaping pools are different than tech and Amazon. The multiples are completely different. So it really depends on what you're looking for, where you're looking for it how much cash you have on hand and how that can be.

Rob Pene (26:06.812)
Yeah.

Blue Collar Business Advisors - Melissa Hostutler (26:19.494)
negotiated into terms that make sense for both parties.

Rob Pene (26:23.132)
Yeah, would you recommend somebody like back to landscaping, go start their landscaping and get all the routes and stuff? Or do you recommend them buy someone that's low level and take it to the next level?

Blue Collar Business Advisors - Melissa Hostutler (26:36.158)
Yeah, would buy somebody. 100 % I would buy somebody. Because the problem is like, okay, so I'm in Florida, right? And I've had two different landscapers over the duration that I've lived here, which is three years. And the reason I got the second guy was because the first guy decided to build his business and give it to his son. And then when his son came, he wasn't as good as his father. And so I said like, well, the standards have changed. And so I need to be just replacing everybody here because, you know, I can't just...

Rob Pene (26:40.232)
How?

Blue Collar Business Advisors - Melissa Hostutler (27:04.456)
and willing to pay more to have a better service. And so the second guy, he is very meticulous and he actually does 30 houses on the circle and I live in an HOA so everybody has to have a meticulous lawn because we're on the golf course. So what he does is he has five guys arrive in a truck, one guy mows the lawn, one guy.

does the edging, one guy blows the leaves, one guy does the spraying for weeds and whatever, and then the other guy does the weed whacking. And they just walk the circle. So they're very like effective in how they systematically know what house is going to be started and what house is going to be the end. And then if they need to do anything in addition to what they already have on route. So for example, like a few weeks ago, I needed a sprinkler head system.

My sprinklers needed their heads being replaced because they popped off. They come back at the end of the route. They don't stop what they're doing and fix it. They have an effective system that works for them. And at the end, they'll go back and fix any additional problems a homeowner might have.

Rob Pene (28:12.914)
Wow, that's pretty cool. Yeah.

Blue Collar Business Advisors - Melissa Hostutler (28:15.208)
Yeah, so it's very effective, right? So this level of service I'm paying $10 extra per month for, and I find that it's like, yeah, it's like, hey, worth it all day long.

Rob Pene (28:24.916)
Yeah, yeah, yeah, yeah, yeah, boomer businesses that are, you know, they're either gonna let go and kids don't want it. Are those good? I guess it depends, right?

Blue Collar Business Advisors - Melissa Hostutler (28:41.907)
Yeah, we call this like the golden age or whatever. There's like terms for this. I would say it doesn't really matter how old the person is that you're buying from or even the person that's selling. It really doesn't matter how old they are either. At the end of the day, you're looking for the things that matter the most to you. So those things could be cashflow, could be technology, could be management in place, could be owner absentee. There's a variety of things, but

Rob Pene (29:03.732)
Thank you.

Blue Collar Business Advisors - Melissa Hostutler (29:10.399)
Again, like what I do isn't like a one size fit all, right? Because I need to know what are Rob's goals? What is Rob's financials? What is Rob actually trying to achieve here? Because if Rob was trying to achieve building a mega company and in order to do that, we're gonna buy a bunch of small companies or Rob's niece wants to buy this, but she only has X amount of dollars. Everybody's situation is different. So this Cody Sanchez or all the gurus online.

sort of like one size fits all solution is not the way. Because there's too many variables on both the buying and on the sell side that dictate how this could work and actually work. So it's a win for both parties.

Rob Pene (29:52.584)
Yeah. Do you find those marketplaces online like the buy, biz, sell websites, good place to find potential acquisition or is there an alternative route for that?

Blue Collar Business Advisors - Melissa Hostutler (30:04.574)
That is the Craigslist of business acquisition places. And the reason is because there's 15 million businesses that come on the market every single month. And so here what we have is we have people that own businesses that don't have any clue on how to actually run the financials. And so instead of buying a broker or instead of engaging somebody that knows, what they do is they just post it on there, just like anybody else.

Rob Pene (30:10.152)
Yeah.

Rob Pene (30:32.712)
Yeah.

Blue Collar Business Advisors - Melissa Hostutler (30:34.014)
And then they have the people that are zero money down, Cody Sanchez said, buy London Mad. well, you know, I think I could sell her finance and then that never comes to fruition. So that site specifically, and I'm not saying all sites are like this, just biz by sell, is the Craigslist of business acquisitions. Stay away.

Rob Pene (30:58.26)
Okay, so the alternative route would be just, cause I've seen videos about this, like if you like a restaurant or if you see somebody working in front of your neighbor's yard, talk to them about it, right?

Blue Collar Business Advisors - Melissa Hostutler (31:12.378)
No, there's different ways that you can go about this, right? Because BizBuyHustle is not the only website. There are credible, verifiable websites that have real businesses for sale that are backed by brokers that know what they're doing. So that's one way to go about it. The second way is that you can have someone like myself who is engaged from the beginning call and figure out if there's a business for sale. So example, I'm looking for a $15 million business for

Rob Pene (31:21.265)
Okay.

Blue Collar Business Advisors - Melissa Hostutler (31:41.577)
specific clients who is an all cash buyer. So what I did was I reached out to my buddy who happens to sell a business for over $100 million. He's very well known. His name is Brian and he wrote Beyond the Hammer. So if you're into reading, check out the book. But

I was like, hey, what do you have or who do know that has something that they would potentially be open to selling that's in the $15 million range? Because obviously he's connected beyond his acquisition. He got here by shaking hands. So I'm going to go to people and figure out what do you have and use those resources and those relationships to try to figure out what I can get my hands on that is not on the open market.

Rob Pene (32:14.984)
Hmm.

Rob Pene (32:28.276)
Yeah, so finding people like you is the best route versus going direct and trying to like figure it out themselves.

Blue Collar Business Advisors - Melissa Hostutler (32:34.833)
mean, you could go direct, but then what are you going to ask for? you going to ask for taxes? Are you going to ask for P &L's balance sheets? Are you going to ask for bank accounts? What are you going to ask for? Are you going to ask for a customer list? Do you know what an NDA is? I mean, because at the end of the day, these people are sharing very, very confidential information, right? And they're very strict about not wanting their employees to know.

Unless you have an NDA on file, like they're not going to be sharing that information with you unless you are like very well versed in connecting with people and building rapport and relationships. They're not just going to be like, oh yes, I owe the bank, you know, $110,000 for this excavator. And they're just not going to do that. So.

Rob Pene (33:15.164)
Yeah, I've seen some videos give out a cost script to ask for if they're looking to sell their business. So that's getting peddled a lot too, which is why I was asking, like, does that even work? But.

Blue Collar Business Advisors - Melissa Hostutler (33:25.53)
Mm-hmm.

Blue Collar Business Advisors - Melissa Hostutler (33:32.442)
mean, people have called me to ask if I'm selling my business. It can work, right? So I just sold a roofing company and like the PE group that ended up buying the company cold called me. And so yes, it can work. But again, like we have two people that know what they're doing, right? So I'm representing the seller and I know what I'm doing and the PE group obviously knows what they're doing. That's why they're coming with cash. So it can work.

Rob Pene (33:53.32)
Yeah.

Blue Collar Business Advisors - Melissa Hostutler (34:00.3)
but on a small scale, it's a lot different dealing with people who have no knowledge on how to buy and sell than people who are very well versed in how to buy and sell.

Rob Pene (34:11.804)
Yeah, would you encourage the young people to chat GPT?

Blue Collar Business Advisors - Melissa Hostutler (34:17.403)
No, no. All right, so I don't use AI, I don't use chat GBT, I don't use, I don't know what I'm, whatever else is out there. I have no idea. I use rapport, relationships, credibility, integrity, transparency, all the things that any smart business owner uses. Now I'm not against these tools because they are exactly that, they're tools, right?

Rob Pene (34:27.048)
Yes.

Blue Collar Business Advisors - Melissa Hostutler (34:43.099)
And I just had an attorney ring my ass like two days ago for this. He's like, when we sit down in my office next time, I'm gonna show you Gronk. And I'm like, okay, well, that's wonderful. But like, that's not gonna necessarily replace me and how I do things. And so there is a place for it. So for example, if you're gonna try to still finance something and you're too cheap to get an attorney, yes, you could get an NDA. Yes, you could make up a...

list of an LOI, for example, a letter of intent to buy, you can make up a contract. There is some security in that, but what I would say in business acquisitions is those things aren't going to stand up in court. So do yourself a favor and just go ahead and do it the right way. Wait until you have some extra money to buy a real attorney to have somebody help advocate for you and advise you. Because at the end of the day, this is

This is a business and you're spending real dollars and you don't want to be left spending all the money that you have and not walking away with something more than what you had. So just protect yourself. That's what I would say. That's what insurance is for. That's what the SBA 7A is for. That's what advisors are for. There are people that you can get in your corner that are willing to help advocate for you to get a win-win situation.

Rob Pene (36:05.406)
Do you work like lawyers? Like, do you charge by the hour or a retainer or contingency? How do people work? How do you work?

Blue Collar Business Advisors - Melissa Hostutler (36:12.059)
I work totally different than all that. Okay, so I'm a flat fee upfront cash only via wire. That's it. I don't take credit cards. I don't take any of that. for something under five million is 25 grand upfront. For something over five million, it can be 50,000 plus upfront, depends on the situation because the deals over five million cannot go through the SBA. They have to be funded by

either cash or a different loan type, and they take a lot more time to get to the finish line. So that's how I differentiate. But what I will say is they're in the agreement because there is an agreement. It's nine months. So let's say, Rob, you and I decide that we want to find a business and you tell me like, OK, I want to be in Orlando. I want to spend two million dollars. I'm going to bring 200,000 cash to the table. I am already pre-approved with the SBA.

And I'm like, okay, so I go find you something. We go on our contract, we start doing due diligence for 45 days. You figure out like, hey, I don't want this business. I'm gonna go back to the drawing board because my contract doesn't say like nine months or one deal. It says nine months. like whatever it takes. Now the time for the financial component does not count in that nine months because I don't.

I'm not the bank, so I don't control any of the financial aspect of the deal. So if you get through to underwriting and then it gets rejected, we'll go back to the table. And so nine months is a pretty sufficient timeframe for somebody to find something and get to the finish line.

Rob Pene (37:52.636)
Hmm, that's really good to know actually. Yeah. So before they engage you, if it's less than 5 million, they should have like, ideally they would think about, okay, I can have X amount down for a business plus here's the fee for the advisor plus here's all the other stuff, right? So they would need more than the down payment to start the process.

Blue Collar Business Advisors - Melissa Hostutler (38:15.214)
Well, so you need the down payment and then my fee if they were gonna engage me, but as far as like the closing fees and stuff like that, that's typically wrapped up in the loan package. So they don't need to bring that to the table.

Rob Pene (38:21.161)
Yeah.

Rob Pene (38:26.44)
Okay, good. Good, good, And I have one more. are you okay with sharing a better website for people to go to that's legitimate versus the ByBiz cell?

Blue Collar Business Advisors - Melissa Hostutler (38:38.925)
mean, so, Cruxie and Loopnet are two, you can buy businesses off those. A lot of people think it's just commercial real estate. Yeah, so there's filters where you can get, you can buy businesses off of those. Those aren't necessarily where I play in all the time, but there are options. They're obviously a lot better than BizBuySell. So, you can use them, but I'm not gonna give out where the good, good stuff is, cause that's a...

Rob Pene (38:46.299)
shit! I didn't that.

Rob Pene (39:06.758)
Yeah, that's yours. Yeah. Yeah. Yeah. That's good. last words, encouragement to people that are looking to, I think, buy. Yeah. Yeah. Yeah. Looking to buy something so that they can get started.

Blue Collar Business Advisors - Melissa Hostutler (39:07.533)
That's why I get paid.

Blue Collar Business Advisors - Melissa Hostutler (39:22.771)
And my last words of encouragement are don't be discouraged because it can take time, it can be emotionally exhausting, it can be mentally draining, it can be physically demanding, it can be financially distressful. There's a lot of situations that you can get yourself into where you will get mentally sort of messed up because...

You're offended by something that someone says or like it needs to you need to bring more money to the table so you have to possibly find another investor or like there's just so many situations that you can get into that would put you in a very stressful situation so you need to be able to balance your emotions and take yourself out of this mental loop.

Rob Pene (40:08.4)
You mentioned something about investors. Do you encourage people to find an investor to help fund everything as part of the process? And then they would take a higher percentage, do you think, if they do engage investors? Or do you encourage them, no, just save, go work, save, go do something and credit card stack or something? I've heard that before. I've heard people say, yeah.

Blue Collar Business Advisors - Melissa Hostutler (40:30.035)
No credit cards. Yeah, no credit cards, no investors. I would try to do it. I'm like the total opposite of I guess what the gurus are. So I'm very anti-debt. If you want to be in debt, then bring cash to the table and bring value to the experience that the person, the other side is going to have with you. So.

Rob Pene (40:42.482)
Yeah

Rob Pene (40:46.462)
this very simple.

Blue Collar Business Advisors - Melissa Hostutler (40:56.361)
It could be skills, it could be knowledge, it could be a lot of different things, but you have to bring value in some capacity. And then you also have to bring money because you're ultimately buying their time and their time is very valuable. And so that's why I tell people like, you want to make sure that you have money. You know, another thing that just passed my mind as we're having this discussion is, is the working capital. So I think that's what you were referring to when you say like more money. Working capital can be

given by the SBA and or other loans. So fun fact, if the real estate is 51 % or more of the deal, you can actually go on a 25-year term loan than a 10-year loan, which decreases the monthly payments substantially because you get an additional 15 years to pay. So you want to make sure that

you're understanding every single component in the negotiation because that will ultimately dictate what your monthly loan payments are and how high you can actually afford to buy. So the deal that I just closed with the 27 year old, they came to me and they ultimately were looking for something in the $2.7 million range and we ended up going to 5 million. And so we were able to do that by moving different things around to make that work for them.

Rob Pene (42:14.814)
Wow, wow, wow. So you're truly custom.

Blue Collar Business Advisors - Melissa Hostutler (42:18.69)
Super custom, super, super custom experience. But I don't do more than 40 deals a year. So I'm very like two, three deals a month, totally happy with. We're not a farm over here. We don't farm out deals. don't, none of that. So it's very custom. I'm involved in the experience. I make sure that I'm the frontline and make sure that I'm having a conversation with you about your goals, dreams, aspirations, reasons why you're doing this and how you're gonna fund this and where money's coming from and making sure that you're.

in the position to do this before we're even going to, let's sign a contract.

Rob Pene (42:52.22)
Yeah. Wow. You must really like what you do.

Blue Collar Business Advisors - Melissa Hostutler (42:57.26)
I love it. Yeah, I love what I do and I wouldn't do anything else.

Rob Pene (43:02.664)
Yeah, awesome. If people wanted to reach out to you, is there an email, obviously the website or Facebook that they can...

Blue Collar Business Advisors - Melissa Hostutler (43:11.339)
blue collar business advisors.com. And then on there is my phone number and email. It's all over the place. So it also outlines like the nine step process. So I believe number four is like 95 questions you would ask during due diligence. And I put that for free there specifically because I want people to know that if you choose not to hire me, you at least have value in going to the website. And so you can

know what I would be looking for as a buyer and what's important to most sellers.

Rob Pene (43:42.708)
Wow, that's 95 questions?

Blue Collar Business Advisors - Melissa Hostutler (43:45.355)
Yeah, so like it'd be marketing, technology, management, assets, depreciation schedules, all kinds of things that I would be asking for on behalf of a buyer.

Rob Pene (43:57.906)
Man, all these people online that I'm watching and I see, they make it sound so easy.

Blue Collar Business Advisors - Melissa Hostutler (44:04.565)
It's not. It's absolutely not. Don't get fooled into thinking that.

Rob Pene (44:09.274)
Yeah, don't believe the hype. Goodness.

Blue Collar Business Advisors - Melissa Hostutler (44:11.735)
Yeah, the hype in the gurus, that's all like to make you think that it's gonna be easy and dreams are gonna come true and money is gonna fall out of the sky and like you're gonna get approved for this SPA loan instantaneously. None of that shit is gonna happen. It's not a reality. I mean, it's just not. So you need to be like very clear on what the expectation is and very transparent with the process is so that people clearly understand what it is that they're getting into before they get into it.

Rob Pene (44:41.876)
Yeah, yeah. Boy, I tell you what, man, this has been super eye-opening and entertaining, but I think it's a sobering insight because with media, it's like, oh, know, rainbows and flowers and unicorns and stuff, that doesn't sound like that's the reality.

Blue Collar Business Advisors - Melissa Hostutler (44:58.238)
Yeah. That is not the reality. And that is why it takes nine months. It takes looking at taxes. It takes looking at all kinds of different variables in the business. And then also it takes money and time and effort and energy and skill and knowledge and all of those things, because all of those things ultimately create the win-win situation. And not having any of those things makes people feel really terrible.

Rob Pene (45:11.325)
Yes.

Rob Pene (45:22.696)
Yeah, yeah, yeah, yeah, yeah, yeah. I'm so grateful for this episode. This is gonna be good, man. I'm definitely gonna be sharing it. Yeah, 100%.

Blue Collar Business Advisors - Melissa Hostutler (45:32.422)
So, well I appreciate that Rob and I appreciate you and people can find me at BlueColorBusinessAdvisors.com.

Rob Pene (45:39.846)
Alrighty, thank you.

Blue Collar Business Advisors - Melissa Hostutler (45:41.322)
You're very welcome. Take care.