Ep 328: Empire Flippers CEO Andy Allaway Shares How Acquiring & Exiting Online Businesses Has Changed

Is it a good time to be selling your business or buying a business right now, based on multiples? Hi, I'm Jaryd Krause. I'm the host of the Buying Online Businesses podcast, and today I'm speaking with Andy Allouay. He is the CEO of Empire Flippers. That's the number one place to buy and sell online businesses. There are some great businesses.

A lot of our clients purchase from there. He's got deep expertise in sales operations and leadership in remote settings. He's built Lean and fast, executes and drives remote companies that scale fast, deliver results, and give employees the freedom to live unconventionally and high-impact lives.

Now, he's passionate about empowering remote leaders. Andy is also the creator and the host of The Leader Sip, which is a YouTube channel dedicated to distilling practical insights from the best business books and leadership books. And it's tailored specifically to remote executives.

In this podcast episode, we talk about Andy's journey of being with Empire Flippers, how he started eight years ago, how he purchased a few businesses before joining, what those businesses were, how they turned out, and what he did with them.

We also talk about how buying and selling online businesses has evolved since he started. We also talk about how the market has fluctuated and changed from 2016, 2017, into the 2020s, 2023 being a difficult year.

2020 being a high year, and where we're at now in 202,5 and what we're gonna be looking like beyond. We talk about multiples, how multiples have been high, and why they're low. We talk about the economy and the macro cycle. We talk about financing deals, what financing looks like, and the six and seven-figure deals when you're buying from Empire Flippers.

We just talk about buyer and seller relationships and how important they are for buying and selling businesses, and where these deals fail or succeed, and why due to these relationships. We also talk about the changes with tariffs for e-commerce businesses moving forward.

Then we talk about different business models and which ones have come, which ones have gone, and which ones are a good business to own at the moment. Then we move on to AI, talking about how AI has impacted things and can impact things moving forward in good ways, as well as maybe some ways that you need to be cautious, as the future of buying online businesses is discussed in this podcast episode.

I'm sure you're gonna love it. Now, if you're buying a business, don't go away and do it yourself. Make sure you get my due diligence framework. It takes the guesswork out of buying a business.

It saved people millions of dollars and made people millions of dollars. So get that at buyingonlinebusinesses.com, forge those free resources. There'll be a link in the show notes.

Let's dive in and chat with Andy.

Andy, welcome to the pod.

Hey Jaryd, good to be here.

Yeah, eight years in about two weeks, I think. On April 1st, 2017, I joined Empire Flippers. Crazy.

Yeah. So what year was that? That must've been 2016. Awesome. What's, well, actually, before we get to that, have you bought any businesses yourself, before online businesses, before empire?

2017.

Small bits and pieces just before Empire Flippers, like a small e-commerce store that, for the most part,t my wife ran. So little bits and pieces, mostly e-comm.

Cool cool. Why econ? What did that crap like gravity?

Good question. Think like particularly back then, you know, as I say, really bought it as like a side hustle for my wife. And that was when, like, I don't know if dropshipping was at its peak, but it was more of a peak then than it is now, for example.

So it was kind of easy to pick up some small dropshipping businesses, which were like reasonably consistent, and I guess like not crazy complex as well. So yeah, that was the main reason for that back then.

Cool. What did you learn through the purchasing phase, and where did you buy these from?

Yeah, that's a good question. Think back then, think that when we bought the one, the main one that my wife ran, I think we bought through Flippa back in like 2016, something like that.

And the main thing that I learned back then, that's obviously like pre me being Empire Flippers, the main thing I learned back then was to not buy a business that is on an unusual operating system. I forget the exact CMS it was on now, but it was one of these, like developer-heavy CMSs. It wasn't like a nice.

WooCommerce or Shopify, or something like that. And like everything was painful. Adding products was a nightmare, and making any kind of changes. So I remember it being a very, very steep learning curve.

Think that a developer was working for the business with whom we kept a relationship, but like weren't super reliable. So yeah, that was painful, feel the pain on that one. The second business I bought was an e-commerce business, and it was built on Joomla.

Maybe a year before your first acquisition was in 2015. It was just not, and Joomla was still like semi-popular, I guess, but I moved it to WordPress and the WooCommerce plugin, and it just made it so much easier.

Okay, now pull back.

For sure. For sure. And then, guess the other thing with the business as well is that, and I think this is partly why dropshipping businesses kind of tapered off in popularity. There's like a whole moor piece there.

But the thing with dropshipping businesses, typically, they're so dependent on the seller's ability with paid traffic channels, right? And very commonly with like meta ads or Facebook ads.

And I think, again, going back, the one thing that we learned then is that that is a real skill that is not as simple as always just taking over the ads and things will always be fine. Things change. And I think we probably didn't have that skill set at the time as much as maybe we should have to buy that business, too.

Yeah, I mean, I'll put my hand up and say I was similar.

Yeah, I think everyone goes on that kind of same, same journey, a little bit, right?

Yeah. Well, I started a couple of small businesses. All right. My first business I started was a dropshipping business in 2014. And I'm like, cool. I'm just going to sell products and do blog content, and get organic traffic, and sell these products.

Likee, dude, you need paid ads and paid ads. I learned and just, yeah, learned the hard way, but it is a good way to learn as well. Learn the hard way with marketing, throw yourself in the deep end because it does make you a better entrepreneur.

For sure. Yeah, yeah.

Understand the fundamentals of marketing, right? Lik, I'm sure that you learned that throughout being with Empire Flippers, too. Did you just struggle with those? Like my first early business I struggled with, my startups I struggled with, and I sort of just let them go by the wayside. Did you end up growing these and selling them, or let them go by the wayside, or how did that pan out?

Yeah, 100%.

Yeah, no, that one, it muddled along for a while. Kind of like it didn't grow crazy, but it did kind of, it was reasonably steady. And I think in the end we sold it for like roughly what we bought it for.

So it wasn't like, uh, it wasn't a huge success, but it kind of served its purpose. Like you say, as a learning tool and a bit of a side hustle. And then, yeah, similarly, the other bit, which I don't think I acquired any, but like my route into hearing about Empire Flippers was kind of like through building small content sites and stuff like that.

And again, like a limited amount of success, but that's kind of like how I first heard about Empire Flippers was like, you can build these things and then eventually, you can sell them. That's kind of cool as well.

Hmm. Yeah. Cool. Yeah. Eight years ago. Wow. I speak to Justin and Joe now and then. And we always laugh that in 2016, I applied for a job at Empire Flippers because I was not willing to sacrifice not being able to acquire businesses. I was also speaking to Ross Gerson the other day, who'd worked with you guys, you know, and a lot. You guys had a phase where employees weren't able to acquire.

Yeah, yeah.

Businesses, and then you went through a phase where it was allowed, you were allowed to like, how long was that period, and when was that? Do remember?

Yeah. Yes, I listened to your episode with Ross. So yeah, I mean, as Ross said, kind of like when we first joined Empire Flippers, many people were buying small businesses on the side.

There were no real restrictions about that. And then there was a point where the decision was taken to kind of like restrict employees from doing that. And it was mostly a case of like, hey, we have access to a lot of like very sensitive seller information.

Trust our team not to use that inappropriately, but we just wanted to take off the table even like the perception that it could be, right? We wanted kind of sellers really to know, as a trust thing, that like when it comes to online businesses, Empire Flippers is the only thing our team is kind of working on.

I think it was one of those decisions that was like from a very, very good place, very good intentions, but like maybe not the right decision to be honest. And I think you raised the point in your episode with Ross, which I a hundred percent agree with, which is like part of our job is to be experts in online business and the process of buying and selling online business.

And it kind of like, doesn't feel right if our team isn't doing that themselves, right? If we're kind of like selling that expertise. And so one of the things, s kind of took over the day-to-day running of the business middle of 2023. And that was one of the first things I did was kind of like reverse that decision.

So there were no restrictions on our team, kind of like buying, selling, and running their online businesses. You know, they're obviously like, very heavy expectations on how we use customer data and how sensitively we treat that.

But yeah, exactly as you outlined with Ross, I think it's super healthy and important that we have a team that is talking to sellers from a point of shared knowledge on this stuff.

Yeah, shared experience is pretty valuable. It's just that's getting-in cliqued conversion rate of businesses being sold for people that are first-time buyers as well. Those brokers are helping people through the process and also helping people through the sales side. It's that shared experience.

For sure. Yeah. I also think it's like way healthier for us internally, culturally as well. Like, I want a culture where people are doing cool stuff on the side and sharing it with the team and things like that.

And the funny thing about that policy was that some people were doing some bits on the side, but like most people in the business, right? But of course, the moment that it's like a restriction that you can't do something, everybody feels like they're kind of like being unfairly treated by that. So was one of those things where, like, it created a bad feeling even for the people that were never going to do anything on the side anyway.

Right. And so when you first started, what was your first role in Empire Flippers? Then you moved to Director of Operations, Chief of Staff, and now CEO. What was before the Director of Operations?

Yeah. So, mean, I became director of operations pretty quickly, but as Empire Flippers was scaling up, I think like 2015, they hired some marketing heads and then 2016 was probably that initial kind of round of sales hires that you were talking about. And then we started selling more and we're like, okay, we need some operation people to kind of like handle the backend.

So I came in as one of three kinds of early operational hires in 2017. And then, yeah, like a few months after that, I was kind of running operations. And that's what I've done for most of my tenure at Empire Flippers up until of middle of 2023.

Yeah, and then you went to Chief of Staff, and then you just, how long ago did you become CEO?

So the chief of over the running of the business, but for Joe and Justin to be able to kind of easily undo it if they kind of, if they have buyer's remorse a bit later down the line. So I think my CEO title kind of changed, like the middle of last year, but it didn't fundamentally change anything in the business. He was kind of already doing that job. We just kind of like transitioned the title in a way that was a bit safer for Justin.

Yeah, cool, cool. And so through this whole process, what are some of the key things you've learned about selling businesses for people that are maybe thinking about coming to you and going, Hey, like, all right, I've got this business. What have you learned about the sale of businesses?

So I'd probably start by saying that, like most, we often talk about preparing your business for sale and thinking a couple of years out about how to get your business in the right state for selling.

And the funny thing is that, like when you go through a lot of those things, which is as an owner, don't have yourself as a single point of failure, make sure you've got a team in place and processes and numbers that are kind of straight and things like that.

A lot of the things for preparing your business for sale are just the things that also match up with running a really good business as well. And so I think like most sellers, even if they're, or most business owners, even if they're like, well, I don't know if I want to sell at any point or shortly, that kind of like preparing your business to exit checklist can probably still be really helpful just for like getting your business in really good shape and well organized and stuff like that.

Yeah, absolutely. Now, let's talk about the state of the market. It's changed a lot, like, and always has. I don't know where to start with this. Would say, since you started, how do you, I mean, even since you like, I mean, it's similar to me, since the timeframe. What changes have you seen, and how has that affected buying and selling businesses in terms of the state of the market?

Sure. Yeah, and I think that is the best place to start to kind of go back to, yeah, pretty much when I joined.

Yeah, exactly. The 2016 area was probably roughly around one to two, right? And a lot of content sites, heavy on content sites.

Yeah, that's right. And I think if you look at kind of just before I started 2017 through to like 2020, I think Empire Flippers, the shape of our business kind of reflected the industry, right?

Which was it was like very healthy and growing. Like economic environment was good. We were probably most years growing very healthy double-digit year over year. As you say, through that period as well, multiples were steadily increasing from kind of like the one to two X up into like the two to three X

Yeah. And then in 2020, things just went insane, right? 2020 to 2022 is probably the period where it was just the perfect mix of bot, like macro, bigger economic stuff, and also things specific to our industry as well.

Interest rates being at zero is kind of amazing for our business, a lot of money in the market. And then you had things like the Amazon aggregators and COVID as well, right? Where COVID was... Right.

That's right. Yeah. It's bad for a lot of businesses in the world, but not online businesses, right? Because kind of everybody was at home. Yeah. So multiples through that period went crazy, particularly on like e-commerce businesses, Amazon FBA, but they were going up on everything. And like, yeah, mean, our business was completely insane through that period as well. And then, in 2022, you started to see the end of that a little bit. And 2023 was a tough year.

Wild. For the industry and us as a business. And it was very much a year of two halves. The first half was okay-ish, but you could kind of see that things were turning. And we had a really poor kind of end to 2023. And there's some other stuff in there as well. Big Google updates in September 2023.

Yeah. In September 2023, big changes with Google. Yeah. 2024 was a pretty gnarly year for everybody. Yes. All online businesses as well.

Yeah, I think so. I think 2024 for us was kind of an interesting year because we were very much rebuilding through the first half of last year. And so if you look at 2024 versus 2023, it's pretty much flat, but in a different direction. So, like our 2023 was getting worse and worse, and last year was kind of getting better and better.

And then I think maybe just to bring that back to the market and multiples and things like that, it's very difficult to pass the data at the moment. So multiples are lower than, obviously, like the crazy period of 2020 to 2022. But I think two things make that up. One is like, yes, demand is lower than when aggregators were buying all these FBA businesses and things like that, and money was very, very cheap.

So there is that impact on multiples. But you've also got the piece where, like, the average business is probably not performing as well as it was back in that period as well, right? And it's certainly it's more of a mixed bag. So we see averages are down at the moment.

But when we do get businesses that like to tickle the boxes, are well prepared for sale, are growing, they kind of stand out even more, and they're still attracting some pretty high multiples. So it's definitely like more variance is what I'd say.

Yeah, I just want to expand on a bunch of what you said as well, just so people understand where the markets are and why right now, like we've got the perfect storm of low interest rates, COVID, and the aggregator space.

For those who don't know what an aggregator is, you know, Ecom aggregators are they're just a bunch of big private equity firms that were just outbidding each other for e-commerce businesses without going too hard into due diligence, which just, they just.

There's a lot of ego, and they just boost the prices and the multiples for e-commerce businesses, which raises the multiples for other business models as well, including content sites and software businesses, and other types of businesses that happened. And then we get, like you said, the access to capital, and then there is more access to capital.

Now there's less access to capital. What does that mean? It's what you alluded to, interest rates before interest rates are low. Now they're quite high and they scaling back a little bit as we speak, but what happens with interest rates is as interest rates become higher, people that have mortgages and cars and debt, say in America, that's what the biggest like 80 to 90 % of the market is American market. have people's debt becomes more expensive to service.

So they have less money, which means it's harder to invest your money into the business that you may have as well. And that can affect businesses. Also the aggregators leaving, bringing multiples down and because there's less money for people to be purchasing businesses you know, capital access, capital for acquisitions, plus people that are hurting that have businesses, if they've got a lot of debt, personal debt or property debt, it makes this interesting area where multiples do scale back because people that can't afford their debt and their business aren't doing so well, they will end up selling their business for a lesser multiple, which means basically for somebody that has cash right now, you can find these amazing businesses for lower multiples than you have seen in the last four years. Right?

Yeah, absolutely. Yeah. And I think we see that. And we also, to pick on a point you kind of said as well, we see buyers being pickier, to be honest, as well. When you go back to that kind of that, the peak ZERP era, where, like you say, multiple people were bidding for businesses and they had to kind of like get due diligence done, otherwise they would open the door for somebody else to buy it.

We see, particularly on the larger businesses now, like typically taking a bit longer in that due diligence stage and buyers being a bit more picky and smaller things because you know, it would have been the case before where multiples were higher, where like, well, something will come up in due diligence, but either the buyer or the seller, would be very, very easily overcome.

Whereas now you kind of go into due diligence, and you know, maybe buyers are a bit closer to the top of what they're willing to pay, whereas sellers are at the bottom. And so that,t like due diligence period becomes a bit more fraught as well. Kind of like, yeah, just typically goes a bit longer.

Yeah, we just saw it e-commerce business by in the five figure range for under a one multiple and That was a perfect case of what you mentioned is the seller was wanting to sell the buyer was pretty particular with what they wanted so they kind of got the terms they wanted and they bought the business and I just had a call with him the other day looking at how we're scaling that thing now.

It's a win. It's a win for the seller, and it's a win for them as well. There are these deals out there, and I'm not like guys, because I say like listeners don't expect a one multiple please. Yeah. On some great deals. I would prefer people to buy a business with a higher multiple, typically because the higher the multiple typically the less risk, right? So, something to be wary of.

Yeah, it's interesting as well. Think again, looking at 2023 versus 2024, a couple of things, like last year, were better for us. It's not because, like, necessarily the economic environment was that much better, but I think it was a little more certain.

Know, like 2023 was the story of interest rates continually going up and inflation figures kind of continually being bad. There was a lot of uncertainty. Last year, things kind of stayed high, but they were relatively steady, I think. Yeah. Still add in as well.

I don't like to bring it up because it's not going to be evergreen, but it is interesting with the change of election. Do you feel there's any impact? Or is it more so that other things that play have are impact on the market?

I think like probably, the jury is still out on that a little bit. You know, without getting again, without going too deep politically, obviously, like the tariffs is the big question at the moment. Yeah. Funny enough, we had this chat on our management call yesterday.

Like, are we hearing much feedback from buyers or sellers on the whole tariffs piece? Then you have the question of, like, how real are these tariffs? How much is it a bargaining chip and things like that? At the moment, we've got that kind of…

Just wait and see. We're not seeing it being a crazy issue at the moment. I think most people are in a kind of holding pattern on that. I think it's just a wait-and-see. I don't know the answer to that in terms of the election.

Yeah. Yeah. Let's just bring up Taris and expand it just a little bit. When you say you don't see it being a big thing, too much of a big thing. Do you want to just explain why people may…

Yeah, well, so I think it has the potential. Yeah, it has the potential to be a big thing. So, you know, for example, a lot of businesses do manufacturing in countries like China, and sell in the US.

So if the US does kind of change tariffs on imports from China or certain goods or stuff like that, it has the potential to have an impact. I think we're just not hearing it from buyers and sellers at the moment. Buyers, for example, aren't bringing it up as a reason why they won't proceed on a deal or stuff like that.

And I think really at the moment, like that could be a thing, three, six months from now. I think at the moment it's just a kind of like people don't know what kind of what's going to happen. So yeah, that's kind of where that fits in.

From my perspective of helping people acquire, when you're doing due diligence and say things become more of a thing or we get more certainty around tariffs that are going to be put in place for the China to the U.S. relationship.

There's things that you can do in terms of due diligence when you're looking at suppliers in the States to sort of understand what if it does, if the tariff hasn't been yet put in place and there's like a 70 % certainty it would be and the business you're looking at purchasing could be affected then enduring due.

I don't think it's something to just walk away from the business. Right. Other things play. A lot of people are always looking for one reason to just walk away from a business. Red flag to walk away. And I'm like, Hey, like it's not just one thing. It's got to be a combination of things that provides a certain level of sentiment towards not purchasing or purchasing.

There are ways around everything in business. And sometimes those challenges can be a benefit, know, maybe it's where, okay, look, there's a risk here and I'm the purchaser. Can we come down on a little bit of price, right? Or do you have other relationships where we can stay at the same price, Mr. Seller, or Mr. Seller, but you have relationships in the States where you may have purchased stock from them before that we could just roll that over to working with them.

So it's all workable, right?

Yeah, yeah, I agree. And I think you nailed it. You know, I think sometimes people think that due diligence is a process of like just finding the red flags. And if there are no red flags, the business is perfect.

But like all businesses have risks, right? So it's about identifying the risks and being like, okay, these are risks I'm comfortable with, or I think I can overcome, or they aren't right.

Yeah. I have a saying that a lot of people know now is that the goal is to prove the business about investment. If you can't, then you must buy. That's a quick, cheap, easy Instagrammable quote, but there's more depth to that. Right?

Like you said that all businesses have risks, and you need to understand that, like if you're going to invest in something, there's some level of risk, you know? Yeah. Who was I speaking to the other day?

I was speaking about content sites, and we're all investors here investing in online businesses, and people were shocked that, you know, we, you know, I lost some money through investing in a content site, and like, is it shocking? Well, not really. Like it's an investment. Like you're going to lose at times as well.

Yeah, for sure. I think, yeah, you hit on a really important point there as well, when it comes to due diligence, is like sellers will often try to hide the risks of a business, right, or hide mistakes they've made in the business.

And it's like the absolute wrong thing to do, right, because buyers are coming in trying to find those things. And they expect them to be some problems and some stuff which has gone wrong in the past.

And by sellers like actually being more open and more forthcoming about that stuff, you what they do is they build trust with the buyer and then the buyer thinks, okay, this is a risk that I feel comfortable with and the seller I feel comfortable with and it's way more likely to be something that gets overcome.

Absolutely. And like the value of the relationship. Talk to me about, like, how much emphasis you guys put on a buyer and seller building a relationship. What are some of the tricky parts about selling a business and having somebody acquire a business between a buyer and seller?

Yeah, I mean, I think the best deals are those deals where both parties see it as more of a partnership, right? Even if it's not a partnership after the fact, most of the sellers who come to our market, their business is their baby, right? They've been working on it for years.

And it's actually, most of them don't want to grab the cash and run. Like it's actually like very, very important to them that the buyer who takes over their business, they think, will take a good, actually like get some success out of it. Like they want buyers to be successful.

So we try, as soon as there's any kind of interest, the first thing we try and do is get the buyer and the seller on a call, even like pre-offer and stuff like that. And of course, that's a huge part of it. Part of it is the buyer understanding the business, but part of it is, there is chemistry between the buyer and the seller as well?

And yeah, when it gets into the due diligence phase, there'll be regular calls. We'll try and have weekly diarized calls to keep things going. And to be honest, we've normally got a pretty good feel at the start of a due diligence period, if a deal is going to have problems or not.

And way more of the time, it comes down to like one or both of the parties,s or how it is very rarely a problem with the business. Like you say, that can't be overcome. It's much more likely it's a relationship thing because once that trust goes on either side, it's like almost impossible to bring it back.

Yeah, I agree. It's the same with any relationship. Somebody cheats, of course, it's hard to bring that trust back. What are some of the things that can get in the way can break trust through a deal that you've seen?

Yeah, I think it is, as I said before, like both parties need to come in super open. I think once again, a buyer is coming in looking for the wrong things. So if they feel for a second that the seller has kind of hidden something, then that can be a problem. I think the other thing as well is one thing we try to hold buyers to is like the terms you put in the letter of intent.

We expect you to stick to those terms unless something egregious comes up during due diligence, like it wasn't foreseen before. We're not at all tolerant of like, but yeah, because some buyers will use it as a tactic, right? Get the business under LOI, kind of pick holes in it through the due diligence period, and come up with a very different offer at the end.

Like, we're quite intolerant of that as a marketplace. And that's a thing that, on the flip side, will break trust with a seller, right? If they feel that the letter of intent was never the figures in there were kind of like never the buyer's intent, we will have sellers walk away from deals.

And sometimes if a buyer tries that, and maybe at the end of it, they're like, okay, I am willing to pay the price I agreed on now. But then sometimes by that point, sellers have checked out, right? And so the trust does run both ways in that thing.

Yeah. All it takes is the decision of a seller to realize that selling the business of that person who is operating from that place, the way they're operating, is like, do they want to sell the business of that person when it's their baby? And do they want to have to be in a relationship with this person for a certain period until they get their money for the deal? Like, right.

Yeah, and that's, it's a really good point as well, because particularly on the larger deals, they are probably going to have some form of seller financing or earn out or something like that. And so the seller is weighing up the buyer, both in terms of their like competency to run the business so that it hits the goals and they get paid, and the kind of relationship moving forward as well.

Yeah, SBA typically draws out the purchase of an online business. What sort of percentage of businesses do you sell using SBA?

Yeah, it's ticked up a bit in the last 12 months. Yeah, we used to not do SBA at all. That's right. And because we had a couple of experiences where the whole process would be dragged out for months and months.

And again, you go back to what the market was like, then sellers were missing out on cash buyers by kind of going through this process. And yeah, we had a couple where it kind of didn't end up closing.

Yeah, we loosened that over the last couple of years. And actually, we've had some success with SBA over the last kind of like 12 to 18 months, I would say, for the most part, it's kind of like some high six-figure deals, but predominantly the seven-figure deals that we're using SBA for, and I don't know. It's probably in the ballpark of 50 % of them or something are going through the SBA now.

50 of 6 to 7 figure deals or 50 % of 7?

Just the seven. Yeah, yeah. It's still rarer on the six-figure deals. And it is slightly longer in the due diligence phase. And there is the extra variable of, like the bank's valuation of the business and stuff like that.

But once you know, once that part is kind of sorted, and we have some good lender relationships in that area now, then actually the deal seems to go reasonably smoothly. So yeah, it is the piece that is working better for us as a business than a few years ago.

Yeah, it's great to hear. It's great to hear from everybody. Oh, except for when it was cash, you're getting these six-figure cash deals when money was hot a couple of years ago. It was a wild time.

It was a wild time. Remember stories of people buying businesses within a minute or two, you listing them, having to pull it on hand on both of the businesses. It was just full on.

Yeah, that's right. I guess we still have this concept, but we used to have this concept of the wire race, right? Where, like, we would put listings live at 10 a.m. every Monday, and then like it would be a race. And our rule was that whichever money we received into our account first, that would be the buyer. Yeah, we don't have as many wire races these days.

Yeah. I remember a lot of clients and people in the community going like, What do I do? They used to sell so fast. It was like, just give some money, put it on hand with Empire Flippers in your holding down.

And when it's ready to execute, as long as they were comfortable with DD and they had our help, they were fine with doing it. Now you've talked about lenders that you're comfortable with, seven-figure deals, like people are purchasing and wanting to use SBA.

How is it working in terms of you saying go and use this lender if you want to use SBA, or are there buyers coming to you with pre-approval, or like some level of letter from a lender saying, I can access this much capital? Like, what does that look like?

Yeah, it's a bit of both. Like, yes, we have some lenders that we've used a couple of times, and things have gone well with those we can point people in the direction with. The ones that kind of work the smoothest, though, are kind of the second scenario where, like buyer has a good relationship with a bank and has been pre-approved for a certain amount.

Then that bit is taken care of, and it just comes down to the bank being kind of happy with the business and the valuation of the business. So yeah, it's probably slightly more common that the bank is on the buyer relationship, but it's a bit of both.

Yeah. That's what I do for my clients, buying as an advisor on this buy side for the seven-figure plus deals. It's like, where are you at financially? Get your money in order. And then we go searching. We're not fumbling around working out. Like, I mean, it's backwards doing it the other way.

Yeah, yeah. And we try and qualify quite heavily for that as well. We have a pretty restrictive buyer access policy where we want buyers to demonstrate liquidity before we give them access to the business and stuff like that.

And then we will, if somebody has SBA pre-approval, then we'll give them access to relevant businesses that have been SBA pre-approved or could be SBA-approved.

Yeah. Awesome. Awesome. Now, how do you feel that buying and selling businesses is going to evolve in 2025 and beyond? Do you foresee many changes? If so, what? Yeah. I've got more questions to add. I'll just leave that there and see what you have to say.

Yeah, I think, I mean, it always seems to be changing in some way. Like, as an example that we spoke about earlier, if you looked at the shape of our business two, three years ago, it would have been way more heavily like a content site-based, affiliate-size, stuff like that.

Yeah. So yes, I'm sure it will change. Mean, right now we still believe that like we're betting very heavily on e-commerce both on and off of Amazon's platform. We still think it's pretty early in that sense that, like five years from now, do we think there'll be more or fewer Shopify stores, for example, than there are now?

Like we think there'll be more. So I think there's still an expectation that to kind of continue on its current trajectory. And then there will be stuff like whatever the trend of building different online businesses is, you know, we always follow slightly behind that when people are coming to exit them.

Thinking over the last year or two, we've seen a big uptick in things like faceless YouTube channels. The other Amazon businesses, like Merch and KDP, are still pretty strong. So I don't know, two years from now maybe we'll be selling vibe-coded apps with a bunch of security holes and stuff like that in them. Don't know.

Yeah, I've seen the same content sites come in, go become has stay stable the whole time. And why would that be when I would say maybe 80 or plus percent of online businesses are e-commerce businesses. Yeah. Maybe not that business model, but e-commerce is the, is the largest sort of like transactional business online, would say. Sorry.

Yeah. Also, so I was just going say it also, e-commerce for me seems to be the one where the AI stuff is like most obviously additive rather than kind of a threat in the sense that like, you you talk about SaaS businesses at the moment on whether or not some of the AI coding stuff is a threat to like small SaaS's.

But it seems like I think most of the use cases in AI, like better targeting and customer segmentation and follow-up, and even like AI-powered logistics and stuff like that. Seems to be at the end of the day, can't AI a physical product at the end of the day that has to come in somewhere, right?

I agree. And that's where I was going to head. I was going to ask you something about AI. I just want to let people know that AI is a tool. And like you said, there is a threat. There can be a threat to software businesses, but it can also be an advantage to you.

Can an AI just go and recreate this software and then spin off and be a competitor? But how can you use AI to look at competitors and take some cool things that they're doing with this, their code, and add it into yours and provide a superior product as well? AI is software is moving faster with AI because that's kind of what AI is lending it to in terms of like text and coding and all that sort of stuff now.

And it's a bit slower on the e-comm side. Mean, but the thing is AI is being used for SEO marketing on Google and platforms, Meta, and TikTok, and all that sort of stuff. Mean, AI is... Sorry?

Yeah, 100%. Yeah.

It's funny that people like, are you using AI? Well, it's like, you can't not use AI. It's a part of everything now without you realizing like we're, I'm recording on a platform now that uses AI, and I don't know how it works, but it's got AI and it pulls certain things and does its own thing.

Like it's kind of like saying like, it's going to be a part of everyday life and we're going to, it's necessary already, just like the incident is necessary for us to use for our business. So, do you foresee any transactions, and how transactions will change in terms of buying and selling using AI?

I mean, I've had a futurist on before, and I mean, it can be pretty far down the line in terms of how transactions will change, but do you see anything coming in the next year or two with any of this?

I think maybe the best way for me to answer that is to talk about how we view it in our business. We view it as just like a multiplier for our people, right? Like it might be Marc Andreessen, I might misattribute this, but like, think that quote that like AI won't take your job, somebody using AI will. Like when we view the next couple of years in Empire Flippers, we want to use AI to free up our people to spend more time, like actually helping customers, right?

So, like a real example of that, we have a very robust vetting process. We have like across our vetting team, probably like a couple of decades of experience, these guys have looked at thousands of businesses for there might be something in their week where like they're checking a number in a particular screenshot and seeing if it matches a number in a P and L or copying it over or something like that.

It's crazy to have someone with that level of experience doing a mundane task like that. And so that's where we want to use AI and then take that person to have them speak to customers about how to help sell their business and stuff like that. So we see it there.

I think there is a big use case for something like buyer-seller matching as well. For example, we have in our CRM, we've had thousands and thousands of conversations with buyers over the years.

And whenever we speak to a buyer, someone will put a note in our HubSpot about like what they're looking for, what's important to them, that kind of stuff. And then that note will sit in our HubSpot and no one will ever look at it again, most likely. And then that person probably leaves the business at some point.

So we're doing a big program at the moment to take all of that information, all of those notes, and kind of like then build a tool that will kind of match that listings we have and stuff like that.

So that seems like an obvious one to me, but yeah, I mean, we plans to use it for as much kind of backend stuff that doesn't degrade our customer experience as possible and actually like free people up to improve our customer experience by, like I say, like sharing the benefit of there was.

Yeah, I love that you mentioned that you're going to use it to not degrade the experience, which a lot of businesses that are taking a shortcut are doing. Like, how can I be a selfish entrepreneur and take more money off the table by doing something a cheaper way using AI versus using AI to make the business better, not just for the business owner, but mostly for the customer, and adding more value, which means the business is gonna grow better. Short-term thinking versus good foresight, I would say. So I'm happy for you guys, the way you're proceeding, it's cool.

It's super important to us as well because of how we view ourselves in the market. Like, there are other options where maybe it's a bit more DIY and you don't get as much hands-on support.

And we view our value as like our people and the fact that we offer more than that. So we're like very, very nervous, as you say, to kind of like degrade that in any way because we view it as our USP.

At the end of the day, you've got a transaction that can be a significant amount of money to people. And if you're putting trust in just technology compared to humans, what are you going to trust more, though? Andy, thanks so much for coming on. Appreciate you.

Yeah, totally.

Well, man, absolute pleasure. Enjoyed it, Jaryd

Thanks so much for saying that. Do you do any content anywhere else, or like, where should we send people, other than I'll put a link to Empire Flippers, obviously, but yeah.

Yeah, so Empire Flippers, obviously I'm pretty active on LinkedIn and I've recently started a little YouTube channel just kind of like breaking down business books for remote leaders and stuff as well. It's called The Leader Sip. So maybe we could link to that too.

Yeah, I'll link to that for sure. Awesome. Thanks so much for your time, Andy. Appreciate you. And I keep looking forward to seeing how Empire Flippers evolves.

Appreciate it. Thanks, Jaryd.

Cheers.