How to 10x your valuation with David Walters

Josh
 Good day, fellow dealmakers. Welcome to the deal scout. It is our job as deal Scouts to go out, find cool deals, report it back into you and then share the story and the journey of the fellow makers so we could learn together. All right, so we've talked, ranging from lemonade, stands to SPACs and kind of all sorts of deals in between that and excited to talk today with David Walters, who has an incredible mustache, and he's going to share his story with us and some of the things that he does to help businesses, David, welcome to the show, 

 David
 Josh, thanks for inviting us. Blessed to be here. 

 Josh
 Yeah, you have a great mustache, but you also have an interesting accent where it's, what's the origin of that accent. 

 David
 I tell people it's my east Texas accent, but it's about 3000 miles east of Texas. I'm from the UK originally. 

 Josh
 Very cool. Very cool. All right. Why don't you tell us about yourself? Who are you? 

 David
 Sure. Okay. I started my career as a weapons engineer in nuclear submarines. I did 12 years in the Royal Navy. I then did another five years in the Canadian forces as a diesel boat submariner. After that, I worked in the nuclear power industry as an emergency management consultant, and then I returned to the UK and actually got involved in a charity doing PTSD recovery programs for British veterans post-fall Catonsville. From that, it was a very challenging job, very rewarding, but three years as a one man charity, you've got to pay the bills regrettably eventually. I went back into the corporate world, joined a gas turbine company and they moved me back out to the states. I had north and south America is my patch, move me back out to the states. I spent about 10 years developing the, a small gas turbine product. The company reorg and I eventually moved into one of the global excellence teams and worked at primarily a process optimization, major project implementation. 

 David
 And, typically it was reducing, nonconformance increasing NPS scores for underperforming units across the world. That was the, the, the last thing I do in the corporate space. I decided to go out on my own about two years ago and we, my son and I had a marketing agency. So I then expanded the consultancy side. Over the last 18 months I developed from just a marketing consultancy into more of the whole business growth and eventually to the business selling. That's where I've got today is really looking at helping businesses prepare for sale. I recently took over the role as a COO of a startup, which is going to be a disruptive force in the additive manufacturing industry. I have basically retooled my consultancy to go from one-on-one consulting. I just don't have the bandwidth to do the COO role and do the one-on-one stuff. I'm now looking at doing group coaching specifically to help business owners present themselves in a, in the best light possible. 

 David
 They're a viable targets for buyouts and business flipping business sales. 

 Josh
 Okay. Helping other people prepare their businesses for sale in a group kind of format. Is that right? 

 David
 Absolutely. Yep. 

 Josh
 Okay. Now, as you're building that, why did you decide, to work with a startup, right? You've got your consultancy that started in marketing. You, you guys grew it, and then it became an exit machine for other companies and then a startup comes along. Why, why did you decide to do both. 

 David
 The, the startup very much sat in my wheelhouse. I've been a chartered engineer for almost 40 years, and this is, this product is going to completely revolutionalize the additive manufacturing industry. We, we believe that, we could completely revitalize American home-based manufacturing with this product. It's a, it was one of those once in a lifetime opportunities that it would be an absolute mug not to engage with it. So, with the product we have, and it's licensed from one of the U S Navy development lamps, but we believe that we can propel and additive manufacturing, two generations in the next couple of years, it's a huge product and huge opportunity. 

 Josh
 Very cool. Very cool. As you're doing this, military background in military got to sent in nonprofit as a kind of one man band, and then corporate. We did that for awhile startups and consultancy, right? You have experienced an incredible amount of businesses and business stages and business types. What do you find is your superpower and the place of the business that you enjoy sitting in the most? 

 David
 Okay. It's really process optimization. Coming from my, my nascence as a weapons engineer on nuclear submarines, I was operational right at the back end of the cold war. We were going under the ice. We were going to places where we probably weren't very welcomed to be there. When you're doing those missions, there is zero margin of error. And the thing is on a submarine. Realistically, anybody on board could do something that would destroy the whole boat or kill everybody. You have total trust in everybody in the crew. You have to make sure that everybody is up for the job, and you have to make sure that you're performing at a hundred percent, all day, every day for the 90 days of the patrol. There's you can't make your foot off the gas when you're dived under the polar ice cap. You've just gotta be on your game constantly 24 7. 

 Josh
 Yeah. Super cool. Let's talk about this zero margin of error, right? Let's bring that into the world of business, running in zero margin of error in the, on a nuclear sub. Absolutely makes sense. When it comes to process improvement that you see in businesses, right? Margin is healthy, right? You want a big margin, you want profit, you want this stuff. What have you learned over here? Running zero margin of error. Everything has to be precision precise or people die versus, what you're bringing to startups and businesses and your consultancy. 

 David
 Okay. It's, it's interesting. So, so when we say zero margin of error, we actually used analogy called the funnel of death. Honor, you mentioned something as complicated as a nuclear powered submarine. There's always going to be stuff that breaks as a weapons engineer officer, I would, could have 10, 20% of my kit either defective or enter deficient mode at any one time at sea. The requirement was that we never let the defects accumulate to put us into the point where we would have a catastrophic failure. We had the analogy of what we call the funnel of death. At any time you're skirting around the top of the fund, you've got some defects they're manageable. You can deal with them, but if you let them slip, every cumulative defect puts you further down into the slope of the funnel. The more defects that you allow to accumulate, whether they're equipment defects, operational errors, crew fatigue, whatever the limiting factor is, the more that you allow these things to accumulate the further and further into the funnel you get. 

 David
 The more likely you are to have a single event caused a catastrophic failure. If you look at the typical entrepreneurs life cycles. One of the things we teach is what we call the seven stages of the entrepreneur's journey. Every business will flatline at some stage, and we've all been taught about the hockey stick growth process. If you look at the research from McKinsey and company, they've actually debunked that in the last year or so, they've come out with a new book called the strategy after the hockey stick. What they basically say is businesses focus on trying to generate the next hockey stick growth spurt. It fails. They, they, the next year they have another strategic plan. They try another hockey stick, it fails. And these cumulation of failed hockey sticks. Although on paper, they seem to be drifting along flat lining. When you actually look at their performance one failure after another failure, the overall performance starts to be great. 

 David
 They, they enter into the point on the life cycle that we call the death curve. From the flat line, you've got two options. You either break out and you go for your high value exit, or you stay where you are, and you start to degrade gradually into that death curve. From it, from the death curve, you become a legacy company, you become a zombie. Ultimately you end up in that zero value exit, which affects 98% of business owners. 

 Josh
 Okay. Super interesting. Could you, I'm not familiar with the seven stages. I haven't heard this before. Could you walk us through the seven stages of entrepreneurship? 

 David
 Yeah. The first stage is basically ideation and coming up with your product. What we say is, we want you to fail fast at this point. If you've got a new idea to try and sell 10 of your core product, if you can sell 10, then you've got something to market it's telling you, it's interested in. From the, from the ideation stage, you go into what we call the predictable growth engine. This is where you systematize your sales marketing, get you into that initial growth stage. The third element is business systematizing nation, because what we typically find is if the company gets it right, and they start to get that growth. They start to get the extra orders in. Typically their backend processes are inadequate to handle the new growth. That actually become that their business process becomes a bottleneck. What we do is we encourage them to implement systems, to allow them to handle the increased growth. 

 David
 Also once they're systematized, we then consider to consider them to be a scalable company, which should be where we would say, that's the first opportunity for the business owner to actually sell when his company will operate without him there, when he's got the growth engine and he's got the business operating systems, that's when he actually had something to sell. Otherwise, he just has a, an owner centric business, which has zero value to a future potential buyer from the, from the point of scalability, they then entrance that flatline process. This is where they have to decide, are they going to go for a breakout or are they going to run the risk of just bouncing along and eventually going into the death spiral? That, that be that the downward slope. What we say at this stage, again, the business owner has to make a decision and we always recommend they go for the breakout. 

 David
 That's how they increase the value. And, and we try and encourage them to go for a 10 X increase in valuation. They need to get they need to get serious about their business. We tell them that the fourth stage of the cycle is what we call the payoff stage. We recommend they double that they double their salary. And we do that for two reasons. Firstly, to make them feel like they're successful, because if they go all the way, they're going to have to talk M and A's, they're going to have to be making some big decisions. We want them to feel like a success. We don't want them to feel that they're just making it. We want them to feel like that they're successful. They're more comfortable having those M and a discussions, but also going through the disciplines that, okay, if I'm going to double my salary, where's this money gonna come from? 

 David
 It makes them look seriously inside the business for any efficiencies, profit opportunities. There's always golden nuggets hiding in a business that the business owners aren't seeing, because they're not looking. By making them go through the payout process, it makes them look seriously inside their own business for the golden nuggets of profit and for the waste, for the nonconformances and the losses that they're living with. It changes their mindset about how they approach the business after the payout phase. The next thing is we recommend is that they implement an advisory board. Now this could be something as formal as a board of directors. It could be an informal advisory board, or it could be simply joining a mastermind group. If they're going to go all the way for the high value assets, they're going to need help. They're going to have to take some big decisions. 

 David
 They're going to need some help to do that, to go through that decision-making process. When they've got the advisory board in place, then the next step is the M and a process. The way we introduce them to that is we take them through what's called the ETP exercise. We asked them to identify the top seven cost lines on their financials. Look at ways that we can turn those cost centers into profit centers. So, for example, if one of your major cost items was digital marketing, would it make sense to buy the agency, bring them into your portfolio? So then it's part of your proposal. It no longer is a cost is another profit center, and you can then grow that into a, another potential spouse down the road. At that point, when you go through the ETP exercise, we also recommend they look at their business structure. 

 David
 Do they need to restructure, do they spin out the intellectual property into a separate company so they can lease out their IP. Do they need to create a special project vehicles to go after high value opportunities? This is all part of the strategic decision making in preparation for that, the M and a portion. Ultimately taking them into the high value exit. What we'd like to say is that from being a tribal business, and if you look at small businesses over 88% of small businesses have less than 20 employees. They tend to be run on a tribal basis. You can a good leader can run 20 to 25 people without having a lot of formal processes above 25 to 30 people, you have to have those corporate processes. Over 88% of small businesses are less than 20 employees. They're running on a tribal owner centric methodology, which means they're never really going to be viable for a buyout because as soon as they bought out and the owner leaves, there actually is no business. 

 David
 The, so the process there of getting them ready for that buyout, then we take them through to the, through, to the accent. What we say is, if you go scalable, you should be able to four X your valuation from your initial, your initial starting point. If you go through all of the protocols we teach for internal optimization, increasing profitability, reducing costs, improving NPS score that should, if you do it properly, that should be able to be achieved within a couple of years and give you a 10 X improvement in valuation. Beyond that, then you're getting very serious. You're looking at M and a growth you're looking at not selling a business, but actually creating a consortium or preparing for a roll-up. That's where you can get the 20 X 30 X, but that's a much bigger ask. That's your three to five years of project. 

 Josh
 You walk people through right now, you're taking the, the individual tactics, and you're applying this to like a group setting. You're creating a, a bootcamp and a, a group coaching program to help business 10 X, their valuation. Essentially the goal is to get to a place to increase your value because one day you're going to sell. Absolutely. Okay. Are there any specific niches or industries or things that work or don't work with your. 

 David
 Perfect, the processes agnostic. I tend to work better in the engineering and technology space. Simply the fact that I am an engineer by training the sorts of businesses that don't really fit well into this process are the ones where it is very, I would say ego driven, but it's very much personality driven. The product is that is the business owner, because it's very difficult to fire yourself when actually your persona is the business itself. It's got to be something that you can systematize and you can leave behind. So, but the tragedy and the reason I got into this is when you look at the statistics, 98% of business exits are for close to zero value. They're a fireside sale. The business owner says I can't do this. I was going to hand it off to my kids. The kids don't want it. I'm just gonna lock the door, sell inventory and see if I can get some money for the, for the fixtures and fittings, which is a tragedy because they've put a huge amount of effort into the business. 

 David
 One of the statistics I saw was 60% of people who start a business, have the intention of selling for a high profit to fund their retirement. The business owners that have been able to, 10 years is that magic point. If you can keep the business going for more than 10 years, you've actually got, you've done well. I mean, you've done very well just to keep going for 10 years. At that 10 year point, the, the statistic is that 85% of the net worth of the business owner is in the business. You've got, these people have been working 10, 20 years. They built the business. They've, they've given them blood in their life to grow the business, but they don't know what they need to do to be appealing for a sale. They haven't gone through the process of exiting themselves from the business. They also, because this is the other thing that we deal with is to take the emotion out. 

 David
 We, we teach them not to work in the business or on the bus. I assume you've heard of the Michael Gerber and the E-Myth process. Yeah. So he says, work on the business. We sell, actually, you're not going high enough. You need to be working over the business. You need to be looking at your business as a series of interconnected, profit, and cost centers. Your job in preparing for the sale is to maximize your profit centers. And, and if you can turn your cost centers into new profit centers, if you restructure, reorganize, do whatever, and then look over the whole business, how you maximize your exit value based on that premise. And, as I said, 98% of business exits are for close to zero value. It's a tragedy. The other thing, I mean, you've obviously heard of the great wealth transfer. So they say $35 billion of wealth. 

 David
 It's going to be transferred in the U S in the next five to 10 years, as the boomer generation retire and expire. All of that wealth is going to go from that generation to the next generation. When you read actually behind the statistic, $10 trillion about wealth transfer is in the form of businesses. There's four and a half million small businesses with a market value of $10 trillion that need to transfer from the boomer who is currently the business owner to whoever's going to take the business over the two. Who's going to take the business over. If you accept the statistic that 98% of business access after near zero value, what that means is in the next five to 10 years, over $9 of business value is going to be lost to the economy because the owners don't know how to keep the value in the business going when they exit it's a tragedy. 

 Josh
 So a zero valuation, no good. Right? That's a fireside sale. That's the fixtures and assets, whatever you have, this is I'm out. And we've got to close this shop. What can I get from it? 

 David
 Thanks exactly. That's exactly what happens. I can't do this anymore. I felt the kids would take it. They wouldn't take it. Or, the market's changed to me. I just don't have the energy to go and do another, another pivot to catch up with the market space and they just get tired and they say, okay, just to step back. One of the other problems, especially when it's been a very owner centric business, their perception of their value is typically much higher than the actual value because they have all that emotional investment. What we teach them is that, okay, tell me how much you love your business. Tell me how much blood and sweat you've put into your business. Tell me all of these things. Good. We've got that on the table. I don't give a s**t. 

 Josh
 Yeah. 

 David
 Right. I'm sorry. I'm going to be tough. I don't give a s**t. I'm the buyer. I want to see what is the value of this when you're on the beach in Cancun or the Virgin islands or wherever, and you're drinking pina coladas, and I'm now left with this. Am I going to get any value? Because I know you're not going to come back. Once you take that check and you're off on the beach Yoakum, you're gone and you've gotta be tough because if people come in and say, but I've spent 20 years and my, my kids were born here. My, everything I've done for the last 20 years is in this place. It must be worth more than that. Well, it's not, that's the emotional investment we've made, but that's irrelevant to the future buyer. And you've got to do that. Tough love to start with, to get them to think, okay. 

 David
 How do I get my business value to where I want it to be, to help fund my retirement, to help leave a legacy. So it's tough love to start with. A lot of people don't like that, but you have to do that. Otherwise, they're going to go in saying, I want all this money. I want all of this value and the broker or the potential partners. There's no way I can give you back because I'm never going to get the return on investment that I'm looking for from this business. So it's a, it's a challenge. But, until you face reality, you can't move forward. 

 Josh
 Yeah. I've heard a lot of these stories, doing interviews over the last eight years or however long, and I've heard a lot of these stories in it. It makes me super sad because that's what I grew up in. I grew up in a construction household and my dad was the GC. If weren't swinging hammers at the time weren't making money. We had to learn the hard way, how to start building assets and things that pay us, but it was brutal to get there. This whole thing of, I think this is great. This owner centric business, a family business, it's blood, sweat, tears, passion. And you know, how does this go? When you have those tough conversations? I bet it doesn't always end in a happy conversation, right? That's tough. Love. That's tough to hear. 

 David
 It is tough love, but it's some cases that is the last conversation we had. The reality is I can't help somebody if they're living on cloud nine. Until they face reality and say, guys, you think you're worth 20 million. You're not, here's the statistics with this level of revenue and this level of margin in your niche, looking at the numbers from 20 21, 20 22, whatever the EBIT down multi-player is, this is where you should be involved. We, we teach them, I teach is, but, shorthand right said, you've got four levels of exit level. Zero is what we want to avoid. That's the zero value exit. You can achieve that at anytime you want, you just turn the lights off, walk away and you get nothing. The level one exit is when we have systematized. No, you're not going to get a huge uptick in value, but at least you have something. 

 David
 So, so the acid test of whether the, whether a business is scalable, we say, if you were to go on vacation for three months and didn't take your laptop and your cell phone, would the business still be operating in three months time when you went back in the office, if they can honestly answer the big, the, the answer to that question is yes. Then they're scalable. They're actually moving away from being owner centric to actually having a real business. And, and, arguably you can say, if you can, if you've transitioned them from an SDE valuation to an EBITDA valuation, you should be able to see a three to four X improvement without any more increase in revenue or profitability. That's just the simple fact they're now they now have a product, which is saying that, tell we go to what we call, 

 Josh
 Hold one second. Anytime I hear us, industry acronyms and such, so S the seller discretionary earnings to an EBITDA. And, so explain what those are right after you go through the four stages. Right? There's 0 1, 2, 3, 4, and then you got to come back to the S S D E to EBIT. Okay. 

 David
 Okay. So, so level one is where we say that you have become scalable, but you haven't done any optimization, but at least you, haven't got something you can sell. The level two exit is where we say you focus on all the internal optimizations. How can you, how can you find those golden nuggets of profit? How can you reduce your non-compliance? I mean, nonconformance costs is just straight off the bottom line. Many people just live with it because we've always done it this way. When I was working in the corporate world, I took, I had one group, there were $30 million a year of sales there, NCC. They were running at about 10% margin. It was a field service group that the company made the money on the past, the field service group. We're really there to facilitate the parts exchange, but at 10% margin, if you're running a 7%, non-conformance, you're basically working for free and you're taking on all that extra liability. 

 David
 By the simple fact of focusing on nonconformance and we had a 14 month gap, well program in the end, we reduced their NCCS from 7% down to 3.1% that added $1.2 million straight back into the bottom line of that work group. If you look at the margin levels, they would have had to make an extra $12 million worth of sales just to recover that non-conformance cost. Non-coffee, if you can get the nonconformances out of the business that is immediate profit to the bottom line. Because, because you're looking at your margin rates that has a much higher impact, but actually increasing revenue. 

 Josh
 Super interesting. All right. That, that CA that could probably be a book, an article, cause there's steps to, to what you're sharing there. When does a business move from an S D E to a EBITDA model, like, cause that's that's when you say at that point, you're starting to have a business before that it's an owner centric ULI for three months, lights out, turn the business off right now, or close to talk to us about that. When does that occur? That SDE to EBITDA? What do they mean? And when does that occur? That should, okay. 

 David
 So-so SDN, seller's discretionary earnings. That's typically where the business owner is just taking money out the business to fund his lifestyle. He's not really defined himself as the CEO or as a board member. The, the business is his piggy bank is taking money out. A broker comes, okay, what is the business worth? They will start with, what are you taking as drawer as the owner, and then see if there's any additions or deductions that they can apply. As a rule of thumb, just to give you an estimate, if you look at your gross revenue multiplied by your net margin, that gives you a rough estimate of the SDN. That's the starting point for the valuation. Depending on the revenue, the broker tables and NSD valuation will be anywhere from a one X to a four X multiplier on the valuation that you get. When you go for an EBITDA, then one of the things is that they can't go for an EBITDA valuation because they can't measure the UBIT though, because they've always been just taking draws. 

 David
 They don't even have the financials in place. They can say, here are my numbers. This is what we are doing as a professional business. One of the first things is to actually, if the business doesn't have one it's to get a fractional CFO, get your books cleaned up. We're always saying, you need to present three, present, three years of good financials, and we need to be showing growth year on year. We need to be showing profits. If there's any anomalies in the growth process, we've got to have a good answer for those. The idea is, a buyer would be interested if they can see constant growth over three years, and they can see this as a trajectory, which they would reasonably expect to continue. The other things that we talked about is to actually have a standardized sales and marketing process. What we call the predictable growth engine that needs to be implemented, and then the business operating system, you have to have those standard SOP. 

 David
 The business owner departs, he no longer of the business doesn't stop because he's not there. In addition to that, they would be looking at strategic opportunities. If the business has got some intellectual property that really gives them a strategic edge, that will be something that would be appealing to a potential buyer. The other things we'd be looking at would be locking in key clients. If you have a client who is strategic to your business, what can you do to lock them in for the long-term? One of the, again, one of the criteria we use is concentration. You should never have more than 40% of your business concentrated in any niche or any single opportunity. As a rule of thumb, we say never, ever have more than 10% of your revenue from any single client. Looking at the concentration factor is part of that process for professionalizing the business. 

 David
 The other thing is locking in key personnel. If you are going to be leaving the key managers, the key, the key team members, are they going to stay behind when you've gone? If you need to make that, if you need to keep that in place, you've got to offer them some a bonus deal or bonus structure. They will stay for 12, 24 months after you've exited so that the new owner has time to bring in his own team and do the transition. We're looking at what are their strategic goals. We talked about the M and a process and restructuring one of the big ones that I always encourage people. If you've got any software product that you've developed in house, see if you can turn that into a SAS products are amazing for business valuation. If you think about it, typically we would be, we would be working with a business that's doing 10 to 15% net margin. 

 David
 The goal would be to get them to 20% or better, for engineering company or any manufacturing. If you can get to 20% net margin, that's great. A SAS product would be minimum 80% margin and the multiplier. Again, if you look at where the market is going in 2021, the EBITDA multiplier for an engineering construction company was 8.22. The market is now hugely biased in favor of the sellers, all the brokers, I'm speaking to Sylvia, it's a sellers market. We just can't find enough businesses that are worth us looking at to take to, because that they're owner centric, they're not prepped for a sale. I looked at the numbers. Kind of, my speciality is engineering and technology companies. The EBITDA multiply for Q1 of 2022 was increased to 12.6. Over one year from the 2021 average to the 2022 Q1, there's been a 53% increase in average valuation. 

 David
 It's definitely a seller's market, but the trouble is so many business owners don't realize, have no idea what they need to do to become saleable. So you've got this huge wealth opportunity. That's just been squatted. 

 Josh
 Super interesting. Yeah, we've been looking at, the seller tsunami, the silver tsunami, the baby boomer transfer. Right. What you're sharing is these businesses, this transfer may just dissolve at 0, 0, 0 valuation, unless they build an actual business that could move on. 

 David
 Exactly. And, and it's, it's huge. I mean, as I said, $10 trillion of business value is going to, I mean, it's not going to gradually decline. It's going to evaporate. There's people struggle getting their head around this. I say, look, what's the, talking to a business owner other than the business, what's the biggest single economic commitment you've made in your lifetime for most people is playing out well, the kids, yeah. The kids you're paying for the sins of the father, but the house. And you're. 

 Josh
 Okay. 

 David
 When you're buying your house. Okay. Yeah. You, you put your life into it. You're paying your mortgage for 10, 20 years. As long as you pay it, when you come and you see that as being an asset, because most people say, okay, when the kids are gone, I'm going to be empty nesting. I'm going to downsize or sell the house. I buy a smaller property, moved down to Florida or moved to the lake or wherever I'm going to end up. The extra value I get is going to help me fund my retirement. That's the mindset now apply that analogy to the business. I've been running this business for 20 years. I've put my heart and soul into the business. I'm going to sell it and live happily ever after, but they don't have a plan to sell. They sell the, if they're lucky that bought the property. 

 David
 They'll sell the property, they'll sell some excess inventory. They may be lucky and sell a client list to somebody. They may sell some desks, some fittings, some furnitures, but the applying that to the house you've been living in this place for 20 years, you now ready to do the empty nest and downsize. So does it make any sense? It's okay. The first guy that comes in, I'm going to sell him all my bills. The next guy that comes on, I'm going to sell him the windows. If somebody else comes along, I'll sell him the shingles on the roof. Okay. You're going to get zero value, because you're not selling a home, you're selling stuff. Unless you can sell it as a viable functioning house, the scrap value or the, the recovery value for the doors and the windows and the countertops and whatever else you sell is negligible compared to the value of a functioning whole. 

 David
 If people get that say, okay, now I get it. It's but people just because they've got so much emotional investment, they don't understand the business has to function without them. If they're going to release any value. 

 Josh
 Now you said, if, someone could come in and buy the windows, they could sell the shingles they could sell. They said, cause you're not selling the house. You're selling stuffs. 

 David
 Stuff. You're just selling. You've got to sell it as a functional entity. It's got to be sold as a, in the business thing, you've got to sell a functioning business, 

 Josh
 I wanted to hear you say that word again. 

 David
 I was stuff. 

 Josh
 I love that you have a great accent minutes. I'm going to circle then. So that completely makes sense. And, and I, as we're building our business, right, I'm building businesses to either sell to my kids or sell to other people, right. I'm building this to sell. Think of me as a house, as a component, as a machine, as something that I have to be able to leave. That's difficult when this is a very custom or owner centric business, the podcast and the media, because it requires this face for now. Yep. We're working on that. I, I appreciate that this is sharpening our capabilities as well. So I, I appreciate your input. Let's do this. We're, we're running out of time and I want to do a few things. One is if someone wants to connect with you and kind of have you diagnose their business or maybe jump into your group program and learn about how to 10 X, our valuation, where's a good place for people to connect with you and do that. 

 David
 They can find me on LinkedIn or just email me directly. I'm always happy to engage through email. So it's justDavid@steampoweredconsulting.com. We can get chatting away. I'm always open to help a business owner, think through what they need to do. 

 Josh
 Steam powered consulting.com. Yup. Okay. Very cool. What we'll do is we'll put that in the show notes below. If people are running, walking, driving, they could always go back to the show notes and connect directly with you, David. One more thing, as you're doing this consulting and helping other businesses and doing that. During this interview, there's probably another question that I should have asked you that maybe I screwed up and I didn't ask you, so one more question. What should I have asked you that I screwed up and did not ask you? 

 David
 I think that the, the biggest question is what defines the value that the business owner wants to take, because we talked about the level 1, 2, 3, all the level, not 1, 2, 3 exit. The reality is if you want go for that really high M and a exit, that's a three to five-year commitment. So, the business owner has to have a sense of reality. If I want to get out quick, I'm just not going to have the time to go all the way through to level three. So, so there has to be a reality check. You can either do it cheap, it's the old project management triangle time cost and quality. You can get out quick for of quality, but not a lot of increased revenue, or you make the commitment five years. And it really is a five-year journey. If you are going to go through the optimization, the M and a process, the business restructuring, creating that high value consortium, and then going for the exit. 

 David
 That's a five-year commitment. If you're, if you tell me today, I want to be out in a year, but I want a 20 X that only for business, the show. Yeah. Footy boots. I don't know how you're going to do that, but go for it. There has to be this routing and a lot of this is just perception management. We all love our business. We put our hearts into it. You talked about, you trying to sell your business, you create a business. Think about the house, with the green walls in the kid's bedroom. It seems like a really good time. What was the, what was the code in the seventies? Avocado green. Every bathroom was avocado green. Yeah. You've kept it like that because that's where the kids are gone. That's the buyer comes in. What the hell is this? Oh, I'm going to leave it that way, because we've got a lot of emotional attachment to puke, avocado, green bathroom walls, the sellers, the buyer, the last thing I want is puke, avocado, green bathroom fittings. 

 David
 You've gotta be willing to meet the salad. The more you leave your own emotions in the business, the more difficult it's going to be to get that set. 

 Josh
 Super cool. Super cool. So, David, great job with this. Are you allowed to talk about the startup? Sure. Okay. If people want to know about what you're working on, what's the best way to begin that conversation. 

 David
 Again, just connect me through connect with me through emails. The steam power consulting is perfectly valid just to give you a bit of background. Additive manufacturing is the wave of the future. There's, there's actually a federal government initiatives now to promote additive manufacturing, to reclaim American based manufacturing. The beauty of am is you actually don't need huge amounts of plant. You don't need big, expensive CNC machines. The, the state of additive manufacturing is getting to the point where even at the the domestic quality printer, you can produce viable products. The company that I've been asked to join actually has a, what we call an exotic filament. We have 3d printing filaments that are very highly conducted. For the first time ever, you can print embedded electronic circuits into your additive manufacturing product. You think about the internet of things, I saw a stat a couple of weeks ago, there's now 1 trillion devices connected through the internet of things. 

 David
 Every one of these devices needs a little wifi antenna to communicate through wifi, to the hub or whatever. That's a trillion antennas that need to be produced currently with where the am technology is today, to be able to print those things. You're looking at a half million dollar machine, the comp that the, the exotic filament that we're bringing to market is 80 times more conductive than anything that's currently available. You can now, and our product, you can print on a domestic level printer. If you wanted somebody to start up a business printing, cases with embedded antennas on a, a hundred or a $500 printer that is now available, this is going to completely change the whole spectrum of additive manufacturing in the U S and it's going to open up opportunities for those that are ready. It, the reason I joined the company, it was, I could say this is actually so disruptive. 

 David
 It can change the whole way we do production. We're not quite at the star Trek. If you remember the old star Trek with Gianluca and, T olive gray, black hot, or whatever, he would say, we're not quite there, but we're getting damn close. You mentioned from a military perspective, rather than have to carry one circuit board for every piece of kit in the battlefield, you have a printer, a CD or a thumb drive with, a hundred circuit designs on. If a circuit board craps out, you put the thumb drive in and say, print new replacement, there's replacement back in the machine. It's huge. The impact that, L embedded electronic circuits in additive manufacturing is going to completely disrupt the manufacturing industry in the U S. 

 Josh
 Yeah, that sounds super interesting. Let's do this as you guys are hitting some milestones, would that organization keep us updated with the deal scout and we want to cheer you on your journey and for the companies that you're working on, helping them 10 X, their valuations keep on going. That's a really cool mission. I appreciate what you're doing. Fellow audience members as always reach out to our guests. If, if what they're saying is interesting to you, and you want to get involved, all their contact information will be in the show notes below, connect with them, say, Hey, heard you on the deal. Scout, want to do a deal with you. Maybe if you're working on a deal and you want to talk about it here on the show, head on over to the deal, scout.com, fill out a quick form. Maybe get you on the show next, tell then talk to you all on the next episode. 

 Josh
 Bye guys.