A (3:02)

Yeah, and I think it really starts with that transparency. So it's really easy for folks to understand when you say to Zillow for small business, because everyone can go on Zillow and look up kind of what the homes in their neighborhood are worth, what their home is worth anywhere else. And I think that creates a level playing field. So when someone reaches out to you, even outside of Zillow, and says, I'll pay you a million dollars for your house, you know, if that's a good or bad offer. And the difference in small business transactions is 98% of small business owners have no idea what their business is worth because they're not, you know, looking at sales comp multiples on a day to day basis. They're building amazing businesses. And so the ability to just bring that transparency to bear then lets that kind of unlocks the market. Because imagine if 98% of homeowners had no idea what their home was worth, you know, how would you even think about buying a home? Reaching out to them. And that's very much how the small business acquisition space works today. There's a lot of folks that'll reach out to people being, you know, saying stuff like, I'm interested in buying your, you know, H Vac business or your car wash, but if that owner doesn't really understand what a good price for their business is and what recent other car washes or H Vac companies have actually sold for, they're not empowered to actually move forward with that decision.

B (4:23)

Thank you so much. Appreciate that. Again, just highlighting that Baton is all about the transparency. Right. You're unlocking that market, truly providing, you know, valuation for anybody to see. And so you feel more confident about whether you're buying or selling that particular business. So I appreciate the share. And Chet, how does Baton leverage data to provide accurate business valuations? And why is that critical to empowering both buyers and sellers?

A (4:48)

Yeah, I would say it's kind of a couple key sources of data One is the actual business data itself. So owners can connect their QuickBooks, they can upload statements from their accountant, whatever they have access to. And we're actually looking at their P and L statements, their kind of income statement and balance sheet, and then running a valuation using seven different models from discounted cash flow to sales comps, industry multiples. And so first we get the data from the owner and then we have a bunch of data on recent sales, both that have happened on Baton and have happened, have been reported to lenders or other brokers have reported. And so that's kind of matching those two things together to say for a, for example, liquor store here in New York, we can have several hundred recent sales comps that enable us to tell that owner of a liquor store what a good price for their businesses, given the cash flow that is flowing out of the business. And I think that's the final piece is that we operate and kind of bring every business to one key number, which is adjusted cash flow. So it's really the cash that the business is generating, whether that owner wants to pay to themselves, wants to invest in the business is funding a loan. There's a lot of stuff that that cash can be used for. And so you can look at an H Vac company or a doggy daycare or a retailer and kind of be able to see the amount of cash and the durability of that cash flow. And we're able to see that through actually running evaluation on their business, which historically, when we started the company, you know, it's $3,000 to $30,000 to get a valuation in three weeks and sending a bunch of stuff to a CPA or a broker. And we can turn those things around in a matter of minutes because we've built it into the platform because we want to give every small business in America a valuation that's really robust and accurate.

B (6:50)

Thank you. I think that's awesome. The data that we talked about here is easy for you to integrate. You know, people that have a different type of ERP financial system, QuickBooks, whatever it is, can upload their financials so that you can get that P and L balance sheets, comps, cash flow, et cetera. What I highlighted is that cash flow is key. Obviously you can run an accurate valuation that way and the turnaround time is probably a hundred times faster than the traditional methods. So I appreciate you sharing that chat. Last question of the day. What trends are you seeing in the small business acquisition space, especially in a post pandemic or shifting economic climate?

A (7:24)

A couple things here. I mean, it's maybe overused, but everyone will talk about the Silver tsunami, right? The baby boomers that are getting ready to retire. And there are some key stats. I think 75% of small businesses are owned by baby boomers. And kind of by definition, if they're still running them, they're probably making a bunch of cashflow. And, you know, their kids aren't going to take it over because they're doing other amazing things. And so there's really a good solution for them right now. And then I think on the buy side, there's also this concept of, you know, people used to want to work at Google and Facebook, and I think they've realized that they are entrepreneurial. But we've kind of conflated entrepreneurial with startup or working at a startup, when actually the small business owners in America and around the world are the true entrepreneurs. Starting an amazing business, growing it, scaling it, and the ability to purchase that business that is throwing off cash flow and using your skills, whether it's in operations and finance, in sales or whatever, and then grow that business or bring in new technology, et cetera. I think those two trends are kind of macro tailwinds for this space, really growing.

B (8:42)

Thank you for sharing that. I really appreciate that. And we do see talked to several of the guests on the podcast here about baby boomers having that generational wealth and especially you mentioned that 75% of small businesses owned by baby boomers, which, there's gotta be a kind of a shift here. And I think what your platform does is bring that information and that availability out to make it a lot easier to transition for others to get into this business or buy a business. So I appreciate that and chat. It was such a pleasure having you on today and I look forward to speaking with you real soon.

A (9:12)

Yeah, this was great. Thanks for reaching out and enjoyed the conversation.

B (9:16)

Bye for now.