Welcome to the inside BS show. So today's show is me answering questions that I've received from you in the month of June in 2025. So these questions come from podcast episodes, as well as my LinkedIn posts.

So I've gotten them via DM. I've gotten them via email. I've received them via text message as well.

I got a couple of messages on WhatsApp. So I'm going to answer four of your questions today. We'll spend about three minutes on each question, but I picked four of them that I think are particularly valuable.

So let's start with question one. Question one says, Dave, you listed 10 drivers of enterprise value, which one moves valuation fastest if an owner plans to sell in six months? Okay. So look, if you're planning to sell in six months, you're already behind because you should have started like a year and a half ago.

Realistically, you're not going to sell your business in six months unless you do an ESOP or a management buyout. If you want to sell to a third party, if you want to sell in a strategic sale, or you want to sell to a financial buyer, meaning private equity or another investor, you've got to give it about 18 months. If your business is perfect, it's going to take a year for you to sell.

So the question is which of the 10 drivers move the valuation the fastest? I look at recurring revenue first and foremost. Obviously the business can't be dependent on the owner. If the business is 100% dependent upon the owner to run, the business can't be sold.

So let's set that aside. I like recurring revenue. If you have recurring revenue that makes up 50% or more of your total revenue, you've got a business that's going to be valued highly.

When people buy your business, they're buying future profit. That's what they're buying. So if someone is looking to buy your business today, they want to know what that business is going to be worth in a year, in three years, in five years.

They want to project it out for a decade. If you have recurring revenue and you have statistics and metrics to support your occurring revenue, you've got a business that can be sold for a significant value compared to competitors that don't have recurring revenue. So if I'm looking for a business, I want recurring revenue.

So the 10 drivers of enterprise value, quality of revenue is probably the number one thing that I look at. And that's the thing that I say I can have the most impact on if you bring me in now. Leadership management team, making sure that there's a succession plan.

That's a close second, but recurring revenue first and succession planning a close second. All right, question number two, Dave in the exit value drivers post you highlighted customer concentration. What percentage keeps buyers from discounting the price? Look, I would say it depends.

Depends on who the buyer is and what they're looking with the reason they're looking to acquire the business, but a good rule of thumb, very broad rule is 25% of your customers shouldn't come from one client or you know, a third shouldn't come from one specific geographic area or one specific industry. Now, I'm going to put a caveat on that, right? If a national company is moving into your geographic area and they're moving in because they want to market presence in your geographic area and you only work in your geographic area, you're fine with geographic customer concentration. If you're in a licensed industry, you're fine with geographic customer concentration.

Here's the thing. If you're in a licensed industry, for example, let's say you're a state licensed Realtor in the state of Florida and you only work in Miami-Dade County and a Realtor national Realtor is going to buy you because they want a presence in Miami-Dade County. That's great.

As long as you're spread out throughout all of Miami-Dade County, so we can work around customer concentration in a lot of different ways. But if you want the most value, you want maximum value for your business making sure that no one customer is more than 25% of your revenue is a good rule of thumb and then spreading it across multiple industries and spreading it across multiple geographies is also a good rule of thumb. You built a daily habit sheet.

What single metric on that sheet best predicts booked client meetings. Okay, so if you haven't seen my daily habits sheet, I will post it in the show notes so that you can take a look at it. I focus on several daily habits every day and one of the daily habits that results in booked client meetings for me is my direct mail.

I do 10 direct mail letters that go out every day and my email outreach. I also send at least 20 customized emails every day. So in July, I'm looking to up that I want to do 20 and 20 but both of those result in meetings books.

So for every 100 direct mail letters that goes out, I book about four or five meetings. So I book 5% but my direct mail is customized. My direct mail is going out in a sequence.

I send out three letters to every contact and I alternate between letter and email letter and email. I also do phone calls to those people. So that sequence letter email LinkedIn message phone call that results in about 15% of the people that are on the list book meetings direct mail alone results in about 5% email alone results in about 5% and the phone call follow-up results believe it or not in about 5% I leave messages because all these people are getting emails and direct mail from me.

So I'm okay with leaving one message to them when I first reach out and then I just call and call and call until they pick up so that sequence email direct mail. LinkedIn message and a phone call that results in about 15% of people who book a meeting with me and a meeting with me is on zoom. It could be a phone call or it could be an in-person meeting.

So that sequence results in 15% pretty good average. It works out really well question. Number three you you are others number four.

I'm sorry. This is the last question you urged in networkers to offer five-minute favors. What is a real example that landed you a referral? Okay, so let's talk about five-minute favors.

Some of the five-minute favors I do are a bit unusual if you ask me to connect you with someone from my network. I consider that a five-minute favor. So, you know that connecting one person with another that doesn't result in direct meetings as from doing that another five-minute favor that I do as much as I can is I like to do LinkedIn recommendations.

So I will write a LinkedIn recommendation to people in my network who I know who I like who I trust whose service I've experienced personally. I'll write them a recommendation if they've done a good job and if they're a good person and that's a five-minute favor that takes it takes about it takes like 15 minutes, but that's what I would consider that a five-minute favor. I also write handwritten notes to people.

I enjoy writing handwritten notes to people it is effective and I write three handwritten notes a day. I send them out as cards as note cards and I consider that a five-minute favor because each note card takes about five minutes to write and send out has any of them resulted directly in a referral. Here's what I'll tell you.

They all result in people reaching back out to me to say, thank you. And that opens the door for me to ask for something from them. Now, what I typically will do is after I write the LinkedIn recommendation or send the handwritten note card, I will put them on my regular list of people to email or to direct mail or just to stay in touch with to stay top-of-mind with and they get my email newsletter.

They get my LinkedIn newsletter all the time. They subscribe, they opt into that and they also get my direct mail pieces. If I ask them for help with something, they're going to help me.

So the way I view those five-minute favors is I view them as karma. I view them as paying it forward and I think to myself for every 100 five-minute favors. I do I've earned myself someone doing me a favor in the future.

That's the way I look at it. So if I'm writing three handwritten note cards a day doing one LinkedIn recommendation each day and reaching out and rekindling a connection with one person each day, that's five favors that I've done for people each day. If I do that five days a week, that's 25.

So that's a hundred favors that I've done every month. I earned myself the right to ask for one favor or I get one favor dropped in my lap in return and that's the way you need to think about it. And that's the greatest way for me to close out this show.

If you are looking for people to be kind to you, if you're looking for people to reach out and help you, you're looking for people to do you favors, do 100 favors for every favor you expect back in return. Does that seem like a lot? What if you get more? What if every 20 favors you do, somebody helps you? What if it was every five favors? If that one favor out of a hundred results in a new client, that's a hundred thousand dollars a year, were those hundred favors worth it? If it results in no business and you just become a better person because you're doing those favors, was it worth it? That's what I've discovered about the five-minute favor. It's made me a better person.

It's made me think about the way I help people differently and that's a good thing for everyone. Alright, those are the four questions that I highlighted from the month of June. Thank you and keep the questions coming.

I appreciate you. Enjoy the rest of your day wherever you are and until tomorrow, here's hoping you make a great living and live a great life.