Matt Coletta is passionate about at selling businesses with his firm M&A Business Advisors. He’s also passionate about fly fishing and wine.
Talking about businesses with Matt Coletta is a treat. He knows a lot selling them for his top quality clients. His firm, M&A Business Advisors, specializes in the confidential sale of privately-owned businesses in a wide range of industries including Manufacturing, Distribution, Service, E- Commerce, Technology, Software, Health Care, Construction, Automotive, Food & Beverage Related Businesses as well as other industries.
Raised in a family that had a vineyard, Matt is very knowledgeable about wine, especially California blends. He also loves to travel, especially back to where his family came from—Italy. But when Matt needs time to chill and become one with nature, he heads to the most northern state in the nation. That’s when his net income takes on a whole different meaning.
Listen to Matt’s story here.
Click here to read the transcript
Intro Speaker 0:00
From Los Angeles, this is the Echelon Radio Network.
Brian Hemsworth 0:16
Everybody welcome back to the Echelon radio podcast. And today we have Matt Coletta, co-founder and managing partner of M&A Business Advisors. Matt, welcome.
Matt Coletta 0:28
Glad to be here. Good to see you, Brian.
Brian Hemsworth 0:31
Tell me Matt, those of us that know you, we have a good understanding of M&A Business Advisors. But for people who don’t know about your company, tell us who you guys are, and tell us what you do.
Matt Coletta 0:43
Sure. So M&A Business Advisors is a full service business brokerage and M&A advisory firm. We specialize in representing privately owned businesses in a wide range of industries. These are manufacturing companies wholesale distribution service, it medical practices, essentially anything that has what I call proof of concept, if a business is profitable, and has made it through the Great Recession, and has made it through COVID. It has proof of concept. And those are the type of quality businesses that we represent.
Brian Hemsworth 1:20
Gotcha. And give me an idea of the scope of M&A Business Advisors, how many offices what and where geographically?
Matt Coletta 1:30
So we currently have seven offices and growing. We are our primary focus is California and Nevada. And we also do business outside of California in certain states, depending on what their regulations are.
Brian Hemsworth 1:43
Gotcha. So seven offices right now. And you you’ve, we’ve all just gotten through two years of the pandemic, right, and it looks like maybe we’re doing a little bit better now. What has it been like for the buying and selling businesses? Has business been slower? busier? What’s the affected?
Matt Coletta 2:03
So that’s an interesting question. The comparing 2019, pre COVID to 2020. There really wasn’t much of a change in the activity level. We saw some, we saw more of a slight downturn in 2021. But now it’s coming back. So the activity level is high. There are there are business owners out there that have to sell regardless of what’s going on in you know, in the environment or the economy. sellers are selling because they may be aging out obviously we have the Baby Boomer effect, as more and more people are getting into their into their older years and they need to sell people sell for other reasons like partnership disputes, divorce, whatever it may be, the the activity level seems to always be there. And but we’re definitely seeing this year 2022 increasing at a much higher rate.
Brian Hemsworth 3:07
Man, I want to get into a little bit about what what you bring to the party and what you do for your clients. And I think maybe one of the best ways to ask you this is to just kind of tee this one up and say, When do people call you? And when should people call you?
Matt Coletta 3:23
Oh, that’s interesting. When do people call me? Well, most people call me when they decide to sell. And I jokingly say that they wake up that day decide to sell and they pick up the phone and they’ll call when should they call me? Well, they should call me typically a year or two before they’re actually ready to sell. This way we can look at their books, look at their record, look, you know, look at their policies, procedures, look, you know, take a deep dive into the business to see what can be done to create, you know, more value with their business. But unfortunately, people you know, don’t do that or want to invest that time.
Brian Hemsworth 4:06
So if they do invest that time, the likelihood that they’re going to create more value by cleaning up their books by maybe changing some of the way they’re doing operations that makes their business look more attractive, that’s part of it, and is also part of it. The more buttoned up that businesses the better it is for the buyer in terms of things like financing, or SBA and their ability to get into that business.
Matt Coletta 4:32
Absolutely. Buyers today are much more sophisticated than they have been in the fast in the past. They can go online and quickly learn. You know, what, what’s important in buying a business. So, buyers look at a business as an investment. And that’s how a seller should look at it. sellers need to spend more time understanding what drives the buyer on on deciding why They’re going to purchase that business. So doing simple things like putting a management level person in place, updating the equipment, creating policies and procedures, improving the books and records and eliminating a lot of the perks that run through a business. This is going to help create more interest with the buyer pool as well as make the business more financeable when it comes to going to the bank and trying to get a loan.
Brian Hemsworth 5:28
Tell me, what are some of the common either mistakes or misconceptions that you see business owners having or or making. When they come to you selling a business, what are things that they sort of don’t have, right or misconceptions about selling?
Matt Coletta 5:47
Oh, so there’s, there’s a lot of things. A lot of sellers don’t document their policies and procedures, they don’t document what I call the recipe to the cake. So they own this business. They have it all here in their head. And they don’t create a business that has clear transferable value. And this can create some challenges. So a lot of times that will require the seller to stay on long term for a longer transition period. And a lot of times the books and records are in a position where it’s not financeable. So they have to carry a note. There are situations where the seller is adamant that this business is doing a certain amount of cash flow, and therefore we have to do an earnout to get the buyer comfortable. So there’s a lot of those things that sellers don’t think about until it’s you know, until there’s a deal at the table. And they don’t realize the consequences of those actions that they did previously.
Brian Hemsworth 6:54
And you’ve already mentioned they a lot of business owners probably have the timing wrong, that they think they’ve got everything buttoned up. But it really takes a little while to get everything prepped the actual sales process once a company is ready to go, I know this can be very short period of time very long period of time. But But what do you see with the businesses that you typically represent? What what’s a period of time to actually go through that sale process.
Matt Coletta 7:22
So everything we look at his case by case, so that’s where my value comes into place. So my 30 years of experience, and looking at different types of businesses, understanding what the buyer pool is looking for, you know, what is what is it going to take to get this business into a position where it’s going to be saleable and attractive to buyers, and, of course, lenders. So, so it’s, it’s it’s a lot of experience, and knowing you know, what is involved, and we look at it case by case, I find that there’s no two businesses alike, everything is different. Everybody runs their business differently. So that’s the value I bring to the table is being able to look at it and decide, alright, here’s the best course of action going forward.
Brian Hemsworth 8:10
So give me just a little slice of what’s what’s a business day in the life of Matt Coletta? What are you doing on a day to day basis for your clients? What are the things that you do?
Matt Coletta 8:24
Well, I analyze a lot of financial statements. So we go through a process in determining what the real cash flow of businesses, that basically involves looking at financial statements and doing a recast determining you know, what perks are acceptable that we can add back and creating a financial analysis spreadsheet, to look at a big picture view of the business and what the cash flow is. So we do a lot of work around that. We do a lot of write ups, packaging on the business, it’s one thing that we spent a lot of time on and what we’re known for is our packaging of our business, we find that it is important to document as much about the business as possible, and and reflected in its best sweat you know, the best way we can. So otherwise, we end up having a lot of conversations, the sellers get fatigued and and frustrated that they’re answering the same question you know, 1015 times. So we go through a lengthy process and creating questionnaires and our packaging and, and deal management we do a lot of deal management. So managing the process.
Brian Hemsworth 9:39
And in deal management, I have to assume you spend a lot of time talking to attorneys accountants, not only the ones maybe for the sellers, but for the buyers as well and that you’re you’re often sort of the person in between who’s trying to make these deals happen and and trying to get everybody happy.
Matt Coletta 9:56
Yeah, I’m essentially the quarterback so I have have multiple people involved in a transaction that I have to manage. We have the seller, the sellers, CPA, the sellers, attorney, the sellers landlord, we have the buyer, the buyer’s attorney, the buyer CPA. So all of these people have to be managed to make sure they’re going in the right direction, and doing it in a, in a way where we don’t jeopardize the momentum of a transaction.
Brian Hemsworth 10:26
Just one more question sort of on this on the process, on on, on what you’re doing? What’s, what’s the sweet spot for you, and M&A Business Advisors? Is it is it a size of company, you mentioned, you do work in a lot of different industries. But is there a size? That’s kind of a sweet spot for you guys to work with?
Matt Coletta 10:45
Yeah, so we handle a wide range of industries, we don’t necessarily need to be experts in the industry, within the business that we’re selling, we are experts in the process of determining the value and transferring the ownership from a seller to a buyer and managing the process that comes along with that. So that’s why we handle businesses in a wide range of industries as far as the sweetspot. We, so I have I have multiple associates that work for me, we’re able to handle a wide range of deal sizes. My deal sizes are typically between like five and 25 million. And and these are typically manufacturing distribution service related type of businesses.
Brian Hemsworth 11:34
Gotcha. So let’s, let’s get away from work for a couple minutes. Let’s just have a little fun with this. What does Matt Coletta do when he’s not busy preparing businesses for sale and selling businesses?
Matt Coletta 11:49
Huh? Well, I am married. I have two daughters that are in college. And I do a lot of mountain biking. So very fortunate to live in an area here in the Santa Monica Mountains where we have some of the best mountain bike trails. I’m also a golfer, and in one of my big passions is fly fishing. So I do two or three fly fishing trips a year. Some of them are remote in Alaska.
Brian Hemsworth 12:23
Didn’t you just do when was it last year that you did.
Matt Coletta 12:26
Brian Hemsworth 12:26
One of the Alaska trips.
Matt Coletta 12:28
Yeah, we had a trip planned a very remote Alaska trip, the the lodge took two days to get there. And that got cancelled in 2020 because of COVID. We ended up going in September of 2021 was which is considered late in the season is very cold that time of the year. And it was a blast. We were we are one of the best lodges in Alaska. And this was a full week trip. Most of them are five, you know, four or five days, this was a full seven days. And it was it was wonderful.
Brian Hemsworth 13:02
Oh, I bet especially coming off of not being able to really go do that for a year because of COVID. And then going out and having a great trip like that. What so when you go to Alaska fly fishing in September, what’s weather like?
Matt Coletta 13:17
It can be as low as 30. In the evening, the daytime temperatures typically 45 to 50. And you have to be prepared, you have to have the right gear and clothing. Otherwise it can be it can be miserable because you are literally out there in the elements.
Brian Hemsworth 13:37
Now I’m assuming you’re not taking the wife and daughters on the fly fishing trips. I am not. So what are the kind of trips that you do you’ve done with the family or you’ve done with the wife, what are some of the other travels, travels that you’ve done that you’ve really enjoyed?
Matt Coletta 13:53
So my wife and I do like to travel. I have a lot of family in Italy. So every few years, we’ll we’ll go there on a short trip. My wife owns a business as well. So time is limited but we go skiing. It’s another thing we enjoy doing. And so yeah, we’ve got some trips planned here, coming up, and we’re looking forward to those as well.
Brian Hemsworth 14:23
So one other thing that I wanted to ask you about before we let you go. I’ve heard you speak of and I want to make sure I get this right. You like California wines. And in particular you like blends, which is a little bit different. And I actually like that a lot because I’m somebody that likes blends. Tell us what it is about blends that you particularly like.
Matt Coletta 14:49
So my family is Italian and we’ve made wine for many, many years. And so I grew up, I grew up in a family where we were making wine as well. And my, we would make a typical Merlo or cab type of wine. And I always found it interesting to be able to blend the grapes and manipulate the flavor. So very similar to the Rhone type of wines. I’m a big fan of the Syrahs. And, and what you would typically see in the south of France in the Rhone district where you’re blending different grapes to create different types of flavors, and typically those flavors have more of a cherry and a tobacco type of flavor and my and I just tend to like those more than just a straight type of grape like a Merlo.
Brian Hemsworth 15:48
Yeah, I think that’s the thing that’s that’s attracted me to it is there’s you can get very interesting blends. Blends, I think it a kind of a bad name because a lot of the big mass winemakers blend, you know, the Campbell Soup philosophy, we got to make this wine for everybody across the country and it’s got to be the same everywhere. But when you find those vineyards that have kind of specialty blends to me, those are just, those are wonderful. They tend to be very affordable. You tend to get these great flavors that you don’t find in the varietals.
Matt Coletta 16:18
Yeah, I agree. We, we just did a we did an event where we had several people do a wine tasting and I focused on the blends and interesting most most of the people who attended you know, we’re very interested and tend to lean more towards the blends. Andrew Murray is one of my favorite wineries out there in the Santa Ynez Valley. He focuses on on that on that Rhone style of blending and, and I really enjoy those minds.
Brian Hemsworth 16:51
So my final question on that is when you go to Europe, do you drink California wines when you go there? Do you drink? Do you drink the local
Matt Coletta 16:59
Drink the local.
Brian Hemsworth 17:00
Good for you.
Matt Coletta 17:01
Brian Hemsworth 17:01
Good for you. Hey, Matt, thanks for coming in. Appreciate your spending some time with us.
Matt Coletta 17:05
Thank you appreciate being here.
Intro Speaker 17:15
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