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Episode Summary
You’re tired. The business consumes you. You work 60-70 hours a week, everything flows through you, and the only path you can see is to sell the damn thing and start over. That’s the death spiral John Bartlett sees every day, and it’s exactly the moment most owners show up at his door. The 8th inning. No time left to fix what would actually move the value. John runs Brentwood Growth in the lower middle market ($5M-$50M enterprise value), the gap where brokers can’t help and the New York banks won’t show up. We got into the three life stages of owners, why work-life balance is what people actually want (not a sale), and the economic engine most owners can’t see: 10 to 20 hours a week, seven figures of distributions, if they fix the operator dependency first. Then we walked the M&A process end-to-end. Valuation, deal structure, earn-outs, adjusted EBITDA, the multiple, rollover equity, quality of earnings, and the gap between the headline number and the wire that hits the bank. If you’re 10 years out, this is the conversation. If you’re at the 8th inning, you’ll find out why your options just got smaller.
Top 10 Takeaways
- Owners fall into three life stages, and the right transaction looks completely different at 35, 55, and 70.
- Life is a jigsaw puzzle. The numbers side and the life side don’t share variables. Solve them separately.
- Don’t expect your M&A advisor to be your therapist, wealth advisor, or life coach. Different problems, different people.
- The economic engine you’re already sitting on can pay you seven figures for 10 to 20 hours a week.
- If your operating system isn’t grounded in cash flow and shareholder value, you’re not having a complete conversation.
- Your business is worth adjusted EBITDA times the multiple. Two numbers. Everything else is commentary.
- The multiple is the number of future cash flow years a buyer will pre-pay you for. Lower risk, higher multiple.
- De-risking the business (revenue mix, concentration, recurring revenue, owner dependency) compounds with EBITDA growth into a much bigger number.
- The headline price hides the deal structure: cash, seller note, earn-out, rollover equity. Negotiate the structure, not just the number.
- Show up to your M&A advisor 10 years before you want to sell, not in the 8th inning when there’s no time left.
Sound Bites
“And so the only thing they can figure out to do is just, screw it, let me sell the damn thing, and start over.” (@00:25:50) — John Bartlett
“They don’t understand and appreciate the power of the economic engine that they’re sitting on.” (@00:24:18) — John Bartlett
“You’re working 10 to 20 hours a week, making 7 figures. People don’t realize that that life is possible.” (@00:27:38) — John Bartlett
“The inability for most people to see their cash flow into the future becomes the Achilles heel.” (@00:21:50) — Ryan Tansom
“You gotta keep drinking water even when you’re not thirsty, because if you wait until you’re thirsty, it’s too late at that point.” (@01:01:01) — John Bartlett
“What they really should do is they should come see us 10 years before they’re even ready to sell, so that we’ve got time to work with them where they’ve got energy to do the right stuff so they can have the right outcome.” (@01:09:54) — John Bartlett
About This Episode
John Bartlett is the founder of Brentwood Growth, an M&A advisory firm focused on the lower middle market ($5M-$50M enterprise value). Before launching Brentwood seven years ago, John spent four decades as a serial entrepreneur, including growing one financial services business from $10M to $100M in revenue and from 25 to 300 employees over an eight-year stretch. He’s owned, run, and sold a handful of companies, and that operator experience is what makes his M&A work different from a typical broker or banker. John has been a podcast listener for 5-6 years, and the conversation reflects it. He speaks Ryan’s language on the gap between operator and owner, the trap of building a business that consumes you, and the work it actually takes to get a clean exit.
Resources Mentioned
- Brentwood Growth — John’s M&A advisory firm, focused on lower middle market businesses. — brentwoodgrowth.com
- John Bartlett on LinkedIn — Direct outreach.
- John’s contact — 908-377-7807, jbartlett@brentwoodgrowth.com
- Jack Stack / The Great Game of Business — Referenced as proof point that owners can run businesses well into their 80s. Jack has been on the podcast.
- Warren Buffett & Charlie Munger — Referenced as long-runway operators
- Bo Burlingham — Referenced on owner identity (author of Finish Big and Small Giants)
- Mike Rowe — Loosely referenced for the blue-collar trades segment Brentwood serves
- EOS, Vistage, Scaling Up, Pinnacle — Referenced as operating systems and coaching groups, with the caveat that they need to be grounded in financial performance and shareholder value to be complete
Connections
Phase + Module:
- Module 9 — Operator Transition — The transition mechanics John walks through end-to-end
- Module 1 — Ownership Goals — The three life stages and the “is it worth it” question that frames every transaction
- Module 4 — Sustainable Financials — The financial grounding that makes the multiple expand
Milestones:
- Milestone 5 — Market Value — Adjusted EBITDA × multiple, the two-number framework
- Milestone 6 — Transaction Value — Cash, seller note, earn-out, rollover equity, net proceeds
- Milestone 7 — Value Growth Plan — De-risking the business to compound EBITDA and multiple together
- Milestone 25 — Operator Transition Plan — The 12-month lockdown before going to market, the post-close transition period
Concepts referenced:
- Normalized EBITDA — Add-backs, adjustments, the gap between the tax return and the real cash flow
- The Multiple & WACC — Multiple as years of forward cash flow a buyer will pre-pay
- Value Gap — The space between what the business is worth today and what the owner needs it to be
- The Four Value Levers — Revenue mix, customer concentration, recurring revenue, owner dependency
- The Owner-Operator Trap™ — The death spiral John names directly
- Three Lenses of Value — Distributable cash, market value, transaction value
- Owner’s Roadmap™ — The 10-year framing John argues every owner should adopt
- Free Cash Flow — What buyers are actually buying