How to Buy a Business Without Having All the Money | Erin Sisko (#211) — Transcript
THE PICTURE OF WEALTH · EPISODE 211
Buying a business can take more than personal savings: it can take a seller willing to finance part of the deal, the right operating partner and a network you trust. Erin Sisko, founder of The Elleiance Network and a former BDC account manager, joins Dustin Serviss to discuss her bakery acquisition, a harder second deal and how she weighs business ownership against time, risk and family life.
Listen to the episode
Chapters
[00:00:00] Why buying a business may be more achievable than you think
[00:01:49] What BDC finances and how lending terms reflect risk
[00:08:56] Buying a bakery and investing alongside an operating partner
[00:15:00] Why Erin’s risk tolerance has increased with experience
[00:18:51] Riding the emotional waves of an acquisition
[00:24:18] The next-step test and the people who help a deal happen
[00:26:39] Asking for capital and introducing seller financing
[00:27:53] Vendor notes and Erin’s experience with acquisition structures
[00:30:45] Using the first business to help finance the next
[00:38:42] Choosing businesses you understand and can improve
[00:39:51] Operating partners, equity and the risk of having to step in
[00:44:51] What happens when the freezer fails and the oven door falls off
[00:46:29] Gratitude, family and the habits that keep Erin sharp
Guest & resources
Further reading from the episode show notes; this BDC study provides broader context for Canada’s ownership transition.
Related episodes
This transcript was generated from the episode audio and lightly edited for readability. It may contain transcription or speaker-attribution errors. Refer to the recording for exact wording.
Transcript
[00:00:00] Dustin Serviss: Erin Sisko built a career around helping entrepreneurs and business owners transact in business. She worked for a major Canadian corporation that financed and helped businesses with major projects. We dove into what she's done in the last five years. So in twenty twenty two, she bought her first business. She's just in the process of buying her second business. I'm quite passionate about trying to figure out how business owners are going to exit their great businesses in Canada. And, also, for them to exit, there's gonna be someone coming in and buying the business. And so we had a great conversation around psychology
[00:00:36] Dustin Serviss: of buying a business and how risk is assessed as we age. Does it get riskier? Should we take less risk? How are we actually putting deals together? Many people believe that to buy business, you need all the savings. Well, in the landscape of business, that is not true. And we unpack exactly how to do it, how many people could achieve business entrepreneurship more than they probably think they could. Welcome you to the picture wealth this morning.
[00:01:05] Erin Sisko: Thank you very much. I'm happy to be here.
[00:01:08] Dustin Serviss: Awesome. Well, I think the thing that was first off most intriguing is that you do have nearly a decade of experience working for business development bank for Canada and working specifically with entrepreneurs on how to transition a business and how to put together a deal. And, again, I don't wanna take too... To the words out of your mouth, but that is fascinating to me. I think I wanna start there and just give listener a a bit of a foundation into what were some of the key things that you saw with working with so many entrepreneurs, and then let's dive into psychology of business owner.
[00:01:49] Erin Sisko: Okay. Sure. I started at the BDC in twenty twelve, and I was there for ten years, always on the client side. So I was a senior account manager dealing directly with small and medium sized business owners. High level, the BDC is a project based term lender in Canada. That's what I did. They have different divisions. They do have a venture capital division, some funds advisory, but, largely, their largest division is project based term lending. So we work complimentary to all of the chartered banks in Canada. We don't do any day to day banking or anything revolving.
[00:02:30] Dustin Serviss: What does project based mean?
[00:02:33] Erin Sisko: Project based means any sort of project that you could be working on that would require a term loan. If I go back, I've been out for five years, but it feels like it still have to roll off my tongue for how often I said it.
[00:02:47] Dustin Serviss: Thank you.
[00:02:47] Erin Sisko: So if you... So a project, the the three large buckets are asset based lending, so land and building. Equipment would be common types of term loans and then working capital, so unsecured lending as well. So when you you think about... It's a term loan because you pay the loan back as the investment that you're investing in, the asset that you're investing in pays you back. So that's why it is the smartest to be structured on a term loan instead of something revolved because it's going to pay you back over a term as you use it to help you make money. There's gotta be an ROI on this investment.
[00:03:34] Erin Sisko: So if you're gonna buy a building or a piece of equipment, you know, that's how it's gonna pay you back. We structure it over the life of the asset. Or if it's working capital, typically, a maximum amortization is about five or six years depending on the project, but we try to match it up to cash flow and make it, you know, as reasonable as possible that we're all successful by going into business together and helping you grow by giving you the money to do so. So that... That's the BDC, which means that I really only talked to entrepreneurs when they were growing. That's when we get involved the most.
[00:04:18] Erin Sisko: We don't really like to get involved when they're in trouble and, like, consolidate all the debt that they've accumulated. So our ideal client is a founder who is growing through a project, through something that they want to invest in, and it's bigger than what they have set aside right now, and they need some debt, some very standard term debt. There's an interest rate and a term, and you pay us back. And in order to kind of move forward in that direction with that type of project.
[00:04:56] Dustin Serviss: Love it. I love it in the environment of expansion is kinda like what I'm thinking. I do have experience with BDC. I did buy a office building in downtown Kelowna in twenty eighteen, and I think you mentioned interest rate. It tweaked my brain to think about it. For all this flexibility and wanting to be partners and we're not a chartered bank, there is a little bit of a premium on the interest than you might pay at somewhere else or defend it. Defend it if I'm wrong in saying that you pay a little bit more for that flexibility.
[00:05:30] Erin Sisko: Yes. Typically, you're not wrong. And what I say around that is you pay for the level of risk that your investor or lender is taking on with you. So if you want a longer amortization or a higher loan to value or to give the lender a lesser amount of security, I e, no personal guarantee, no corporate guarantees, no GSA, then that is possible, and it is compensated in interest rate.
[00:06:08] Dustin Serviss: No. Okay.
[00:06:09] Erin Sisko: Like any other type of negotiation, there is five or six or seven areas that we gotta work together. So, like, what's the most important thing to you? And if you came to any lender and you're like, I have fifty percent down. I have an eight hundred credit rating. I have ten million in retained earnings. I've been in business for twenty years. Then we're like, great. Here's twenty five percent of the project at, like, the lowest bottom barrel of an interest rate because you've taken away almost all of our risk at that point, but that's not the sweet spot for the BDC. We tend to deal with clients that, you know,
[00:06:57] Erin Sisko: want a twenty five year am on the building, not a ten year am. Or like I said, we play with security. We play with loan to value. We can do a hundred percent loan to value. I say we. I don't work there anymore. I don't like
[00:07:11] Dustin Serviss: I know. I know.
[00:07:13] Erin Sisko: You know? But
[00:07:13] Dustin Serviss: I know.
[00:07:14] Erin Sisko: That's the difference when you're looking at a bank depending on... And if you want the lowest, lowest interest rate, we're maybe not maybe not the best lender. Like, maybe try one of the chartered banks because you just need a little bit, and you're you're really strong in the borrowing department. But if you need more flexibility, that's where the BDC is a really good contender.
[00:07:37] Dustin Serviss: Well, I think that... That's a great foundation, so thank you. To set us up for sort of the next chapter or segment of of my curiosity around you and sort of what you're building. You are building business or you're... Bought your first built... You bought your first business recently, which we'll talk about in a minute. And business ownership is something that is going to be in your future, is in your future, and you're a part of right now. And we've had a lot of guests on the podcast, male guests, talking about business transition, buying, selling. I've got not as much representation from a female side in
[00:08:16] Dustin Serviss: the process, and that intrigued me about some of your posts online. And, you know, so maybe give us your perspective of buying a business. I recently did a episode on buyer psychology. It was one of the recent ones, and I did not... Seller psychology as well. But, again, that's kind of from my lens and some of the things that you go through when you buy a business or when you sell. But give us some of your experience most recently, and feel free to share in story as much as you can without, you know, anything too confidential. And that was a long winded question, but I hope that that stirred up some thought.
[00:08:56] Erin Sisko: Yeah. Okay. So I acquired my first business in twenty twenty two, and it was not by some on purpose plan. It was something that, like, the stars aligned and things just continuously fell into place. And next thing you know, I bought a business. And so I've I've founded a business too. I run a business called the Elleiance Network, and that's what I started when I left the BDC. And just high level, I define that as a business mastermind network for Canadian women entrepreneurs who are looking to build a valuable company. So that's my day job. And then... But what I learned at the BDC is that I'm
[00:09:49] Erin Sisko: actually kind of obsessed with entrepreneurs and entrepreneurship. So that's everything that I do, and I really wanted to get my hands dirty on these different aspects of entrepreneurship. And the best way to do that is to just get in there and do it in my experience. So working at the BDC was a really, really great foundation, but my hands were really clean. I was personally taking no risk, and I did a lot of advising from a position of reading articles and talking to other entrepreneurs, but not my own lived experience, which now I feel like I know a hundred times more than I did. I thought I knew a lot back then.
[00:10:39] Erin Sisko: But now that I've started something from scratch and I've bought, you know, and done a million things in between that, there is something to be said about getting in the trenches with these founders to be able to properly advise them. So that was one of my reasons. And you know how... So I bought a bakery with a partner. Now my personal experience as a business acquirer, I'll call it, is because there are several different ways to get involved in business acquisition depending on what your goals are, why you wanna do it, what you're hoping to accomplish. So I can speak from my own personal lens,
[00:11:28] Erin Sisko: and that is I have decided to get involved in business acquisition as a... To diversify my own portfolio of assets. And like I said, I love entrepreneurship. So this is an asset class that excites me and that I have a unique level of understanding of because of my ten years at BDC. And then my five years of being a founder myself. So I am not involved in the day to day. This is separate. So from my lens, I look at it like an investor. This is an asset for me. I do not have an emotional attachment to this business. I look at the numbers. I look at value driving factors. It's, like, reputation as a business in my city.
[00:12:26] Erin Sisko: So far, the two businesses I've acquired are local businesses. What systems are in place? How much founder involvement? How... You know, I look at all what sort of future opportunities, what additional value can me and my experience bring into this business, where are there gaps that I feel I could fill and strengthen these financial statements even further. So these are some of the aspects that I look at. I have an operating partner. So once I go through all my due diligence and structure and negotiation and funding, then I largely step out and stay on at a high level in a strategic advisory role. So I think my lens of business acquisition
[00:13:16] Erin Sisko: could be a little bit different than somebody who is acquiring because they want it to be the business that they own for a long time and that they work in, that they are personally passionate about. If it's a management buyout and they've worked there for the last twenty years, if I were to ever acquire a business to help me grow the Elleiance Network in some vertical of what I do there to help me grow faster, I think I might even have a bit of a different lens on how I would assign value and view that particular business, but I haven't done that yet. So I say that I participate in the silver tsunami, and I buy businesses from retiring baby
[00:14:06] Erin Sisko: boomers. And it's one way to get involved in business acquisition, but it's definitely not the only way, which I think is really interesting.
[00:14:17] Dustin Serviss: Yeah. Well, it's a... It's, it's an epidemic that is across Canada that is all there's business, great businesses, and likely not a lot of... Not as many buyers as one might think and not quite as simple as just push a button, sell the business. I'm retired now. It is... It takes a creative mind as a buyer, and it takes also a very creative mind as a seller and it... More an open mind on the seller. The seller can be less creative. They just need to be open to what... You know, let... Everyone would just like to push a button maybe and and... Or most people. Say some people might wanna kinda slowly phase out, but that's very, fascinating.
[00:15:00] Dustin Serviss: And and I wanna unpack your decision making as it applies to risk. And has your risk gotten more risk? Like, you are interested in more risk as you get older, or are you reducing risk as you get older?
[00:15:19] Erin Sisko: I'm not getting older, am I?
[00:15:21] Dustin Serviss: Well, nothing. I love it because that's that's just a way to look at things. And if you're looking at it like that, then it's it's sort of easy. Okay. I'll ask you this way. Is your risk the same as when you were twenty year old there?
[00:15:34] Erin Sisko: No. No. It's not. It's actually... Interestingly, in this...
[00:15:40] Dustin Serviss: So like
[00:15:41] Erin Sisko: I said, it's it's part of a diversified portfolio, so I've gotten smarter, and I understand wealth better, and I understand assets and what a diversified portfolio even means to me. So that's me coming a long way from being twenty years old.
[00:15:58] Dustin Serviss: Right.
[00:16:01] Erin Sisko: In this sense, because businesses don't necessarily have to be a thirty year hold. You can add a lot of value to a business and turn it around in five to ten years and make a good profit off of it. So, again, depending on what your goals are and how you want to run that business, it it can kinda serve multiple different purposes in your life. And I really liked the conversation we had when we met briefly earlier this week, how we talked about it's also so much more than Justin, like, placing your money in a bond or a GIC because of who you meet and what you learn and the role that you wanna play in this, you can gain so much more
[00:17:01] Erin Sisko: value as a growth minded investor and entrepreneur than you can, I think, in any other asset class available? So that makes it kind of exciting if you are interested in entrepreneurship. But I would say that my risk tolerance has increased as I have gotten older. And the reason in this particular asset class that I'm looking at right now, which are small and medium sized businesses, so, like, a very private asset class. And I say that because I believe in myself a lot more. I know a lot more, and I have cultivated a network of people around me that give me confidence that if I run into a problem or if I don't understand something or if I
[00:17:58] Erin Sisko: need something to be able to navigate through a challenge, I have people that I can call or text or send a message to and that will get back to me very quickly to help me get through what might feel like is a disastrous situation or a stressful situation in business. You know, I... I've spent the last fifteen years now living and breathing entrepreneurship and cultivating a really amazing network of brilliant human beings, and that alone kinda makes me feel like I can do anything because I'm not alone in doing it. So those are some of my mindsets on risk when it comes to buying businesses. It's definitely increased as I've gotten older.
[00:18:51] Dustin Serviss: I love it. You have mentioned these people, and I think what I was sort of leaning into was the confidence that you get from buying. So maybe bring us back to twenty twenty two, your first business. Did you ever have moments in the buying process of the business where you almost had to rebuy it? So you're excited. You see this business or you see, you know, someone sends you a link to something you're like, oh, this is for sale. Oh, that might be cool. You look into something low energy. Then all of a sudden, you find something and it's high energy. And then, you know, someone takes a long time to get back to you and you consolidate again.
[00:19:30] Dustin Serviss: So I I think of, like, you know, investing in business, there is waves, or I experienced waves in the deal, like emotional... Like, if you wanna sell me something, get me at the start because my emotional attachment is highest. And then I will look at it from why, like, shouldn't I do this deal? And so it... You're kinda just checking off, like, oh, you know, that that proved me wrong. And so you kinda go to the end. It's like, well, I have ten things on my list, and there's nine of them are a goal. Green. So why do you stop? So my question to you is on your decision framework, how you kind of ride those waves, and who are those specific
[00:20:12] Dustin Serviss: people in your network that are, say, your core five that keep you rallying to the finish line to do the deal.
[00:20:22] Erin Sisko: Yeah. Yep. I resonate with everything you've said. For some reason, when I'm ready to put an offer in on a business, there's always somebody else who's, like, randomly ready even though the business has been for sale for two years. It's like, come on.
[00:20:41] Dustin Serviss: That's three extra one zero one.
[00:20:45] Erin Sisko: The first business, that is exactly what happened, and they took the other offer. And Oh, wow. We were like, okay. We tried. We're out. There'll be something else. You know? You tell yourself all the the stories to, like, keep your mindset okay, and you you keep moving forward. And then, of course, we own it now. So maybe a month later, we get a call from the the gentleman who had it listed, and the deal fell through. Are you guys still interested? So then that that was a little bit tough because you've... You're out. You know? We've been out for a month, and we forgot about it. And Yep. You know, to get back in was like, okay.
[00:21:31] Erin Sisko: Are we back in? Are we really back in? Do we really wanna do this? Now... So, yeah, the the second business, I have literally been trying to close on it for over one year. Over one year. So what I would say, again, from my lens as somebody who is a hundred percent approaching these as investments. That helps because I am less emotionally invested. There are businesses for sale, and I really do... It is my mindset that if this is supposed to happen, it will happen. And if it's not, it is okay, and it's... There will be another one, and there's always another one. So it's okay. So there is a benefit to
[00:22:24] Erin Sisko: wanting something but having that detachment to the outcome. And it's taken so long because this one here was, on the lending side, and I've learned a lot again in how to put the lending together on... In a business acquisition. The deal has had to change. We started off with a broker that really, really, really did not work, and, you know, I probably never needed to go that way. I happen to have... Know a lot about the financing landscape in Canada, so I can handle it myself. But, you know, there's lots promised and not as much delivered in a lot of cases. So you learn. You learn as you go along. I've never worked with a broker team before.
[00:23:13] Erin Sisko: It fell apart in the end. I had to start over again. All the things that happened. And so I have a business partner, an operating partner that I feel very fortunate to have her as part of my team. We work really well together, and she trusts me a hundred percent to find us the best deals and put them together, which is great.
[00:23:39] Dustin Serviss: No. No. We're talking about just the process of, you know, the buying, looking at the business, and who is the team. So if you ever have moments where you're like, oh my god. This deal... Like, so in this case, you're saying you've had all sorts of woes in the deal and the... Maybe you have growth or frustration. Yeah. You gotta call somebody. Who are you calling as, like, a listener?
[00:24:01] Erin Sisko: Okay.
[00:24:02] Dustin Serviss: There are people around in their life that are there, and they just don't know they're there. And that would give them the confidence. Like, if someone's on the fence about buying a business or leaving a career job, then their team is right there. They just need to know who they are.
[00:24:18] Erin Sisko: So on that, thank you for bringing me back. I... What I say, and my business partner and I say this to each other all the time, is if it's meant to be, it'll be... So, like, we're, like, we're gonna take the next step. I'm gonna take the next step. And if at any point in this process, something shows up or something doesn't come together that kills it and, like, there's no coming back from it, then so be it. But if we can get to the end without, like, sacrificing way too much... Beyond our limits, beyond where we're comfortable, then we keep going. And that is our litmus test kind of where, like, hey. Okay. We negotiated.
[00:25:08] Erin Sisko: They are agreeing with that structure. They are agreeing with that purchase price. Oh, that risk there, okay. We navigated it. It doesn't seem like a too big of a deal. Keep going. Keep going. Keep going. So that's been our process. Again, that little level of detachment. The team... So, you know, we are a small team. I come with some experience in areas that she doesn't have and vice versa, so I I lean on her. But then, also, we have a really good lawyer. We have a good accountant. Lenders, I have lots of lender relationships. Our first business, we actually... I wasn't able to initially get it funded through a
[00:25:58] Erin Sisko: traditional lender, so I had to get it funded through a private investor. So, again, it's that network. That network is really... It goes a long way to help you put a deal together because you might need different things at different times. Like, there is your standard support team of accountants and lawyers and bankers. But beyond that, you never know who you're kinda gonna need to call on or ask for some advice or ask for a little bit of money to close it. And to have those types of people that
[00:26:39] Dustin Serviss: How have you found or what have you refined since you first started on the ask for money? The... And it could be twofold. It could be, like, a genuine ask to a person for some money to invest in a business, and you'll pay them back. Or it could be in the sort of thing is like the seller. Most people don't understand or if if you have a team, they would probably enlighten you on this idea. But in many cases, a person can't get the financing to buy a business. And so the vendor has to take on some of that financing, which in real simple terms is, hey, mister seller. I wanna buy your business.
[00:27:16] Dustin Serviss: I can only get a million dollars from the bank, and you wanna sell to me. I'm right fit buyer. You need to give me a loan for a million dollars, which just means I'm gonna pay you back out of cash flow of the business over time. So what has evolved in your ask for money over the last few years? Or... And what have you seen the best entrepreneur... Scrappiest entrepreneurs when you're at BDC do in regards to finishing off a deal where BDC came short, and they made the deal happen because of some very creative way or ask.
[00:27:53] Erin Sisko: Yeah. That's a good point. Seller financing or holding a vendor note is a very, very common practice in structuring a sale of a business. And it's another thing that I love to share with people, and I think why this area of entrepreneurship is exciting and interesting to me is because it is just two people, a couple people sitting down at a table, figuring out how they're gonna make this happen together. And, yes, you can get a bank or a more traditional lender involved in some aspects, but you don't have to, and you can still make deals happen. And everybody could still win at the end of the day. So when I was at the BDC, their favorite
[00:28:56] Erin Sisko: structure was that the buyer came in with twenty five percent down in cash, that the seller stayed in at twenty five percent of the purchase price, and then the bank came in with fifty percent of the dollar amount. Now at at BDC, and this is not every lender, but if the vendor note was postponed for five years, meaning you don't make any principal payments on their money, you can make interest payments but not principal payments, and it was written down, we will postpone this for five years, then that could be viewed as equity that the bank would loan against. Just like if I came in with twenty five percent cash from my
[00:29:48] Erin Sisko: own investments or from refinancing my home, then that is equity going on to the opening balance sheet. And if the seller postponed theirs, now if they didn't, then it was still debt. So when we're looking at trying to reach a comfortable debt to equity ratio for a lender, those are some five... Now if you could pay them back before five years, then you're welcome to do so. But it had to be written down in your agreement of purchase and sale that it was postponed for five years. So that is a very common structure. Beyond that, there is, you know, a profit sharing or a revenue split after close. There is just multiple different ways
[00:30:45] Erin Sisko: that you could look at what they want and what you need out of the deal and come up with something that is reasonable for both sides that a transition can occur. So I think a lot of people believe that business acquisition is out of reach for them because they don't have very deep pockets or hundreds of thousands of dollars that they can put down, and that's just not always the case of what is required. And once you asset stack, like, I will share one reason why I'm able to buy business number two is because I bought business number one. I increased the value of it, strengthened the balance sheet and the income
[00:31:35] Erin Sisko: statement, and then could leverage that, to a cross guarantee. And then that makes everyone more comfortable with me coming in to buy business number two and requires me to put less money in of my own capital and let the, you know, the business cash flow just pay for the debt itself, which is my ideal way of structuring these if possible. Yeah.
[00:32:01] Dustin Serviss: I think that's... You know, many of the episodes before, we would talk about PE or private equity, m and a, bigger things. Yet what excites me the most about what we're talking about is this is available to everybody. Like, it literally is really grassroots, and I'm trying to think for all the people that could buy the business, but the... There's obviously that first stumbling block of, like, I don't have a million dollars. It's like, okay. Well, you... So so where do you think... And I'm just brainstorming right now. This isn't a a pre question. It's like, where do you think or how do you think someone looks at it
[00:32:41] Dustin Serviss: to know that these structures and these these ways of thinking are available outside if they listen to this podcast. But if it... If this is the first time they listen to it, it might not set in. But what's something that they could kinda leave the episode with sort of knowing and how to do, like, a... You know, you could check which way is the wind blowing when they see a business that might be for sale or they're visiting at a cocktail party and someone says, oh, man. I just hate our business. You know, I just wanna retire. And even though on the outside, it kinda looks like a good business and you think, oh, maybe I'm gonna buy that.
[00:33:17] Dustin Serviss: Like, what is the first step for somebody to... Do you figure out all that structure stuff, or do you just employ some... But, like, it's like, you know, we already kind of talked with the broker. It's like, well, the broker that... And then an m and a advisor, it's too big. So then then you go talk to your bank, but they're an employee who works at a bank. And, like, what do they know about entrepreneurship? And so there's there's skew there in the... And so I'm that is kinda... You see where I'm going?
[00:33:44] Erin Sisko: Yeah. Yeah. Like, where's the support for this?
[00:33:48] Dustin Serviss: What makes a confidence boost and to to know, like, don't Well,
[00:33:53] Erin Sisko: it should definitely hang out with me and you.
[00:33:56] Dustin Serviss: Yeah. Yeah. Yeah. That's a good one. You
[00:33:59] Erin Sisko: know, again, building your network. Right? Like, there's nothing more powerful than building... Like, when you're a founder, like, you can't possibly know everything. We are talking about one minuscule aspect of entrepreneurship that we happen to have a little bit of a depth of knowledge in. There is one million things that I know nothing about and that I need to call on all the people to help me. And, like, what you don't know, you don't know. So that's the other unfortunate part here that I think you're kinda touching on is that if you trip down this episode and you get curious, and that's all that I could want is get curious about it.
[00:34:35] Erin Sisko: Don't count yourself out before you have even put in some effort there because, you know, if I could just make a few people believe that this is available to you, that you don't have to be a... An extremely high net worth individual to be able to acquire a business and that this is another path to building your wealth that is kinda interesting and fun. And, you know, the the thing I say about business is that it is the only asset that you could own a hundred percent of and have no ceiling on its appreciation, have full control over how far this thing appreciates. Because in business, there is an example in every single industry.
[00:35:31] Erin Sisko: Even the stupidest thing has become a billion dollar operation. Like, somebody's done it. You know what I mean? Like, doesn't matter what it is. Like, you're like, that sounds ridiculous. And next thing you know, it is booming on TikTok. So there's no limits here. You are your only limit. So don't... Just don't count yourself out. I did not... You know, I I came into this with just enough knowledge to be dangerous probably. And when I say I still have only very few of the answers and that I truly am like, okay. The next right step here is x, so I'm gonna try to figure that out and see what happens. And then, oh, I'm still in the game.
[00:36:20] Erin Sisko: You know what I mean? I'm gonna Yeah. It's the next rights. That's all that... Like, a teeny tiny step. So you can... You... If you have someone that has done it before that you know who has bought a business or... There's so... The Internet is so deep and so wide with everything that you could possibly need. It... It's a starting place at least. And, you know, really just get curious about it and just tell yourself, like, what would happen if I just walked in to that guy or that gal's business and said, hey. Are you thinking about selling anytime soon? And what happens if they say, why? You wanna talk about it? Then what do you do?
[00:37:02] Erin Sisko: You take the next step. Like, the...
[00:37:04] Dustin Serviss: And the
[00:37:04] Erin Sisko: next step is nothing more than, oh, okay. You wanna meet me for coffee next week and talk about where you're at and, you know, just get to know each other a little bit? It's really just that it doesn't have to be a big overwhelming thing. It just has to be the next tiny little step, and you will be amazed at where you end up because you said, hey. You want... I'm curious. I would be interested maybe. You wanna chat about it and see what happens.
[00:37:34] Dustin Serviss: So for anyone who is saying or listed so far and say, oh, yeah, Erin. You're just... You know, you must not have kids, and I could never do that. You are doing it, and you are managing it. One thing that I... That comes to mind is when you look at... Because I'm envisioning that person walking into... I'm I'm thinking of your bakery. It's like I'm walking into the bakery, and I'm I'm kinda like baking. So there's two different... You know, you're talking from an investor standpoint currently. Many entrepreneurs likely would say... You know, I'm I'm just thinking around my time.
[00:38:09] Dustin Serviss: It's like, you walk into the bike shop and you're really into biking and you talk to the bike guy, or you talk to somebody and you're like, I'm really into this. Like, I could see myself with a bit of an identity extension by being the owner of this. So there's that piece of entrepreneurship. But when you look at it from an investment standpoint, how do you maintain... Is the... Also, it's not like, is there a level of curiosity that you have or passion that you have for the type of business, or is it strictly a numbers thing and fill in the blank?
[00:38:42] Erin Sisko: No. What my... How... Like, I don't I won't look at a business that... I say that I wouldn't... I would like to be a customer of the business. And I'm also not really gonna consider a business that I don't understand very well the business model or what they're doing. I don't wanna learn a million more things, and I want to be able to provide value. I know what my value is at this point. I know where I... Like, how I can take everything I've done in the last twenty years and package it up into some value, and I want to be able to do that. So that is kind of where I... The little box that I operate in is that I am interested
[00:39:36] Erin Sisko: in companies that I would be a customer of, that I understand the business model, and that I feel like I can add value to as a strategic adviser.
[00:39:51] Dustin Serviss: Do you think it's do you think it's more important to have the operating part? So let's put, let's put person in the the lens of an investor and wants to invest in businesses. I don't want those bonds. I don't want GICs so boring. I wanna invest in businesses and be a little more exciting at my next kid's birthday party. K? So they wanna do that. So that's what they're looking for. How important is the operating partner, and is that something someone should be on the lookout first before the business or find the business then find the operating part?
[00:40:33] Erin Sisko: So I think you could go either way, which is maybe not the answer you're looking for, but it depends on the business, and it depends on how much risk you wanna take. So when I say that I am more open to risk as I get older for all these reasons because I'm smarter and and more better networked at this point, I also... You... I am a mom, and I run a national business and a national funding award, and I am also busy. I I don't know how to bake, really. I can't pay... I'm not good at everything. Okay. I never want to have to hop into the bakery and run the show. So one way that I feel I could keep...
[00:41:26] Erin Sisko: Protect myself even better is that if my operating partner is also my business partner with equity and skin in the game alongside of me, then it is another protective measure that she's not gonna walk away from me. Now it... Pros and cons pros and cons. You know, I I have to... Obviously, if you take on an equity business partner, then... And things don't work out, and she still does walk away from me. I've had to buy out a partner. When we started the bakery, like I said, we had to get money from a private lender who did take some shares along with the debt, and then we had to buy her out. And it wasn't that fun. It wasn't that fun.
[00:42:17] Erin Sisko: It was expensive money at the end of the day. And so there's pros and cons. I so far have feel that I've gotten really lucky with my operating partner, but there is a risk there. And on the other side of it, it does tend to make people a little bit more invested in what you're doing. So... But if you're gonna buy a biz... And also the two businesses I've bought, would be considered small businesses, and they did not come with fully functioning teams. So somebody had to go in there because the seller wanted to leave, and they were very active hands on seller. And because I buy businesses from retiring baby boomers,
[00:43:05] Erin Sisko: in neither case, whereas they're a nice Google folder with systems and processes and everything that any team would need. So that part there needs to be built out. So it has worked for me to have an operating partner, But if you're gonna buy a business that has a highly functioning team in place and, say, the seller is already quite absent and living in Florida for eight months out of the year, then... And you're willing to take on that risk. Right? If the manager leaves, are you willing to step in and and train some... Like, how do you wanna structure that team is what I mean? And, like, you... It's not a... Yes. It is fun.
[00:43:55] Erin Sisko: If you like entrepreneurship, you can learn a lot. You can make some money. It's also super high risk. It can fail. The team could leave you, and you could find yourself with an apron on trying to figure out.
[00:44:10] Dustin Serviss: Well, I I think of that. I think where... You know, is there a story in the last four years, we, in the spring bought a building. A group of us bought a building. It has thirty eight tenants. And there was the power company had two different accounts, but the previous owner only kind of thought he had one. And so we moved one over, but twenty tenants all of a sudden didn't have power on a certain day. You know, they're coming in and and saying, like, we don't have power. Like, we're running businesses. So, like, I think of those little things where people are driving down frantically to the building to figure that out.
[00:44:43] Dustin Serviss: Is there any stories that you have of the bakery where you have had to put the apron on or figure out how to work the cash register?
[00:44:51] Erin Sisko: You know what? I haven't, and that's where... Don't get me wrong. There have been the day when the transformer blew and every freezer is down, and then the oven door falls off and all the things. But, you know, you just... You... The value in a good operating partner who... Like, then the... It's just phone calls to make. Okay. Right. We're gonna stay calm. If we've gotta tell our tell our next five customers, like, a big apology and a refund, then that's what we do. You know what I mean?
[00:45:27] Dustin Serviss: Like Yeah. Yeah.
[00:45:28] Erin Sisko: More just, being, like, that extra... Because my business partner, as you said, she did leave a full time job where she got a paycheck. So entering into full time business ownership where the paycheck isn't quite as stable in some circumstances. And, like, that's where, you know, we really rely on each other's strengths because I had been in business for quite a while. So to have that person to lean on when you're feeling uncomfortable or scared or challenged, you know, a lot of people don't have that. Like, I didn't have that at first when I started my business, and it's a lot. So partnerships have a lot of beauty in them, and they also,
[00:46:22] Erin Sisko: as we know with all partnerships in life, can also be the reason that you go bald or gray. Or
[00:46:29] Dustin Serviss: Hey. Hey. Can you see my beard in the in the video? So I wanna close off on a, we didn't talk about wellness or what you do to kinda keep your mind nourished and keep sort of your energy levels at a high level to be able to have the cognition to deal with all the things you deal with. Can you close us off with what sort of your routine looks like for health, fitness, nutrition, any... Or or or what you do to kinda stay sharp?
[00:47:04] Erin Sisko: You know what? I think what I'll say simply is I feel... I have an immense amount of gratitude for my life. I feel so lucky that I get to wake up every day and only do things that I'm fully obsessed with doing, which is raising my kids and building businesses. And I know that not everybody gets to say that. So I look at my life, like, because I I do things that bring me joy and are so purpose driven and fulfilling that the byproduct of that is that I am not gonna let myself go down. I am an important factor in making sure that I can get up every day and be the best mom that I could be and show up for my teams and my partner
[00:48:08] Erin Sisko: and my clients and my community and my network and all the people that rely on me to show up for them, my family, I I view that with gratitude, not with pain or a sluggish, like, oh, I gotta do this again. You know? So when you genuinely love what you... When you get to wake up instead of have to wake up, it changes everything about how you operate in life. And so getting enough sleep and putting enough nourishing food in me and moving my body and getting outside and doing the basic things, focusing on my breath when I need to, taking a ten minutes, whatever it is, is just it's all a part of a lifestyle that I've chosen and
[00:49:01] Erin Sisko: I'm committed to, which is that I get to do this life. And that's just a mindset that has... I've cultivated over the years. I haven't always had it either, but I chose this path, and I'm happy. You know, it it really brings a lot of fulfillment and just having work that fulfills you, I think, is an underrated conversation because everything else kinda falls into place. You naturally take better care of yourself because you wanna show up the next day and do it again because you're pumped up.
[00:49:40] Dustin Serviss: I do know. Listener, that was very special. That was a very cool nugget. Thank you, Erin, for sharing that and also the rest of the episode. For any listeners that wanna continue on with learning what you're up to and your mindset, where can people find most of your information?
[00:49:59] Erin Sisko: My website is Elleiance dot c a. Elleiance is e l l e i a n c e, and I probably hang out on LinkedIn most at Erin Sisko.
[00:50:13] Dustin Serviss: Awesome, Erin. I can't wait, for part two if we're ever so lucky to hear about all the rest of the businesses that you've, bought.
[00:50:20] Erin Sisko: Thanks, Dustin. I appreciate it.
[00:50:22] Dustin Serviss: You're welcome.