Monty Walker

Monty W. Walker, CPA, CGMA, CBI,  of Walker Business Advisory Services, is a member of the M&A Source Leadership Committee and is the go-to guy for tax, exit, and transition strategies for our members. Monty is a member of the American Institute of Certified Public Accountants, the Texas Association of Certified Public Accountants, the International Business Brokers Association, and the Texas Association of Business Brokers. He has been recognized by his peer group in the business transfer industry as one of the foremost innovative advisors to small business owners in the areas of business transactions, business structuring & design, business tax planning, and business exit planning.

He works with business sellers, business buyers, and their various advisors, such as business intermediaries, accountants, and attorneys, to manage the unique financial, tax, planning, and procedural matters associated with buying and selling a business. Monty is a featured speaker and presenter at many of the M&A Source and IBBA events. Due to his background and many years of experience in the area of business transfers and business transitionshe is known to his clients and colleagues as “the business transaction CPA.”

Tell us about your career and how it led you to do this work with the M&A Source.

Growing up, my family had various small business ventures where I was able to get a lot of training and exposure to how entrepreneurs’ function. When I started college, I knew I wanted to major in accounting. My goal was to become a Certified Public Accountant (CPA). While in college I worked for a Stroh’s Beer Distributor where I attained the position of general manager. At 21, I was the youngest Stroh’s general manager in the country. The learning experience was great, but the job responsibilities made it impossible to get my college degree completed. So, I quit so I could complete my degree. 

Once I was out of college, I landed a position as a controller for the Boy Scouts of America working in one of the district offices. This position allowed me to meet many volunteer businesspeople which led me to be introduced to wealthy family looking to bring in someone to serve as the CFO in their family office. I worked for this family until around age 32, at which time I decided to take the entrepreneurial plunge. Prior to leaving, a business broker came to the family office to meet with me about some of his business listings. This is the first time I ever met a business broker. The listings were not the type of businesses of interest to my employer, but I did decide to purchase a couple of them myself. So, when I left a bought a couple of businesses and started my business advisory practice.  

 The business broker liked the way I structured and negotiated business acquisitions. He called me to see if I could help him with a business deal that was essentially dead. I attended a meeting with him, the seller, the buyer, and their advisors. At the end of the meeting, the deal was back in play. The deal ended up closing, the broker made his success fee and was very happy. But, most important, that broker asking for my assistance led me to find my calling. It was that event that made me decide to focus my business advisory practice on supporting and advising entrepreneurs with the unique planning needs associated with buying and selling businesses. I now practice nationally advising on business transactions. 

What personal characteristics and strengths have supported your success in working with the M&A industry? 

Technical knowledge is certainly important. The ability to understand economics, financing, accounting, tax, marketing, sales, law, etc. is important and essential. But a trusted advisor looks beyond these technical items and focuses on client relational factors. Family time, children, grandchildren, success, legacy, significance, etc. are what people find of value and the M&A industry is about people. Yes, this industry is about transitioning business ownership, but it is peoples’ lives that are impacted. So, using technical knowledge to help people meet their objectives while staying aware that the relational factors are most important is what has helped me attain success in this industry 

What is your greatest career accomplishment? 

I really can’t find one single event that I can say represents something I identify as a single great accomplishment. Practicing nationally has enabled me to help many people across multiple industries.  

I do consider the positive results I have witnessed experienced by many of my clients to be a great accomplishment. Several years ago, I had the honor of speaking before the United States House of Representatives Small Busines Committee on the topic of How Tax Complexity Hinders Small Businesses.” This committee was looking specifically for a tax practitioner in the small business area when I was contacted. My chosen career path is what led me to be chosen to speak before this group. Helping people is really where my greatest accomplishments reside but speaking before the United States House of Representatives Small Business Committee was definitely a significant honor. 

With regard to the majority of your engagements with M&A advisors, how do you generally assist them? 

With respect to M&A advisors, my role is to help them achieve success in representing their clients. The M&A advisor is the quarterback in the business transaction. I can be engaged by the seller, buyer, or I can be neutral and be engaged by both simultaneous. A simultaneous engagement is a neutral engagement where I am there to essentially represent the deal.  also have some M&A advisors that engage me to be a team member. In this case, I am there to provide transaction support to all parties in the deal. M&A advisors who engage me as a team member are doing so to bring a comprehensive service offering under the roof to the transaction. 

 I have a general review process I do for business transactions in which I create and send back a deliverable report called a Transaction Structuring Report. This report provides narrative and numerical data information on structuring, tax strategies, tax outcomes, payout arrangements, etc. This is one of my most requested services. 

Do you just do M&A tax advisement, or do you provide other services – valuations, consulting, etc.? 

My focus is on providing business transition planning and transaction support services. I provide support to entrepreneurs in the areas of business transactions, business structuring & design, business tax planning, and business exit planning. I work with business sellers, business buyers, and their various advisors, such as business intermediaries, accountants, and attorneys, to manage the unique financial, tax, planning, and procedural matters associated with buying and selling a business.

What is the biggest mistake you have made when working on a deal? 

I can remember one deal in which I had a calculation error occurring in the spreadsheet I compiled to do data analysis. There wasn’t anything evident to show that the error was occurring, but something made me feel the need to essentially audit through the analysis before completing the deal. There were several businesses in the transaction. I was at the location where the deal was being finalized. The day included morning meetings with the deal terms to be agreed upon and signed in the afternoon. Some changes to the spreadsheet were required in real-time during the morning meetings which lead to the calculation error. After the morning meetings completed and about two hours before the signing of the deal terms, I identified the error. The error was around $2,000,000 to the negative. The tax outcome was going to be $2,000,000 more than what was being illustrated. 

The parties were not happy. In fact, I took a significant tongue lashing. But, after the initial frustration was out of the way I was thanked for my integrity to disclose the error and thoroughness to locate it. It was a humbling experience and a significant learning experience. That happened around 25 years ago and something like that has never happened again.  

What are the three most important qualities that you think a good M&A advisor needs to have? 

I look at qualities as being something above and beyond having the requisite knowledge to achieve success. There are numerous qualities I can identify an M&A advisor needs but the three most important I believe are: 

  • Listen – Clients will listen to you only after you listen to them.
  • Clarity – Clear and understandable communication leads to perceived expertise.
  • Passion – Have passion in your work. It shows you love what you do.  

Clients migrate to those who make them feel comfortable. Listening to them, speaking to them so they understand, and letting them see you love what you do helps them gain comfort which leads to the M&A Advisor being a trusted advisor. 

What is the most interesting deal that you are working on today? 

Although some of my deals are interesting, I am most proud of a current engagement involving a widow whose husband recently suddenly died. I advised her husband years ago while he was purchasing his business. I have also been a resource to him as he needed advisory support on various business matters. He told his wife if anything ever happened to him that she needed to call me. I am now helping her at a very tragic time in her life. This is the core of what I strive for in my practice, which is to be a trusted advisor. 

What changes and trends do you see on the horizon that will impact on M&A? 

The M&A industry is dynamic and constantly changing. I did a study several years ago on the changing face of entrepreneurs. It appeared that the age of entrepreneurs was increasing. I found this to be true. From 1990 to 2010, the percentage of self-employed people grew as follows:

  • 44.50% growth for people age 45 to 54 
  • 74.30% growth for people age 55 to 64 
  • 65.70% growth for people age 65 and older 

Supply and demand suggest that older people with businesses will sell to younger people wanting businesses. This is also how retirement monetization is to work. Older people sell assets to create cash for retirement while younger people are investing and growing retirement assets. 

What I found is that the number of entrepreneurs age 44 and younger decreased, while the number of entrepreneurs age 45 and older increased. People reaching retirement age are working longer to supplement retirement assets and this is being done in part through business ownership. Also, older entrepreneurs are selling to older entrepreneurs. This is happening, in part, due to a lack of confidence in younger people’s ability to run their company. Thus, older sellers are tending to seek older buyers. I still find this to be true today. Older entrepreneurs will stay strong and they will have a tendency to favor selling to older buyers. 

What advice would you give to new people entering the M&A profession?   

Be well capitalized so you do not need to depend on immediate revenue for survival. Either join a firm so that infrastructure exists in which to learn and receive support or develop a strong support network. Be prepared to invest in yourself. Pay for education courses and pay to attend M&A-related conferences. 

Most important: be patient. It takes time to get established. Keep in mind, you are your brand. Even if you work for a firm, you are your brand, and building brand recognition takes time. This is just how professional services work.  

Please tell us something about yourself that has nothing to do with your M&A career. 

I like to run and bike. I do several half-marathons each year. I participate in several bike events each year. One bike event, in particular, is 100 miles and then the next day is a half-marathon run. So, I do try to keep in shape and stay active. I also hunt and fish.