1:26

We have another fun one, ladies and gents.

1:28

This one, though, is probably

1:30

one of the most important things as a business owner

1:32

that you need to do. You need to plan

1:34

for and you need to do it now.

1:37

Wherever you're at in your business, you need to do it now.

1:39

And that is exit planning. With a

1:41

business owner, I've got Tracy gun on. I'm really excited

1:43

about this. I told her off camera that

1:46

I'm excited for a multitude of reasons. Again, everyone

1:48

should do it. We don't really talk about it much.

1:50

And then, my own uncle is ready for

1:52

it as well. So I'm here to learn along with

1:54

all of you. I just get to ask all the

1:56

questions. So without further ado,

1:58

Tracy, thanks for being here. And why don't you

2:00

tell us your story and

2:02

where you came from, what you got going on and how

2:05

you're currently sitting in a candy shop in North

2:07

Carolina. so much.

2:09

Totally. Refer to it as my cautionary

2:11

tale, right? That I feel like

2:14

as a business owner, I was running four successful

2:16

businesses, meaning they weren't in the hole,

2:18

right? They weren't making me millions, but they were

2:21

like most business, like 99.

2:23

9 percent of us, right under a million. And

2:26

I had four of them and I was managing them

2:28

all. Two candy stores, two restaurants,

2:31

one humongous restaurant that kind of put me

2:33

over the edge. And my daughter

2:35

had a grandbaby, which is why I'm in

2:37

North Carolina. And I was

2:39

like, all of a sudden I looked around

2:41

the bar one night at 1 a.

2:43

m., the band's packing up, my

2:45

staff is grumping, and I was like,

2:48

I don't want to do this. This is not fun

2:50

anymore. I don't want to do this. And

2:53

then, all of a sudden, I was like, I'm done

2:55

and so I contacted a broker and was like,

2:58

okay, I'll just say, oh, no biggie. That's what everybody's

3:00

like. They're going to sell their house. They think I'll just

3:02

say, same for business. We think I'll just

3:04

hire a broker. Everybody will want my

3:06

job that nobody wants. And which is

3:08

scary in itself because you have to show them

3:11

your books, you have to show them everything you have to show

3:13

them behind the curtain. The part we

3:15

don't want anybody to see. And

3:17

I hired a broker. He was someone I

3:19

knew had no personal grudge

3:21

or anything. And he was like, don't bother, just

3:24

liquidate everything. And I was broken.

3:27

Like I cried, I had a moment and

3:29

I was like, are you kidding? Like I've

3:31

been working for that

3:33

at that time, it was like 14 or 15

3:35

years. For this big

3:38

exit thinking someday

3:40

this will not just pay for myself, but

3:42

pay me back and

3:45

you're telling me it's a no go. What? And

3:48

I had to think about it and I had to think about

3:50

number one, why does he think

3:52

that it's not worth anything? Which

3:55

I had never thought about what makes a business

3:57

valuable before. I just had never thought

3:59

about it. It was valuable to me because it was paying

4:02

for all my things and it was growing,

4:04

but it wasn't valuable to him.

4:06

And why? So I had to learn about what that

4:09

meant. But also I had to figure out,

4:11

is he right? Is he right

4:13

that there's nothing worth salvaging here?

4:16

And if he is, what

4:18

do I do about that? Do I just, am I burnt

4:20

out enough that I think I'm out of

4:22

here?

4:23

Set the match, watch it burn, break

4:25

off the pieces or could

4:28

I do something about it? And I think as entrepreneurs,

4:30

we're like, how can I

4:32

pivot? How can I fix this? And this

4:34

was pre COVID. So this was before I got my

4:37

real pivot muscles going, this was

4:39

like, I'm just in it thinking, what

4:41

do I do? And so that's

4:43

what happened. And so I gave myself,

4:45

I set myself a date, like a deadline,

4:48

which Number one, most important

4:50

thing to do. And second, I backed

4:52

into it like, okay, what can I fix to

4:55

make this valuable? What can I fix

4:58

to make this? Attractive

5:01

to somebody and that's what I did

5:03

and that's how exitable was born this

5:05

business that I'm doing now

5:07

because I realized gosh, why didn't

5:09

somebody tell me this stuff? Like why didn't I

5:12

know this I'm smart running for businesses

5:14

How dumb could I be but I didn't

5:16

know and the thing is Almost nobody

5:18

knows what their business is worth. Almost nobody

5:21

knows what makes it valuable or not.

5:23

They have some ideas and they

5:25

don't know that they need to plan ahead.

5:28

They just think, oh, somebody will buy it. But

5:31

that's not true.

5:32

No, it is not a

5:33

very long story. No,

5:35

it wasn't very long. It was great. It was fantastic.

5:38

No, a lot of people don't know.

5:40

And we do this when we're working

5:42

with business owners, younger business owners

5:44

who are just getting started. And it's not an age thing,

5:46

right? The young business itself is you

5:48

need to think about. Your

5:51

exit, what you want it to be. We don't

5:53

have to plan for it per se yet, but

5:55

what type of exit do you want? Do you want it to be

5:57

a transition or do you want to be

5:59

bought out? Because from a a

6:01

book standpoint or even a value standpoint,

6:04

those can be two different things. And

6:06

you need to be able to structure

6:08

your business that way. When we talk

6:11

about exit planning and I know that's like the marketing

6:13

term that we all use, but really all we're talking

6:15

about is like, how do you leave your business? How,

6:18

when you're done, what can you do and

6:20

how do you do it? When you first did

6:22

that and went to a broker. Besides,

6:25

basically stripping down naked and saying, here's

6:27

all my stuff, judge me, we'll judge everything

6:29

I have. Besides that point,

6:32

where were you in terms of

6:35

the structure part of your business? Was

6:38

it like all over the place? Was it easy?

6:40

Like, where were you with the business structure itself?

6:43

So I was very blessed. I,

6:45

think of God blessing me, sending me an

6:47

angel. When I first started my first

6:50

business, my candy store, somebody handed

6:52

me the email within the first two

6:54

months. And so

6:57

I never again, never really thought

6:59

about it. I was like, I could do this, right? I

7:01

stepped homeschooling. My kids

7:03

all went to school. I was in this life transition

7:06

with my kids. Ex husband, it's just,

7:08

it was complicated and I wanted to build

7:11

something that was mine, right? And

7:13

I got to control. I never

7:15

thought about do I want to own a business

7:18

or do I want to run a business? Two different things. But

7:21

very rarely do we think about that.

7:23

And thankfully Lisa gave me a book

7:25

and I knew from the

7:27

beginning, I didn't want to be the candy

7:29

lady behind the register. It's

7:32

fine. I love my customers.

7:34

I love to see them grow up. 18

7:36

years later, I've seen them all right.

7:39

However, I just knew that would not

7:41

be attractive for me long

7:44

term, right? I like the

7:46

start the 0 to 1, not the

7:48

1 to 10. And so I

7:50

knew going in I would have to do a lot

7:52

of those technical things at first. So the

7:54

goal would be to get me out to

7:57

systematize and figure out how

7:59

it could run without me. And

8:01

what they would have the same experience without,

8:04

right? And so from the get go,

8:06

I always set it up with that in mind. And

8:08

when you always have that time at

8:10

the beginning where you're figuring it out,

8:12

right? Where you know you're going to have to be in

8:14

all, right? So the goal is to

8:16

get yourself out of it, right? To not be

8:19

Tracy driven. And

8:21

so when I had all four, the only reason

8:23

I'd be able to have four businesses

8:25

is that other people were working.

8:27

I have 42 staff at my highest.

8:30

It's a lot of stuff.

8:31

It's a lot.

8:32

And and not the easiest step, right? Restaurants

8:35

and retail are, you're talking like low

8:37

level, not skill,

8:39

but like just lower level income,

8:42

because often restaurant industry, everything

8:44

you could possibly think bad

8:47

does happen. If you've seen the bear,

8:49

that TV show, it really symbolizes

8:52

exactly what most restaurants are like,

8:54

and the insanity of the staff and

8:56

just all the things. I wouldn't be able to do that

8:59

myself if I was just dependent on

9:01

me. So I had systems in place.

9:04

But I didn't, I was the engine

9:06

that was pushing everything. I

9:08

was the octopus making sure

9:11

everything got touched, everything was

9:13

moving forward. And that's

9:16

the piece for me that I think

9:18

where I had the gap, right? When

9:20

we talk about setting the exit

9:22

plan, yes, it is how

9:24

do you want to leave or what is, I also

9:26

look at it like, what does the finish line

9:28

look like? Like

9:31

you go on vacation, you don't get on the plane

9:33

and not know where you're going,

9:36

right? You spend all that money and make a plan

9:39

and you don't know where you're going, right? Same

9:41

thing in a business, like you don't spend You

9:43

know, a decade working in a business and

9:45

not have a clear sense of where you're

9:48

going. And yet most of us are just like, we're like

9:50

that way. West, not

9:53

LF. North. Forward. Forward

9:55

and more. That's usually our thought,

9:58

right? More money, more customers,

10:00

more profit, and that way. And

10:03

we'll try a thousand different things

10:06

to make those things happen, but not

10:08

because we haven't

10:09

pinpointed like the destination

10:15

by pinpointing that destination, it filters

10:17

everything,

10:18

right? Like you mentioned about

10:20

do you want to have a transition? Do

10:22

you want to sell? I'll

10:25

give an example, like I had a gentleman I

10:27

was working with and he had 3 businesses. He

10:29

actually had a really good system, right? He

10:31

was working minimally. So that was, that's

10:33

a great place to start to sell, but

10:37

he, for each business. The model was going

10:39

to be different to exit because for his 1,

10:42

that was an oil company. The

10:45

people that we're going to buy that are other oil

10:47

companies. They don't care about his systems.

10:49

They don't care about they, what,

10:52

you know what they want his customers. That's all they want.

10:54

And he in turn also

10:57

wants his customers taken care of after 40

10:59

years, right? His exit

11:01

is very different than somebody

11:04

who's like a Brent. Let's say it was a guy who was

11:06

just buying his first company and he was

11:08

buying an oil company. He cares about the system. Do

11:10

you see how that's different? And what you work

11:13

on and improve. Is going

11:15

to be different depending on what

11:17

the exit looks like. When we do the exit

11:19

planning, we talk about what is the destination

11:21

look like? What's the target? What's

11:23

the number you need to leave with? And

11:25

how do you get there? And

11:27

there's a lot of different ways to do that.

11:29

Sometimes that's by acquisition. Because

11:33

you put a few businesses, like a

11:35

few candy stores together is worth way

11:37

more than one by itself, right? The

11:40

multiple's higher. I don't even have to improve

11:42

profitability. I just have to put them together

11:44

and it's worth 4x instead of

11:46

1x. So there's all kinds of strategies

11:49

about that. When you think about that exit,

11:52

you're thinking, gosh what do I want? And

11:54

even as a new business, you should

11:56

be thinking, What does this look like

11:58

in 20 years? Do I even want to be here in

12:00

20 years? Do I want to have 20 or do I

12:02

want to have one? When you nail those

12:04

things down, all your decisions

12:06

remove shiny objects because

12:09

you're filtered by what you've already decided.

12:12

But by not deciding at all, you

12:15

don't have a filter. So everything's

12:17

just coming in and you're in a thousand directions.

12:20

Sorry, I might've gone off track there, but I

12:22

think, for me, I had

12:24

my systems in place. I knew I didn't want to be

12:26

there all the time, but

12:28

they weren't making enough to hire

12:30

somebody full time at each.

12:32

And I think

12:35

what you, that's what I had

12:35

to work on.

12:36

Yeah. And the important part you said there was

12:39

you knew you didn't want to be in it.

12:41

And so let me ask you this, when you're thinking

12:43

about exiting and being at, either selling

12:46

a trade, it doesn't matter if the business

12:48

owner is still in it, doesn't

12:51

that make it much harder to sell

12:53

or to transition or to exit?

12:55

Yeah, I look at, so when we coined

12:58

this term exitable, which isn't really

13:00

a word, but it so defines exactly

13:02

what it is, right? Like the business

13:04

should be exitable in order to

13:06

be transferable and sellable.

13:08

And the litmus test is, could you go away

13:11

for a month and not have it be a disaster,

13:14

right? Okay, so it's not a disaster.

13:17

Does it stay the same? Does

13:19

it increase? Maybe you're the problem, right?

13:21

That's certainly possible, right? But

13:24

could it continue without you? Because nobody

13:27

otherwise The reality

13:29

is most people are not going

13:31

to buy your job because

13:34

it's really not a job. I'm

13:37

sorry. It's really not a business if you're working

13:39

in it full time, right? It's

13:41

like a full time job for

13:42

you. Absolutely

13:44

right now, you can fix it, meaning

13:46

you could get somebody else in there, have less profitability

13:49

and now professionalize it,

13:51

meaning you're not running it. You're just directing

13:53

right from the overhead. Totally,

13:55

that's a different scenario. Lots

13:58

and lots. Oh, gosh, I hate to throw

14:00

just percentages around, but, the stats

14:02

are only 1

14:04

in 10 listed businesses sell. Maybe

14:07

2 in 10, depending, right? You've

14:09

got 12 million baby boomers

14:11

who are ready to sell because they're done,

14:14

they might have been done a few years ago, but then COVID,

14:16

so they had to pivot. Some of them never came

14:18

back, right? But

14:20

if only 1 in 10 sell, why,

14:23

right? Is it because it's not really a good business?

14:26

Is it because there's

14:28

a problem with the broker, which certainly is

14:30

possible. Is it because I didn't prepare?

14:33

More often than not, it's because it's not really

14:35

a solid business that transcripts well.

14:39

That's

14:40

usually.

14:41

And I think out of the 12 million business baby

14:43

boomers, they've all worked themselves like

14:45

myself, where I got

14:47

to be comfortable doing the things I was doing.

14:50

Handling the things I chose to handle

14:53

and delegating the rest. But I

14:55

still was handling and

14:57

that's. So we make our lives more

15:00

comfortable. We make our prison more comfortable,

15:02

put some

15:02

cushions and some bed. Yeah. But it's still a prison.

15:05

It's

15:05

still

15:05

can't, it's grown up around

15:07

you, probably despite you and

15:11

trapped you. And fixing

15:13

that can be really easy depending

15:15

on the exit, but recognizing

15:18

that's what you have, like the hardest

15:20

conversation to have with an owner is

15:22

that you don't have Not

15:27

only is it really not worth anything, right?

15:29

Because that's another hard part, right?

15:31

Because values are low, right? If it's if you're

15:33

making less than 200, 000 in profit.

15:37

It's probably only worth out 200 it's

15:40

probably a 1 X. Yeah, right because

15:42

people the multiples you're banking on

15:44

the profitability of

15:47

the business. And so you're involved.

15:50

the likelihood that without you it will be profitable

15:52

is lower. So it's a lower multiple, just

15:54

the way it is. Now you can fix

15:57

that, but like the

15:59

reality is most of us think our business is going

16:01

to be worth all the name and

16:03

this and that. But like the reality

16:05

is it's only worth what

16:07

it's going to bring in.

16:08

Right.

16:10

And the higher the confidence

16:12

in the to higher

16:14

the value, based on your profits. And

16:16

fixing those things. You can

16:19

do it. You just have to know what to do. Most

16:21

people don't even think about it enough to

16:23

know to do.

16:25

We talk about mindset a lot in

16:27

our podcast, whether

16:29

you have to have the positive money mindset

16:32

or from a personal perspective,

16:34

like you need to make business decisions within your own

16:36

personal finances, all

16:38

of this is around a mindset, talk

16:41

to us about your specific mindset

16:43

change, and then maybe a story from

16:45

a client's change when you recognized.

16:47

This isn't

16:49

sellable. It might not be worth

16:52

what it is. How do I overcome

16:54

my own, initial defense mechanisms

16:57

and be able to move forward to recognize

17:00

that, Hey, I need to change my mind because

17:02

it's not where it's supposed to be.

17:05

And that's where I get back into the setting the date

17:07

thing. There's just some, it's that's the theory

17:09

about like you get engaged and you look

17:12

at your ring and all that. But until

17:14

you set a wedding date, and book the

17:16

hall. Are you really getting married or is it

17:18

just fantasy, right? Once

17:21

you set that date, all the crap that

17:23

has to get done between now and then has

17:26

to get done. And that's why

17:28

setting the date. And so for me setting

17:30

the date, really like I gave myself

17:32

an exit. I was like, okay, by

17:34

the end of this year, this was in like July

17:38

of 2019 and I said, by Christmas,

17:40

like by the end of the year, I'm done.

17:43

So I can fix this. And

17:45

let's see what I can fix right

17:47

to make it more attractive to make it easily

17:50

transferable to make it more profitable,

17:52

all those things. And

17:54

for me, once I set that date, I was like,

17:56

okay, I could do anything for 6 months. It

17:59

wasn't so painful anymore. I wasn't

18:01

so resentful and frustrated now.

18:03

I had a very different. So

18:06

it was like putting on exit glasses, right?

18:08

It was like, okay, I'm not looking at all the possibilities.

18:11

I'm looking about what gets me right.

18:13

I've got the date. If the countdown has begun,

18:16

what do I need to get done between now and then? And

18:19

that's how, for me, that shifted everything

18:21

for me. That's setting the date. I know it sounds

18:23

really simple, but it really

18:26

changes your perspective on

18:28

what you're doing. It narrows it

18:30

automatically filters. And and some of that

18:32

is not just, okay, I want to be out of this

18:34

business, but some of that is what do I actually

18:37

want? Maybe I want to do something

18:39

else, maybe, what people

18:41

are selling, there's a lot of reasons

18:43

people are selling, they're burnt out. Maybe

18:46

they're getting a divorce. Maybe they're have

18:48

grandchildren, want to be more around

18:50

them more like that happened for me. Maybe

18:53

they just have a new passion project.

18:55

There's a lot, there's health where I just am

18:57

opening my candy store. The lady that

18:59

I was supposed to take over her space, she

19:01

got cancer. I'm She,

19:05

so she couldn't run her business anymore. She was a solopreneur.

19:08

And so they had to do

19:10

this whole like lease, like termination

19:12

through the courts and whatever. But

19:15

that happens. And so people are

19:17

exiting, they aren't as I sell,

19:19

they're exiting for all different reasons. Maybe it's just

19:21

not making enough money and they're tired

19:24

of trying, right? For

19:26

all those reasons, knowing what you

19:28

actually want versus what you have

19:31

is a part of that, right? And that's the motivator

19:34

that for me, that's the mindset. It's every once

19:36

in a while, someone will come to me,

19:38

especially my hometown and say, we have this

19:40

beautiful restaurant. You should

19:42

open it. You should take it over. And

19:45

for a minute, I'm like, Ooh,

19:48

an opportunity. Shiny.

19:50

And I look and I go see it and I

19:52

get all excited and I dream about all the things

19:54

it could be. And then reality,

19:58

my goals remind

20:00

me, remember how you said you wanted to travel

20:02

the country and not be tied to a place? It's

20:05

Or an insane business. Remember that

20:07

Tracy? A profit like a business

20:09

that has low margins, remember, and

20:11

crazy people. Remember that? Yes.

20:14

Okay. Nope. Thank you very much.

20:16

I'm on my way. But it keeps me, even if I

20:18

get off track a second, what I

20:20

have already determined for myself holds

20:23

me back. Cause it doesn't align with

20:25

what I really, and that is

20:27

part of that whole mindset things. Like

20:29

when you realize this is not what you want.

20:32

Figuring out what you actually want is

20:34

different and I'll tell you when I started

20:36

to make changes, especially my big business.

20:38

I had a 6500 square foot restaurant.

20:42

It was like a the bar sat for

20:44

it was big. We did weddings for

20:46

the hotel. We had our own private catering room.

20:48

We had live bands. We had a bar 40

20:50

it was. A lot and

20:53

when I decided. That

20:55

I was just going to do this within a month

20:57

or so. I didn't hate it as much anymore

21:00

because I got rid of the things that may be crazy.

21:02

And at that point, cause I had given myself six months,

21:04

it's like month two. I was

21:06

like,

21:07

Cause I had gotten myself out of a

21:09

lot of the things I had figured

21:11

out some things that were not working,

21:13

that were making me crazy all

21:15

because I was thinking, what can

21:17

I get rid of? What can I give to somebody

21:19

else? Whether it's turning on my customer

21:21

loyalty program and having a customer list

21:24

or, training my kitchen manager

21:26

to do the liquor inventory

21:28

or whatever it is. All of a sudden

21:31

those things were off my list and

21:33

not only made my business more valuable,

21:35

more profitable, like Managing

21:38

the liquor, finding fit, made

21:40

me more profitable, which made it more expensive,

21:42

right? Made my more valuable because I was

21:44

more profitable. So but again, only

21:46

because I was thinking about that,

21:49

did that even come into mind. I

21:52

would have just kept going and adding things

21:55

and trying to figure out the new, the next

21:57

event. And then I have another gentleman,

22:00

Jim, that we worked with, and he

22:02

was thinking, he came in thinking, I'm going to start on my

22:04

staff in breaking

22:06

down. What do you want? What do you need?

22:08

What is the number you need to reach

22:11

getting out of this? He

22:13

realized that they probably number 1,

22:16

weren't going to be capable of doing

22:18

it. Because he was still in it and

22:21

then he thought, gosh, I'm going to keep my, I'm going to keep

22:23

the business. Meaning

22:26

the real estate. So he still

22:28

have income from that. And then

22:30

he realized that he thought about, growth

22:32

through acquisition. I think he changed

22:34

his mind about it, but then he actually wound

22:36

up finding a buyer for the

22:38

business with some seller financing.

22:41

So he can sell it for higher. He has longterm,

22:43

he saved some taxes. So like

22:46

he came into it thinking, yes, I want

22:48

to be done. And this is the easiest way I could just

22:50

say, here you go. But

22:52

he realized, wait a minute, that doesn't I

22:54

want expert, I want this

22:57

much more for it. So again, just

22:59

by setting the date and figuring

23:01

out what he wanted, he was able

23:03

to filter and work towards it.

23:06

It starts in the mind, right?

23:07

Yeah, absolutely does. What's a realistic

23:10

date, right? Obviously we all can set

23:12

a date and go at

23:14

it, right? But is six months? Is

23:16

12 months, a good enough time

23:18

frame for all the things you got to do? And then we'll

23:21

follow up and talk about all the things that you need to do.

23:23

But what is a realistic date

23:25

for people that are listening going, Oh,

23:27

I can get this done in six months. Now it depends on the business

23:30

and I get that. But what would be realistic? Yeah.

23:32

For myself, I gave myself six months

23:35

because I thought I could do this six months, but no

23:37

more. I had to set something realistic

23:39

for me. Because the nice thing about

23:41

setting a date is that it can change. You're the

23:43

boss. If all of a sudden,

23:45

half of the things that annoy you disappeared,

23:49

six months doesn't seem so long, does it? You're

23:51

like I could do this another year, maybe.

23:53

And now you're doing it with intent. So

23:55

the way we work with people is we help them

23:57

figure out what they want and not just I

23:59

want to hang out with my grandkids, but what number

24:02

do you need to get? And

24:04

how can we get you there? Are you close?

24:07

It's, we call it bridging the gap. And

24:09

then we lay out the, we call

24:11

it the opportunity roadmap, of fixing

24:13

your basic stuff. That maybe.

24:16

Should be there, but aren't because you've just

24:18

figured it out, right? All of us are just figuring

24:21

it out as we go, right? Fixing the basics

24:23

and then what can it be value

24:26

adds? What could help

24:29

grow it and whether that's growth by acquisition

24:32

or streamlining the product line

24:34

or raising prices or all those

24:36

things, right? And to do

24:38

that, like you can start

24:41

there and then you back into it. So

24:43

six months, like I found a buyer in three months. And

24:46

he approached me in my bar, he'd

24:48

always dreamed of owning a bar. He was a customer

24:51

at my counter. I had been talking about having grandbaby.

24:53

I want to go, because I talk a lot, right?

24:56

And I was just schmoozing it up. And,

24:58

after a couple months, he was like, would you sell it to

25:00

me? And I was like, heck yeah, right?

25:03

I went from nobody wanting it. And

25:05

give it up to somebody actually wanting

25:07

it for money. Sure.

25:09

Absolutely.

25:10

Absolutely. So it can

25:12

happen really fast. It just depends

25:14

what your goals. And I

25:17

don't even think it's just your goals. It's what you

25:19

need. Cause again, when we talk about the

25:21

12 million boomers, like

25:23

they don't have a retirement plan. This

25:26

is it. So that

25:28

makes it even more important for them

25:30

to dive in to getting this crap

25:32

fixed and. Enhancing

25:35

the value so they can get the number.

25:37

Cause I think after running a business

25:39

for 20, 30, 40, 50 years,

25:42

you should get paid, right?

25:45

But that the exit. So I had another gentleman,

25:47

Don, he had really five businesses.

25:50

If he had been running it for 52 years,

25:52

which is think about that.

25:54

Easy. Yeah.

25:55

And he was an importer for like

25:57

motorcycle pieces that they create

25:59

that. So you've manufactured the imports.

26:02

He had retail locations, he had wholesale

26:05

and he had e commerce. And

26:07

he was really running low. And

26:09

he recognized, crap, I'm

26:11

not going to be able to do this in 6 months. For him,

26:13

that was not realistic, because he had too

26:15

many working pieces, it was fresh off

26:17

of COVID numbers were down.

26:20

So what did he do, is he really figured out what

26:22

pieces would be the most valuable,

26:24

and he focused on those, and carved off the

26:26

others, and just sold them, let them go.

26:29

So there's a lot of different strategies, but

26:31

the goal is to figure out what you need

26:33

as well as what you want. And those 2

26:36

things can be the same. And

26:38

if you are somebody who

26:41

is,

26:41

Yes. Let's just start a little

26:43

bit different. So you had mentioned

26:46

a timing. It was six months for you. Really

26:48

it's about your needs and wants. And I want to throw

26:50

something into that is they can be

26:52

the same, but also you need to be realistic

26:54

as well. And that's where I believe having

26:56

a team in this atmosphere. And I'm going

26:58

to ask you this, cause I don't know your process, but having

27:01

a team to help you understand

27:03

what your true needs are. So therefore,

27:05

if your wants are drastically out of

27:07

line We can fix that. If not, maybe they're the

27:10

same. But what I mean by that is making

27:12

sure you do have, your accountant and

27:14

your planner and everyone in place

27:16

for your personal side, because that's what it comes

27:18

down to, right? When you exit, it's now all

27:20

personal. There is no business. So that's

27:23

what I feel like with the needs and wants you got to be

27:25

realistic as well and make sure it just fits

27:27

whatever. So

27:30

talk us through exitables process

27:33

and what people need to do prior

27:35

to coming with you and then what that whole thing

27:37

looks like.

27:39

And actually, honestly, we do

27:41

a lot of free workshops because

27:43

this, there's such a huge knowledge

27:46

gap on this subject. Like

27:48

we talked about, like most people haven't even thought about

27:51

it. They dream someday, right?

27:53

Someday, but they really

27:55

have no idea what makes their business valuable. They

27:57

have no idea what it's worth and

27:59

they don't know what the process is and they don't even

28:01

understand often that their business

28:03

is not sellable. They don't understand

28:06

any of those things, right? So there is

28:08

we have to bring them along a step at

28:10

a time, right? They just have

28:12

in their mind that they want to sell, right?

28:15

Or they want to retire. They have no

28:17

idea that all these things Our

28:20

problems, right? It's they don't even know

28:22

they have a problem, right? They just think,

28:24

what up? Oh, I'm going to sell next year. I'm

28:26

going to sell like, oh, okay, sure,

28:28

sure you are, right? You're going to beat

28:30

the odds, right? And by having

28:33

these calls with them where they can

28:35

ask questions and show them or

28:37

talk about that. So thank you so much for being

28:39

able to share this is that it's

28:42

raising the awareness that they have a problem

28:44

to be careful. And it feels sad

28:47

to say, Hey, you have a business, you

28:49

have a problem, but you do. That's what business

28:51

ownership is. It's solving millions of problems

28:53

all the time. But one of them is

28:55

that you have a problem. If you ever want

28:58

to sell or exit now, when

29:00

I say exit, that could be, that you

29:02

just make it professionalized and you just keep

29:04

the checks. And you don't have to show up anymore.

29:07

Like how many business owners would still want

29:09

to sell if they fixed all

29:11

the things and they didn't have to be there ever, right?

29:15

So that's getting exitable,

29:17

right? That's not a bad gig.

29:20

But for some, they just want to be done and move

29:22

away and not think about it ever again. Now

29:24

that is a different exit. And

29:26

so our process is usually we have

29:29

to educate on the front end about,

29:32

How do you value your business? I think every

29:34

business owner on the planet should know

29:36

what their businesses work. It's

29:38

not a hard formula. I do

29:40

a very basic one, like a down and dirty

29:42

of like your profitability. And

29:45

your multiple, if it's under 200 is one.

29:47

That's it. If it's a little over, then

29:49

maybe it's two. But it's just your profit from

29:51

last year. Now you could tweak that. You could fix

29:53

that. There's some add ins that you

29:55

can, make the profit higher. But also,

29:58

if you're working in it, you got to make your profit lower

30:00

because you got to pay someone to replace you. So there

30:02

is some wiggle room. But the down and dirty

30:05

is, what's your profit? That's

30:07

probably what it's worth for most

30:09

business owners, right? I'm not talking

30:12

about big multi million dollar

30:14

different conglomerates, right? I'm talking about

30:16

like most owners who are never hitting a

30:18

million dollars a year in revenue.

30:21

They're going to be 1 X,

30:23

right? Everybody should know what their businesses

30:26

work, right? It just grounds

30:28

them in reality. And

30:31

then from there, so we help them

30:33

do that. We help them to figure out an estimate

30:36

of what. What would your ideal

30:38

date be? Because you can decide that.

30:40

You can create that. There's none

30:42

that's too short or too, like we have

30:44

some people like yesterday. I'm like that's harder

30:46

for me to do. But

30:49

right? It's six months. That's not too short.

30:52

Three months, not too short. Now,

30:54

if the business is highly dependent on

30:56

you, that's going to be a little bit harder. You're not

30:59

going to get as much for it.

31:01

But if you're flexible and open to

31:03

creative financing, you probably can get your

31:05

number. Because if

31:07

you are flexible on terms

31:10

then you'll probably get your price. And

31:12

it's just marketing for that and fixing some

31:14

basic things. So our process in

31:16

general is to educate on the front end so

31:18

that they understand they have a problem,

31:21

right? Because we think it's the

31:23

most important part, right? They just don't

31:25

know. And then once they do, we're like,

31:27

do you want help figuring out what you

31:29

want? So then it's figuring out what you want,

31:32

setting the date, understanding what

31:34

the value is, and then what are your opportunities,

31:37

right? Now, part of the setting that the

31:40

target is. What do you need

31:42

your business to be worth? If you need

31:44

to walk away with 300 grand

31:47

and it's only worth 100 we have a little bit of

31:49

work to do. You either have to just be realistic

31:52

or you have to professionalize. Because

31:54

if you're professionalized, you could 3 4x it, right?

31:58

Now, you won't make a lot of profit that year.

32:00

However, if

32:02

you professionalize, it probably is going to grow because,

32:05

new fresh blood in the mix,

32:07

right? So that's the process. And then from

32:09

there we take them on, we do more

32:12

of a group training

32:15

where we bring them through the process

32:17

for a year at a time just to get them to

32:19

their exit. And keep them accountable, right?

32:22

We, it's not just about information. It's about

32:24

understanding what you can do and how you

32:27

can figure out, like, where are the opportunities?

32:29

It's taking an assessment of what your business

32:32

is right now. For example,

32:34

for myself, I didn't realize I didn't

32:36

have a customer list at the time,

32:38

right? I knew, I was walking around,

32:41

I had, a texting program that I was

32:43

paying for, but I turned

32:45

on my loyalty program. I trained my

32:47

staff to offer a free appetizer

32:49

to sign people up. And within

32:52

a month, I had a 5, 000 person

32:54

list, knowing what they bought

32:56

and how much they were worth and how often they

32:58

came in. And that took a month.

33:01

And all I did was turn the button on. It didn't

33:03

cost me anything, but I never thought

33:05

that it was important. I didn't for whatever

33:07

reason, I just didn't think about it. So I just turned

33:10

that on. Now, all of a sudden, I had a list. I

33:13

can predict how often Joe was going to come

33:15

in and what he was going to buy every time.

33:17

Yeah,

33:17

right. Which makes it more

33:19

valuable, right? So there

33:21

are things you can do. One,

33:24

but you often don't know them until

33:27

somebody points it out, right? And

33:29

the nice part about our process,

33:31

you don't have to do it by yourself. You don't have to be,

33:34

finally, you're at a level in your business

33:36

where you don't have to be the one to save

33:39

the pennies, right? And do the

33:41

hard learning and trial

33:43

and error that you could just follow

33:45

a proven process and

33:48

get to the goal.

33:50

That's the perk of not being brand new,

33:52

right? When you have to do everything.

33:54

Yeah, do you need a business

33:57

broker? Like how important is that

33:59

aspect? Say we've done that we've got

34:01

the process We've cleaned it up to

34:03

a degree of which we want it or whatever it is

34:06

Where does the business broker come in and do you need

34:10

and again for some? So

34:12

one of the stats I used before 1 in

34:14

10, right? Sometimes 2 in 10

34:17

don't sell there was a listed Businesses.

34:20

So keep in mind, those are not the ones that are off market,

34:23

right? Those are not family acquisitions.

34:25

That's listed. So the broker

34:28

doesn't have a great track record. We'll

34:30

just say that. Let's just say half

34:32

of it is on the business, right?

34:34

Yep.

34:36

But an honest broker would just

34:38

say no thank you to the business if

34:40

it really wasn't sellable. But

34:42

mostly what happens is brokers will list

34:44

it, they'll do a thing, right? They'll do

34:47

a write up, and then they just wait for

34:49

somebody to call. Most

34:51

brokers are just waiting,

34:54

right? And so the broker,

34:56

if you feel more comfortable in

34:58

that process, and you really want to lean

35:01

on somebody's expertise.

35:03

Great, make sure you hire somebody

35:06

who sold more than 1 a year. Because

35:08

keep in mind, they're going to take 10%.

35:10

Yeah, absolutely.

35:13

So they're going to take 10%. They're basically

35:15

you're going to the other part. I was interviewing

35:17

a broker and I just want to understand

35:20

the the mindset, the

35:22

way that they see it is that they're

35:24

protecting you, the owner from

35:27

the buyer. They're protecting

35:29

you, their job and their mind is to

35:31

keep you. But

35:34

my belief is that if you got

35:37

a buyer and seller together to

35:39

sit down and have a meal and discuss

35:41

the business and the possibilities and

35:43

why you're leaving and all the honesty,

35:46

you'd have a deal just like that.

35:48

Absolutely.

35:48

So the broker's in the way, like

35:50

they're building the wall. And for some

35:52

people, that's what they're comfortable with. And that's fine.

35:55

But understand that is

35:57

their mindset and that's their job. Legally,

36:00

they're there to protect you from them.

36:02

And will often kill the deal.

36:05

Some people call them deal killers.

36:07

If

36:09

you don't have a broker, how do you find a buyer?

36:12

There's lots of ways, like mine was

36:14

sitting at my bar talking about it,

36:16

like I've shared with all my staff. I didn't want

36:18

to be like, Hey, by the way, I'm out

36:20

of here. I told them that I would

36:22

figure out something that I'm giving myself six

36:24

months to improve things. It explained

36:27

why I was making things better for

36:29

them, easier for them. Delegating

36:32

have systems. So it wasn't so based

36:34

on me. Okay. Which actually in the end

36:36

was better for them, right? Cause they just

36:38

had to follow the system, right? Some of

36:40

them got promotions, some of them

36:42

had more responsibilities, so they made more money.

36:45

But I was very open about

36:47

it. Not everybody feels comfortable and that's

36:49

okay. There are tons like this,

36:51

buy, sell, you can list your own. What's

36:54

it called? Oh gosh, it's escaping

36:56

me. There's a ton of them now. And because

36:58

there's so many that are on the market. That

37:01

are going to be on the market, they're popping

37:03

up all over and really, there's

37:06

whole, booms like Cody Sanchez,

37:08

who's talking about buying boring businesses,

37:10

old school, like businesses

37:12

that have been around forever because

37:14

there aren't enough buyers.

37:17

That's the other reason, right? We talked about

37:19

not being a good business. We talked about the

37:21

broker. The final one is there's not enough buyers.

37:24

There are not 12 million people. Ready,

37:27

ready to pony

37:27

up and buy these builders, right? Each generation's

37:30

getting smaller. They actually

37:32

had Cody Sanchez actually recently had a

37:34

listing about they were giving away businesses

37:36

for free in Japan because

37:40

they didn't want to see it go away. They

37:43

didn't have anybody to buy. Because

37:46

that's the most, I think

37:48

it's the most harmful

37:50

piece of this whole puzzle is

37:52

that once the business liquidates.

37:56

All value just disappears 50

37:59

years of value, right? In a community,

38:02

right? Serving customers

38:05

and manufacturing, like all the things

38:08

just evaporates.

38:09

Yeah,

38:10

and I think that's going to be really detrimental

38:13

to our country. Not to

38:15

mention to the owner.

38:17

To their community, right? To all

38:19

of the people in that pond

38:21

that the ripple will affect. And

38:24

so if you could sell

38:27

and find a buyer, which I think you can,

38:29

especially if you've prepared and most people

38:31

haven't you're good to go. Because you

38:33

know the things now, right? There's millions

38:36

who don't. Yeah. But you can find them everywhere.

38:39

There are tons of listings between Facebook

38:41

and social media and, biz by

38:43

sell and flip up. That's the other one

38:45

I was thinking of, there's tons of interest,

38:47

but you could use a broker too. I mean,

38:50

it's just really about being educated

38:52

about the process and you're shifting.

38:55

Like we talked a little bit about mindset, you're

38:57

shifting from growing right

39:00

and surviving to

39:03

exiting. It's. Just

39:05

as simple as that's like turning a different direction

39:07

and that's what you're thinking about. And so all

39:09

of a sudden you'll see buyers everywhere because

39:13

buyers are everywhere because they're people.

39:16

And I'll add whatever industry,

39:18

service, whatever your business is Have

39:21

colleagues, have masterminds, whatever you want

39:23

to call it, but the more, and network

39:25

with probably makes it a little

39:27

easier to when you're going to exit. Make sure you're doing

39:29

that. All right. As we leave this off, what

39:31

is one simple thing that you want

39:34

to leave? These business owners who are thinking

39:36

about exit planning or even new ones

39:38

who are building and structuring for an exit

39:40

at some point. What's one thing you want to leave

39:42

with them?

39:44

Sorry, I couldn't hear. Say, ask me

39:46

the question. The rain, they have the door

39:48

open. The rain is loud.

39:49

Oh, all no problem. What

39:52

is one thing you want to leave

39:54

these business owners who are listening with? That

39:56

are either thinking about exiting now or

39:58

building their business at some point to exit.

40:01

What's 1 thing you want to leave with them?

40:04

I just think it's be aware. The

40:06

biggest thing is be aware of where

40:08

you're the direction you're going. Nobody,

40:11

like I said, nobody sets off on

40:13

a plane. It's a destination unknown.

40:16

Oh, they do, but how

40:18

do you know if you have enough gas to get there, right?

40:20

Know where you're going. Take

40:23

a minute. We're so busy. We're so

40:25

in everything, juggling,

40:27

solving problems, getting through

40:29

the day, and then we have a whole life hopefully

40:32

outside of family and this and

40:34

that, right? And vacation and statuses

40:36

and health concerns and you

40:39

just took one hour

40:42

to jot down some What

40:45

does the end look like? What's, I'm running

40:47

a marathon. What does the finish line look

40:49

like? What's important to me

40:51

on the other end of that? Everybody's

40:54

different. Some want a big paycheck,

40:57

but others don't. Others just

40:59

want to be done. And that's

41:01

okay. Like I had a client who

41:04

had a big catering business

41:06

that was 35 years old. It was family run. He

41:09

had made lots of money, but it was post COVID.

41:11

So all of his numbers were low and he had

41:13

zero interest in building

41:16

more. He didn't want to fix it. He

41:18

didn't want to wait for him. He

41:20

was cool. He set the date and he's I'm just going to close

41:23

her up. I was like, but you could have somebody

41:25

come in from a culinary school. You can

41:27

let them earn in. You could do all these things.

41:29

I don't want to. Thank

41:32

you. Do you need me to sign? Sorry,

41:35

yeah, there you go. Thank

41:37

you. So

41:40

I'm so sorry.

41:43

So let's go stop a 2nd. I

41:48

was saying that they need to see this.

41:50

What happens? Entrepreneurship, your brain

41:52

goes, tell me where we were again.

41:56

You need to be aware ultimately, right? You need

41:58

to be aware of where you want to go, what you want to

42:00

do, and that's what you wanted to leave

42:02

everyone with. And that's probably the definition

42:05

of exitable, right? Being able to figure

42:07

out what you want and your needs and

42:09

make that happen. And ultimately

42:11

this part of a business is

42:13

one of the most important things to think about. So like

42:16

you said, take that hour. Figure it

42:18

out. Use resources, right?

42:20

Go talk to you. That's what this podcast

42:22

is for. Ultimately is

42:24

for us all to have resources to, to achieve

42:27

those things. And really come

42:29

talk to us, right? That's, I ask everyone who listens,

42:32

just comment. We are here to

42:34

help. All my guests are the only

42:36

ones that I vet out and say, Hey, we're

42:38

here to help. And they're going to help you, right? They're not

42:40

going to charge you an arm or leg. Sometimes it's just a

42:42

little bit of guidance. That's all we need. And

42:45

Hey, everybody reach out to Tracy

42:47

at exitable. Obviously we'll have all our socials

42:49

and everything, but ultimately figure

42:52

out what you want to do. Be aware

42:54

of how you need, how you want to exit

42:57

and you can get it done.

42:59

Yes, absolutely. You did that better

43:01

than I did. Good job.

43:02

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43:05

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43:33

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