Sales & Cigars Podcast | Marty Fahncke | Stages of Exiting Your Business | Episode 198

[00:00:00] Hey everyone, Walter Crosby with Helix Sales Development, your host of Sales & Cigars. Today I'm smoking another Padron 4000, my favorite go-to cigar. I am not drinking any bourbon today because I have an important meeting after this recording, so I need to be as sharp as possible.

[00:00:21] Today's guest is Marty Fahncke. He is with a company that is called Westbound Road. They help business owners and entrepreneurs get ready to sell their business. They can consult, they can be brokers, but what they're really good at is helping you think about what you need to be thinking about to get your business ready.

[00:00:45] And that's what this program is about today, is the things that you should be doing, the things that you should be thinking about. Marty drops a bunch of great little gold nuggets here.

[00:00:57] He also, in about the middle of the program, he talks about this BoomerSellsTheBusiness.com. It's a book that if you go sign up for it, they'll send it to you with a workbook to help you self-assess where you are,

[00:01:11] to give you a sense as to where you are with being ready to have a saleable business.

[00:01:17] We do a little diagnostic on what's for for solo-preneurs in the conversation. So go grab a cigar, grab a cocktail and strap in for another interesting episode of Sales & Cigars. Thanks.

[00:01:45] So Marty, welcome to Sales & Cigars. I appreciate you taking some time out of your schedule to have a conversation.

[00:01:51] I'm glad to be here, man. Appreciate you having me.

[00:01:55] I think we're, just let the audience know, I'm talking to folks who can help entrepreneurs and business owners for the next couple of weeks,

[00:02:05] you know, understand what they need to know, what they need to think about, when they need to start thinking about,

[00:02:12] thinking about selling their business. So it's one of your talents, one of your superpowers. So we'll get into that.

[00:02:24] I always like to start off with this dumb question, but I think it's informative. Is there a book that you re-gift or gift, not re-gift, a book you gift or re-read on a regular?

[00:02:38] Well, it's interesting you ask me that. So I have been, for the last year and a half, I've been on a reading and re-reading tear.

[00:02:44] I quit watching television for the most part and switched over to reading.

[00:02:48] And in that time, I've read over a hundred books and I have, I don't know what the hours, I actually have a log in front of me here.

[00:02:57] But yeah, 522 hours of reading, which is like 21, 24 hour days.

[00:03:04] It's a lot of book reports.

[00:03:05] It is a lot of book reports. And I went, I've got everything from the old classics to the new standards.

[00:03:12] And it's been a, it's been a really fun journey for about the last 18, 18 months or so.

[00:03:19] Continually, you know, it's an, it's a really old one, but everybody should read it. How to Win Friends and Influence People.

[00:03:26] It's just good. It's just good advice, no matter, no matter what.

[00:03:31] I have fallen in love with a book called Unreasonable Hospitality that I've recommended to a number of people.

[00:03:40] That is such a good book. I, I got into that and I, I didn't think I was going to enjoy it, but wow.

[00:03:50] How, how much hospitality is tied to B2B and B2C.

[00:03:55] It is. And I'm surprised how many people haven't heard of that book.

[00:03:58] When I make a recommendation of that to people, they're like, I've never heard of it.

[00:04:02] So it's kind of a, it's kind of a hidden gem, but it's just phenomenal.

[00:04:05] I've read it twice now in the last year and a half.

[00:04:09] And then Never Split the Difference is another one that I have given out to multiple people.

[00:04:15] And then the last one that I've, that I've highly recommended and I've, and I've purchased for my team and everyone else.

[00:04:22] Well, first of all, Unreasonable Hospitality is one that everybody I work with, you know, manage by reading.

[00:04:27] But he is Atomic Habits.

[00:04:31] Absolutely phenomenal book.

[00:04:32] So you asked me for one, I gave you four, but these were kind of my top four out of reading over a hundred in the last 18 months.

[00:04:37] And so it's a little bit of an educated recommendation.

[00:04:41] Well, I mean, they're all great books, right?

[00:04:44] You've got the classic in there.

[00:04:46] You got the one that I think people should really think about read and reading it more than once.

[00:04:51] Right.

[00:04:51] Cause you're what they talk about in Unreasonable Hospitality.

[00:04:55] I mean, it is the service piece of it, making people feel special.

[00:04:59] But the way they went about it was systematizing, systematizing, systematizing what they were doing, breaking it down into pieces, making it trainable culture.

[00:05:14] Right.

[00:05:15] Making sure they're the right people, giving people authority.

[00:05:19] Right.

[00:05:19] And supporting their decisions.

[00:05:23] When he talked about the, that, how they went about, you know, making that cup of coffee.

[00:05:31] Right.

[00:05:31] And that the process they went through to make a cup of coffee at the table.

[00:05:36] So, yeah, that's a, that's a, that's a great book.

[00:05:39] Yeah.

[00:05:39] Any business owner who reads that with the mindset of what can I take from here and make it work in my business is, is going to have a better business a year from now.

[00:05:50] Yeah.

[00:05:50] I think, I think that's a hundred percent accurate, but they got to go to their, go to thinking about how do I implement that idea?

[00:05:58] Right.

[00:05:59] Right.

[00:05:59] And, and is it, is it applicable?

[00:06:02] And I would argue that most of it, the beginning part, not so much, right?

[00:06:07] Cause he's setting up how we got there.

[00:06:08] Right.

[00:06:08] It's the, it's the backstory.

[00:06:10] It's the, yeah.

[00:06:11] Heck, but I have had dinner at that place and it was, it was spectacular.

[00:06:18] I'm really glad I didn't pay for dinner that night.

[00:06:23] Cause for four people, it was almost three grand.

[00:06:26] Yeah.

[00:06:27] But it was, it was, it was.

[00:06:28] You have to do that.

[00:06:30] It's the experience, right?

[00:06:31] It was an experience.

[00:06:33] It's, um, and doing that thing where they ran out and got a hot dog for those people.

[00:06:37] That.

[00:06:38] Yeah.

[00:06:38] Yeah.

[00:06:39] And the whole thing.

[00:06:41] Yeah.

[00:06:41] With the mustard little swirls.

[00:06:43] Kind of cool.

[00:06:44] Um, all right.

[00:06:46] So we want to get into like talking about, you know, doubling revenue and how to get prepared

[00:06:51] to sell a business from your perspective.

[00:06:53] But you, how did you get to this entrepreneurial space?

[00:06:58] How did you, how'd you get here?

[00:06:59] What's your background?

[00:07:00] Let's kind of set that up a little bit.

[00:07:01] So, yeah, so I was always kind of an entrepreneur ever since I was a kid.

[00:07:06] I was the proverbial, you know, I never had an actual lemonade stand, but I had a business.

[00:07:12] When I was 12, I had a business where I was getting old, um, you know, broken bikes and

[00:07:16] building them and putting them together and reselling them and, you know, fixing them up

[00:07:20] and that sort of thing.

[00:07:21] And I've just always had kind of an entrepreneurial spirit.

[00:07:23] I've had some corporate jobs over the years, but for the most part, um, I've, I've just

[00:07:28] been very entrepreneurial.

[00:07:29] Most of my family has not been, they don't understand what I do.

[00:07:33] Um, my mom to this day still doesn't understand what my job is.

[00:07:38] Um, and so it's kind of fascinating.

[00:07:41] Most of them, you know, work for the government or a lot of military in my family, et cetera.

[00:07:44] So I don't know exactly where it came from.

[00:07:46] I generally describe it to my grandfather who had a general contracting business and built,

[00:07:51] uh, many of the homes and some of the best businesses in my hometown.

[00:07:56] Uh, obviously he was entrepreneurial, but he's kind of the only, the only one.

[00:08:00] Um, and, uh, when I was in my, when I was in my twenties, um, I started a business with some friends.

[00:08:08] Um, one guy had a really great idea for a sporting goods product and patented it.

[00:08:13] Another guy was really good at operations and logistics.

[00:08:15] And I came in as the marketing guy.

[00:08:17] And, um, we, uh, we started the ultimate grassroots business.

[00:08:21] And I say that cause it was a, it was a soccer training device.

[00:08:24] And, um, how we launched the business was I would get my kids and we would go across the street to the big soccer fields that were across the street from us.

[00:08:31] And I'd put up a, an easy up and my kids would demonstrate the product and I'd stand there taking $20 bills all day long.

[00:08:39] And that told us, and that was great market research.

[00:08:42] Cause it, you know, we had people come back a week or two later, well, this did, you know, it didn't work or something like that.

[00:08:47] And so we, from that ultimate literally selling this on the grass out there at the park, um, we refined the product, we refined the messaging, we refined, um, uh, the pricing.

[00:08:57] Like it did, we did all of our market research right there in the real world.

[00:09:00] We eventually moved around a few other parts and whatnot.

[00:09:02] Um, but by the time that, by the time that summer was over and we had sold, you know, maybe a thousand units or something like that, or 2000 years, we did, we did really well locally.

[00:09:12] Um, I knew exactly what the world wanted to hear to put that on television.

[00:09:16] So I got it on television and direct response commercial.

[00:09:18] And then eventually I got it onto QVC, got onto QVC in Japan, got it on QVC in, or not a QVC, but home shopping in Brazil, which was at that time hosting the world cup that year.

[00:09:28] Um, and we did, uh, we did a million and something in sales in the first year and 18 months after we very first started selling our product, we had somebody come along and offers a million and a half dollars cash for the business.

[00:09:41] Um, and I thought, well, this stuff's easy, man.

[00:09:43] You just come up with an idea, you market it.

[00:09:45] And then somebody comes and offers you a wheelbarrow full of money.

[00:09:48] Yeah.

[00:09:49] And, uh, and I, and I've been hooked as an entrepreneur ever since.

[00:09:51] And, uh, it had been buying and selling businesses ever since.

[00:09:55] So did your, uh, do your kids have the entrepreneurial spirit where they say, Hey dad, you've been making money on our backs here.

[00:10:03] You're like, God, they were paid well for their time and energy.

[00:10:08] Good.

[00:10:09] Um, that's a great story.

[00:10:11] Uh, and I think that that's something that from, from manufacturing operations, from marketing, from sales, if you can actually get at that level, right.

[00:10:23] You're, you're in the park with the kids and, and moving the product, but getting immediate feedback, right.

[00:10:30] You know, two or three days a week later.

[00:10:32] I mean, if we could, if we did a better job as entrepreneurs of getting that feedback from our customers and our prospects about what works and what doesn't work.

[00:10:43] Um, we could go faster.

[00:10:47] We can get it right.

[00:10:48] And you, we can get that wheel barrel of money at the, the end of the 18 to 24 months.

[00:10:53] Yeah.

[00:10:54] Um, and I, and I think there's lots of, with the internet, it's gotten easier to do that.

[00:10:59] Right.

[00:10:59] We don't necessarily have to have the park to do it.

[00:11:02] We can do it through reviews and listen to what people are saying and send people things and get feedback.

[00:11:08] But here's something I want to make really, that's really important is I know so many business owners who never speak with their customers.

[00:11:19] And I think that's a huge mistake that allowed me.

[00:11:22] I was talking to my customers all day, every day.

[00:11:24] I was selling it to them and then, and then I was following up.

[00:11:26] I was in front of my customers actually speaking with them.

[00:11:29] And there are a lot of entrepreneurs who shield themselves from, and, and never talk to their customers, you know, especially once they've built their business to a certain level.

[00:11:36] You know, that's a huge mistake.

[00:11:38] You need to be, you need to be interfacing with your customers.

[00:11:41] If you own that business, you need to take ownership of that customer relationship, regardless of whether you have an entire team of people who are, you know, customer service and salespeople and everything else.

[00:11:50] You as an entrepreneur, you need to be talking to your customers on a regular basis and, and understanding what their, you know, their interactions with you and your business and your products and services, but just in, in the world, what are they thinking?

[00:12:04] What are their fears?

[00:12:05] What are they, you know, take them to lunch, give them a phone call, take them to coffee, like be interacting with your customers because that's part of what made that business so successful.

[00:12:12] So fast is that, that customer.

[00:12:14] And by the way, I wasn't the only one out there selling in the part of all of the three partners.

[00:12:18] We were all, we're all in different geographies.

[00:12:20] We all three of us were doing the same thing in our, in our respective towns.

[00:12:24] And that's part of what accelerated the business.

[00:12:27] Yeah.

[00:12:27] Cause you're, you're getting feedback.

[00:12:29] Um, and I, I think that's really great advice that I, I've never really thought about that.

[00:12:35] Um, but when you were talking, there was a, I worked for an entrepreneur, um, the family business.

[00:12:41] And whenever he heard that one of us, the salespeople were, had a customer in the conference room, he would literally come look in the glass, look through the glass, like peek through, right.

[00:12:56] Look like a little, like a little stalker.

[00:12:59] And the customer would be like, who's that?

[00:13:00] Like, Oh, that's a, the guy that signs the check.

[00:13:03] He's the boss.

[00:13:04] Um, let me, cause he, he's going to want to talk to you.

[00:13:06] So can I let him in and, and he would sit down and five minutes, you know, ask some good questions, look for some feedback, but he just, he wanted that.

[00:13:17] He kind of vibrated when he saw that happening.

[00:13:19] He didn't want to leave the building to do it.

[00:13:21] Um, but he did want that, did want that feedback.

[00:13:25] And was the business successful?

[00:13:27] Third generation.

[00:13:29] No debt.

[00:13:30] Um, spinning off 70% margins.

[00:13:33] Yeah.

[00:13:33] They're doing okay.

[00:13:34] Define all that as very successful.

[00:13:36] Yeah.

[00:13:37] Um, anyway.

[00:13:39] Okay.

[00:13:40] Um, a great, a great little nugget there to, you know, for business owners not to hide and they don't necessarily have to talk to the, the other CEO, the other business owner.

[00:13:50] They can go do, go on a sales call or show up or just ask questions or call somebody up for, you know, take them to lunch and get some feedback.

[00:13:58] I love it.

[00:14:00] Um, so, you know, there's a, uh, you know, when, when I was thinking about how we would have this conversation, um, you know, what, what's, what's one of the mistakes that you see business owners make that they could avoid if they thought about their business differently.

[00:14:24] Right.

[00:14:25] And they weren't waiting until they were 60 to think about selling their business.

[00:14:30] Yeah.

[00:14:31] So let's say they're like five years in, they're successful.

[00:14:35] They're looking to scale.

[00:14:36] When is it?

[00:14:37] Is it too early to start thinking about selling your business?

[00:14:40] Never too early to think about it.

[00:14:42] And here's why.

[00:14:44] If you have your business ready to sell, even if you never plan to sell it or you don't plan to sell it in 10 or 20 years, but if you have it ready to sell, it's going to put you in a much, much better place.

[00:14:59] So the steps to get your business ready for sale.

[00:15:02] And we can talk about those, uh, some of those, some of those things that need to be done.

[00:15:06] But if you follow all those steps, that's going to make your business attractive to a future owner.

[00:15:13] It's also going to make the business much more attractive to you as the current owner and effective and give you a much better, much better business.

[00:15:20] And the other thing to think about is, uh, a, a significant portion of business sales are unplanned, meaning you may not plan to sell your business for five, 10, 20 years.

[00:15:35] But the reality is there are a lot of things that may change your plans and entrepreneurs and business owners have a tendency to bury their head in the sand and not think about those things.

[00:15:46] You know, you have a home with homeowners insurance.

[00:15:50] You don't ever want a fire, but if it happens, you're insured, right?

[00:15:54] You have insurance on your car.

[00:15:56] You don't plan on a car accident, but you, you have the preparation for that.

[00:16:00] Um, a lot of things can happen that can force you to sell your business long before you even think you are ready.

[00:16:07] I call them five D's and a B.

[00:16:09] And very quickly it's divorce, disease, death, debt, disagreements.

[00:16:17] And the B is burnout.

[00:16:18] And we have business owners calling us every single week experiencing one of those five D's and a B.

[00:16:26] And they're in a position where they need to sell their business.

[00:16:30] Note I said, need and, and are not prepared for it because they have, they didn't know that they, they didn't want to before they hadn't planned on it.

[00:16:40] And now they're in a bind.

[00:16:41] And so if you have your business always ready to sell at any given moment, you will a defend yourself against the five D's and a B's from, from taking you down.

[00:16:51] And B you'll have a business that's very enjoyable and profitable for you to run.

[00:16:56] Well, I mean, that's great advice.

[00:16:59] I love the, run through the five D's again.

[00:17:02] Divorce, disease, death, debt, and disagreements.

[00:17:12] Partnerships, family business.

[00:17:13] Yeah.

[00:17:13] Things like that.

[00:17:16] And be shocked at how many businesses go south because of disagreements.

[00:17:21] Oh, I, I don't think I would.

[00:17:23] I, I see it regularly.

[00:17:25] I had a partner in one of my first businesses and I mean, I bought him out.

[00:17:32] I mean, cause it was easier than dealing with what I was dealing with.

[00:17:36] It was sort of like a divorce though.

[00:17:38] It is.

[00:17:39] It's a business divorce.

[00:17:40] Yeah.

[00:17:41] Um, I, I think the other thing that if, if, if they're thinking about this along the way and they're doing the things that they need to do, they're going to get to that level of freedom.

[00:17:58] That, um, that, that, that entrepreneur is usually looking for it.

[00:18:02] Right.

[00:18:03] They, they love the business.

[00:18:05] It's, it's like they're one of their children.

[00:18:07] They have passion for it, but they get to a point where they just don't want to spend every day making the decisions and, and being there on a day in and day out basis.

[00:18:22] They would like for it to see.

[00:18:23] So if you've got a business that kind of run without your nest, you being there every day, you, you, you, you're pretty close to being ready to sell it in, in a lot of, in a lot of those boxes you need to check.

[00:18:34] That's exactly right.

[00:18:35] Yeah.

[00:18:36] A business that's not ready for sale.

[00:18:38] The owner is probably working 50, 60 hours a week and kind of flying by the seat of their pants and it's constant chaos.

[00:18:45] And that's a business that would be very difficult to sell to somebody else, but a business that's ready to sell has operating systems in place.

[00:18:53] Um, their financials are in place.

[00:18:55] They've got, um, and the owner has exited themselves from at least parts of the business.

[00:19:01] And we can talk about the owner exit in a minute, but, um, you know, they, they're probably making, they're probably working 20 hours a week and making twice as much money.

[00:19:10] And that's a business that's ready to sell.

[00:19:12] Even if they never sell it, it's still a better business.

[00:19:15] It's a better business because of your time to, to return ratio, your, your happiness, your ability to spend time doing the things you want.

[00:19:23] But you, I think the other thing that entrepreneurs think, don't think about is that if you have that kind of business and you have that type of freedom, you're, you've built a legacy there.

[00:19:34] Your leadership team, your management team, you've done something to develop them, at least had a hand in it so that they can, they can grow as professionals.

[00:19:45] Absolutely.

[00:19:45] They have, they have that ceiling where they can keep going and they don't bump their head.

[00:19:50] Mm-hmm . . . .

[00:19:51] And I think that's a, a thing I've noticed with some entrepreneurs, they don't want to give up the control, but they want the freedom.

[00:20:00] And to get there, you gotta, you gotta give that, some of that control to your leadership team to make, make decisions within guard, within the guardrails.

[00:20:10] And you just keep expanding the guardrails as trust is built.

[00:20:13] Exactly.

[00:20:14] Yep.

[00:20:15] That will make your business more enjoyable to run now and worth a lot more when you're ready to sell it.

[00:20:21] So, you mentioned the owner's exit.

[00:20:25] And I would assume that there's, I don't know, stages to that or, or, or different things that they need to think about to be ready for that.

[00:20:36] So, if you're five years into your business and it's profitable and it's working, but you, you'd like to get it ready.

[00:20:42] What are those things that, that owner needs to, what boxes do they need to chuck?

[00:20:47] Yeah.

[00:20:48] Yeah.

[00:20:49] So, the owner's exit is there, there are stages to the exit and being people hear owner's exit, they think, oh, that means they sell the business and walk away.

[00:20:55] And that's, that's the last exit, right?

[00:20:57] It's the, it's the, that's the final one, but there are a number of exits that need to happen before then.

[00:21:01] So, the first exit they need is to exit the front line, meaning if they're still out turning the wrenches or installing the air conditioners or selling the services and the business doesn't survive without them, they're on the front line still.

[00:21:17] So, the business owner needs to exit themselves from the front line and move into purely management.

[00:21:22] They should not be the ones turning the wrenches and pushing the buttons and digging the holes.

[00:21:27] They need to be managing the people who are doing that.

[00:21:30] Okay.

[00:21:30] That's the first step.

[00:21:32] And a shocking number of entrepreneurs never get from that one stage to the other.

[00:21:36] They're still, you know, the business is out there on their shoulders.

[00:21:40] But if they can achieve that and get into management, that's going to be a much better business, better operated if they're able to focus just on managing and operating.

[00:21:49] The next exit from there for the owner is exiting that management, right?

[00:21:53] There should be a management team who is operating the business.

[00:21:57] And whether that's a chief operating officer, a general manager, something like that, the owner should be able to exit management as the next step and go into a role of a CEO or chairman or visionary type of a role, which means you are guiding the business from behind.

[00:22:15] You're invisible to the business, but your influence is all over it, right?

[00:22:19] You shouldn't be working every day, but you should be still, you're still involved in the business, you know, tweaking things, improving things, finding opportunities for big partnerships, big deals, big opportunities.

[00:22:31] You know, out networking in the community to grow your business, whatever community the business is in and bringing those introductions to your team and finding sales opportunities, finding partnership opportunities, etc.

[00:22:42] But you're working because you want to and because you love it and you're passionate about it and you have a creative, the space to be creative in that.

[00:22:51] And that's the exit before the final exit, which is exiting the business completely and cashing out with, you know, with hopefully a very, very large nest egg and handing that legacy on to something else.

[00:23:02] So those are some of the steps of an owner exit that happened before the actual selling business.

[00:23:09] And I think people can, you know, for the business owners that are listening to this, they can they can kind of self assess as to where are they really?

[00:23:19] Are they straddling one of those lines?

[00:23:22] Are they are they clearly out of the front line?

[00:23:25] I love how you like refer to digging the hole and turning the wrench, you know, or, you know, just managing those other people.

[00:23:36] I think there's a way to self assess that.

[00:23:40] So if I can be a little self promotional here, but it's for your listeners benefit.

[00:23:47] I actually have a workbook that has the assessments in it.

[00:23:52] I have a book called Boomer sells the business, a step by step guide to cashing out and living large.

[00:23:59] Accompanying that book is a workbook.

[00:24:02] And I would be able to give that to your listeners for free.

[00:24:07] And I and that's a physical copy.

[00:24:08] My team will mail to them a workbook that has all the steps and everything in it, including that as the exact exit assessment.

[00:24:15] You mentioned this.

[00:24:16] I thought I'd throw it out there.

[00:24:18] But if they go to boomersellsthebusiness.com, put their information in, they'll get a they'll get a free copy of the book.

[00:24:24] They can have it digital or physical.

[00:24:25] And either one's going to be free as a gift.

[00:24:28] Let me just make sure because I don't have that in my in my show notes.

[00:24:32] Boomer sells the business or boomersellsbusiness.com?

[00:24:36] Boomersellsthebusiness.com.

[00:24:37] Got it.

[00:24:38] All right.

[00:24:39] I think I wasn't going to talk about it, but you mentioned the self assessment.

[00:24:43] I'm like, well, I've already done it work for you.

[00:24:45] So I'll give you a gift.

[00:24:47] Well, there's nothing wrong with there's nothing wrong with a little self promotion when we're adding value to the audio.

[00:24:54] And that's really what you're doing.

[00:24:56] They're getting a they're getting something that you sell for dollars and then they get a sense as to how you think and get a sense as to what they should be thinking about.

[00:25:06] And it's a great introduction for them to reach out to you for further questions and consultation.

[00:25:14] That's absolutely that's a great thing.

[00:25:16] And because there's a lot of entrepreneurs like they're like they like to think they have certain things figured out.

[00:25:24] Like I know.

[00:25:26] I know.

[00:25:27] I know where I I should be spending my time and I know where I shouldn't be spending my time.

[00:25:32] So I built.

[00:25:35] So, I built.

[00:25:35] So, P's and I built structure so that that thing that I don't want to do because I'm not good at it.

[00:25:44] And I could put it over here.

[00:25:46] Here's how this is done.

[00:25:47] I know it's because I've done it and it sucks for me.

[00:25:52] But if I find the right person, they can go do that thing.

[00:25:55] And the way the world works today, that's really easy to to get executed.

[00:26:00] Yeah.

[00:26:01] As I'm building building a business that is significant and saleable in the traditional sense where you have all of those layers and you're manufacturing a widget.

[00:26:15] I mean, that's a that's sort of that traditional business sale is what people think about.

[00:26:22] There's a lot of people that are in that consulting role that still have assets in their business that are saleable that can be monetized.

[00:26:34] And I think that's a it's a different approach for that solopreneur to start to build that structure so they can bring somebody else in, start to duplicate themselves.

[00:26:50] And then like you can run a business like what I'm doing for 10, 12 years and then start to break that into pieces and bring people in.

[00:27:00] I don't have a desire to sell my business.

[00:27:04] I can't stop the D's from happening.

[00:27:08] I can't even stop the B.

[00:27:11] Wouldn't we all wish we could?

[00:27:13] Well, I mean, but I do things to minimize it.

[00:27:16] Right.

[00:27:17] But I mean, is there any advice for that?

[00:27:20] So that that's consultant, that solopreneur that is really the front line, the manager, the leader to start to think about.

[00:27:32] Doing something with their business that makes it saleable.

[00:27:35] Yes.

[00:27:36] Yeah.

[00:27:37] So so first of all, let's be clear that that that solopreneur like consultant who trades their hours for dollars and you can make a really great living that way and be very, very successful.

[00:27:47] But that is most likely an unsellable business when because you're selling your brain and you can't sell your brain.

[00:27:54] Right.

[00:27:54] So so those types of businesses are not sellable.

[00:27:58] And even in the even in the the real world businesses, I'll tell you about a call I got just literally a few weeks ago.

[00:28:04] So a woman called me.

[00:28:06] She said, my husband is an electrician or was an electrician.

[00:28:10] He just he just passed away.

[00:28:13] He told me, though, that, you know, he read somewhere that a business is worth three times its revenue.

[00:28:19] And so he did like, you know, he did like a half a million dollars in revenue last year.

[00:28:24] So I need to figure out how to sell his business for a million and a half dollars.

[00:28:28] And I said, OK, well, tell me about his business.

[00:28:31] He said, well, I just told you he's an electrician.

[00:28:34] OK, what does that mean?

[00:28:35] Well, it means every morning he got up, he went in his van and he went out and did electrical jobs.

[00:28:39] And then every night he came home.

[00:28:40] I said, OK, so does he have any employees?

[00:28:42] No. Does he you know, does he have you know, are any of these clients, you know, recurring like really, you know, contracts with like developers and he's going out and building new project?

[00:28:52] No, no, it's mostly just people call.

[00:28:55] And I had to tell her that, A, the whole fallacy of you sell a business for three times the revenue is completely wrong.

[00:29:02] B, there is no business here to sell the assets of the value of that business is basically his truck and his tools, which had been amortized and depreciated down to almost nothing.

[00:29:11] And it was a horrible conversation for me to have to have.

[00:29:14] Mm hmm.

[00:29:16] But it's a hard mission for the husband to put her in.

[00:29:18] It was.

[00:29:19] And he didn't he he didn't reach out to somebody like me and say, hey, is my business really worth a million and a half dollars when I die?

[00:29:27] And if not, how can I get it there?

[00:29:29] And that's why I'm here literally is because I want to help others avoid that problem.

[00:29:34] And I want to share it with your audience.

[00:29:35] But to answer the question, though, if you have a solo business, it has to be something where you create something of value without your interaction.

[00:29:46] For example, let's say you are a consultant and you know how to help businesses make more money and you go in and you help a business and you get paid on whatever it is, hourly basis or revenue generate, you know, revenue increase, whatever.

[00:29:58] That business has very little value as an asset.

[00:30:02] But let's say you take that expertise that you have and you turn that into a training program with, you know, online trainings, certifications, et cetera.

[00:30:14] And in that training program, people can go through the training, get qualified, do the actions and and succeed in their businesses that on their own without you having to be involved in the process.

[00:30:29] They can pay the money and do it and receive the same benefits.

[00:30:32] Now you've created a product around your expertise, your knowledge that has value.

[00:30:37] Okay.

[00:30:38] If you want to have it really have value, have it be something that has recurring revenue.

[00:30:44] Recurring revenue is the magic bullet to selling a business for the top dollar.

[00:30:51] And that is where let's say in that training instead of just training them how to do something once and they pay you money, which is better than just telling them or doing it for them.

[00:30:59] Right. From a valuation standpoint.

[00:31:00] Right. But what if you can put them into a mastermind group or or an association group or something where they're receiving value every month and every month you're charging the credit card for that.

[00:31:12] And in exchange for the value that you're getting them.

[00:31:15] So whether that's a recurring revenue service or product or whatever, those types of things are valued three, five, seven times more than single transactions.

[00:31:26] So if you have a business doing a million dollars a year as a consultant, that business when you sell it is worth practically nothing.

[00:31:35] If you have a business doing a million dollars a year that is selling a product or service based on your expertise as a consultant, that business might be worth a million dollars when you want to go sell it.

[00:31:46] If you have a business doing a million dollars a year of recurring revenue, that business could be worth five, six, even seven million dollars.

[00:31:56] So it matter if it's monthly recurring revenue or monthly is is is the key once once people start paying.

[00:32:04] If you have a product or service that people start paying, let me give you let me give you the car wash example.

[00:32:08] So back in the olden days when you wanted to wash your car, you'd pull into a car wash place, get out, you'd pump in a whole bunch of quarters.

[00:32:15] Right. And then you'd get out and scrub your car.

[00:32:16] And then automatic car washes came up and you'd go through and you'd put your credit card in and then it would wash your car.

[00:32:21] OK, that's that's a that's a model of one time revenue.

[00:32:26] Right. It's transactional revenue. You go in, you put your money, you leave.

[00:32:29] You may never come back. They have no idea.

[00:32:30] Today, on almost every corner in every city of the United States, you see all these huge car washes.

[00:32:36] And what do they have? Monthly memberships, because it's like, well, we'll we'll wash your car once for 20 bucks.

[00:32:44] But for 25 bucks, we'll give you unlimited car washes all month. Right.

[00:32:48] They want you to sign up for that monthly recurring revenue.

[00:32:51] So even a car wash has gone from putting quarters in a machine to put a credit card new in a machine to not even running your credit card ever or putting pulling your credit card ever again.

[00:33:01] But they're still billing you every month. You just try.

[00:33:03] You just drive through and the gate opens and you get your car.

[00:33:05] They put a little QR code on your window and RFID or whatever.

[00:33:08] Hey, welcome back. You know, welcome back. We're ready to wash your car.

[00:33:11] And they're billing your credit card every single month.

[00:33:13] And I know people who've been their car wash members at our local car for years because it's like it's handy. Right.

[00:33:19] They go once a week. They go through and drive it through and they don't have to pay anything extra.

[00:33:23] I'm one of those business can do this. Any business can do this.

[00:33:26] And this is something that you need to think about.

[00:33:29] I mean, sometimes we think of those as subscriptions to.

[00:33:33] And if you really like I did this a couple of weeks ago, like what are all the subscriptions that I belong to?

[00:33:39] And then, holy crap, that much money is going out on a subscription basis.

[00:33:45] And I haven't looked at that subscription for 18 months. Right.

[00:33:49] No, I mean, it's something that we should review as a as a consumer.

[00:33:53] Absolutely.

[00:33:54] And as a business owner, too, by the way, have a have a credit card statement audit party with your team and go and find you will find constantly.

[00:34:06] We do this once a quarter. We go through what are we? Why are we paying for this? Who wanted this? Why are we?

[00:34:11] And we we cut cut every quarter. We have a credit card review party and it takes takes 45 minutes and will save you thousands of dollars.

[00:34:19] Yeah, that's a that's another great little nugget for any any any business owner to look at that, because you sign up for something and you don't think about it.

[00:34:29] And I mean, if you're if you're following or listening to certain people who are great at creating subscriptions and great at getting people to buy something because Russell Brunson said it.

[00:34:44] Right. So I should I should buy that subscription because it's going to give me access to all those books.

[00:34:50] And then you never look at it. It's really not. Russell's making dope.

[00:34:55] I mean, he is providing value. Right. You just not seeing it. He's adding new things. It's all there.

[00:35:00] And we can do that as as solopreneurs. We can we can create those situations and create that community.

[00:35:07] But it has to be with intent. So you've got to provide value, provide value for the money you're charging.

[00:35:13] But look for ways to provide that value in a way that the consumer is happy to be to be paying you every single month.

[00:35:22] Love it. Great stuff, Marty. So last question.

[00:35:27] Past or present any relationship with cigars?

[00:35:32] Yes. So back in the late 90s, when I think, you know, mid to late 90s, I think there was like a cigar renaissance, right?

[00:35:42] Cigar Aficionado magazine was at its peak and, you know, Rush Limbaugh was on the cover and back then.

[00:35:48] And I definitely got into got into the cigar culture.

[00:35:53] And and one of the things that came from that is my dad, who was a who was a lifelong cigarette smoker.

[00:36:00] And I always hated that. But we we found a connection in cigars.

[00:36:06] And so we found that that was one of the ways we didn't always have the great, greatest connection or communication.

[00:36:13] So but we found that sitting out on a patio on an evening and pondering life over a cigar was an absolutely phenomenal way to to connect.

[00:36:27] And so I still occasionally have one with my dad.

[00:36:31] I've I cut back substantially part of its opportunity.

[00:36:36] There's like, you know, the world was different 20, 25 years ago with regards of opportunity.

[00:36:41] But but for me, cigar equals conversation in relationship.

[00:36:49] And they're really they're really a phenomenal tool for making that happen.

[00:36:53] Yeah, that's a great story.

[00:36:55] And I've heard that a lot between father son.

[00:37:00] And, you know, sometimes you're the father, sometimes you're the son, sometimes you're the brother.

[00:37:07] But it has helped mend fences, having that cigar on the on the deck and the patio, because it's sort of.

[00:37:17] It forces you to be somewhat contemplative.

[00:37:20] It forces you to spend some time to kind of relax and not be so whatever.

[00:37:30] Right. Yeah.

[00:37:30] And I don't know.

[00:37:33] To me, I can walk into any cigar lounge anywhere in the country and.

[00:37:39] I have something in common with those people and you can get into a conversation.

[00:37:44] You may not have anything else in common, nothing else.

[00:37:49] You might not agree with them on anything.

[00:37:53] This happened to me.

[00:37:54] I was at a conference in Atlanta a few weeks ago and I sitting sitting there having cigars.

[00:38:00] Guy came in.

[00:38:01] He was a regular and we hit it off because smoking cigars.

[00:38:05] But as we talked, we had similar values, but nothing else.

[00:38:11] Yeah.

[00:38:12] Politics, religion, how we operated our lives.

[00:38:16] Nothing right was was in common.

[00:38:19] But we had the bond of the cigar.

[00:38:21] And yeah, it was a nice it was a nice.

[00:38:24] It'd be nice that everybody could find some common ground these days.

[00:38:28] Wouldn't it?

[00:38:29] Or a sanction.

[00:38:30] And I don't know if we need everybody to go have a cigar because all that's going to do is raise prices.

[00:38:34] It wouldn't hurt.

[00:38:36] It would help the culture.

[00:38:38] I am.

[00:38:39] So anyway, Marty, I appreciate you taking the time.

[00:38:43] We'll have the boomer sales.

[00:38:45] We're having me here.

[00:38:46] Yeah, I appreciate.

[00:38:47] I appreciate you being here because you really dropped some some great ideas for entrepreneurs to think about what they should be doing before it gets to the 11th hour.

[00:38:56] And then they're then they're forced.

[00:38:58] So thank you, man.

[00:38:59] Appreciate it.

[00:39:00] Absolutely.

[00:39:00] Thanks for having me.