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Speaker 1: What they're looking for as an investor is a ten,

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fifteen to twenty percent return. So what we have to

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do on our mindset is you may be a solopreneur,

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you may own your company, but we've got to shift

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to the other side of the table and say, how

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can I make my company where somebody's willing to pay

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me cha ching serious revenue and then themselves be able

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to look back and say, hey, I can get above

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average market return.

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Speaker 2: You're listening to Carrie Letz's Financial Survival Network, where you

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get valuable information you just can't find anywhere else to

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thrive in today's trying times. You need the Financial Survival

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Network now more than ever. Go to Financial Survivalnetwork dot

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com and get your free newsletter and gift. Financial Survival

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Network now more than ever.

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Speaker 3: And welcome. You are listening to and watching the Financial

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Survival Network. I'm your host, Carrie Letz. My god, we're

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just two days from the end of February of this

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new year, and so much is happening, but none of

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us me in particular, you as well are getting younger.

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If you own your own business, you really need to

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listen to what you're about to hear Justin goodbred an

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expert in succession planning, building your exit plan, because if

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you haven't done it right, it's going to be really

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difficult to get top dollar for your business and to

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move on to something else if that's what you want

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to do, or retire. And I've been through this, owned

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a number of small businesses, was fortunate enough to sell

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a couple of them. No regrets for sure, But had

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I known this information thirty forty years ago, I would

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have done things completely different. Justin, it's great to have

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you on the show. Hey, if you got a question

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for Justin myself, email is kl at kerrie lets dot com.

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Justin Blake, how'd you become an expert in succession planning?

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Speaker 1: I would say that that comes like me of things

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carry that we come through trial and error. So like yourself,

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I started and sold at this point six companies, and

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I became a major shareholder in the seventh and exited it.

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But my first three, if i'd known now then what

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I know now, Oh my goodness, it'd been in the

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world difference. I'm talking to the two to seven figures

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in terms of value difference. So just through the role

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of Harbor Knox and then about ten years ago, I'm sorry,

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twenty years ago now, I started consulting business owners, began

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teaching at the Exit Planning Institute as one of the

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founder of faculty members there. And now after two decades

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of working in value acceleration, which is how you grow

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the value of a company, and walking through exits bostht

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my own and with hundreds of clients, I think that's

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what led to the exits of the expert status that

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you're asking about.

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Speaker 3: So all right, so you got some experience in this,

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and what are the three most common mistakes that business

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owners make along these lines of not having an exit plan.

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Speaker 1: Well, most of us as business owners were extreme control freaks,

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and we need to be, especially because in the early

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days of our business it takes a lot of tenacity

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and a lot of vigor and vem to actually survive

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the business world. And what happens, though, is that we

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really don't understand the truth the income that we make

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out of our companies. You know, a lot of business

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owners will pay for let's say, our kids' education, will

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pay for our vehicles, our health insurance, our trips, our travel,

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you name it, through the company. On top of taking

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a salary or distribution. And while we do that, when

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it comes time to exit our company, we don't really

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calculate the sheer amount of money we're going to need

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in order to reach our long term desire. As you mentioned,

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some people want to just exit and retire myself sounds

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like you as well. We did and we want to

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do something slightly different. So the first stake that people

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make is they don't realize the sheer amount of money

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they make in their company and how much they need

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their companies to grow. For to grow too. I actually

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run my own podcast called deca Millionaire Decoded. The reality

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is is deca Millionaire is a new millionaire, especially for

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US business owners. So for example, if you're making a

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two hundred thousand dollars or three hundred thousand dollars in

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take home pay as a successful business owner, you may

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have another hundred two hundred thousand dollars of income that's

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being sheltered by the company through good tax strategy. That

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means you need somewhere north of ten million dollars in

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value in order to maintain your lifestyle if you're going

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to go into retirement. So the first mistake they have

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is that we don't realize how much income our businesses

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generated for us. The second one is is we end

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up staying at the epicenter of our business. We all

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know that we should work on our business working versus

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working at our company. We know that we've heard it

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if we've been around a while, but many of us

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don't realize that we end up costing us ourselves millions

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of dollars in terms of enterprise value because we don't

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build a business that can operate without us. So that'd

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be the second one. And the third one is is

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we don't start planning our exit soon enough. A lot

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of the words here. What I also see is business

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owners will wait until a year before I'm like, Okay,

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I'm tired, I'm ready to exit my company. The reality is,

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as you know through your law practices in the past,

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is there's certain state laws and there's certain tax codes

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issues that if we start planning our exit three, four, five,

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six years, perhaps even longer before we need to exit,

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we can actually drive our value up and position ourselves

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in a more tax favorite environment, as well as it's

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in a better negotiating standpoint when we're negotiating with the

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perceived buyer.

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Speaker 3: In the future. All right, So if you were starting

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over from the beginning, what would you do.

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Speaker 1: What I do in terms of trying to grow a

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company for value?

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Speaker 3: Yeah, exactly, with the intention of selling it eventually. Right.

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Speaker 1: Absolutely. We actually teach this when we're coaching business owners

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on how they could double or triple the value of

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their company. And this is what we talk about when

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we do our free strategy calls. So the very first

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thing we have to do is what we call a

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relentless foundation. The foundation of anything has to be laid solid.

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Most of us we because we don't know exactly where

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we want to end up. We have a trade, we

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know a skill set. Maybe we're a technician. I was

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a financial advisor, you were an attorney. We knew our craft,

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we go to school for that, we knew our trade,

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but yet we don't think ourselves and a business owner.

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So the very first thing we teach our business owner clients,

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whether just starting out or when they engage us to

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do relentless coaching, is we say, okay, let's lay the

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foundation on where exactly do you want to be and

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why do you want to be there? And then what

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are the mechanisms that we're going to do to grow

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to that particular point. So the very first thing we

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have to know is our vision. What specifically do one

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want to accomplish? Now, whenever I say vision, carry you

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and I've been around the block a while, man, we

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both are seasoned entrepreneurs. I get so tired of these

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fly by night coaches. I come out of the corporate

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world as they talk about vision, vision, vision, and they

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don't understand that, actually, what are with? Where do I

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exactly want to end up? I love shooting my bow

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and arrow. It's like me trying to aim my arrow

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at the bullseye on the target. I want to know

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exactly where that era is going to end up. Many

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business owners will take that position, So I would start

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there right off the bat with any business owner, know

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exactly where you want to end up, what your value

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needs to be, what do walkaway numbers need to be,

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and then we can backwards engineer the academic side of it.

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Speaker 3: Okay, so you know, you got to have goals, you

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got to have long term vision. You know, problem is

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here justin It's like when you start a business, you're

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so concerned with just trying to make it successful and

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make it work that you just don't really focus on

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these things.

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Speaker 1: What happens is in the early days, you and I

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both have founded businesses, and we know what it's like.

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I founded seven and exited seven. And what is happening

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is is we work with anybody who fog amerr because

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we have to make income. And that's okay, but there's

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so that comes a certain right point, and I challenge

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our students, the ones at our clients and we have

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the privilege to serve, I challenge them at some point,

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usually within the first twelve to eighteen months. As soon

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as we get a little traction where we're making a

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little bit of income, we're able to feed our family.

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We're no longer living on beans and duct taping our

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families at that point. What we need to do is

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when you get hyperniched, we talk about niche and down,

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but some of us business owners we don't get super specific.

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And here's where the problem lies because we don't know

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specifically who we're going to serve. We don't know specifically

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the marketing that we need to use to attract that person.

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So we're going to serve we don't know specifically the

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language and the syntaxes of which they're going to buy

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from us, Nor do we align our offer whatever that service.

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Whether you're in a law practice or mean and my

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advisory practice, or maybe a dentist or an entrepreneur a

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construction company, we don't know specifically the offer that needs

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to align with that avatar. So what we do in

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the early days that we cast a wide net to

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work with anybody and everybody. The danger with that is

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is that we cannot build scalable models that drive us

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to that eight to nine figure exits that we need.

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Most of us need to reach decka millionaire status in

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order to in order to maintain our quality of life.

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So the way that we drive this, the way we

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work with our clients to drive them to their success metrics,

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is we get super niched on who we're going to serve,

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and then we align the entire ecosystem of the company

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to serve one specific avatar. Now, when I say that

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I've been doing this a long time've been a business

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over thirty plus years. When we say that we as

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business owners, often we fall into the scarcity mindset like, oh,

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my goodness, you only want me to work with one

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one particular type of person. Well, what about is all

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these other ones I can serve. You know, the way

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I talk about this is again back to my bow

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and earrow. I like shooting my bow at my target

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and the very center of the target. May have you

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seen this in the Olympics. There's a red dot. We

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call that the bull's eye. Typically that's where ten points.

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If you get the air to land there, that would

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be what we call our perfect avatar. That is the

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person that we know that we can solve their problems.

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We so we we've assessed sever of their problems. We

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know our service can deliver them a phenomenal result like

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they are raving fans. That's our center point, that's our

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ten ring. But oftentimes the wind may blow the arrow, etc.

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We may land on the nine ring or the eight

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ring or the Severn ring. It's okay to work with

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clients who maybe not fall in that exact avatar because

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as wes, long as we shoot at that bull's eye,

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where more often hit the bulls eye, which creates a

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greater value for our company. So what we try to

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coach our clients around is get hyper focused on serving

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one person. One person. You can see their face, you

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know where they work, you know what their syntax, you

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know where they shop, you know their beliefs, you know

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their you know their emotions. And in doing so, it's

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okay if the economic winds come. If somebody hears your message,

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you're like, dude, I know I'm not quite the person

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you're looking for, but I want to work with you.

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It's okay to work with them. But when we put

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ourselves carry in the position of the buyer of a company,

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not the owner of the company. The buyer's ultimately looking

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for ROI, what is the return on their investments? And

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the way that they drive the multiple up and the

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value of our companies up is by us being able

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to show a repeatable process, deliver it on a repeatable solution,

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delivered on a repeatable sales process, et cetera, serving the

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exact same person over and over and over without us

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being in the center of our business.

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Speaker 3: Yeah. So all right, So we're scaling and we're basically systematizing.

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Speaker 1: Right, we're systematizing, but we're systematizing around one key word,

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and that is value. And this is a huge paradigm

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that most business owners don't think about. Literally, I'll be

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on a call tonight with seven thousand attorneys CPAs and

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financial advisors teaching this concept as we a third day

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in a row with this coach of this group that

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I'm teaching, most of even the professionals that work with

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business owners, don't think in this light. You see, all

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of us know we want to see our top line

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revenue increase. We call it profit. Let's say we want

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to see our profit increase. The problem is is we're

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scaling systems. The Internet gurus and all the stuff I

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see on YouTube and social media, a lot of stuff says,

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let's go out and create more sales. You can get

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more sales. You can make a million dollars in a day.

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I've seen all this nonsense out there. We all kind

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of scoff at because we know how hard it is

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to get scales. Here's the reality, though, if we focus

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on value, what we end up doing is we end

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up driving our revenue. I say it this way, Carrie,

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and it's a play on words. I'd love to have

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your insight on this particular statement, especially with your past.

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I've seen a lot of companies and I look at

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thousands of financials and thousands of transactional documents what we

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call due diligent documents. See thousands of them, per I

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have yet to see a company I've seen any companies

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who are profitable but are not valuable. Think about what

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I call chuck in the truck. You know there somebody's

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out there riding around do an HVAC work or landscaping,

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or maybe they're attorney or financial values like you and

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I are in our past life. They're making a good income,

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but their business is not worth a lot of money.

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They may get one at one time's revenue or four

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times sde it's just not worth a lot of money.

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But Carrie, I've yet to see a business that focuses

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on value and builds a business that where value is

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at the center where we're saying we're going to move

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the enterprise value of the company up through systems, through decentralization,

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through revenues, what I call the eight value drivers. Whenever

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I see companies that focus on value, they are always profitable.

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So it's the play on words. I've seen a lot

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of companies who are profitable but not valuable, and thus

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we end up having this workforce who ends up working

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till they die or they just close the business down.

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I've yet to see a company that's valuable, that's not

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also profitable.

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Speaker 3: All right, So there's a difference, all right, there is

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a difference. So if you have a one man solopreneur business,

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who's going to buy that from you? Right?

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Speaker 1: That's correct? Then that's what happens. Most of us are

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at the epicode of our business and an investor does

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not want to buy a job. I saw this actually

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just yesterday when in the teaching session there was an

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attorney who's a tax attorney, slashed the state attorney, and

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he was going through an M and A deal where

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where he had a landscaper who was trying to sell

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a business and it was a profitable landscaping company in

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terms of top line revenue, but the company had not

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been built for the investor. And the investor came in

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and they're like, look, you only pay four and a

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half million dollars with landscape company. But by the time

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I end up replacing the owner, regrastructuring the company, putting

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together the right systems and processes, my ROI is only

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going to be four percent. Why in the world would I,

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as an investor put money into a high risk, high

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concentrated position of one company only get a four percent return.

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What they're looking for as an investor is a ten,

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fifteen to twenty percent return. So what we have to

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do at our mindset is you may be a solopreneur,

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you may own your company, but we've got to shift

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to the other side of the table and say, how

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can I make my company where somebody is willing to

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pay me cha ching serious revenue and then themselves be

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able to look back and say, hey, I can get

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above average market return. Behind your background drop right there,

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I see technical indicators, I see market movements behind your return,

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behind your stream their carry what most investors, they're familiar

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with the capital markets, what we call the capital markets,

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and they realize that they're going to invest dollars into

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what's called the private capital markets, which is where we

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have small business owners and business owners live. Then they

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should get a better return than the small cap market

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would be or the S and P five hundred or

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the Russell two thousand. They're looking for a better return

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than that. And so we have small business owners and

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we change the paradigm and say, hey, our business is

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not our identity. It is not it's nothing more than

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a wealth creation tool, and we've got to align it

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for the future buyer. So my own story was I've

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started three businesses. One was a landscape company, one was

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an insurance based business, one was a small dental consulting practice.

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Each of those were acquired by big national firms. I

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built systems, and someone reached out and said, hey, Justin,

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I want to buy these firms from you. But I

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had not reached my personal goals. I had this desire

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to become a deca millionaire so I could maintain my

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quality of lifestyle that I was generating through my companies.

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I had because I know that if I have ten

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million dollars earning five percent, it's going to give you

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five hundred thousand bey four taxes. And in reality, that's

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where many small business owners live. When they backwards engineer,

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what we call recast their income. They may be taking

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one hundred and fifty, but all the benefits in the

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company surely add up to a lot more than that

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company vehicles, trips, and things of that nature. So I

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can remember carry's sitting down. I said, you know, I'm

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going to restructure my life. I'm going to build a

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company from the investor's viewpoint versus my viewpoint. I'm going

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to build it in a way to where an investor

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would come in and say, man, I am willing to

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pay you significant cash because I will get a better

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return on the quality of this asset than I will

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if I buy the S and P five hundred or

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the wrestle two thousand. And it took me about forty

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nine months. The company scale from a startup to an

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eight figure exit in forty nine months. And the secret

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to that, and the secret that we coach literally business

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owners all over the nation, hundreds of business owners of

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my career, the secret is is that we have to

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change a paradigm and not look at our business as

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our baby, but we have to look at it from

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the investor's lens and make sure it's attractive to the

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investor so when the time comes that they will be

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willing to pay a significant cash for the business.

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Speaker 3: Hmm, all right, I like it. I like it justin

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how do we connect with you on the web? How

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do we find out more about you? Where are you?

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Speaker 1: Absolutely so for those of you who are interested in

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perhaps a free strategy call to talk about how you

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can look at your company and rapidly accelerated, I would

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say go to justingobread dot com for slash free call

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and we have a whole process there that'll hope you

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get prepared for one of our strategies to hop on

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the phone with you. For those of you want to

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see what a life of freedom is as a business owner, Hey,

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follow me on Instagram at Justin Gearbread. I'm the only

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00:16:58,000 --> 00:17:00,399
Justin Gearbread in the world. I promise you has really

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00:17:00,480 --> 00:17:02,960
unique name. Or if you want to learn like a

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DIY self learning, I having a YouTube channel. It has

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over one thousand videos of me teaching the technical side

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of how to scale businesses. So I would challenge you

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to look at either my website, our YouTube channel, our

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Instagram channel.

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Speaker 3: All right, I like it. Hey, if you got a

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question for Justin or myself, shoot me an email Klatcarrie

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Lutz dot com and you'll find a link to Justin's

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site in the show notes to this interview on Financial

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Survival Network dot com. Well you ask is when you

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00:17:33,079 --> 00:17:35,319
go there, please sign up for your free newsletter, as

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over seventy thousand FSN members have already done. Justin been

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a pleasure. We'll talk to you again soon.

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Speaker 2: Thanks for having me, Kery, Thanks for listening to Carrie

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Letz's Financial Survival Network your solution to today's trying times.

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00:17:50,200 --> 00:17:54,319
For the latest, go to Financial Survivalnetwork dot com. Financial

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Survival Network now more than ever

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Speaker 1: Clus