1
00:00:00,040 --> 00:00:02,160
Speaker 1: There are a lot of options out there today for

2
00:00:02,279 --> 00:00:07,120
the private business owner. Some are transitioning internally to management

3
00:00:07,160 --> 00:00:10,960
team if they have some key employees that are well

4
00:00:11,000 --> 00:00:15,800
equipped to take over ownership or family transitions.

5
00:00:16,039 --> 00:00:18,079
Speaker 2: But when you're getting you know, when you're working with

6
00:00:18,480 --> 00:00:18,760
you know.

7
00:00:18,719 --> 00:00:21,160
Speaker 1: Say a businesses that are valued at I don't know's

8
00:00:21,160 --> 00:00:24,359
say five million, unless generally it's going to change hands

9
00:00:24,359 --> 00:00:27,440
to another private owner. Another a private buyer is going

10
00:00:27,480 --> 00:00:28,920
to buy it from a private seller.

11
00:00:29,120 --> 00:00:32,920
Speaker 3: You are listening to Carrie let'sa's Financial Survival Network where

12
00:00:32,960 --> 00:00:36,359
you get valuable information you just can't find anywhere else

13
00:00:36,960 --> 00:00:37,759
to thrive in.

14
00:00:37,719 --> 00:00:38,960
Speaker 4: Today's trying times.

15
00:00:39,159 --> 00:00:43,159
Speaker 3: You need the Financial Survival Network now more than ever.

16
00:00:43,759 --> 00:00:47,280
Go to Financial Survivalnetwork dot com and get your free

17
00:00:47,280 --> 00:00:53,280
newsletter and gift. Financial Survival Network now more than ever.

18
00:00:56,520 --> 00:01:00,320
Speaker 5: And welcome you are listening to and watching the Financial

19
00:01:00,399 --> 00:01:04,200
Survival Network. I'm your host, Carrie lutz A where second

20
00:01:04,280 --> 00:01:07,439
to last day of February here, it's hard to believe

21
00:01:07,480 --> 00:01:11,439
this year is sailing by so quickly, a sea of change,

22
00:01:11,599 --> 00:01:14,799
that's for sure. A one thing though, if you are

23
00:01:15,000 --> 00:01:17,920
a small business owner like I have been, My entire

24
00:01:18,000 --> 00:01:20,239
life is a book that you're going to want to

25
00:01:20,280 --> 00:01:25,480
get and it's called exit by design, And what does

26
00:01:25,480 --> 00:01:30,879
that mean. That means that you, as a successful business owner,

27
00:01:31,439 --> 00:01:35,239
you pick when you sell, when you leave, when you

28
00:01:35,280 --> 00:01:38,719
go onto retirement, or when you go on to something else.

29
00:01:39,120 --> 00:01:40,680
Speaker 4: And it's probably appropriate that.

30
00:01:40,680 --> 00:01:45,159
Speaker 5: A book like that would be written by a financial planner,

31
00:01:45,280 --> 00:01:50,280
financial advisor, and it is. His name is Joseph Lapresty

32
00:01:50,560 --> 00:01:54,519
and Joseph and Marissa La Presty. I guess that's a relative, Joe.

33
00:01:55,120 --> 00:02:01,400
And you wrote your daughter, okay, great going into the

34
00:02:01,439 --> 00:02:02,319
family business.

35
00:02:02,359 --> 00:02:03,400
Speaker 4: That's always a great thing.

36
00:02:03,480 --> 00:02:06,400
Speaker 5: So your exit plan has already set up, your daughter

37
00:02:06,480 --> 00:02:07,400
is doing it for you.

38
00:02:07,920 --> 00:02:10,199
Speaker 4: Of Hey, what made you write the book?

39
00:02:10,400 --> 00:02:14,479
Speaker 1: Oh, well, we wrote the book because, you know, being

40
00:02:14,879 --> 00:02:19,879
a wealth manager now for forty years and a business

41
00:02:19,960 --> 00:02:22,960
owner myself starting my own company twenty five years ago,

42
00:02:23,599 --> 00:02:26,000
we felt there was a gap in the types of

43
00:02:26,039 --> 00:02:30,599
planning that business owners are getting where they may have

44
00:02:31,120 --> 00:02:37,240
you know, different advisors, accountants, attorneys, financial advisors, business coaches

45
00:02:37,360 --> 00:02:41,599
or some advisors on their business level, but they're dealing

46
00:02:41,639 --> 00:02:47,280
with them in a silo and nobody's coordinating that advice,

47
00:02:47,759 --> 00:02:52,599
and oftentimes it conflicts with each other. So getting that

48
00:02:53,039 --> 00:02:57,800
synergistic and having a unified approach to help the business owner,

49
00:02:58,680 --> 00:03:01,759
you know, be the advocate or the owner and what

50
00:03:01,840 --> 00:03:04,719
they want to achieve in life. We feel that there's

51
00:03:04,719 --> 00:03:07,159
a gap in the types of and the type of

52
00:03:07,159 --> 00:03:12,599
advice that is available for the privately owned business.

53
00:03:13,719 --> 00:03:17,280
Speaker 5: So the need is out there identify this. I mean,

54
00:03:17,319 --> 00:03:20,000
I know myself. I've been in.

55
00:03:20,000 --> 00:03:21,199
Speaker 4: Business my whole life.

56
00:03:21,479 --> 00:03:25,919
Speaker 5: I've sold two businesses and I think I got a

57
00:03:25,960 --> 00:03:29,599
good price for it, but I always felt like there

58
00:03:29,680 --> 00:03:30,840
was a better way to do this.

59
00:03:31,319 --> 00:03:32,719
Speaker 2: Yeah, so that's interesting.

60
00:03:32,840 --> 00:03:35,919
Speaker 1: Can you share a little bit of your reflection on

61
00:03:36,800 --> 00:03:40,680
after the fact. Were you satisfied with the exit? Did

62
00:03:40,719 --> 00:03:42,120
you regret anything about it?

63
00:03:42,639 --> 00:03:45,280
Speaker 5: No, because I was ready to move on both times,

64
00:03:46,199 --> 00:03:50,199
but I felt that look, the first time, as partners,

65
00:03:50,479 --> 00:03:55,240
the family member in a thriving legal printing concern industry

66
00:03:55,240 --> 00:03:58,280
that doesn't exist anymore, and I.

67
00:03:58,319 --> 00:03:59,479
Speaker 4: Knew it was time to move on.

68
00:04:01,560 --> 00:04:06,439
Speaker 5: I contacted our largest competitor, which had just been acquired

69
00:04:06,800 --> 00:04:07,840
by somebody else.

70
00:04:08,479 --> 00:04:09,919
Speaker 4: They needed a few months to.

71
00:04:09,879 --> 00:04:12,759
Speaker 5: Get their feet under the desk and you know, get

72
00:04:12,800 --> 00:04:16,639
control of the company before discussing it. But eventually nine

73
00:04:16,680 --> 00:04:20,120
months later we closed the transaction, I couldn't have been

74
00:04:20,160 --> 00:04:23,279
happier with it, got what then was probably top dollar.

75
00:04:23,759 --> 00:04:27,160
Second time, I was a partner in the law firm

76
00:04:27,639 --> 00:04:30,680
and just didn't really enjoy the practice anymore.

77
00:04:30,680 --> 00:04:31,519
Speaker 4: I wanted to move on.

78
00:04:32,000 --> 00:04:36,319
Speaker 5: So both times, you know, I probably would have taken

79
00:04:36,439 --> 00:04:38,040
less just to get out.

80
00:04:38,160 --> 00:04:40,240
Speaker 1: You know, Well, good for you that I find that

81
00:04:40,279 --> 00:04:43,480
to be pretty rare where there isn't some regret, you know,

82
00:04:43,560 --> 00:04:48,480
after the fact, which is why being proactive and designing

83
00:04:48,519 --> 00:04:51,399
the exit right. The title of the book is exit

84
00:04:51,439 --> 00:04:56,079
by design, because people that aren't proactive end up exiting

85
00:04:56,120 --> 00:05:00,279
by default, and it's that's what, you know, some thing

86
00:05:00,399 --> 00:05:04,920
in that transaction they usually end up regretting, whether it's

87
00:05:05,360 --> 00:05:09,360
you know, a different type of transaction, or maybe not

88
00:05:10,199 --> 00:05:14,439
finding the right buyer, maybe how their employees were treated

89
00:05:14,519 --> 00:05:17,439
after the fact they could have designed that better, or

90
00:05:17,560 --> 00:05:20,199
it's about their own personal they didn't plan their personal

91
00:05:20,240 --> 00:05:22,800
wealth management of how are they going to live the

92
00:05:22,839 --> 00:05:26,279
life that they want? And tax the tax drag on

93
00:05:26,360 --> 00:05:29,439
those transaction is often a big one too, where they

94
00:05:29,519 --> 00:05:32,639
maybe they talked to another business owner who sold and

95
00:05:32,680 --> 00:05:35,759
they told them about a strategy that their advisors put

96
00:05:35,759 --> 00:05:38,079
in place that saved them a lot in taxes and

97
00:05:38,120 --> 00:05:40,079
they say, gee, I wish I would have known about that.

98
00:05:40,959 --> 00:05:44,519
Speaker 5: Yeah, so it's a combined kind of approach from taxes,

99
00:05:45,040 --> 00:05:50,680
from getting top dollar. You know, normally, unless you're getting

100
00:05:50,759 --> 00:05:53,720
bought out by a larger company, you're probably going to

101
00:05:53,759 --> 00:05:56,120
take back paper. So how do you make sure that

102
00:05:56,160 --> 00:05:59,000
you actually get paid? How do you know that the

103
00:05:59,360 --> 00:06:02,480
person you're to is in the scammer that's gonna just

104
00:06:02,560 --> 00:06:05,240
take your money? Right, All those things come into play.

105
00:06:05,639 --> 00:06:08,680
Speaker 1: Yeah, seller financing is a big part of you know,

106
00:06:08,759 --> 00:06:14,120
many many deals. Uh So that that's always but you

107
00:06:14,120 --> 00:06:18,439
know buyers are generally going to pay that note because

108
00:06:19,199 --> 00:06:22,800
you know the recourses you get the company back if

109
00:06:22,800 --> 00:06:26,120
they don't pay the note. Uh So it's there's a

110
00:06:26,160 --> 00:06:27,600
there's a big risk there for the buyer.

111
00:06:28,519 --> 00:06:32,040
Speaker 4: What's left a bit? Well, that is sure, sure what's

112
00:06:32,120 --> 00:06:32,480
left of it?

113
00:06:33,160 --> 00:06:36,279
Speaker 1: You don't want to We try to educate clients where

114
00:06:36,680 --> 00:06:40,000
seller financing is good to the extent that it opens

115
00:06:40,040 --> 00:06:43,920
up the door to more buyers. You'll get more interest, Okay,

116
00:06:44,120 --> 00:06:47,279
and that was good for value because the more the

117
00:06:47,319 --> 00:06:47,759
more buyer.

118
00:06:48,519 --> 00:06:49,800
Speaker 2: Right, it's supplying man.

119
00:06:50,720 --> 00:06:52,600
Speaker 1: But you don't want to go too deep into seller

120
00:06:52,680 --> 00:06:54,800
financing and you want to get the right terms to

121
00:06:54,839 --> 00:06:55,639
reduce that risk.

122
00:06:55,959 --> 00:06:59,759
Speaker 4: Yeah. Well, so there is usually the one perfect buyer

123
00:06:59,839 --> 00:07:01,000
for your company, right.

124
00:07:01,040 --> 00:07:03,120
Speaker 2: Yeah, I mean it depends on the type of business.

125
00:07:03,319 --> 00:07:06,519
Speaker 1: Uh. You know that in this in this day and age,

126
00:07:06,560 --> 00:07:11,120
there's a lot of industry consolidators, there's strategic buyers, there's

127
00:07:11,160 --> 00:07:13,800
private equity depending on the size of the business.

128
00:07:13,959 --> 00:07:16,199
Speaker 2: Uh so there are there are a.

129
00:07:16,120 --> 00:07:19,240
Speaker 1: Lot of options out there today for the private business owner.

130
00:07:20,360 --> 00:07:24,160
Some are transitioning internally to management team if they have

131
00:07:24,240 --> 00:07:27,839
some key employees that are well equipped to take over

132
00:07:28,240 --> 00:07:31,480
ownership or family transitions.

133
00:07:31,680 --> 00:07:33,720
Speaker 2: But when you're getting you know, when you're working with

134
00:07:34,160 --> 00:07:34,759
you know, say a.

135
00:07:34,879 --> 00:07:37,639
Speaker 1: Businesses that are valued at I don't know, say five million,

136
00:07:37,759 --> 00:07:41,560
unless generally it's going to change hands to another private owner.

137
00:07:41,639 --> 00:07:43,720
Another a private buyer is going to buy it from

138
00:07:43,759 --> 00:07:44,600
a private seller.

139
00:07:45,360 --> 00:07:50,160
Speaker 5: Right so, uh Like, what do you think the three

140
00:07:50,199 --> 00:07:57,040
biggest mistakes business owners make when when they're thinking about selling.

141
00:07:57,800 --> 00:08:02,120
Speaker 1: Yeah, I think the I think one mistake is is

142
00:08:02,480 --> 00:08:07,519
determining their personal plans ahead of time, knowing what your

143
00:08:07,560 --> 00:08:09,519
next act in life is going to be.

144
00:08:10,439 --> 00:08:11,439
Speaker 2: Having that thought.

145
00:08:11,240 --> 00:08:14,839
Speaker 1: Out ahead of time. We we help business owners create

146
00:08:14,879 --> 00:08:19,160
what we call a personal action plan that just maps

147
00:08:19,199 --> 00:08:22,920
out what their next chapter in life is, and you know,

148
00:08:22,959 --> 00:08:25,240
think about that if you can. If you can, you

149
00:08:25,279 --> 00:08:29,319
know a few years before you're exiting and give it

150
00:08:29,360 --> 00:08:31,480
a lot of thought. You know, you're not just gonna,

151
00:08:32,039 --> 00:08:34,200
you know, say I'm gonna move to Arizona or Florida

152
00:08:34,279 --> 00:08:35,720
or even know, if you're in a cold climate, you're

153
00:08:35,720 --> 00:08:37,879
going to go somewhere warm and Okay, well that's not

154
00:08:37,919 --> 00:08:38,799
really your life.

155
00:08:38,840 --> 00:08:40,759
Speaker 2: That's changing where you're living.

156
00:08:40,799 --> 00:08:43,039
Speaker 1: But what are you going to do there? You know

157
00:08:43,080 --> 00:08:45,080
what you're going to be on the golf course five

158
00:08:45,159 --> 00:08:47,200
or seven days a week. Are you gonna you know, what,

159
00:08:47,320 --> 00:08:49,279
what's your life really going to look like? Where you

160
00:08:49,320 --> 00:08:52,399
could still have meaning and purpose? Because you know, many

161
00:08:52,440 --> 00:08:55,360
of the owners we work with where the founding owners

162
00:08:55,360 --> 00:08:58,799
of the company. Then you know their their baby boomers,

163
00:08:58,879 --> 00:09:02,039
let's say, and they own the company for twenty thirty,

164
00:09:02,159 --> 00:09:05,399
forty years sometimes, so it's like their baby, it's like

165
00:09:05,440 --> 00:09:10,399
their identity. And stepping away from that is really emotional psychological.

166
00:09:10,639 --> 00:09:14,039
So that's a big thing. I think determining your what

167
00:09:14,080 --> 00:09:17,200
we call your freedom point is another big one, and

168
00:09:17,279 --> 00:09:21,240
we define that as having enough money to be able

169
00:09:21,279 --> 00:09:24,600
to live the life that you want without being constrained

170
00:09:24,879 --> 00:09:28,200
by you know, financially of course, within reason, but you know,

171
00:09:28,279 --> 00:09:32,720
having that ideal life and knowing what you need from

172
00:09:32,720 --> 00:09:35,559
the business along with other assets to be accumulated through

173
00:09:35,600 --> 00:09:36,120
your life.

174
00:09:36,720 --> 00:09:37,919
Speaker 4: What is that point?

175
00:09:39,080 --> 00:09:40,120
Speaker 2: Where does it need to be?

176
00:09:41,000 --> 00:09:43,200
Speaker 1: So it will help a business owner develop what we

177
00:09:43,279 --> 00:09:45,960
call a lifetime cash flow plan and will show them

178
00:09:46,399 --> 00:09:49,919
what they need from the business sale to be able

179
00:09:49,919 --> 00:09:54,679
to have that secure their freedom. Right that's say a second, big,

180
00:09:54,840 --> 00:09:57,039
big one because many of them don't know, you know,

181
00:09:57,120 --> 00:09:59,679
they just kind of do planning on a legal pad

182
00:09:59,759 --> 00:10:03,360
or something. And uh, but there's a lot to consider there.

183
00:10:03,360 --> 00:10:07,320
Speaker 5: All right, So yeah, absolute one piece of advice you

184
00:10:07,360 --> 00:10:10,240
give to anybody thinking is selling their business at this

185
00:10:10,279 --> 00:10:12,480
particular point in time.

186
00:10:13,720 --> 00:10:19,440
Speaker 1: I would say, no, no, your Uh, there's a couple

187
00:10:19,480 --> 00:10:23,200
of ways to put this. Know the readiness and attractiveness

188
00:10:23,480 --> 00:10:27,559
of your business to try to sell to transition, Know

189
00:10:27,759 --> 00:10:30,440
what that looks like. Know what a buyer is going

190
00:10:30,480 --> 00:10:35,879
to look for because oftentimes that those those metrics are

191
00:10:35,960 --> 00:10:39,440
much different than the way the owner measures their business.

192
00:10:40,679 --> 00:10:44,279
So some things like how dependent is the business on

193
00:10:44,399 --> 00:10:46,240
the owner. You know, if you're going to step away

194
00:10:46,240 --> 00:10:48,000
from the business and a new buyer is going to

195
00:10:48,360 --> 00:10:50,960
new owner is going to step in, if it's very

196
00:10:51,000 --> 00:10:54,279
dependent on you, it's not very valuable to them unless

197
00:10:54,279 --> 00:10:58,679
you plan on working for them. What's your competitive advantage?

198
00:10:59,840 --> 00:11:03,799
You know, the higher the better your competitive advantages, the

199
00:11:03,879 --> 00:11:06,600
more valuable it would be to a buyer. You know,

200
00:11:06,639 --> 00:11:10,120
a strategic buyer, for example, could take what you've built

201
00:11:10,799 --> 00:11:13,679
and be able to offer it to maybe a broader

202
00:11:14,519 --> 00:11:18,000
list of club customers, or have an add on feature

203
00:11:18,039 --> 00:11:21,440
they don't have that you have that they could add another,

204
00:11:21,799 --> 00:11:23,679
you know, service or product onto.

205
00:11:23,480 --> 00:11:25,879
Speaker 4: Their current offer, right.

206
00:11:26,279 --> 00:11:29,600
Speaker 1: Brings things like that. Do you have recurring revenue streams

207
00:11:29,799 --> 00:11:31,840
that's very valuable, you know, as opposed to have a

208
00:11:31,919 --> 00:11:34,679
starting at zero every year. So that's what a buyer

209
00:11:34,720 --> 00:11:36,759
is going to look at, and your business is going

210
00:11:36,799 --> 00:11:39,159
to be value based off of that. And if those

211
00:11:39,240 --> 00:11:43,480
measures are poor, then you're going to get a low value, right,

212
00:11:44,000 --> 00:11:47,000
a low multiple of whatever the earnings are in your company.

213
00:11:47,559 --> 00:11:50,000
But if they're high, you could get a much higher multiple.

214
00:11:50,559 --> 00:11:52,759
Speaker 4: All right, Joe, it's been great speaking with you. Just

215
00:11:52,799 --> 00:11:54,679
tell us where do we find you, How do we

216
00:11:54,720 --> 00:11:55,440
get your book.

217
00:11:55,759 --> 00:11:57,039
Speaker 2: Yes, so the book.

218
00:11:57,720 --> 00:12:02,720
Speaker 1: Any of your listeners can download a version complimentary at

219
00:12:02,799 --> 00:12:07,159
Exit bydesignbook dot com. There's some information there, and you

220
00:12:07,200 --> 00:12:12,399
could find me at my company website Arlington Dashwealth dot com.

221
00:12:12,480 --> 00:12:14,559
Speaker 5: All right, links are in the show notes this interview

222
00:12:14,600 --> 00:12:17,399
on Financial Survival Network dot com.

223
00:12:17,639 --> 00:12:20,120
Speaker 4: Just click through. All we ask is when you go there,

224
00:12:20,200 --> 00:12:21,120
sign up for your free.

225
00:12:21,080 --> 00:12:24,200
Speaker 5: Newsletter, and if you've got a question for Joe myself

226
00:12:24,279 --> 00:12:28,120
kl atcarrielets dot com is the place to send it to.

227
00:12:28,559 --> 00:12:31,519
Joe always appreciate you coming on. Thanks so much yet

228
00:12:31,600 --> 00:12:32,159
my pleasure.

229
00:12:32,440 --> 00:12:36,519
Speaker 3: Thanks for listening to Carrie Let's's Financial Survival Network, your

230
00:12:36,679 --> 00:12:40,480
solution to today's trying times. For the latest, go to

231
00:12:40,639 --> 00:12:46,279
Financial Survival Network dot com. Financial Survival Network now more

232
00:12:46,360 --> 00:12:46,879
than ever