Speaker 1: There are a lot of options out there today for
the private business owner. Some are transitioning internally to management
team if they have some key employees that are well
equipped to take over ownership or family transitions.
Speaker 2: But when you're getting you know, when you're working with
you know.
Speaker 1: Say a businesses that are valued at I don't know's
say five million, unless generally it's going to change hands
to another private owner. Another a private buyer is going
to buy it from a private seller.
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Speaker 5: And welcome you are listening to and watching the Financial
Survival Network. I'm your host, Carrie lutz A where second
to last day of February here, it's hard to believe
this year is sailing by so quickly, a sea of change,
that's for sure. A one thing though, if you are
a small business owner like I have been, My entire
life is a book that you're going to want to
get and it's called exit by design, And what does
that mean. That means that you, as a successful business owner,
you pick when you sell, when you leave, when you
go onto retirement, or when you go on to something else.
Speaker 4: And it's probably appropriate that.
Speaker 5: A book like that would be written by a financial planner,
financial advisor, and it is. His name is Joseph Lapresty
and Joseph and Marissa La Presty. I guess that's a relative, Joe.
And you wrote your daughter, okay, great going into the
family business.
Speaker 4: That's always a great thing.
Speaker 5: So your exit plan has already set up, your daughter
is doing it for you.
Speaker 4: Of Hey, what made you write the book?
Speaker 1: Oh, well, we wrote the book because, you know, being
a wealth manager now for forty years and a business
owner myself starting my own company twenty five years ago,
we felt there was a gap in the types of
planning that business owners are getting where they may have
you know, different advisors, accountants, attorneys, financial advisors, business coaches
or some advisors on their business level, but they're dealing
with them in a silo and nobody's coordinating that advice,
and oftentimes it conflicts with each other. So getting that
synergistic and having a unified approach to help the business owner,
you know, be the advocate or the owner and what
they want to achieve in life. We feel that there's
a gap in the types of and the type of
advice that is available for the privately owned business.
Speaker 5: So the need is out there identify this. I mean,
I know myself. I've been in.
Speaker 4: Business my whole life.
Speaker 5: I've sold two businesses and I think I got a
good price for it, but I always felt like there
was a better way to do this.
Speaker 2: Yeah, so that's interesting.
Speaker 1: Can you share a little bit of your reflection on
after the fact. Were you satisfied with the exit? Did
you regret anything about it?
Speaker 5: No, because I was ready to move on both times,
but I felt that look, the first time, as partners,
the family member in a thriving legal printing concern industry
that doesn't exist anymore, and I.
Speaker 4: Knew it was time to move on.
Speaker 5: I contacted our largest competitor, which had just been acquired
by somebody else.
Speaker 4: They needed a few months to.
Speaker 5: Get their feet under the desk and you know, get
control of the company before discussing it. But eventually nine
months later we closed the transaction, I couldn't have been
happier with it, got what then was probably top dollar.
Second time, I was a partner in the law firm
and just didn't really enjoy the practice anymore.
Speaker 4: I wanted to move on.
Speaker 5: So both times, you know, I probably would have taken
less just to get out.
Speaker 1: You know, Well, good for you that I find that
to be pretty rare where there isn't some regret, you know,
after the fact, which is why being proactive and designing
the exit right. The title of the book is exit
by design, because people that aren't proactive end up exiting
by default, and it's that's what, you know, some thing
in that transaction they usually end up regretting, whether it's
you know, a different type of transaction, or maybe not
finding the right buyer, maybe how their employees were treated
after the fact they could have designed that better, or
it's about their own personal they didn't plan their personal
wealth management of how are they going to live the
life that they want? And tax the tax drag on
those transaction is often a big one too, where they
maybe they talked to another business owner who sold and
they told them about a strategy that their advisors put
in place that saved them a lot in taxes and
they say, gee, I wish I would have known about that.
Speaker 5: Yeah, so it's a combined kind of approach from taxes,
from getting top dollar. You know, normally, unless you're getting
bought out by a larger company, you're probably going to
take back paper. So how do you make sure that
you actually get paid? How do you know that the
person you're to is in the scammer that's gonna just
take your money? Right, All those things come into play.
Speaker 1: Yeah, seller financing is a big part of you know,
many many deals. Uh So that that's always but you
know buyers are generally going to pay that note because
you know the recourses you get the company back if
they don't pay the note. Uh So it's there's a
there's a big risk there for the buyer.
Speaker 4: What's left a bit? Well, that is sure, sure what's
left of it?
Speaker 1: You don't want to We try to educate clients where
seller financing is good to the extent that it opens
up the door to more buyers. You'll get more interest, Okay,
and that was good for value because the more the
more buyer.
Speaker 2: Right, it's supplying man.
Speaker 1: But you don't want to go too deep into seller
financing and you want to get the right terms to
reduce that risk.
Speaker 4: Yeah. Well, so there is usually the one perfect buyer
for your company, right.
Speaker 2: Yeah, I mean it depends on the type of business.
Speaker 1: Uh. You know that in this in this day and age,
there's a lot of industry consolidators, there's strategic buyers, there's
private equity depending on the size of the business.
Speaker 2: Uh so there are there are a.
Speaker 1: Lot of options out there today for the private business owner.
Some are transitioning internally to management team if they have
some key employees that are well equipped to take over
ownership or family transitions.
Speaker 2: But when you're getting you know, when you're working with
you know, say a.
Speaker 1: Businesses that are valued at I don't know, say five million,
unless generally it's going to change hands to another private owner.
Another a private buyer is going to buy it from
a private seller.
Speaker 5: Right so, uh Like, what do you think the three
biggest mistakes business owners make when when they're thinking about selling.
Speaker 1: Yeah, I think the I think one mistake is is
determining their personal plans ahead of time, knowing what your
next act in life is going to be.
Speaker 2: Having that thought.
Speaker 1: Out ahead of time. We we help business owners create
what we call a personal action plan that just maps
out what their next chapter in life is, and you know,
think about that if you can. If you can, you
know a few years before you're exiting and give it
a lot of thought. You know, you're not just gonna,
you know, say I'm gonna move to Arizona or Florida
or even know, if you're in a cold climate, you're
going to go somewhere warm and Okay, well that's not
really your life.
Speaker 2: That's changing where you're living.
Speaker 1: But what are you going to do there? You know
what you're going to be on the golf course five
or seven days a week. Are you gonna you know, what,
what's your life really going to look like? Where you
could still have meaning and purpose? Because you know, many
of the owners we work with where the founding owners
of the company. Then you know their their baby boomers,
let's say, and they own the company for twenty thirty,
forty years sometimes, so it's like their baby, it's like
their identity. And stepping away from that is really emotional psychological.
So that's a big thing. I think determining your what
we call your freedom point is another big one, and
we define that as having enough money to be able
to live the life that you want without being constrained
by you know, financially of course, within reason, but you know,
having that ideal life and knowing what you need from
the business along with other assets to be accumulated through
your life.
Speaker 4: What is that point?
Speaker 2: Where does it need to be?
Speaker 1: So it will help a business owner develop what we
call a lifetime cash flow plan and will show them
what they need from the business sale to be able
to have that secure their freedom. Right that's say a second, big,
big one because many of them don't know, you know,
they just kind of do planning on a legal pad
or something. And uh, but there's a lot to consider there.
Speaker 5: All right, So yeah, absolute one piece of advice you
give to anybody thinking is selling their business at this
particular point in time.
Speaker 1: I would say, no, no, your Uh, there's a couple
of ways to put this. Know the readiness and attractiveness
of your business to try to sell to transition, Know
what that looks like. Know what a buyer is going
to look for because oftentimes that those those metrics are
much different than the way the owner measures their business.
So some things like how dependent is the business on
the owner. You know, if you're going to step away
from the business and a new buyer is going to
new owner is going to step in, if it's very
dependent on you, it's not very valuable to them unless
you plan on working for them. What's your competitive advantage?
You know, the higher the better your competitive advantages, the
more valuable it would be to a buyer. You know,
a strategic buyer, for example, could take what you've built
and be able to offer it to maybe a broader
list of club customers, or have an add on feature
they don't have that you have that they could add another,
you know, service or product onto.
Speaker 4: Their current offer, right.
Speaker 1: Brings things like that. Do you have recurring revenue streams
that's very valuable, you know, as opposed to have a
starting at zero every year. So that's what a buyer
is going to look at, and your business is going
to be value based off of that. And if those
measures are poor, then you're going to get a low value, right,
a low multiple of whatever the earnings are in your company.
But if they're high, you could get a much higher multiple.
Speaker 4: All right, Joe, it's been great speaking with you. Just
tell us where do we find you, How do we
get your book.
Speaker 2: Yes, so the book.
Speaker 1: Any of your listeners can download a version complimentary at
Exit bydesignbook dot com. There's some information there, and you
could find me at my company website Arlington Dashwealth dot com.
Speaker 5: All right, links are in the show notes this interview
on Financial Survival Network dot com.
Speaker 4: Just click through. All we ask is when you go there,
sign up for your free.
Speaker 5: Newsletter, and if you've got a question for Joe myself
kl atcarrielets dot com is the place to send it to.
Joe always appreciate you coming on. Thanks so much yet
my pleasure.
Speaker 3: Thanks for listening to Carrie Let's's Financial Survival Network, your
solution to today's trying times. For the latest, go to
Financial Survival Network dot com. Financial Survival Network now more
than ever