What Is Laurie Barkman’s BUILT Method for Successful Business Transitions

Welcome to the B2B Growth Blueprint podcast, where we talk with entrepreneurs, founders, and leaders at B2B services, tech, and SaaS companies to learn the systems and processes they've used to create success for their business. We'll also learn from marketing and sales experts to provide insights to help you grow your business. I'm your host, Mark Osborne, and the podcast is brought to you by Modern Revenue strategies and their 10x ROI B2B growth guarantee. Schedule a free diagnostic call to learn the fastest path to double your B2B revenues in just 90 days. Hello and welcome to another episode of the B2B Growth Blueprint podcast. I'm your host, Mark Osborne, and today I'm very excited to welcome my guest, Lori Barkman. So Lori is the founder of the Business Transition Sherpa. She's a strategic advisor for owners who want to grow their businesses without being tied to them. She works with architecture, engineering, design, and construction leaders who are stuck in the day-to-day and ready for a smarter way to scale through her BILT method. And we're going to talk about what that means. She guides owners on how to reduce owner dependency, strengthen operations, and grow enterprise value so your business can run and thrive without needing you in every decision. So Lori, welcome to the show.

Hey Mark, thanks so much for having me. I'm so glad to be here with you.

Absolutely. So you've got obviously a really diverse background. You've done a lot of things. Why don't you kind of give our audience a little bit of a picture of what your journey and path has looked like?

Yeah, I love that your show is about B2B growth. Most of my career has been in B2B growth roles. I was also in B2C, but I realized something about You know what that is?

What's that?

We're selling to people just like we're selling to people in B2C.

That's right.

So it's kind of funny, but I do think one distinction is about kind of relationship building and, and more, uh, less transactional and, and more kind of this long game. And that's what I really was excited about when I got the opportunity to be the CEO of a division of a third-generation company. I was coming in with not only corporate enterprise global experiences, but also startups and that, mentality of, hey, I want to be a bit of a maverick. I want to be a bit entrepreneurial. And hey, and also, this is not a 2-year thing. I'm in it for the next 20. You know, I was all in, in my young 40s in this long-term succession plan and part of this third-generation privately held company. I was not family. So, I like to say, you know, describe myself as a hired gun.

Wow.

And, you know, here's the story. I wasn't there for 20 years. I was there for 3. And the reason why was because of a transaction that happened midway. And it was a surprise transaction, so to speak. It was an acquirer, a global business that acquired our company, or this company I was a part of. And it was publicly traded, though this was public information. The transaction was $1.4 billion. So, it was a very, very big transaction. Myself and about a dozen other executives were part of the M&A process. And we were then part of the executive team that Got full-time executive roles with the acquirer. It was a major, major undertaking to get this thing done. And, and I learned a ton. And yeah, I was on the other side of it, you know, not too long after the acquisition. But that's how sometimes these integrations go. I learned so much. And I think there's always things to learn about these transactions. And what I also really thought about, Mark, was the transition. So in the 3 pillars of how I've kind of put this in, in my head as how I work and what I bring to the table and what I try to inspire and help entrepreneurs with is ultimately innovation, growth, and transition. I might— throughout my whole career, you know, we're looking at 25+ years now, it's really been about those 3 pillars. And at any given time, probably one more than the other, but I keep coming back to those 3. So that's what got me started in creating this business.

That's so interesting. Well, and it gives you such an interesting perspective when you've sort of personally had the experience and seen it from the sort of front row, as they say, and gives you a lot of unique sort of expertise there. One thing that, you know, as you've started to develop your practice within helping, you know, businesses transition and, you know, the exit planning space has really sort of burgeoned and grown and a lot more advisors in the space and a lot more businesses preparing. A lot of— and we talk about that a lot on the show, but a lot of folks talk about sort of this big sort of wave of boomers that are sort of making their transition out either to the next generation or selling their business to private equity or even employee ownership. But not as much attention has been given to sort of Gen X. business owners that are preparing for exit. But it's almost as big of a, uh, you know, sort of swath of owners, um, partly because they're looking to do things a little differently than some of the boomers are. And I know you have some sort of personal expertise there. Tell us a little bit about what you see that's different about business owners that are Gen X, uh, and, and how they're sort of approaching this challenge of the next phase, whether it's recapitalization or M&A or, you know, transitioning to another generation or just a founder exit. What are you seeing there?

Yeah, there's so much to talk about here. I think it's fascinating. First off, I identify as a Gen Xer, so I'll put that out there. Likewise, I think the Gen X community, we're an interesting bunch because, you know, we know what the 8-track is as well as the AirPods, right? And we know what a typewriter is as well as you know, using AI, and we're actively using kind of any, anything over the decades. We've been in it, we've been in the middle of it, and we've been a translator in a lot of ways from the boomer generation to the millennial generation. And we all know that, look, every generation, you know, we think differently, we act differently. I think one of the main things as I've worked with baby boomer business owners who want to exit their business, It's an age and it's a life stage, you know? And I think the same is true for the Gen Xers. They just look at things a little bit differently. So to kind of compare and contrast a little bit, the conversations that I'll have if a baby boomer reaches out to me and says, I'm interested in selling my business.

Mm-hmm.

I say, okay, well, let's talk about the business. And I'm trying to understand different dimensions and why they wanna sell and when. And it tends to be, Pretty near term, you know, well, I want to sell within the next 12 months. Oh gosh, translation, we need to start yesterday. Okay, we're already behind.

That's right.

The other translation of that, Mark, in terms of timing is we really don't have time to make any changes substantially in the business. So as an M&A advisor, I'm looking for the attractiveness of the business, the transferability of the business, the readiness of the business for sellability, as well as the readiness of the seller.

Yeah.

Now, there's a lot to unpack in all of that. But if we kind of say, all right, well, time is really going to be different there because they're saying, I'm ready now, when, when maybe the business isn't ready, but we have what we have because of maybe health reasons or they just really want to retire. The other thing I hear a lot from baby boomers is sort of like Oh, well, it's age. You know, a lot of the baby boomers are kind of thinking about the timing like the Social Security Administration thinks about the timing. And the way that they talk about retirement is this notion of, oh, well, my business is going to fund my retirement. And kind of like the misnomer maybe of, gee, you know, the Social Security Administration is going to fund my retirement. We know better now, don't we? Right.

Right.

And I think there's a lot of boomers that are disappointed when they get to that point where they're selling and their offers are below what their expectations are. It's very disappointing. And again, we've now kind of run out of runway. We don't have a lot of time to make changes. And we can go through all the reasons why, you know, your business is not getting a premium, it's getting a discount. So, a lot of boomers are in that situation where they're kind of stuck, you know? But if we take the Gen Xers in contrast and say, okay, well, What are the age and life stage dimensions that's different? Because of course they're younger and let's just generalize and say they're 50 to 55.

Sure.

And so, um, if you look at the survey data from a variety of different places that have done surveys of Gen Xers, Gen X business owners, we're seeing that the Gen X business owner has an intention of selling within the next 5 to 7 years. And that tracks, like I've seen that in a couple of different data points. And that kind of makes sense, right? Because then that puts them at 62.

Right.

Or it puts them at 60. And so, hopefully, they're young enough and healthy enough to enjoy that time where they can go do something else. The baby boomer business owner, I don't know if you've seen these folks, maybe you're related to some of them. I've talked with them. I've seen them in action. They are going to die at their desk. There are definitely baby boomers who are not selling. They're not interested in selling. They're upset with their family for wanting to sell. Maybe because their name's on the door, maybe because their identity is so entrenched. I also think it has something to do with their how they've grown up and what they've survived in the decades that they've lived. You know, there's been a lot of hard times, and they are really, really hardworking people. And so for many baby boomers, it's just that hardworking nature of well, I'm I'm always going to work. You know, but I think for Gen Xers, we've seen that, and we've seen that behavior. Maybe it's our father or our uncle, and we don't want to do that. We don't want to be them. We want to be different and we want to enjoy life while we can. And that's exciting. You know, it's exciting. And because they have the age and the life stage to make the investments in the business, make the changes in the business to be impactful and get it ready, make it attractive for a buyer, make it transferable and be able to have an exit on their terms.

So, you hit on a few things there that I think are worth unpacking. And those are from a high level. Selling a business isn't like you just put a sign in the yard and wait for people to make offers, at least not if you want to get the most. In fact, selling a house, if you want to get the most out of it, it's not like that either. But it's even more so for a business in that you talked about, you know, really an ideal timeline is more like, you know, 3 to 5, 5 to 7 years to sort of prepare. And so, you know, as the Sherpa for people who are exiting, what are some of the things that you're able to do with a little more time that really impacts the value of the business and the outcomes that you get that come out of that?

There's a number of areas. I think the first place I would point to is understanding whether or not you have an owner-dependent business. And for sake of conversation, you know, we could kind of point to some of the key culprits that make our business more dependent upon us. You know, this is a sales show, so you won't be surprised to know that I'm gonna say, look, if you are the rainmaker in your business or you're the only salesperson in your business or the only person who can sell and can connect and has the customer relationships, Then how systematized is your sales process? Well, it's not, right? And so if we're looking to have a business that can grow and thrive without us, which is whoa, big idea here, right? It's kind of like counterintuitive that the more we can have a business that thrives without us, the more valuable it will be. So many owners are like, well, wait a minute. I'm you know wait I you know me blah blah blah me. I know it's not about you. It's about your team. It's about your process. It's about how you're structured. And so the very, very first thing, Marc, could be quite simply just have a look in the mirror. You know, ask yourself, well, how many hours in the week are you working? Or who is supporting you? What is your time worth?

Bam!

Yeah. Have— do the math. What is your time worth? If we do the math on what our time is worth, I'm just making this up. Let's say that we do the math and we figure out that our time— should we be paid for our time on an hourly basis or whatever, just for sake of conversation— is $500 an hour. Okay, well, one way to think about that then is if you are doing tasks that you could outsource for $10 an hour, $20, $60, even $100, is that worth it to you? Chances are the answer is yes. Well, why don't people do it? Because it takes effort and time and you got to train people and you got to document processes. And isn't that a pain in the butt? Well, yeah, except if you think about it in the context of what creates enterprise value, maybe you would look at it as an investment and not a cost. So, let's do the math. Okay, let's say you're going to spend $10,000 a year, just again, making this up. You're going to spend $10,000 a year outsourcing tasks. Well, one way to look at the math would be, well, if, if I don't know if it's 100 hours or whatever, if I was spending that time and I'm $500 an hour, and so now that's costing me, you know, $50,000 plus versus spending $10,000. Okay, so that's a 5x return there. All right. Another way to look at it. Well, if I'm spending $10,000 a year and I think that one day I might have a multiple of my, my profits worth 3 times that. Well, could we do kind of a barometer and say, all right, well, I'll, I'll be conservative and get a multiplier of 2, or I'll give it a multiplier, you know, of something. That's the other way to look at that expense. And so that expense is going to earn me money in the future, right? Because if I get an ROI of how I'm spending that money, can get my time back, and spending that's going to enable me to grow. It's going to be marketing services or whatever that leads to further growth. Multiply that revenue or multiply that EBITDA times a multiple. And all of a sudden we might be talking millions of dollars. So, you know, a little bit exaggerating, but, but not really. I mean, I think that's the kind of math that if we were opening our mind as business owners to what a team means. You don't have to be hiring people full-time, 40 hours a week to surround yourself with talented people and documents and processes to enable you to scale.

You, you hit on such a great point that it's really worth underscoring, which is, you know, by removing that owner dependency, not only do you get your time back, not only does it improve the overall efficiency because Instead of, you know, you at $500 an hour, you can outsource it for $100 an hour. So, that fundamentally drops to the bottom line of the EBITDA. But more importantly, that multiple that you're able to get for the business when it's got transferable systems can go up a full turn. So, a million-dollar business that you make less dependent on you, and so then you can go from a 2x multiple to a 3x multiple. That same million dollars is now, you know, worth an extra, you know, million dollars at the sale. Like what a difference that makes. It's definitely worth that investment of time to figure out how to document your processes and how to get out of the way. Not to mention the fact that it's just a better business to run. Like you'll get more enjoyment. You can go on vacation. You can, you know, show up for the the. You know, the Little League games and the, you know, ballet recitals and all of those things that people want to do, but oftentimes can't because the business is so wrapped up in them.

Yeah, absolutely. And I think that that is, is the story. And I think part of what I enjoy a lot, you know, working with my clients is helping them get some data. So we're not guessing because we all know hope is not a strategy, right? And if I ask the question of a client, Well, what's your business worth today? They have no idea. They don't know.

Yeah.

Most business owners have not had a formal valuation. You can talk to your golf buddies all you want and you can read articles about or listen to podcasts about companies that have sold. And that's great. And it'll give you a good baseline. But until we know specifically what would make your multiple go up or down, I want to kind of put this out there for anyone who's curious about valuations. I do valuations as part of my you know, what I do for a living, right? I've been trained in it. And you can't just kind of like just take a multiple and multiply it. You have to understand that this is an art and a science. And there's reasons why we can— sure, we can look up data and see comps just like in real estate. Okay. Yeah, that's good for a market-based valuation. Just to be clear, not for a certified valuation, which is a whole other beast, but for a market-based valuation.

Yeah.

We would look at market comps. We might look at an income approach. We might do a discounted cash flow model if we've got a business that is more like a subscription business or a software business that, you know, has recurring revenues. So there's different reasons why we would use different methodologies of valuation. Another one is assets. It's kind of like the lowest value one. It's sort of like if you were going to liquidate your business and kind of sell it in pieces of just the asset base, that's usually the lowest number. What we're trying to get to is like a fair market range and then understand, well, what would make it premium? What would make it best in class? And that becomes the value gap of where are we now and what's best in class. And if we see that gap and go, aha, we can close that gap, what do we need to do? That becomes the roadmap. That becomes the roadmap. And it's like an infinite number of things it could be, right? But we look for pattern matching, and we have some usual suspects of where we look first, which is why I pointed out owner dependency.

Mm-hmm.

Because that can very well reduce your valuation multiple because it's a less transferable business.

That's right.

And that means that— what do I mean by that? Well, what is the buyer getting? You know, what is the buyer getting if they're getting a business that you have to sink a lot more cash into, you have cash flow issues, you have client handshake deals, you know, nothing's really papered or a sales process is kind of all in with one person, that represents risk. And so if you think about price, price and risk are inherently opposite from each other. The more risky we perceive a business to be, then the lower the price. So that's where the multiple and discount or premium kind of comes into play.

That's right. Well, and there's, you know, although it's commonly said that, you know, for a seller, oftentimes it's the only time they'll ever sell their business. But for a buyer, they have often bought multiple businesses. And so they're coming into it with a much more sort of logic-driven ability to sort of analyze and see, oh, there's a gap in process documentation here, or there's a dependency on a key person who might leave because their process isn't documented. And so that, that's a real risk. All of those things scare a buyer away. They'll go back out to the market and find another business to buy. Uh, and then you'll be sort of left holding the, the business that you're trying to sell, uh, versus if you sort of uplevel all of those things to best in class, then you can sort of be ready for those opportunities when they come.

Yeah, absolutely.

So we hit on something as part of your bio that I want to dig into a little more. So we talked about your trademarked BILT method. Tell us what that— it's B-U-I-L-T. So, each of those letters stands for something. Tell us about that BUILD Method and how you use that in guiding owners. Yeah.

And so, also just to note Sherpa too, you know, what is Sherpa? Somebody who's helping you on your journey. And if we recognize that being an entrepreneur is part of a long journey, you know, this is the classic 10-year overnight success, sometimes 20 years, right? And so, we need some tools. We need some Frameworks to help us and guide us. And that's what, as a Sherpa, I'm looking to do is let's, let's put some frameworks together to help and to help you and guide you. I work a lot with folks in the built environment, so that's the other reason why I call it the BUILD Method. Built environment includes architectural engineering design. You know, we're in a physical world with these folks, and so the BUILD Method, you know, obviously looks to speak to them directly. But yeah, there's an acronym here, and so I can. Kind of run through the acronym.

Yeah.

It really won't shock you because I think a lot of these things are thematically what we've been talking about, Mark, but it just puts it together in a way that I hope makes sense to people. So, the BUILD Method, the B stands for blueprint.

Right.

And it's that roadmap, right? It's how do we set the vision and how do we set where our firm is going? I think it's important that our company vision is clear, but really, it's also very important as an individual, especially if you're the sole owner of the business, Maybe you're the founder, maybe your family, or you bought it. Doesn't matter. You yourself need a vision for you personally, and it's where a lot of people get stuck. We can come back to this point about personal fulfillment and personal readiness. There's a lot to talk about there, but I think blueprint is for you personally, and blueprint is for the business too. Because we don't want to fly blind and hope it's not a strategy. The U stands for unlock. And what do we need to unlock? Well, we need operational and leadership to flourish, right? We don't want bottlenecks. And by the way, right, we as the owner or founder could be the biggest bottleneck. So we really need to be paying attention to what's holding our company back. And so unlock, unblock, whatever you want to say, but that's really the guiding force here. The I stands for integrate, and integrate is about integrating The systems, the processes, our team, our people. Do we have the right people in the right seats? Do they have the right capabilities? Are we— are they what we need to be able to scale and grow? Another I that I love, I'll throw it out as a bonus I, is intention.

Hmm.

Do we set the intention for what we have to, to work on and be proactive and working on the right things? It's really a focus of our time. So integrate, but if you want to put intention in there too. I love that word. Now, lead is the L. So lead, how do we lead with clarity and not chaos? We are so busy. Business owners are so always, they got a million things going on. They're working in the business. They're not always working on the business. And this is really to say, look, we gotta focus. We gotta focus you. We gotta focus your intention. And if you do have that key leadership team, we gotta focus them as well. So this includes things like key measurements and Again, back to the roadmap and blueprint. Where are we going? Where are we trying to go to? How do we know what our North Star is and how do we know when we get there? And hey, let's celebrate when we do get there. And then last but not least is the T. And so, shocker, it stands for transition, right? So T for transition. How do we transition with confidence and control? We've worked so hard to build this asset called our business. And it's not just a job, right? It's not just a J-O-B. It's not just a lifestyle. It's an actual asset that we're looking to grow and protect the value. And if that's what we're trying to do, just like you want to grow and protect the value of your house or art that you've invested in, well, your business is probably the number one asset you have. For many business owners, it's 70 to 80% of their net worth and it's illiquid. You can't just go and sell it on Yahoo, right? You can't just transact online.

Exactly.

You can't just sell your business that way. And yet we don't know what it's worth today. We don't know what it could be worth. And we're not sort of investing and looking at the owner's metric the way that we should be. And so if we have the idea not only on the value, the enterprise value, but we're thinking about this transition in a big picture, look, we're human, right? 100% of business owners are going to leave their company one day, but very, very few are prepared. So I'm all about how do we transition on our terms? You know, how do we create a business transition that is meeting what we needed to fulfill personal, financial, and business?

Fantastic. Well, Lori, you're obviously an expert in a lot of really interesting things that we're both passionate about. We could talk about all day, but I got to be mindful of your time. But so you've told us about the BUILD Method and that you work with, you know, companies specifically within that space of, you know, sort of building things like architectures and folks in the construction space. Kind of give us the pitch a little bit, like who specifically should reach out? What sort of benefits will they get from working with you?

Yeah, business owners who are Gen Xers who are owning companies that I call my analytical owners. You know, they're looking for they're not going to want to guess anymore. You know, they want to have a process. They want it to be facilitated by someone who's going to help hold them accountable. We work with folks in a number of different ways. We offer what we call our leader circle groups. So it's our, our BUILD leader circles where they get the peer-to-peer benefit of that network, as well as myself and facilitation from somebody who's kind of been, been through this, right? And couple that with a masterclass that I've created. I wrote a book couple of years ago about business transition and created a masterclass from that. And so, the way that we put this all together is, look, we're supporting you all along the way on your journey, and we're offering you tools and frameworks and proven ways to create value, to grow, scale, and eventually exit on your terms. We also work private, you know, private client one-on-one, but our groups are really, are really, really valuable. I'm super excited about that.

Fantastic. And what's the best way for folks to engage with you?

I think the, the first place to go if they want to learn more, you know, they could check out my website. It's btsherpa.com. And we have a free gift if people are interested in checking out my book. They can download a digital copy of my book for free. So btsherpa.com/book. If they want to buy my book, of course, on Amazon, so grateful for that. But it's a The Business Transition Handbook. So it's a little gift for you if people are listening and wanna check that out. And they can also book a call with me. We do, we do discovery calls and we could talk more about what challenges people are facing and how we might be able to help them.

Fantastic. Well, thanks so much for that free gift. I know our audience will appreciate that. And thanks so much for taking the time to join us today, Lori.

Oh, absolutely my pleasure. Thanks, Mark, for having me.

All right. Talk to you soon.

Talk to you soon.

Thank you for joining this episode of the B2B Growth Blueprint podcast. We hope you've gained insights to grow your business. If you enjoyed this discussion, please rate, comment, like on your favorite platform, and share to others who will find it useful. Do you know a CEO, founder, or leader at an early-stage B2B services, tech, or SaaS company who would like to be a guest and share their story? Send us a note. Let's schedule a conversation.