The Perlman Blueprint: Crafting Sustainable Futures in Established Markets

I believe in a really good kind of build up assessment phase, we actually get to learn the company, learn the clients, learn what's important. A couple of the tips that they really need to kind of figure out is one is how much of the business are they actually goes across the desk every single day. There's never a time that's too early to start thinking about what's next in your business, whether that next is a growth milestone you're trying to achieve or a how are you going to look into the future to sell your business or how are you going to look into the future to make your business passive income for you Foreign.

Welcome to the Wealthy Entrepreneur Podcast. My name is Bob Govreau, I am your host. I'm excited. Today we've got a great guest in here and what we're going to be talking about is transferring business to the next generation and creating sustainable businesses in traditional industries. And our special guest is going to be Josh Pearlman. I'm going to introduce him in just a second. But I want to remind you that that the Wealthy Entrepreneur podcast, this is the place where we dissect the elements that contribute to entrepreneurial success for mindset and leadership, to profits and revenue. Now let me introduce Josh. Josh Perlman is a seasoned business executive with over 20 years of experience in shaping resilient businesses across various industries. He's held executive roles including CEO, CEO, President and Senior Vice President with expertise in operations, sales and product development management. Josh's career is marked by his dedication to bridging the talent gap for small businesses and startups, inspiring him to establish the Gig Exec, which we're going to learn a little bit more about in a few minutes. His mission is to make senior level executive experience accessible to small innovative companies and family businesses, not just tech startups and large corporations. Currently, Josh is the Managing Director of the Gig Exec and the founder and president of Better Productions, continuing his journey on empowering businesses with strategic leadership and innovative solutions. Josh, welcome to the show.

Thanks Bob. Thanks for having me on.

Yeah. And you know what, you've definitely pulled on my heartstrings here when we're starting to talk about some of the things that you're doing, you know, the gig. Exact really from what I understand. And I'm going to get you to maybe give a little bit more of a background but understanding how we can help business owners successfully prepare for, you know, a company to operate without them and ultimately to be able to exit successfully. So Josh, we'd love to hear a little bit about how you got to where you are today. Tell us a little bit about the Josh Berlman story.

Absolutely. So I worked for a company for, God, almost, almost 15 years up, kind of up through the ranks, going through a fairly large company at the time, and it had an older owner who was the founder of the company. And over time, he just didn't know how to transition that company to that next generation. He held on, he micromanaged. He brought in then the wrong type of support around him that kind of just were. Yes. People to what he was doing. And it drove the company apart to the point that the company, eventually this company was $100 million a year Company been around for 40 years, went out of business. Like, I mean, that's like it just. And I watched myself, along with some others kind of do the. Well, I have a job, I have my salary. I can only push so hard. He doesn't want to hear it from me. Right. Like I keep saying, he doesn't want to hear it. Well.

And you know, $100 million company, that's no joke either, right. Like, there's a lot of blood, sweat and tears that got into getting there. It's pretty dramatic exit in an unfavorable way and favorable.

And you know, Covid definitely played a part in that as well. Like, I mean, it wasn't just purely from lack of, you know, we were heading in not a good direction. Covid accelerated it much faster than it probably should have happened. But at the same time, I watched myself, I heard myself kind of dating myself. I would say what needs to be said. I would get pushback that was very unpleasant and I wanted to keep my job. So when they did go out of business, I decided I don't want to be in a situation anymore where I am so scared for my job and my paycheck that I can't actually give people the advice that they need to hear. Which is why I started the gig exec was to actually be able to give that advice as an outside third party, neutral voice that can help these owners actually and founders transition that business without losing a step, because that's what they need to do. Only 30% of companies actually will survive. And a leader and founder actually stepping away with selling the business, though, and that's. Those are not good stats for companies that have been around for good legacy 30, 40, 50 years to then fail within a year or two of the owner trying to get out of it. And a lot of these older owners now are also facing a lot of challenges with attracting new younger talent because they're locked into a lot of these old, older kind of processes and approaches that just kind of don't resonate anymore. And they need help kind of bridging those 10, those kind of T gaps in order to really make sure that that business thrives and that they don't have to micromanage it and be involved because they spent 20, 30, 40 years building these great companies. They should get to actually now go enjoy that and go enjoy the rest of life without having to be dealing with the headache of running that business until the day they die.

So, Josh, when did you start the gig exec? Is that within the last couple years?

Since COVID Yeah, since COVID I rebranded it just recently, but I started the company in 2021.

Excellent. And then so, and I believe based on what I understand, you work with everybody or is there a specific market that you focus on?

I work, I've worked with people in all markets. I have a background and kind of the event technology, event production agency, marketing space. But I've worked with restaurants. I've worked with people who run small social media companies, whether it's they're running social media marketing or, or they, or they're an influencer trying to figure out how to branch out their business models. I've worked with, you know, local restaurants trying to expand and franchises that are trying to figure out how to move on. A lot of the good practice things you can do kind of work at all companies. You need to understand the business. Like, I'm not someone who's going to come in and make one of those claims that I'm going to know everything about your company in 20 days and you'll see results in the first 45 days. That's not a good way to bring someone in because they're going to ruin your company. So I believe in a really good kind of buildup assessment phase, we actually get to learn the company, learn the clients, learn what's important. Because if you just start going in and breaking things that might be working because they don't make sense on a spreadsheet, you could actually just break the company worse, significantly worse than it currently is.

Well, it's always funny too. I read a lot of books and to even talk about some of the change agents that have come in to businesses in the past, you know, it's really easy to come in and cut expenses and increase profitability in the short term, but what about the impacts of what those changes are doing in the long term? Listen, I would love for you to Share some of the key strategies that maybe business owners could start thinking about in a way that they could modernize their business, but also maybe prepare for them to eventually exit. Like, what are some of the top tips that business owners need to have on their radar?

A couple of the tips that they really need to kind of figure out is one is how much of the business are they actually goes across the desk every single day. Like that's the number one thing I find that most owners don't undervalue or under realize is if they ended up in the hospital tomorrow, what would happen to the company? Would it be able to survive and keep going? Or would a pile of stuff end up on your desk that never got dealt with and eventually becomes a problem? That's the very first place every owner needs to kind of start and look. Because like, because most of them, they didn't get to found a successful company by not being in it, by not being engaged, by not caring about every single thing that that company does. Right? But at some point you need to actually take a step back and figure out how do you actually start to move on. So the first thing I look at is what does your everyday look like? What time does your day start? What time does it end?

What time?

What do you do all day? Who's calling you? Are you talking to clients? Are you dealing with internal issues and strife? And those are the kind of the first things you have to kind of start to understand and internalize before you can do anything else. Because those are the things that are going to hold you back from being able to transition that company either into a more modern business or using whether being able to sell or just step out of the everyday of the business. So that's the first thing I would do. The second thing is I would look at, do you actually use technology? Are you using pen and paper, using spreadsheets? You know, I'm not a big fan of process for the sake of process, right? Like process that adds work isn't going to be followed, it's going to break down, it's going to cause problems. But is there a way to get some stuff that you're doing and automate it? Do you really need to have as many people as you have on staff doing some tasks that can be more automated these days? Because there's a lot of great software out there now, a lot of that software. People are often scared of that software. And there's obviously there's monthly cost and there's all these things. But if you actually look at what that software can do and you set it up and you take the time to do it the right way. That software can really empower your entire company. And the one thing that I would always caution whenever you set out any kind of transformation project like that, don't decide on the end goal right now. When you try to, like if you set a, if you set a line on a map and you try to go straight there, you are going to end up somewhere you don't want to be. You need to make incremental change as you go. You need to acknowledge the fact that things are going to change and that you don't know anything when you start a project. And if you think you know everything when you start a project, you are going to implement the wrong thing. So you need to do a little bit. Here's some feedback. You know what you need to accomplish, you know what your goal needs to be. Right. But how exactly you get that you need to trust the people around you. There's a reason you hire them, there's a reason you kept them theoretically. Right. Like you need to trust these people and you need to let them do what they're really good at. You need to start empowering them to make that business run more efficiently for you and you not trying to do everything yourself.

Yeah. And I can tell you, you know, from someone who's built a company that now has, we're currently at 105 people, you know, growing is definitely a challenging situation and I feel like a lot of people, you mentioned technology and being a little bit afraid of it. And I think some team members get a little bit afraid of it especially when people start talking about AI and the replacement of people. And that's never been the way that I've looked at it, but it's more so and I think Josh, you're agreeing with this more. So let's use technology to create greater efficiencies so that we have more time to focus our team and our energy on either growing the business or doing more value add so that we can enhance the client experience, the client journey and overall, you know, client satisfaction and the success of the team as well. So you know, technology isn't anything that, that we need to be scared of guys. It's definitely something that can be embraced. I've definitely spent a lot of money on technology I didn't need. So to Josh's point it's, it's identifying the right technology to help with the efficiencies, some of the automations so you can make life a little Bit easier. So you guys can double down on where it's most important in the client experience. So love that. Josh, when we're. When we're thinking of this, what are some of the challenges maybe that some business owners do face when they're starting to look at this transition? So we talked about some of the things they could do to start getting ready for it, but what are some of the barriers that you found with them being able to successfully exit?

Well, a big one is actually internally. Once your team, and especially your leadership team that you have starts to understand that you might be looking for an out if you don't handle it correctly, it actually starts to create an internal, let's call it, UFC match start to happen in there. Right. Everyone starts kind of vying for that role because you don't have a clear picture on what you actually need or want to do. So until you're actually ready to start having these conversations and start looking at who the right fit for those are, you need. That's an internal obstacle that can quickly derail an entire company, and people start to leave if you don't handle that correctly. So you really need to handle in a delicate way. And ideally, that's been something that you've kind of been grooming for years at this point to make sense. But again, that's what most companies don't. So managing that kind of piece right there, that can quickly rip a company apart if you don't handle that gracefully.

Yeah. And, you know, and it's. It's interesting, too, because you threw at the stat of, I believe it's 30% of businesses have a successful transition that sort of carries on. I hadn't heard that one. That's a good one.

That's from the sba.

Yeah. And I think, you know, some other statistics or one other one that I would love to share would be, you know, that only 20% of businesses actually successfully have that transition take place. You know, 100% of business owners feel like, oh, we have a saleable business, it's going to happen. It's going to give us a paycheck at the end of the day that we have for our retirement. You know, the reality is that it's much lower than that. And then when you add on the 30% success rate, at the end of the day, you know, we're now talking about a very small amount of businesses that are having a successful transition. So, you know, what would maybe be some of the positive outcomes or one of the tactics that you could use, even from a buyer's perspective to make sure that, you know, a transition happens successfully from one party to the next.

So one of the things to consider is sometimes selling the business isn't actually your best move. Right. A successful, let's say $20 million a year company, Right. If you can make that company run by itself and you can promote from within and you got to pay people more money, you can generate a lot of cash out of that business for you into retirement in some ways even better because you're not getting that lump sum check at once that you might have to manage for another 40 or 50 years. You're trying to get this company consistently give you money. Maybe eventually you have an employee buyout or you negotiate something along those lines where again, like those, you know, I've seen those be more successful than trying to actually sell your business. Because when you try to sell your business, you're never going to get as much money as you think you should get for it. So no matter what, you then spend the next 30 years kind of being a little upset about it because you felt like. Or you watch what they did to your company and they ripped it apart and it failed and your legacy's gone. A lot of owners build these companies and they want that legacy piece and that's important to them. And by just keeping a company alive as you own, but letting it run without help you and rewarding the team that's there and running it for you, significantly rewarding them, but you can still generate a really nice life into retirement for yourself.

Yeah, absolutely. No, super interesting. And you know, I think one of the factors when we're starting to talk about selling a company or exiting from a company, and I know Josh has circled around this, you know, is the fact that there's risk associated with ownership dependence and you know, even. And I would probably, I would probably argue this, Josh, you may know better than I, but I would argue that if a company were to be able to run without the owner, it would enhance the success rate of that transition from one party to the next because there isn't that significant risk associated with you, your management style, your client relationships, your employee relationships. You know, the more that the owner is depended upon during the day to day activity, you know, the higher the risk factor as well. So when, you know, whenever we're looking at our clients acquiring another business or clients looking to exit with the highest value possible, you know, the number one thing we're focusing on. Well, actually two, I'll say two things at one, let's get the profitability rolling and start getting the earnings up to a level that they need to be at and to let's start eliminating the owner from the day to day activities because if, if we can't eliminate that owner or start allocating roles to other people, it's going to be super challenging. So. And then this is work that you help support as well, right Josh?

That's exactly it. Because if that owner is involved in that day to day activity significantly and every client relies on that owner, you're not selling a business, you're selling yourself. And whoever's buying it isn't going to want you to not be involved anymore. So now you cash out of your business probably on some five year buyout. We have to work no five years to get you money because they need to figure out how to get you out of the business and they can't do it right away. So now you're not really getting that full cash out. You're still working another five years. You're going to grow the business during those five years, you're going to watch it grow and you're going to make no extra money for doing it. So instead how do you get that out beforehand so that way you can step away from the business, get paid in full immediately or within the first year or two, as opposed to being dragged out for multiple years. Because every client, every relationship is you and they're really buying you, not the business.

Yeah. And you know what, the majority of businesses, I'm going to go in on a limb and say 98% of businesses are less than that $10 million mark. And so, you know, for business owners, you know, we've got to a point now where we've got a full leadership team that's in place. Everybody knows exactly what they're responsible for. Everyone's got their roles, their objectives and, and accountabilities that they're so they're responsible for. And that's a huge shift. But 98% of businesses don't necessarily even have the resources to be able to, to work on those things. So being being able to pull in an advisor like Josh and his team to help bring the insights that typically a leadership team might be able to support with is really invaluable in that sort of transition, guys. And, and honestly it's one of those things where when you ask anybody how long should you be planning an exit and people are saying five years, these are some of the reasons why. But you've got to be able to get yourself out of the business. You've got to create the financial, the financial outcomes that the business is going to be need to successfully exit. You need to increase your automation, your efficiency. And honestly, why wait? Why wait until you're ready to exit? All of these things help make the company operate in a better way, more profitably, increase your client experience. Like, it's almost like when you're getting ready to sell your house. And this always bugs me, it's always bugged me about the house. You've had the little things around the house that have bugged you for years and you've just kind of let them lie. And you go to list your house and all of a sudden, oh, we've got to put the $10,000 renovation or $20,000 renovation in to make this perfect. And you're like, what if we just got to enjoy all of that for the period of time that we've lived there? It would have made our, our home that much better. This is the same situation, right? To be able to, to take advantage of getting, you know, this efficiency.

Why am I going to make it better for the next people when I could have had five more years of company being more profitable? That's more money to me as the owner. Right? That's more money and that's more track record. Because when a company goes to buy you, they don't want to look at your last year track. They want to look at what your track record is year over year for the last three, five, three to five, 10 years, depending how, right? And decide what you really were. You have five plus years of that better operation, more profitable, high ebitda, all those things, you're going to save your company more money and you got to enjoy more cash along the way.

100% and who wouldn't want that really? But you know, at the same token, one of the other factors that influences, and I know we're talking about, you know, how to prepare a business for it, but if we're actually talking about evaluation of it, you know, one of the factors is the growth of where the business has been going. And if you've got more resources available to reinvest in your growth, you know, this is just another factor that's going to make your company worth more money. And these are, these are different areas that, that we can focus on. Okay, let's shift gears a little bit. Let's talk about sustainability of businesses. I think we've, we've kind of been touching on some of that as well. What are some of the ideas that you would have to enhance sustainability long term? Sustainability. Some ideas may be related to tech implementation. What are some tools that you've seen work and, and how can we all start making our businesses run a little bit more efficiently?

So one thing you need to consider, every business is different. Are you a warehouse, are you a factory that has people who need to be in the factory every day? Are you more of a service and operational company where people can be anywhere? Right. Those have two very distinct needs. But if you're talking about kind of generally how to make things better, there are, you know, simple communication tools. Slack, right? Give people a way to just communicate super easily and in a way that most people are pretty comfortable with. Don't make it an email, don't make it this big formal thing. Start to implement these things and make it easy for collaboration across teams and information. And cut out the 20 and 30 and 40 person meetings. Like those are not things that are ever productive. When you have 30 people in a meeting on a zoom call, you're not going to be productive. No one's going to talk. People aren't listening. You need to build your company to be more sustainable. You need to also build your company to actually how do you make your company attractive to new employees too is part of it. Your current employees need to stay. They're great, they've been with you forever. But if you're growing and you need more people, how do you attract new people? How do you attract new ideas to your company and what are you doing for your company to make that success happen? Because it's like you talk about baseball, right? Look at the major league Baseball. You have, you have college, a double A, triple A, the majors. You have all these different levels of people. They have this giant pipeline of people to pull from that they move people through. And New York needs to be the same way. And the problem at a lot of smaller businesses is that sub, I mean honestly sub because know $100 million ranges eventually the top end doesn't have anywhere else to go which then stops everyone below for being able to be hired for the most part and being able to move people up. So you need to figure out how you again that's another good reason why getting yourself out of the day to day helps to trace that next step for those high, high end executive people which opens up more opportunity on the low end to bring people up through the business. But you bring people up through the business in a way that's the they understand what the business is and they care about it. And you have to not look at them like they're a number on a spreadsheet. You have to understand what is driving the current generation of people and why they are picking to go to a company and why they're staying. It's not necessarily just a paycheck. That's not the only thing people are looking at these days. If you're trying to attract the next generation of talent, it's what are you doing? Do I enjoy the people I work with? Am I having fun? Those are not. Questions that were asked 40 years ago was, how much am I making? When do I start? Right. But if you want people to work for your company for a long time now, they have to also enjoy it. So how do you make your company enjoyable to work at? Which always is a big joke when one of your core values is, I have fun at work. Right. That should be a core value. It should be something you say, but it should be something most people try to actually, how do you make sure that you enjoy the people you work with and it isn't a hostile environment where everyone's competing and fighting with each other and you feel like you're in a debtor? Those are kind of the ways you can start to drive your company towards a bit more sustainability is you need to be able to create an environment where people want to be there. Because if you don't, at the end of the day, your company is only as good as the people who are on the front lines doing the actual work. And if they don't buy into it, they don't do it well.

And I think too, on that, it brings us right into a whole snowball of leadership. And, you know, what does leadership mean? And you know, really, when I think of leaders, that means that you've got to have followers. It's hard to be a leader if no one's following you. So what does it mean to build followers? Well, it typically means that somebody is believing in what you are doing enough that they embark on this journey with you. And, you know, a lot of times I'll go back to core values are fantastic. It's how everybody comes together with, like, common generalities. But it's really about the purpose of the organization and what that organization is trying to accomplish and what it means to the individuals who are part of it. And, you know, we've spent a lot of time on this in our organization. We've come up with a. A fairly clear definition of what it is we want to do, which is empower entrepreneurs with the right financial information and clarity to make informed decisions and, and change the world. So for us, we're all coming together, as you know, financial experts and professional services team members to say we want to empower people who are in the entrepreneurial space to, to change the world and the experience of those that they're serving. And you know, that is something that people will attach themselves to and they get excited about it. And I know I get excited about it. So when we're thinking about CEOs, you know, you want to be creating a company that you're excited about as well and also, you know, transitioning that to somebody else, it's gotta be something that's exciting enough that there's a purpose enough there that somebody would be interested in carrying that on as well. And back to your comments about communication channels. Yeah, we. I've never, although I do have a few slack channels going. Our company uses Microsoft Teams. But you're right, you know, to be able to have a one area where you can have ongoing internal communication. It also eliminates emails that are happening in your inbox because God knows we all get a little stressed out when our inbox has hundreds of unread emails in there.

So with one line in each of them.

Yeah, that's it, right? Yeah. Do you have a minute? Right, yeah. So no. The answer is no. But yeah, to be able to have those slack or teams. Communication channels are super important for internal communication. Love that as well. Josh, any last words of wisdom for any of our entrepreneurs who are listening today?

I think you really touched on it. There's never a time that's too early to start thinking about what's next in your business. Whether that next is a growth milestone you're trying to achieve or a how are you going to look into the future to sell your business? Or how are you going to look into the future to make your business passive income for you? There's never too early of a time in a business to start thinking about what those things look like. You need to build a business that's at least going once you do. The longer you wait, the less you can actually enjoy the work you've done to make your company successful. And I've seen way too many founders of companies completely burnt out running their businesses. And with no time for family, kids, grandkids, dogs, friends. Why build these successful twenty, fifty hundred million dollar companies that are great, employ all these people, and yet you have no time for things for yourself. What's the point of it? The whole point of all the money you raise, of all the things you're doing in your life it's not just to have all the money and never use it just to show you have it. It's to be able to go enjoy yourself. Enjoy yourself with your family and your friends and be a person outside of the job. And I think so many people lose track of that, that that's the thing that I think you need to start looking at earlier in her business growth journey.

Absolutely. I couldn't agree more. Everyone, this has been Josh Pearlman. Josh is the executive, I guess the managing director at the gig exec and the founder and president of Better Productions. We've definitely talked about how we can successfully transition, exit, build a company with value today. So many insightful tidbits. So Josh, thank you for that. Josh, if someone were to look to find out a little bit more about you, how you, your team can support them in introducing some of these great concepts in their business, what's the best way for them to find you?

So the gigexec.com is definitely one of them, easy enough. And Josh at the gig@joshegigexec.com my email, feel free to reach out the gig exact on Instagram. You know, we're around posting things all the time and you know, again, it's never too early to start thinking about it and feel free to reach out. And I'm never, I will never shy away from a conversation with anyone about anything. Even if it goes nowhere. I'm always happy to chat with anyone anytime.

Love that, Josh. Thank you so much for that. Guys. This has been the wealthy entrepreneur. I am your host, Bob Govreau. If you found something in this episode, leave a comment. Share it with somebody. If you've got somebody who you know is struggling to build a business with value or they're overworked or they're looking for a way to exit their business, share this episode with them. Make sure you give us a follow. Every single week we release a new episode. We've definitely got a lot of value in here. Talking about how to transfer business to the next generation and how to create a sustainable business in really in any industry. So give us a like, give us a follow, shoot us a comment, hit us up with an email, whatever it is. We've got Josh's contact information attached below, including the link to his website. Josh, thanks again for joining us everybody. Have a fantastic afternoon.

Thanks, Bob.