Selling (Yourself On) Your Business

Business Brain, the Show for entrepreneurs episode 504 for Wednesday, November 29, 2023. Greetings, folks, and welcome to Business Brain, the show where we take a few ideas, we crunch them together, we dissect them them, we analyze them such that we're each tuning our business brains about that topic and perhaps even some spillover topics every single time we get together. Here in Durham, New Hampshire, I'm Dave.

Hamilton, and out here in Lafayette, California, I'm Shannon Jean. How goes it, man?

It goes. Yeah, yeah, it goes rocking and rolling along past Thanksgiving here.

Back from the holiday.

Yeah, I actually had a nice. I had a nice break the Wednesday before Thanksgiving. I had a ton of work to do, and I never expected that I would get through it. And not only did I get through it, I got through everything I needed to get through so that there wasn't anything lingering in my head as I detached on Wednesday evening to sort of go into the Thanksgiving weekend, which is rare for me.

That's really good.

Yeah, it was good. It was tough. Yeah, it's tough to. To make the world work where that happens, I guess. I mean, we don't deal with exclusively with people in the United States, but we deal with primarily people in the United States. So I think it helped that everyone was sort of heading into this, like, you know, connecting. Yeah, the disconnect kind of thing. So how about you? Were you able to detach for a bit?

Yeah, yeah, yeah. We went up. We were out for a week. We went up to this new property that we're getting ready for for guests and worked a lot. I mean, there's a lot of. There's a lot of things to. I'm just learning about this place. I don't know a lot. I'm doing all these different things, but I was able to disconnect and. Because physically I'm out doing stuff versus sitting behind my desk or standing behind my desk. And so I didn't have my computer in front of me a little bit during the day, but, yeah, it was really nice. We had a terrific, terrific holiday. It was great.

Amazing. That's great. Well, folks, I hope you were able to disconnect and get some sort of space from the grind, as it were, because we're always grinding it out here. So if you. If you did anything specific that was notable and you want to let us know, feedback at Businessbrain show is the place to send that because we'd like to hear it. And, you know, maybe there's something to dissect there, too. Who knows? Right. I mentioned last week, Shannon, that we're working with hopefully the right M and a firm this time around for this other business that I have. And it's been interesting. Right? We've been, we are all ready to market, as I think I mentioned, and we're having conversations with potential buyers, interested parties is what I should, what I should call them right now. And it's, you know, you go through this and you get to meet these people and you get to work back and forth with them and see what their interests are. We had this one guy, bless his heart, who said he had been a software engineer or something for his entire career. He saved up some money and wants to be in business for himself. Same. Got you. I get it. And he started asking us all like, how much time do you put into this business? He's like, because I added it up and it's, it's more than one person. And we said, well, you know, you could, like, it depends what you want to do with the business. You could, you're going to get out of it what you put into it. But it is kind of a. It could be passive income if you really wanted it to. And he said, yeah, okay, well, that sounds good because I'm really thinking that I would want to put in maybe 30 hours a week as a business owner. And that's all fine and good, but I think he might be in for an awakening as he heads down that path. So, yeah, it's even to get to.

That, especially to just get to that point of passive income, you need, you need some active income first. Right.

Well, and he's been doing, I mean, he's, you know, mounted up a war chest, I guess, or, you know, knows how to get the financing or whatever. But. So he's done the, he's done work. But to think about being a business owner and compartmentalizing it to 30 hours a week, I'm not good at that. I don't know anyone who is, you know, a solopreneur, a small business owner who, you know, is able to compartmentalize their business life into 30 hours a week and remain successful if you are. Feedbackusbrain show. During those conversations, though, an interesting thing started to happen. All of the savvy prospects will wind up asking you a few questions in that are similar to one another. Obviously there'll be details of the business, but they're going to ask you, why are you getting out? Like, why are you selling the business? Right. Because they want to hear your explanation and decide if they believe you or not, because one of the reasons that you might be getting out is that you see doom and gloom around, around the corner and you want to, you know, cash in before that happens. But, you know, you want to have an answer for that, both for them, but also for yourself. And then. And so that's, that's a good thing. And for us, it's, you know, we, we want to diversify some of our holdings, and we think that this business needs a greater infrastructure to go to the next plateau.

Is.

Is. And these are two very true things. I'm happy to dig into what I mean by that at some other point. But the other questions they will ask are, okay, well, what would you do next to grow the business farther? Like, if you had that infrastructure or you had extra capital or, you know, all these other things, what would you do next? And be ready to answer those questions, too. And then the interesting thing will happen because of some of them, the savviest ones, the ones that are most likely to be your buyers, will start asking you, well, if you know that you could invest X in, you know, this one thing, and that would help increase the value of the business, why don't you just do that yourself, right? And there will be these why don't you just questions. And oftentimes they are not strategically asked by the prospect. They are just truly asked out of, like, rhetorical curiosity. Why don't you just do that? Like, if that's going to be the next thing, why don't you just do that? And they almost don't want an answer, most of them. It truly is rhetorical. But they are interesting questions because they will often cause you to rethink your entire decision to sell. Let me, let me couch this a little differently, Shannon. You've sold houses before. You've, you've owned houses, you've sold houses. Have you ever been in that scenario where you're about to, you know, put your house on the market and you think, oh, well, we know the kitchen needs, you know, you know, we need to redo the floors in the kitchen, that that's going to help it sell. Maybe we need to put a new refrigerator in. Maybe we, you know, some of these quote unquote, simple things. Not like, you know, remodeling the entire thing, but the simple things that, you know, quick floor job in the kitchen and that sort of thing. And have you ever done those things and then stopped and said, hey, this is a pretty good house.

It's pretty nice.

Yeah. Why do I want to sell it, right? And it's this. I'm noticing the same kind of thing. There are a lot of similarities in selling a business and selling a house because it is one asset that you are selling to one buyer. It's unlike most businesses where, you know, you, you make a product and you hopefully keep churning it out and sell it to many buyers. Right. This is a one asset, one buyer project, and then it's over. And it's many similarities, including this one. It caused us to. After, you know, we had a couple of these calls to sit down and like, answer that question. Why don't you just. And for us, it was. It was a pretty easy answer once we sort of got out of the reality distortion field of the meeting. Right. Because you get all excited about it and like, oh, maybe we should keep this. And then, you know, you help bring each other down to earth, which is one of my favorite parts about having partners and super valuable. Yep. And we started talking. It was like, well, yeah, we would do that if it was other people's money. That, that was kind of the, Our, our approach to answering those questions. Like, right, we want to diversify our, our risk here. But, you know, we have a lot tied up in this particular business that we've built. We want to get something out of it, not put more into it, you know, and not that it's not worth it to put more in, but for us, the whole purpose is, you know, how we answered that first question. Like, we want to get something out. We don't just want to keep building. Now if somebody wants to invest a partial investment and put some capital in and we take a little bit of risk off the table and we keep working with them, that's, you know, we're open to that kind of deal structure.

That's good.

Right.

Because then, then you could get the boat. You get both.

Yeah.

I mean, you still. For me, a big part of it is, is the energy and motivation there.

Yeah. To get it to this, to that next level.

Because. And maybe when you, if you, if, if it turns out you don't sell, but bring out another operator or active investor.

Yep.

Uh, maybe that helps to energize and motivate to get to the next level.

There's the energy that can change it. Yeah, totally seems. Totally.

Yeah. Some sort of change is required, it sounds like.

And that's. That would be an interesting answer to that question. You'd have to be really careful.

Yes.

Articulating that. You'd want to practice that before you tell buyers, well, I'm getting out. Because I'm, you know, I. Because some kind of change needs to happen. It's very easy to say, because this business is super boring to me. Right. Like, that's.

Yeah. You don't want to think like, oh, it's not working anymore, so I want to get out, or whatever.

Right, right. You don't. Yeah. You don't want to mislead them down that path. Yeah, exactly.

But it is a great exercise in, you know, so I don't know where I read it, but years ago, I read it somewhere that, hey, you should get your business and run your business. Like you're going to sell it tomorrow.

Yes.

Because just like your house, you and you have to get. Oh, I got to replace a carpet. I've been not, you know, I've been talking about doing for a few years or this needs to be painted now because, you know, you live with places, you start to kind of just put up with things.

Yes.

And I've learned that with owning vacation rentals, you can't do that because everybody else comes in and they go, what the heck? There's. There's marks on the wall. Well, in your house, you may have walked by those marks for, you know, whatever. And I got to get to that. You can't do that when other people are looking at it. And it's the same with your business. Right. You need to have it such that it's. It's ready to go and it's in good shape and all those little nicks and scrapes are taken care of. And that could be your accounting or your finances cleaning up, your accounts payable or accounts receivable, all that stuff.

Yeah. Whatever it might be. That's right. Yeah.

It makes your business run better. It makes your house look. Look better, whatever analogy you want to use. So that's pretty fast. It's an interesting exercise.

It is an. It's been a fascinating exercise. Yeah, yeah, yeah, yeah. I think we're. We're still resolved to sell it if we can find the right buyer. But it's like, it's much better to answer those questions before you sell than it is to wait until six months after you sold. And then it's like, well, do I. Do I really want to answer these questions? Like, do I. Do I want to know my answer for that question. It. You know, you want to be sort of resolved through the process for sure. Absolutely.

Because it's different when you sell your business and the name you developed and the logo you sweated over and the. All the sales and the building you Put together and then you walk away. At some point, maybe there's an earn out, but at some point, you know, I can remember driving out to the Midwest in Kansas and driving up to a warehouse that had my sign on it that I didn't own anymore, you know, that I was like, wow, this is weird. And I was a guest and just couldn't walk in and.

Oh, you don't have a key anymore?

No, I was a guest and I was like, wow.

Yeah. The day my admin access for The Mac Observer, WordPress, you know, login went away was an interesting day. Like, I mean, it was supposed to happen obviously, you know, after we sold it, but it still was like, oh, I don't, I don't like this feeling. Like, I think this is new. Very different. Yeah. It wasn't a surprise. The surprise was not the action, but my reaction was the surprise. Yeah.

Yeah. And I find I would find myself like, the first company I sold, I tracked it. You know what I mean? After it was gone, I was like, oh, what are they doing? And this. And I was like, God, they're better at it than I am, you know, and. And I actually struggled with it as a young business owner. I was thrilled to sell it and get out and do be able to do something else for a number of reasons, sure. But watching it for, you know, a few years after and eventually I, I just, you know, kind of stopped that. But for a while, it was kind of like it was my ex. Girlfriend.

I was going to say. It's. You obsess about it. Like, it, like it's an ex, because it is an X. You know, I mean, it's. I'm finding the same thing with my children as they're leaving the house. Oh, that's interesting. You know, it's. I mean, it's. It's similar. Obviously, I'm still in touch with them and, And I. I mean, I don't own them, nor did I ever.

You're thrilled that they're out in the world doing their thing.

Correct. But it's like, oh, why are you. What are you doing? Why are you. Huh? Oh, okay. You know, and you just sort of got to breathe through it a little bit and. But I mean, I still have a vested interest in my children. Not that I don't have an emotionally vested interest in the Mac observer, but I, you know, I get nothing out of it. Whether it succeeds or fails at this point. Right. Like, it's, it's all your brand.

It's part of your story.

It's Part of my story. Exactly.

Don't want it to fail. Like. And I've been fortunate that, you know, the companies I've sold are still around, run by good people, very different than I probably would have done it in some case better than I would have done it, took it to another level. Which is kind of what you're looking for.

Yes.

And you want to create that opportunity. But I would. I would not, you know, not gonna lie. Sometimes there's envy in there. Not jealousy, because. No, jealousy. Jealousy and envy are so different. But envy that. Whoa. They were able to get it.

They did that thing that I never did.

Yeah, yeah, yeah, yeah. And. But then I. After then I sold another one, I started to realize I'm really good at certain things and getting things to a certain scale. But I don't know jack about the next. You know, there was another level and bringing in all this outside money and accelerating it, you know, I kind of. It. I didn't want that either. I didn't want to be beholden to. I'm super independent, just like we're talking about before the show. It's a. It's a superpower, and it can be a weakness. And the thought of having a bunch of investors breathing down my neck about their return, it's just not interesting to me. Could I been. Yeah, it's weird. It's a. Weird. So I turned down this over and over. Um. And yes, I definitely left money on the table, but I probably kept a larger chunk of my peace of mind than some other folks. I don't know.

Yeah, I, I. For me, it's. I've never done that. So other than fear of the unknown, I. I'm not. I, I don't have an aversion to. To that. Although I, I mean, I've heard the horror stories of. Yeah. You know, you're. As soon as you take money and now all you're doing is managing the. Your investors. Right. And you can't run your business anymore. So, like, I'm aware of that, and I don't like that idea. So maybe there's. Maybe there is a little more to it.

That's mainly what I'm. Yeah, that.

That part of it. But the, the part for me is. And maybe this is just a convenient thing to say. It is true. You know, speaking about this other business, like, okay, look, you know, we built it to this point. I'm. I don't know that I would have said that we had the skill set to build it to that point, but we did. Now that we're here. I don't, we definitely don't have the skill set in house to take it to, you know, 5x this or, you know, or certainly not 10x this. We need somebody else now. Could we figure it out on our own? Sure. With, with unlimited failure attempts. But, you know, this isn't a video game. I don't get unlimited lives. And so there is, there is also that feel, that fear of, you know, failing and losing my investment. Right. Like, you know, I've, I've built it up.

Yes.

On paper it's worth something, but I could, if I, if I don't realize that gain, I could either see it increase or, or I could see it decrease. Yeah.

And, and I think it's a trade off. Like, for me, I, you know, for 20 years I worked, you know, a ton of hours every day, late at night, started businesses, you know, some with you, other people and different things. And now that I'm at the point in my life where I've, I, I use this phrase, I, I've made it to the other side of the grind. I don't want to work those late night hours anymore. I just don't. And I will if I'm excited about something and I get something going. But for the most part, thinking about it, you're like, you know, it's, it's, let's, let's get somebody in here. And that's where maybe bringing in another operator.

Oh, yeah.

Is the way to go.

Like, I like the idea of that. Yeah, yeah, yeah, yeah.

So you bring in somebody that can work under your guidance. And, and I've been reading a lot about folks that have, instead of selling each time, you know, like, I've, I've managed a, a small stable of companies at one time, but there are folks that have done much, you know, on a larger scale with a holding company that have done it. So instead of selling, okay, great, let's get an operator in here. You know, maybe it's somebody in their 30s that wants to grind out, you know.

Yep.

Late at night again. Okay, great. That's it. And you can kind of grease the skids for them based on the things you've learned by doing it for, you know, 20, 25 years.

Yep.

So that, that's another way to do it. So it's, it's an interesting discussion to have that all, you know, started with your quick comment about how you answer those questions. But there's a lot to it. It's like, okay, you've, you're at this point now, what now what? Yeah. And we'd love to hear, you know, from you out there, our listeners feedback at BusinessBrain Show. Tell us how you've handled a transition like that or if you are struggling with one, and we'll come back and talk about it on the show.

Absolutely. Absolutely. Yeah. Thanks for hanging out with us, folks. Feedback at BusinessBrain show like he said. And yeah, do us a, do us a few favor, sign up for our, our mailing list at businessbrain show and keep living that charm.