How planning your exit from the beginning could help you to get noticed and exit rich

Welcome to this episode of the Unnoticed Entrepreneur. Today, I am delighted to have Michelle Sila Tucker joining me from New Orleans. Welcome, Michelle.

Thank you, Jim. Thank you so much for having me. It's Mardi Gras right now in New Orleans.

Oh, I would love to come over for Mardi Gras. Sounds like just the biggest party in the world.

It is a huge party and it's really a big party right now because it's been shut down for the last year due to the pandemic.

So I'm sure everyone's partying. But you know, there are business owners out there hopefully who are having a party and help us to understand how you as an M and a expert and author of the book Exit Rich, how you help business owners to to get noticed.

Let's talk about it. So. Well, the way we help business owners get noticed, there's so many steps before getting noticed that we help prepare the business for salary, package the business for sale. We work with business owners to make sure they're building their business with a proper infrastructure, what we call the 6Ps. But as far as getting noticed, it's kind of difficult as a slippery slope, Jim, because most business owners don't want to be noticed when they're settling. Confidentiality is everyone's number, number one priority. They don't want their employees or their clients, their vendors, their landlords. They don't want everyone that they do business with knowing that that for sale that they're on the market. And before you and I jump in this phone callist, I have a very nervous seller and it's like I don't want my investors, I don't want my clients, I don't want anyone to know. And so it's really not getting that business owner noticed because you can ruin your business if you reach confidentiality. People don't like change. Employees don't want to know that the owner is selling because they're fearful that they're going to lose their job. They're fearful that the new owner is going to take away maybe certain benefits, change faith, be difficult to work for. Clients think that no owner is going to come in and not provide the same level of quality, quality customer service. And so it's usually the best kept secret that a business is selling their business. And so it's really difficult. Well, we never ever showcase that business with proprietary information. We always go to market without any proprietary details about anything that will give it away. We're extremely cautious because if we breach confidentiality and employees start to find out for sale, customers Et cetera, then they can literally put them out of business. So we get the business noticed. Like I said, it's very difficult process, but we get them noticed without anyone ever knowing the company name, the company address, knowing anything proprietary about that business. And the way we do that is by blind mailings, telemarketing listings, business site listings that we utilize. And we send out blind teasers to gauge the interest, wet someone's appetite to see if they have an interest to sign them on disclosure agreement, go through the qualifying process, financial qualifying process, and move on to get more information to find out who that business is. But in the beginning, we get that list, that, that engagement, knowing that company, knowing without reaching confidentiality, which is not easy.

Yeah, yeah. And that's a really fabulous start to the podcast because this assumption that everyone wants to get noticed. There are times, and especially if you have a listed company, that are quiet periods as well, aren't there, where you're not allowed to talk about provisional earnings. Michelle, how are you helping companies to prepare to be seen to look attractive? Because there's two elements, aren't there? One is they need to look as a, as a company that's going somewhere and then you've got the transaction part of communication.

Yeah, so, so let. I do want to make one more statement about getting noticed because a lot of business owners don't really know who to call or who to hire when they go to sell their business. And some of them will hire real estate agents. Well, you should never hire real estate agents to sell your business because real estate agents models, their model is the more you tell, the more you sell. So they have excited their front yard. They put on the mls, everybody knows about it. They conduct open houses. So you want to make sure that you hire an M and A expert so they, they maintain confidentiality throughout the process. So as far as the transaction go, how do we make it look pretty? Well, you know, how do you put lipstick on a pic sometimes? I've been out. And what we try to do is not cover anything up. We want to tell the truth. We want to be transparent. We want to tell the good, the bad and the ugly. We want to talk about the skeletons in the closet up front. You know, we really want to work with our business owners ahead of putting the business on the market because we want to clean up some of these things. If there's a pending lawsuit, if there's a workers comp issue, if there's some employment scandal, we want to try to clean all that up before we go to Market. So we're telling a story about what did happen, but not what's happening today. So we really want to package that business in the best light. But we're going to do it with full transparency. We're always going to tell the truth.

Wow.

That.

Yeah, there's a lot in there. So a little bit of sort of, sort of. Is that a redecoration? I mean, are you going out and looking at things, maybe on Glassdoor, for example, that are not favorable or, you know, it's an old employee post?

Yeah, absolutely. It's kind of like staging a house. You know, when you want to put your house on the market, a real estate agent will come in. If it's a really good real estate agent, you know, there's good or bad will come in and work with a stage or a stage of themselves and really show your house in the best possible light. Get rid of the flutter, get rid of the junk. You know, make it look like you have no kids. And so for a business, depending upon the size of the business, if it's a small retail business, like a coffee shop or restaurant, equipment for something like that, you know, we really want to dress up the curb appeal, want to make sure the signage is visible. We want to make sure that the windows are clean up harder. If it's a larger business like a manufacturing plant and trucking company, something like that, we want to make sure that the business looks as good as it possibly can for a warehouse or for, like I said, a trucking facility or a manufacturing plant. And then we want to make sure that we're working with that owner to dress up the staff, make sure that they're in proper attire, make sure that they look good, and make sure everything's clean. You know, make sure everything looks good on the outside, but on the inside, we're working with the business owner to really clean up those fees, to make sure they have the right people in the right seats, make sure they have management teams in place. Because Steve Forbes, who endorsed exit Rich, says 80% of businesses will never sell. M and a source in America says 90% will never sell. That means you have a 10 to 20% chance of success. If we don't work with you on the inside and out, the probability of you selling your business is slim to none. So we want to dress up those 6Ps and build that infrastructure to make sure that your business is shown in the most possible light as possible. That's why we have an exit, we have a road to Exit Rich program that we really work with. Our clients maybe one to two to three years before we put their business on the market. Because this stuff takes time. You know, you didn't build the business overnight, we're going to fix it overnight.

Interesting. Now you've mentioned there are 6Ps in the exit Rich book which you you authored with Sharon Lecter I believe who is the co author of Rich Dad, Poor Dad, Just share. What are the other, what are the.

Other P's for people? It's number one. So you know the number one reason that businesses are not sellable is number one, business owners don't find their exit. They wake up when they go, I can't do this anymore, I have to sell my company. And it could be health issues, partners, divorce, death. It could be this pandemic, we've been living in it for the two years. It could be the employee market and not wanting to deal with employees anymore. But you can't wake up one day and expect you're going to maximize value. It never happens that way. So you got to plan your exit from the beginning. Like Stephen Covey said, start with the end in mind. The number one reason that businesses on owners don't sell is because the business is 1000% dependent on that owner. You want to make sure you have the right people in the right seats. And you want to ask a who question. Who opens doors, who has customer service, who handles quality control, marketing, legal, accounting, who handles manufacturing, distribution, et cetera. The list goes on. None. Jim, your name, Jim should never be next to the who in your company. You want the business to run without you. So that's people product is next in America. It used to be that startups were at great risk. You know 90% of startups will go out of business in the first one to five years. Guess what? It's not a startups a great risk anymore. Only 30% of startups are going out now. Out of 27.6 million businesses in the United States, 70% of those businesses have been in business 10 years or longer will go out of business. They are going out of business. This is your product, the product, your industry or service. You have to ask yourself, are you at the top of your game? Are you an Amazon and you're in your prime, no plan or you're a blockbuster and you're about to go out of business. The number one reason businesses are going out of business all around the world and they're exiting poor, not exiting rich is because of lack of aim. Aim. AIM is always innovate and market business owners stop innovating they stop marketing. They want to continue to do things the way they've always done them by the growing or dying. Jim. There's no in between natural product. Then you have processes. Most business owners design their concepts around the owner's agenda. A doctor's office. We're trying to take our doctor to pediatrician. The hours are 9 to 4, Monday to Friday. When does my daughter go to school? 8:30 to 3:30, you know. So you got to look and ask yourself, ask yourself, ask your clients. What are the three things we want our clients to experience when they do business with our company? McDonald's did this back in the 40s. They said we want our customers to experience great tasting food that's hot and fast, 30 seconds or less. Those processes were designed in 1940s. That's why you can eat at McDonald's anywhere in the world to get the same experience. Got to have those SOP checklists, you got to have employee contracts, you got to have those non compete. Then you have proprietary. Proprietary is the highest driver. It can take you from a 4 multiple to buy to an 8 to 10 to 15. These are your contracts. These are, these are. The more well branded you are, the more I can sell your company for. Apple is the largest brand in the world worth over $389 billion. That's not assets, inventory, anything else. Databases are huge. Facebook paid $19 billion for that. And what's that was hemorrhaging money. But guess what? They had a billion users. Patents are huge. If you ever watch tape or Lions Den or any of those shows, they always ask you about patents, contracts. But the biggest mistake business owners make with contracts, if they don't have the transferability clause, it says this contract is transferable upon an entity because 98% of all sales in America are asset sales, not stock sales. Then you have celebrity endorsements. You have what I call digital real estate. If you have a bedding company and you have a radio personality that talks about your sheets and how luxurious they are, your colors, etc. They can only endorse one vertical at a time. Somebody else is going to pay huge money to get that real estate because you can't get it as long as they're endorsing your company. So there's so many things that build up value that really can take because again we do evaluate. When you look at evaluations, it's not just about the numbers, it's about the synergy. That's about those proprietary assets that really drive value. And then you have patrons which is a fit fee. This is customer concentration versus customer diversification. Many businesses in America follow the 8020 rule where 80% of the revenue comes from 20% of their clients. If they lose any of those clients, then their business can go, you know, can be tanked really quickly. They can lose revenue, they can lose ebitda. They can basically be out of business. And then the very last P, the most important P to all of your listeners, Jim, is profits. The reason I put profits last is because profits is never your problem. Lack of profits is never your problem. It's the symptom of not helping the right people in place. It's a symptom of being in a dying industry. It's a symptom of not having your processes all buttoned up, not having checks and balances. You know, three out of five companies in America get embezzled every single year because owners are trusting but not verifying. They don't have the right systems and processes in place to make sure they're protecting their money. So lack of profits is never your problem. It's a symptom of.

Wow. That's an amazingly, you know, comprehensive view there, Michelle, of. Of all the things that one needs to do. If you're preparing now, what I also love is what you talked about in terms of kind of the ramp, the one to three years to get the business kind of packaged. It needs to be profitable, as you say, but to be packaged as well. Can you just talk us through the process and for example, creating investment memos. So you've talked about the, the process of maybe farming out and putting out that this business in this sector, in this location is available. What about stage two? Once you've got people interested, can you tell us a little bit about what needs to happen from a communications perspective there?

So once we have people qualified, because qualified is a big key here, mostly qualified them and they're interested. And then we send them what we call a prospectus. It's also called a SIM confidential information memorandum. And once they, they go through that, then they typically will let us know if they're still interested or not. They'll send us a list of questions. And we really prepare the buyer and we prepare the seller. So before they get on the phone together, they typically are having a call before they have an insight meaning, especially on the larger transactions, smaller transactions, a little bit different. But we want to, we want to prepare the buyer to make sure you know that when you're asking questions, let's get those questions ahead of time. Let's make sure. The seller has time to prepare. Let's make sure that we're not getting in the negotiations because that's our job. Let's make sure you're not insulting the seller by saying, oh, my gosh, I hate your location. I hate your building. I hate this. I hate that. Because that happens all the time. You know, we want to set the buyer up for success of building a good relationship from the beginning. And then the sellers who really want to help them be able to communicate and be transparent. Because a lot of sellers are like, I don't know if I want to tell them that. I'm like, yes, you have to tell the truth. You tell the truth in a positive light. This hap. Because no business is perfect. They all have skeletons every day. I have hair on it. You got to tell the truth. You got to be crystal clear, and you just got to do it in a positive spin. And then we also make sure that they know not to communicate without us. We are the experts. We're the advisors. A lot of times, deals are made based on emotions, not logic. So a lot of times, if buyers and sellers talk to each other without us being present, buyers must interpret the. Interpret something sellers say. Sellers must interpret something buyers say. Look, it's a common problem in America, in the world. You know, if we all have better communication, we want to have most of the problems we have today in the entire world. Right. So we want to make sure that everybody's heard and understood. And so that's where we have to be positive at all means. Because I literally have had those fall apart because a buyer called the seller without getting us involved. And the seller didn't like the buyer because they misinterpreted something they said. And we want to make sure that everybody's heard and that it's clear and that no one's misunderstood. Does that make sense?

Yeah, absolutely. Absolutely. So having, if you like, an objective party brokering the deal in every term is really, really important from a basic communications point of view.

Yeah, it's kind of like we're advisors, right. It's kind of like an attorney. Attorney's representing you. Attorney is going to say, don't talk to representing you in a divorce if they're representing you in a criminal matter. If they're representing you maybe a patent issue or trademark infringement, they're going to say, don't talk to the other side without your attorney present. Well, same thing. Don't talk to the other side without your advisor present. Because we're there to make sure that the T's are crossed and the I's are dotted.

Exactly, exactly. So, so you're obviously, you know, looking at your bio. You've got an M and A emergence and acquisitions Masters intermediary was a title. So you've got a professional qualification. But how have you in New Orleans been building your brand as an entrepreneur? Because you've also got stakes in multiple companies. Michelle, share with us how as an entrepreneur you've been getting noticed as well, because that's really interesting.

So I am from California. Just to throw that out there, welcome to California. But yes, I'm emerging Acquisitions mastermindary, Senior Business Analyst in which other titles behind my name. What matters is results. I always say titles don't matter, results matter. We are results driven. We make sure our clients get results or they don't pay us. Or probably the only M and A advisor out there that doesn't charge retainer fees. But how, how did I get? Are you asking me how did I get?

Yeah, I mean I love the exit rich, I love the look of that. It's fantastic. But yeah, tell us because as a, as an entrepreneur you've obviously carved out a really fabulous niche.

Jim, I call myself the best kept secret. I was always a best kept secret because remember, selling a business is confidential. It's not selling a house. So we will go out and sell businesses but there's seller financing, there's earn out, there's all kinds of different creative financing that's involved. So the buyer doesn't want us to tell anyone about the sell because they don't want the clients and everybody to find out. Sellers want to keep a confidentiality because they want confidential because they want to make sure they get paid. So I can't talk about it. So I've been able to sell businesses for millions and millions and millions and help business owners retire rich. But I can't talk about it. And so after so many years and if it's a public deal, you can talk about, if it's private, you can never talk about it until you get everybody's permission to do so in writing. So back in 2013 I met, I went to a conference and met someone there that says you should write a book. And I'm like, you know what, I was a writer when I was a kid. I love writing poetry and short stories and things. You're right, I should write a book. So I wrote my very first book in 2013 called Sell your business for ordinance work and I self published. That was a huge, huge game changer for me. That Just really opened up the world because nobody knew who I was. And the bigger issue of not knowing who I was was business owners didn't know that their business focus more just acquisitions advisors. They exist. You don't have to go to a real estate agent or an attorney or a CPA to try to sell your business because they're not experts in selling companies. So I really wrote the book to educate the marketplace of who we are and what we do and there's a better way to sell your company. And I wrote the book for branding purposes, you know, to get recognized, to get noticed for lead generation. And it really, really helped. And Exit Rich is my third book now and I've got a couple more coming out. But Exit Rich is also a game changer because now I have a publisher, I have Charlotte, my co author and Steve Forbes endorsed it. Kevin Harrington, the original truck on shark tape worker forward. So it's a huge game changer. We're in the Hudson bookstores, in airports, all around, in 90 different Hudson book sports in America. So if you go by Hudson, pick up Exit Rich. And we've got totally, we've been on over 300 podcasts because of it. So you write a book, you launch book, you get off podcasts. You want to get your name out there, you get your brand out there and but for me, it's not just about becoming, being recognized. For me it's about making a difference in the world and really changing the landscape of business.

Well, you know, in just 20 minutes, Michelle, you've changed my awareness and understanding of my landscape. If you want to find out more about you, how can they do that?

Sure. So there are several things. Number one, I encourage everyone to go there and get pick up Exit Rich. Exit Rich is not a business of selling business. That's where people, that's where everybody tends to get confused. Exit Rich is all about building a sellable asset. It's not building a business that is sustainable to continue to grow without you that you can continue to scale. And when you're ready, you will actually have an asset to sell. So you can pick up Exit Rich if you're outside of America, go to Amazon because of the shipping hust go to Amazon inside of the America, you could go to Hudson Bookstore. You can go books a million, any of your favorite bookstores. Also you can go to Amazon and you can go to exit richbook.com because Jim, I have to tell you this really quickly. We are giving away a free. So anybody that buys Exit Rich shows them your receipt. If you buy anywhere else other than@rich book.com you get a lifetime membership into the Exit Rich Book Club where you get video content. We do in deep dives in these different strategies and techniques. But more there's documents documents to operate your business like sample SOPs, policy and procedure manuals, non competes, sample Letter of Intents, prospectuses, due diligence, purchase agreements, Closing documents. All these documents will cost you over $50,000. All that is available for you for your review and your download for you by Exit Ridge and that's@exrichbook.com you can also take the 6P quiz@solar tougher academy.com and my main website is solartupper.com and then don't forget to listen to Exit Rich podcast where we'll talk about Million dollar Build no exits.

Well, Michelle Siletucka from New Orleans, I nearly said New Zealand. New Orleans, my landscape shapes. There was much I'm in different continents. Michelle, thank you so much for sharing amazing amount and how you've gone and built yourself into becoming such a recognized entrepreneur and helping so many of us around the world. Thank you so much for joining me today on the show.

Thank you Jen. Thanks for having me. I'm having a lot of fun.

Yeah, me too. Thank you so much. And so I will put all those details in the show notes around Exit Rich and Michelle Silertucker, thank you so much for listening to this episode of the Unnoticed Entrepreneur with me, Jim James.