Selling Your Business for MAXIMUM Value: Expert Secrets Revealed

The art of the deal. I'm going to go positive first. The art of the deal is getting the strategic buyers to fall in love with the business, to understand the integrated value, to open the kimono, what the integrated value is, so that you can leverage up your value in their eyes, and they're willing to pay it because they're going to make more money owning it. And we've done deals at what people consider crazy multiples. 60 times EBITDA, I can give you the whole story, 56 times EBITDA, you know, a profit. But the way we get there is making sure it's a win for the buyer, but then keeping them honest by having a competitive soft auction between several of them. I do believe that living life to the fullest is an opportunity we all have. And I love to revisit that every year and hope that myself and all those I can support around me will live life to the fullest. I also believe very much we're lucky to be where we are. And therefore I'm a real proponent of philanthropy and time, treasure and talent, not just money that we can free ourselves to give, to make the world a better place, all of us.

So, you know, let me ask you about that before we get into it, because your real massive skill is basically helping people exit their companies and organizations. And just to, you know, we're going to get into those sort of conversations. Me and Rob have prepared very extensively for this interview, but I want it to be super conversational and we could talk for 10 hours. So just know that we're going to touch on what I think are some of the most important things for you as an entrepreneur, as a business owner, on how to think about your company, the value of your company, if you are going to exit your company. This is a guy who's an absolute expert and master at it. This is what he does, and I'll ask him all about that. But ultimately, people are running their companies because they want certain things. They want freedom, they want money, they want relationships, they want to achieve. But you talked about altruism, and we've had many conversations off camera, and I have interesting perspectives on it. I think there are genuine people that do wonderful things with charitable organizations. And I think there's a lot of people that pretend like they're doing good in the world, but it's cosmetic. It's to give the illusion that they really do. And it's kind of sneaky and stuff. So I'd love to get your perspective, like, why do you do what it is you do what's your purpose about this? And then we'll get into like the how to and share things with our viewers and listeners that would be just really helpful for them.

Sure. Thank you. That's a great question, Joe. So this started for me as an entrepreneur running my own business. My dad had a business and he wanted me as the oldest son to get into the business and I couldn't. It was machinery and I love people and marketing and strategy and ideas and helping make the world a better place. So I ended up, first of all, selling my business for what became 27 times EBITDA, which is a huge number. People say that's just crazy. It's not believable.

And by the way, I'm going to, if it's annoying, just slap me or something. Ebitda, like a term like that, which, no, I'll ask you about things that a lot of people do know, but some people may so just explain that term.

So that would be. EBITDA is earning. Well, EBITDA is profit. I mean, there's a definition of ebitda, but for an entrepreneur, it's just your profit. And it's before taxes, depreciation, amortization, stuff that a new owner wouldn't necessarily have in the definition. And to define it is taking out interest because maybe they'd have their own capital. Depreciation, amortization, those things your accountant can show you. But it's basically a multiple profit. Yep, perfect. So I was young, I had been through a lot. I decided that I wanted to sell my business to start a charitable foundation. Just a personal goal, but also free trade came along and I was originally operating in Canada. I'm Canadian originally, before I moved to the US and when free trade opened up, the potential of getting crushed. So this is one of the changes that can occur in somebody's business where the competitive landscape changed. You think, well, do I sell or do I try to compete in this new landscape? And I thought as I was an expert in the Canadian market, I would sell. And I went to the biggest three buyers in the U.S. not because I knew then that it was strategic, Ma, it's because I didn't want to get crushed. And I knew if I was aligned with one of them, I wouldn't get crushed by the other two. So I went to the top three, two in Minneapolis and one in St. Louis, Missouri. And I said, listen, you guys, I was in the below the line marketing services business. If you guys come into Canada, I tried to make it as complicated as I could. It's like 10 languages. Sorry, two languages, 10 tax systems. And it's complicated. It's only as big. The whole thing is California, so just let me run that for you and I'll do all your fulfillment, everything in Canada. And they said, great, but knowing about each other, they said, we have to buy you. And I tried, Joe, to go and find an M and A advisor I tried to find. And the accounting groups I talked to from the big four that you know the names of, said, where's your dad? Because I was 29 years old, 28 years old when this started. And I said, well, my dad, if you believe he's the one owning the business, fine. He's not here right now. But just, I want to meet the guys that can help me sell my business. And they didn't understand my business. And a lot of MA advisors, I've learned, are not business operators. They don't fundamentally understand what's strategic about a business. What was strategic about mine had nothing to do with the purchase price. I was protecting the intellectual property. And I didn't know this as a seller. And you got to learn as a seller what the buyers want. If you're going to get a big price, maximize value. I didn't understand this. They paid what was equivalent to 27 times my profit was, which is massive because most people think in private equity terms five to seven times. So with that big bump, I was able to start a charitable foundation. And that was great. I'll tell you a very sad and a very shocking moment for me. That was when I became an executive. I became a corporate officer at this very large firm. And we had $3 billion in annual sales. And I was able then because I was then responsible for all the business outside the United States, which was a large chunk of that. And when I open my own file, Joe, when I did the calculations, they would have paid four times what they paid for my business. Nothing to do with me as a seller. All to do with the calculations they ran on how it saved their largest client. And that was the beginning of my understanding that when you go to sell a business, it's not about your profit. It's not about your EBITDA's private equity. I'll say it's not about the way you look at your business is the owner of your business. It's the way a new buyer might look at your business. What makes it strategic is that they would make more money owning your business than you would. So the question I would say is, do you know of someone if you're a seller, there would be a strategic buyer that would make more money owning your business than you would. So that concept of selling way more of a multiple. And then I went to Oxford. It's another whole story. But I was offered a PhD, which I didn't A, think I was smart enough to do, and B, that I had time to do when I went to a leadership course for a month. And in that course, which I can get into later if you'd like, I learned I was in the strategy discipline. I was looking at corporate philanthropy because I'm passionate about philanthropy and why my own foundation wasn't scaling. But I learned that my experience in selling my business was very different than what all the learning was that the guys who were going to go out and be investment bankers were learning at Oxford. And so I told the professors, you've got to teach these investment bankers that strategy comes first, not the numbers. And they were like, no, that's not the way it works. And that's where STS Capital Partners was born. And my passion is always about philanthropy. So can we help people sell their businesses like I did for a big number, but for even more that the buyers are happy to pay for, and maybe they'll give that upside to making the world a better place? That's what I do, and that's why I do it.

That's awesome. That's awesome. So you said something very interesting in how a potential buyer will look at the value of your company. And so my sense is that when you look at a sale, and by the way, we have a mutual friend who you actually helped with his business. John Ratley.

Yeah, Great guy.

Yeah. And so John's been a genius network for a while, and we've done interviews and various things on this particular subject of exiting a company. So I'm learning as I go along different viewpoints and perspectives and how people think about selling a company. And for most people watching, they may only have this sale once in their entire life. Right. They may not. I mean, most people aren't selling companies over and over, building them, selling them. And so there's a lot. What I've learned is there's people that experts in buying companies. We can talk about that, too. Not just selling a company, but how do people think about buying a company? Right. Yep. That there's a lot of, I guess, ruthless to shrewd to ethical to unethical behavior and everything in between that happens. And if you don't, if you're not prepared, you're either going to have a lousy Exit, if you have an exit at all. Some people try to give it to their family and the company, you know, gets, you know, goes to nothing, or in some cases, how it's set up. It could be built into an enormously successful organization. And there's many companies you can point to that that's happened. But most people, I have learned, are woefully ill prepared on how when I sold my very first company, which was a carpet cleaning company, I totally got screwed, right? I mean, the guy just, you know, he ripped me off of hundreds of thousands of dollars, which back then when I was in my early 20s, that was a lot of money, right? And had I known what, you know, what people that are experts in this, I would have avoided a lot of that. But what you said is you actually sold your company, you could have got four times more and they would have been willing to pay it had you known what they knew.

Exactly.

Because you didn't know it, they were able to get it at a bargain price and it was infinitely more valuable. And the reason I'm bringing this up and want to emphasize this is most people that are going to go sell a company are ecstatic that anyone's even going to buy it. And you probably thought it the time, and correct me if I'm wrong, that, wow, I'm selling it for this, I've hit the jackpot. But then you found later that, oh my God, I could have. So how does one even know this? Like, what do you. What? I guess we'll get into this, but I'd like to, you know, emphasize that point because a lot of people are thinking there, I'm not ready to sell my company. I don't even know how to set it up. I don't know how to do any of this stuff. And that's the reason I want to talk with you today so that we can go through how to think about your thinking when it comes to selling a business. So let me start with. I've got a. And by the way, if we get too deeply into this, this may be. We can do future.

I could answer your question on John if you'd like. Would you like me to do that?

Sure.

Yeah. So I love John Ratliff. He's a great guy. John, love you. And we were referred to John. We only do business through referrals, so we work with people who do understand the business owners. And we were referred to John by a wonderful guy, Vern Harnish. And Vern said, you know, you gotta promise me you're gonna Help him maximize. I said absolutely. So in John's industry it was a 0.7 times revenue norm. And our team took the mandate as we know to help and our commitment is we're gonna help all entrepreneurs and family business owners maximize value. If you're an entrepreneur as John did a fantastic job buying a whole bunch over 20 companies in his industry, he knew how the M worked. He also knew and I think everybody should know you're best to have an investment banker M and a advisor. But it should be a specialist in sell side advisory that's going to help you because it's a very specialized business to know how to position businesses with strategic buyers, not with private equity. I'll go through that later. John's business was to the industry. It was an inbound telemarketing business. It was fairly standard and they and the offers we got initially were 0.7 times in that range revenue. And yet our promise is to maximize value. So we stopped the process and thought okay, let's get really strategic about this. And this is the operative question. Who would value your business more than you do? Who could own the business and make much more money than you do owning that business? And so with that in mind, we started looking at all different types. John gave us input, his team gave us input. Our team who always put a whole team together on the deals from STS Capital Partners. He came up with a thesis that, and John was quite involved in this and got to understand our process, which I'm thrilled with, that there would be somebody outside of the normal industry in an adjacent business and in this case it was in the hazardous waste industry that would value the assets that John had because there's a huge downside risk and hazardous waste if an inbound call goes wrong, I don't know if that makes sense but it could have a huge liability. And so we together with client in this case John ourselves position that to a strategic investor in this case it was somebody who was trading in the neighborhood of 38 times earnings which means they have lots of currency to use. And when they buy a company for less than 38 times, it's a bump in value. Just getting in a public company, I don't want to get complicated about it, but it bumps the value. So you know there's currency there, there's the potential to go all the way up to 38 times EBITDA in order to and that's a big stretch.

So all of a sudden with that information before in his industry it was seven point I think was the number now that you have this differential of 38, now, you know you have got all this room for more value. And until you knew that, then you're only going to be looking at what's normal for a company like this to be sold.

Exactly, exactly. And what we specialize in and we need to encourage everybody to do is dive deeply into the head space of the strategic buyer. And so one of our advantages STS we've all been strategic buyers. And so I was doing that for a large family out of St. Louis, Missouri.

Define strategic buyer real quick.

Yeah, a strategic buyer is somebody who is not a private equity group, not a fund, not a family, well, sometimes family office, but generally not a family office. Not somebody that has financial gain as their driver. So private equity is a brilliant place to invest, but not a good place to sell to. And the reason is they want to buy low to sell high to a strategic investor. Now, what's a strategic investor? A strategic investor is somebody in a business that's operating, usually a large enterprise. Then when you integrate your business, you take your business and right now you're making X with that business because you own it. And then, Joe, what you do is you picture it, you visualize it, and then you start to run models on what would it be as part of a large strategic buyer, a large corporation, and how would they use it, what would they do with it? Would they create more distribution? Would they take the intellectual property and spread it across all of their enterprises? Would they leverage in their geography? And each of those theses have different financial outcomes. And what we do is A, propose that, B, make sure that the buyer shares with us what that is because they don't want to make a mistake. These are corporate people that don't want to make a mistake buying because it's very public when they buy a company. And so the art of the deal is to get them to fall in love with the business, to share with us what the integrated value is, and then to extrapolate that in a competitive process so that you have others competing. A soft auction, we call it gentlemanly soft auction. Gentle person lease soft auction such that they'll put an indicative value out that's much higher than what you would normally get from financial buyers because they're going to make more money owning it. Joe. That's as simple as that.

And by the way, truth be told, how hardcore of a world is it? I mean, are these, I mean, it doesn't sound like these are like the nicest angels that are floating around wanting to do good deals I mean, what level of. I mean, look, in every industry, there's con artists and then there's people that are ethical. So, I mean, what sort of game are we playing here?

Well, it's a game where I just came from watching a video of somebody that did not get paid for their business and went bankrupt because they went into a process with no advisors and they took the wrong advice. And unfortunately, they're now bankrupt because a private equity group. Well, let me take a step back. So if you run a strategic process like we just described, and you have more than one player as a strategic buyer, and in John Ratliff's case, we had a buyer out of the Philippines because the strategic buyer in John's case, who is out of the United States, told us and they shouldn't have, but they told us they were very afraid of a strategic buyer coming in from the Philippines. So we contacted a friend in the industry in the Philippines, said, spread the word that you're coming in so that a competitive view would be taken by the strategic that you wanted to work with. The art of the deal. I'm going to go positive first. The art of the deal is getting the strategic buyers to fall in love with the business, to understand the integrated value, to open the kimono and what the integrated value is so that you can leverage up your value in their eyes and they're willing to pay it because they're going to make more money owning it. And we've done deals that what people consider crazy multiples. 60 times EBITDA, I can give you the whole story, 56 times EBITDA of profit. But the way we get there is making sure it's a win for the buyer, but then keeping them honest by having a competitive soft auction between several of them. So that is a healthy, positive process, a negative process where you will have all these negative things come out. Can be a financial buyer, and there's all different types of financial buyers. But the way you know this is a financial buyer is they're using other people's money. They're motivated. They'll call it a 2 and 20 model, which I can get into if you like. But the bottom line is they're motivated by any money, any dollars they don't pay you. They get in that model if it's at the right level. 20 cents of that's a huge motivation. And their interest is in maximizing dollars as an outcome, not a strategic fit. And right now, the leadership of that group is private equity. And they make great money for their investors and the people working it make great money. And so if you're an investor, you want to invest there potentially. But if you're a seller, selling to them is an opposite objective. They want to maximize profit by buying low, to sell high to a strategic. And you as a seller, you as a seller want to maximize value by selling high. So they want to buy low and you want to sell high. That creates tension and a whole playbook of private equity on how to achieve a lower purchase price from a seller. When the seller wants to sell high.

Yeah, yeah. So when are the times that someone would sell to private equity that there's no either.

No.

Is it because they have no other alternative or. There are some situations where private equity and I say all this out of ignorance.

No, no, they're great questions.

Yeah, I'm not in any means.

So we have sold to private equity when the strategics are either not understanding the value proposition or through a soft auction are creating such a high level price that the private equity guys, depending on their motivation, feel like they need to match that because they really feel like they. But without a competitive process with strategics involved, you can't get private equity to make a high offer. This year we just closed with a private equity group after running a process just like that with a whole bunch of strategies. And the clients came to. I'll give you the numbers and not the names. They came to us, they said, well, I met them through referral, we don't need you, we have a $40 million offer. I said, okay, well who's it from? Well, this private equity firm. We said. I said, look, I'll give you my right hand if that's the value of your business, because it's not. Think about the private equity guy's motivation. And I'm not disrespecting private equity. It's their place in the market. But they want to buy low, add value where they can and sell high. And they want you to continue to run the business for 20% of the second bite of the apple. What we're suggesting is people should keep their whole apple and not just a second bite of the apple and sell that whole beautiful apple to somebody that will appreciate that and will. And we'll pay a high price for that. Now, that private equity firm who offered the 40 million, the client there were two brothers. We have a video, happy to show our listeners if they're interested. And they got 108 million from that same private equity firm, 100% cash up front. And they're very happy. And the Way that that worked was, and I won't name the firms because it's confidential. And by the way, by the way strategic selling process is you can keep everything confidential. If you sell a private equity, it's their job to get out in the marketplace and check whether what you know what the future of your business is going to be so it can get back to your employees and it can get back to your customers. And that's one of the other benefits of selling to strategics and having an advisor that will help you sell two strategics is it's more confidential because it can really hurt your business if your employees find out about it in the middle of the process and you haven't involved them in it. And we can talk about that or if your competitors find out about that and tell your clients. So you want to be sure processing.

So it is a very interesting game and process to go through with when and how do you actually mention it and stuff like that. I don't even know what the stats are. But how many businesses go under or get worse after they've been sold compared to how many get better?

Oh well, that's a whole other subject that we're not involved in. But integration of a business and planning integration of a business after it's purchased is really critically important for the buyer. We're working for the sellers for the most part. But if we are working as a buyer with clients to help them build up, we do something called a roll up to sell. Joe. So if you want to be the guy in your industry that buys all your competitors, we'll go and find an international strategic buyer. The last one we did was with a Japanese buyer that said I want to come into the American market and we want to buy a bigger deal than you have. So how about you roll up and you can use our currency roll up all these into roll up means buy your competitors into a platform so you're rolling them in and then we'll sell here. So we'll take the sell side mandate now and help them roll up. And in that case we're helping them as a buyer. And when you're a buyer, you want to have 100 day integration plan. You want to have the executive team clearly in place. You want to know exactly who you're going to keep and who's going to go before you do that purchase so that it's very smooth in the integration. That does not happen unfortunately enough. So I would encourage people that are buying businesses to have an integration plan, have an integration team, have the Clarity of ownership and the clarity of outcomes before they close on a deal.

No, that's really valuable because I cannot tell you, like I've come across quite a few people that they build up their dream baby and then it becomes a mature, you know, sometimes a teenager, sometimes an adult, and then it gets handed off to someone else and they just screw it up.

Yeah, yeah. So I just want to tell you my passion for this comes from that experience and knowing that if we can free people's time, treasure and talent up, that they can live their life more fully. They can potentially contribute to charity or create a foundation, or they can go and live their dreams. They can become a guru in their industry. They can do things that fulfill them before they leave this.

Yeah, yeah, that's good. Okay, so some of the questions I have here, what are some of the most important lessons you've learned about buying and exiting companies?

You want to just like people ask me about climbing Everest and the seven Summits. You want to be completely. So I give speeches on what are the parallels. And you want to set a high goal first of all, which is a parallel with climbing. You want to be completely prepared before you start. You want to get the best in Climanche guides in our world. It's MA Advisors in the world that will tell you they're the best in the world at the specific jobs.

M and A Mergers and acquisitions. I don't know if we. Maybe you said that in the beginning, I can't remember. But just in case M and A.

Means mergers and acquisitions. And that's the same word from each perspective. Just to have some fun with that perspective for a second. If you're a merger, it's because you've been bought and you're saying I've merged. If you're an acquisition, you're the buyer and you say I'm acquiring. So it's the same thing from two different perspectives. So, Joe, preparing is really important. And the way that people prepare and the more prepared they are and the better advised they are, the better outcome they're going to have. Okay.

Okay. Awesome. And now I'll ask you this. What are the biggest mistakes entrepreneurs make when selling their company and getting their company ready for sale?

The worst one is taking their eye off the operating ball. So if you're going to sell your business, keep your eye on that ball of continuing to increase your sales, to manage your expenses, to increase the strength of your management team. Dan Sullivan's who make sure you have all of your who's in place so that you are. I just had a conversation with somebody today where it was the opposite of this, that you are not viewed as integral to the business. You, as the owner of the business want to be viewed as being not required for the day to day operations of the business. And today I was having a call with somebody who said we don't want to buy that because he's too involved in the business and we can't put somebody else in. And if we give him the hundred million he's looking for, he's likely going to leave. So you want to be prepared. You want to make sure that you keep your eye on that ball, that you continue operating your business as if you're not going to sell it so that the performance continues to go up because if it drops off, the buyers won't stay in the race.

Yeah, no, that's great.

Great.

What's the difference in mindset and approach between building a company to run versus building a company to sell?

Well, I used to believe that I was running my company when I was an entrepreneurial operator and I wasn't going to sell it. And that is a fallacy. As hard as it is, we all have to realize that one day we're going to sell our business because we're not going to live forever. With that in mind and with all the experience I have now, having been an operator and somebody that advises others and we have a whole team, by the way, we're a global business in 24 cities around the world. So we bring international buyers, not just strategic buyers to the table. But with all that learning, I now know it's really important to always think about how do I set my company up so that it's successful operating but it's also successful as a potential sale.

The whole thing that we're all going to. We're not going to live forever. Yeah, that's something that I'd almost like to have you emphasize in this way. What I mean by that is that this seems to be. Ever since I started, I did a exit panel at my Genius Network annual event a couple years ago.

Great.

And I brought five people, including John Ratliff, who had all. Everyone on the panel had sold the company for between 35 million to 40 $500 million. So all of them had successfully exited a company. And by talking to people since then in the audience and stuff, some people completely shifted the way they are running their companies. They're now thinking about it. It planted a seed. I have this down here, you know, the domino. I did an exercise called the first domino. And the reason I brought this out is that I hope this conversation is a domino for the people that are watching it or viewing it. So if you're only listening on audio, I'm holding a big giant 3D printed domino. Thank you Darrell Sutherland, whose company actually 3D printed this giant domino. But the way that I look at this is we all have those insights and perspectives that we hear from someone that change the trajectory. And this is not just another oh, how do you do better marketing? This is a really important conversation that we're having right now. It could change the whole entire course of your life. And some people, they get it, they understand. Like, yeah, I mean I probably should be thinking about how I'm going to exit. I'm either going to have an elegant exit or my company's going to go bankrupt. I'm never going to go to anyone, it's going to be handed off to a family member or someone in a bad way or I'm going to be so ill prepared that by the time comes when I'm forced to sell it, I'm going to get nothing for it. Worst case is totally screwed and taken advantage of. Or if I start doing this stuff right now, I actually can have this amazing, wonderful thing happen that I don't even know is possible until we start putting them on that path. So what have you learned over all the years that you've been doing this? I mean you've got how many, because we didn't talk about this. How many offices and people, team members do you have all over the world?

Well, our 24 offices around the world. So in places like Singapore and Hong Kong, Monaco, Amsterdam, London and of course all through the United States and Canada and Latin America and the Caribbean. We're actually setting up, we've done deals in the stands in Asia and our core core team is 100 and our team that operates our deals is 400 people and then including our advisors, we're 1,600 altogether. So we're, you know, we're upper mid market and so most of our deals are in the 100 million to billion dollar enterprise value size. Ultimately we will come down to 50 million. But because we're selling do strategics, we can't do $10 million deals, you know, and smaller deals like that. And there's other people we can refer people to that are doing smaller deals. But here's the learning. I would say think about your business not just as you being the owner of the business. Joe, think of it. If you're the entrepreneur you own Genius network that if ever I was to think about moving on, because at some point we are going to move on, would I want to sell it to my management team, which is an option. Would I ipo, which is another option, or would I sell the business and the sales are either to private equity, other financial investors who will resell it later because that's their business model, or two as strategic? And there's a whole bunch of debate in the marketplace. I met somebody here yesterday who had given a presentation to 60 private business owners in one industry and his only experience was with private equity. So he didn't know that strategics will pay more if they're managed well. And he thought they would pay less. And so he told this whole room they're going to pay less strategics than right now private equity would. That's not the case. If you think about your business as one that you're operating for your own success and your own interests. But then also once in a while, that's the in the business operating mode, think about on the business from a different owner's perspective and start to think about who would be a strategic owner of your business, who could give it global distribution, who could give it more capital so it could do more. And when you start to think about that, it'll be interesting for you because you'll start to be more objective. But it'll also start to have you create a list of the strategic buyers in whatever part of the world they're in that could really grow your business or grow the profitability of it and take it to the next level. And that death, disease, divorce, disability, disenchantment, disintermediation. If something happened to you or in your world, you would know where to go. You'd be prepared to think about, you know what? It's time for me to talk to you. As Gigi I talked to somebody this week. I asked them how long they were going to live, planning to live till 2081, May 31, 5pm so we've got a long way to go.

That's pretty specific.

And I know my wife will push me to extend that date and I'll look forward to that. But I talked to somebody this week who said, I'm not sure I'm going to live that many more days. And I really want to set this sale of this business up so we can, my partner and I. And he's 94, his partner can set it up as a foundation. And the work he's doing is he's the chief philanthropy Officer, love that title for several groups. And he's doing wonderful work in the world. But Joe, it may not happen. He didn't plan ahead far enough, didn't start early enough to plan ahead to necessarily get. And he's talking about billions of dollars of value that are in the businesses he and his partner have. And if they can't get this structured well to sell to a strategic so that the capital can be extracted and they can bequeath that to all their children, then it's going to end up, unfortunately, the asset will end up in a big fight. And their beneficiaries, the charitable causes that they dream about supporting before they go, and enough to give their children, as they say, enough that they will do well but not spoil them is not something they're going to be able to do if they don't live long enough. So I've had to set an emergency meeting up there because they didn't start many years ago. So I'd advise all entrepreneurs and business owners to think about operating your business for your own goals as a stakeholder, but also start to think about a who can advise you on your sale. And of course we do that, but other people do too. But who would be the strategics, where would they be in the world that would liberate you from your business if you needed to be liberated at an extended price and on the terms you want, because strategics will give you the right terms that you want if you know how to negotiate with them.

Hey, I hope you're enjoying this video. And I want to let you know that I have a new book that's come out and if you'd like to get it absolutely free, there's a link below in the description. Or you can wait till the end of this video, or you can Simply go to joe'sfreebook.com and you can get a copy there. Yeah, I swear. I mean, if there's any way for people that are in there, you know, even because we now have Genius Youth, so we have people coming to Genius Network annual events and stuff. And then in our office headquarters, we have live streaming rooms for the entrepreneur's young children or relatives or someone that they're close to between starting at 13 years old up. If I would have grasped this when I was in my 20s starting my first company, 30s, I mean, it would have made the biggest difference. I'm now in my 50s. Right. But it's like one of these things where you hear this.

As you get.

Older and as you get into different things and as Your perspectives change. I mean, whatever. You're so, you know, dead set. This is what I'm going to do, this how I'm going to do it. I mean, life can change on a dime. And I'm not saying that you should look at everything as temporary. Some people never want to sell their companies. I have a few genius network members, like, I'm never going to sell my company. But just thinking about it this way is, if you had to, the company's going to run better anyway if you do all of this thinking. Because like you said, worst case scenario, what if you get really sick? What if there's a giant economic shift? What if something happens? I mean, it's really nice to, you know, because anxiety mostly comes from lack of preparation. And there will be seasons in your business that are amazing and others that are pure hell. And so just having done this initial thinking and so. Yeah.

Well, there's one more thing I'd like to add. International strategic buyers will pay not just for the value of your business that is supported by a good advisor, but they'll also pay to come into a market. So if you have strategic buyers, if you have strategic buyers potentially out there that are in Japan or in Norway or anywhere in Europe or potentially in China or in another part of the Americas, and you know they're in your industry and you know they have huge liquidity and that you would be a strategic acquisition for them, put them on your list, right, because they will not talk to your competitors. You're not leaking it to your competitors. Most people don't want to sell to their competitors. They think, oh, that's a horrible idea. Selling to the guy I've been competing with around the corner from me for 20 years, but taking a big step and saying, okay, I'm going to go to an adjacency, a different industry right beside mine, international buyer. Bring them in, set this vision out for them. And maybe you could start with a strategic alliance with them. Get to know each other, get on their radar and understand. But I would not do that without an Advisor. I lost $5 million at the closing dinner of my deal because I didn't have an advisor sitting beside me.

Well, let me say this too, because it's one of the same things, like, with different people have their sweet spots. John, you. I don't know how many people in the world do kind of like the stuff you do. I think it's a tiny percentage of individuals. And everyone that I have come across that touts themselves as an expert, most of them are Not. And so it's funny before I ever did this interview with you and I mean because we just recently met each other last year, I had. Not that I even sought out people once they knew we knew each other that had done deals with you. Like, the guy's amazing. He treated me so well. You know all this sort of stuff. Very thankful, which is great. The way you guys, your company works is you go in, you charge a fee for helping someone exit their company. And as far as I know, the goal's always like you are always a free advisor because you end up getting them far more money than if they were to ever do it without an advisor. So speak to how does compensation work for someone like in your world?

So there are lots of people that you have quite a few questions. I'll try to answer them all. There's a lot of people that are in what they call investment banking because if you think of it, it's a high roi, return on investment, return on capital, invested business. So it attracts a lot of people that come out of brokerage or come out of Wall street kind of mentality of brokering things. That's not what you want. It's not what you want. If you want somebody helping you sell your business, you want somebody who is going to actually who's been an operator who understands the issues, understands strategic buyers and how they think and can position you really well. It's a marketing and strategy exercise. It's not about the numbers. It starts with strategy and it's about positioning directly with a strategic buyer at a high level. That's what you want to look for if you're looking to sell to a strategic. And being prepared that way, I think is really important. The whole spectrum of investment banking is just to share with everybody how that works. It includes like this is the most difficult, which is private advisory to private business owners. Way on this end. You have IPOs, initial public offerings, you've got valuation opinions, you've got all kinds of capital raising and then working with VCs and working with private equity. Those are all investment banking portfolio items that they offer. The work that John Ratliff does, that I do that many other. And John and I are partners. We work together. I love John and we work together on clients and with clients. But the last bit of that, the last 3 or 4% of the spectrum is the hardest, which we embrace, which is coming to understand an entrepreneur family's real objectives. What are the required outcomes they must have in order to wave a magic wand and have a great Deal. What are the preferred outcomes they have? And no buyer is going to come in that doesn't meet those required absolute meets all the required outcomes. That might be a price. It might be keeping the values, it might be keeping the name, it might be keeping your brother in the business, whatever it might be because you're creating enough value to make those demands. That's what I want to assure entrepreneurs and family business owners. You can do it confidentially and you can get all of the things that are very important to you and then the rest that are optional. You kind of do your best to negotiate them all. You want to be ready with all of that before you get out into marketplace. When you do, then you're ready to go. And how does the pricing work? The pricing Think of a hockey stick curve. So at the base of the hockey stick curve, success fees are how all of us and everybody in the industry makes money. So success fees are a percentage of the sale price of the business. And it starts with the base of a hockey stick on an agreement between the client and us on what the value of the business is. And then you want to set up an incentive curve so that as they sell at a higher and a higher and higher value, Joe. That you're paying them more. So that they're pushing with all the creativity and all the might and all the energy they have and all their knowledge and their relationships to push up the value of that sale. If you think about that for a second, going back to private equity. Private equity wants to buy a low. They're going to push it down. So you want to give your advisor an incentive to sell high and try very hard to push them away from selling your private equity unless they run the process with all the strategics and private equity comes in and is willing to push up that curve. Now there's also a monthly commitment fee that we would suggest B monthly as opposed to a chunk some investment banks or MA advisors charge up front 100,000 or $200,000. Our suggestion to lie on interest is it be a monthly fee and you can negotiate that with your advisor and that is to support some of the costs so that there's skin in the game from both sides, both the advisor and the seller, investing in the team that's doing all the work to get it ready, to present it well, to make sure that we have a process running where there's a soft auction so you have monthly fees when it triggers and then that's not a profit. They shouldn't be too high. And then there's the hockey stick curve of success. Fees that are paid as a percentage of the deal when it's sold. And you should always be happy to pay your fee because that advisor has overachieved the valuation that you were hoping for, right?

Well, you know, it's interesting because when I talk to people that are in the process of selling a company, about half of them are like, I've got someone that I'm working with. We've already created an engagement. And it's very hard to know, including, not just from me, without obviously getting into deep conversations with them. But even for them, I always tend to, on a good percentage of these individuals, they're just not sure they have the right person. They don't really know. And how. I mean, what are some of the signs that someone should do beforehand before they hire someone to help?

How to hire an advisor.

How do you know that you're engaging with someone that's best aligned for you?

That's a great question. So in terms of how do you find and hire a great advisor you want to. And it's not industry specific. A lot of people say, you know, I'm going to hire the guy in my industry that knows everybody. Let's talk about how not to do it for a second. So the bell curve of valuations is very clear and it's set by people doing transactions in the industry. Many of the transactions in an industry are private equity driven now because private equity is growing. It's a great alternative for investors than the market. And so it's direct private investment. They create a bell curve that's in their own interest. As you'd imagine, five to seven times profit of EBITDA is what you'll often hear. And so if you have an industry expert that says, we know exactly how this works and who in the industry is going to buy, you should not go there. And the reason is that they're part of that bell curve creation. If you want to maximize value, you shouldn't go there if you're looking to maximize value. Because what you want to do in terms of the bell curve analogy is go to the front of the bell curve and be the top performer or the outperformer. And we do that in many, many industries. The first time we go into an industry because we're not paying attention to all the norms in the industry we're going for how do we create maximum value. So you want to find somebody that is all about maximizing value, not about industry standard deals that have been done, first of all. Secondly, you Want to find somebody that's very creative. This is a creative process. It's about marketing and strategy. It's not about here's all the numbers that have been done before. It's about how do you understand the value drivers in the business. That takes creative analytical ability. I know that sounds different, but both together analytical perspective on what's the metrics that drive a business for the strategic buyer, not the seller. See, that's the difference. And also then creativity to understand how it would fit. And you can imagine that. So you can tell that story, that strategic story to the buyers and then have them verify that. So those are two elements you need in a good advisor. Also, one of the negative signs of an advisor, if they say, well, I know these four private equity guys that have already done deals and we're going to go to them and I just interviewed somebody that we're looking at hiring yesterday who had been to and a deal didn't get done because they took it out to all these different private equity groups who started competing with each other and there was nobody at the table that was strategic. And so somebody that brings up the names of private equity groups that they know in the industry is not a good sign, Joe, because private equity guys, I mean, just think about this. Want to buy low, you want to sell high. So how would a private equity convince your advisor to allow your business to be sold at a lower price? It's quite natural in the industry. They would say, well, you have this fee you're getting for your client, but we'll give you the resale, Joe, we'll give you the resale. That's two fees for that advisor. So it's quite a temptation to go to private equity because private equity would do a deal faster. It might be lower, but it's more assured. And because they're not, I'll get into the strategic issues in a second. They're not involved with strategic operations issues and they'll do a deal quickly, but they'll do it at a lower multiple than the strategic they're eventually going to sell to. So what you want is an advisor that's going to talk about understanding strategy, understanding positioning and marketing as you do and how to position your business with strategic buyers and understands how those buyers think. These are corporate people that don't want to make a mistake. Imagine being a corporate person and you're a man or woman in this. Looking at this, saying, wow, I could really put my. I could do great for my company and make a name for myself. And making this Big acquisition. The downside is true too. They don't want to make a mistake. So you want an advisor to understand strategy so they understand how to work with a strategic buyer in a big corporation and help them be assured they won't make a mistake because that'll advance your client's positioning. Now, in terms of the problems with strategics the private equity brings up all the time. If you have a good advisor that can show you as a seller, they understand these, then you're in good hands. And that'll be, how quickly can a strategic get a deal done? Well, a good advisor understands how they operate and knows there has to be various owners that are willing and able to do it and test the buyers for their willingness. That's corporate willingness. That's to say it's in the business plan. There's allocation of capital to it and all that's there that, you know, can go quickly because you're. Because they're ready to go. And the ability is, you know, obviously the capital that's required that's owned by leadership in that business. So the ability of a collective directive mind of a big company is expressed in executives that are wanting to get the deal done, have the capacity to get it done. Understanding. Do the integration that you talked about before, when somebody understand this quickly, because I don't want to bore anybody, but when somebody understands this is helpful, all of that as an advisor and they have those conversations with you at the beginning and they're not actually trying to sell themselves. Here's another good sign. They're trying to understand what you really want as a seller and what those required outcomes are going to be and those preferred outcomes. So that when you actually talk to your advisor, you believe they're actually trying to understand what it is you want, not what they want and how to position that with the strengths of your business so that a buyer will give you what you want. Because they're seeing the strengths of your business as really a benefit to them.

Yeah, I think what you've done is you just demonstrated a lot of how much you know and secondly, how to help people in this whole process. And honestly, I can't imagine someone trying to do this that's never done it before and doesn't understand it without an advisor. In the same way, this is infinitely more complicated than exercising or working out. Right. But people would get a personal trainer even if they. Because they're just gonna. They're gonna work out probably better. They're gonna work out maybe harder. They're gonna be consistent with it when you take it to something at this level, I think trying to do this alone is. But this is what's so great about this interview though is I want people to have a foundational understanding of even thinking about this. I mean, my main goal for a lot of the people that are watching and listening to us right now is to even get them thinking about this asset in a different way than they're looking at now, which is your business. I mean, like people devote more time. Most entrepreneurs I know devote more time to their companies and their businesses and their entrepreneurial ambitions than anything else in their life. And they're so ill prepared on what the end game is.

Well, think about the six Ds that financial buyers look for. Death, which can come up in the family, not just yourself. Disease, divorce, which I saw somebody just last week in tears at a360 because they'd gotten divorced in December. They weren't expecting it. So death, disease, divorce, disability. I know somebody that fell off their gym in their house and broke their neck and they weren't expecting that. Disintermediation. There's things that can change in the marketplace. Sometimes there's a shift and you have too much debt. Sometimes there's disinterest that comes up because other things become more important in their lives. If any of those things happen, Joe, to a business owner, they're in a disadvantaged position when they go. If they haven't prepared themselves and they don't have a thought about who might be their advisor, who might be the strategic buyers and how they would engage in a process that's maybe a negative way to look at it, but being. Being thoughtful about it, you want to be as prepared as you possibly can. The other reason you need an advisor is if you're going to enter into not a full sale, you might think, you know what? I'd like to bring somebody else's capital to the table, take my capital out. I want to be the big dog in my industry that's going to go and buy as we were talking about my other competitors. But I want to do that as part of a big company, bigger role like I had where you actually stay inside of the buyer of your business. And I did for 10 years. I mean, I was an entre and became a corporate guy. And it was hard, it was different, but it was thrilling because we had a huge balance sheet, big, you know, lots of PhDs in the business that we could work with great ideas. And it was really, it was really a next step in growth for me, which Imagine something like that if that's going to happen and I didn't have an advisor and I got hurt in the process. But if you're going to stay involved, you want to be the good cop, the person they fall in love with as the seller of the business, and let the advisor be the hard negotiator. And as I explain to clients all the time, and our team always explains to them, you want an advisor. So you're the appeal level, Joe. You get to the end of. Like the guy that bought John's company, he said, rob, I'm an Alaska. It was on Easter Sunday, remember? Because he insisted on doing a call on Easter Sunday. So I'll never forget it. And he said, rob, I am stretched like an elastic. And we've got. And John's like, you can't take it any further. You can't go. I said, john, when I've taken it too far, they're gonna phone you and say, get your dogs out of here. We're done. And they're gonna call you. You're the appeal level as the client, so you need that advisor. As this buyer said, stretch the elastic as far as you can till it's just about to snap in terms of valuation, in this case, 300% of what would have been the normal purchase price. And then he'll say. And John was on the phone listening. He's like, rob, that's enough. He said, it's not enough. You know why it wasn't enough? Because in this case, they didn't understand that we were as thorough as we were. And they announced the purchase of his company on Wall street before we finished negotiating.

Wow. Okay.

So he did have some more room in that elastic. We had one or two.

You understood that? No. I'll tell you, though, that is such great awareness to have. And what. You know, I mean, there's a lot of things that I'm getting out of this, but one of the things I'm getting out of this is you don't know what you don't know. And you want to bring in the right. Who's that actually do know this? Because you are. Best case scenario, you're going to get a lot more value and a lot more money and a lot more things that you probably don't even know are available. It's not just revenue. There's other things.

Let me tell you one story that can illustrate that. Can I do that? And it won an award for the best sell side, which we didn't apply for. And it was a client who said, I want $40 million from business. Different client. I want 40 million from business. He'd had an offer from a private Equity Group for 30 million, so he thought he'd add 10. He knew his brother would split. They didn't have any excess cash. They'd just gotten into profitability. And they were in the. Well, I won't say the industry because I don't want. It's a private. Everything's confidential. But wait till you hear these numbers. So he did not know what he didn't know other than he was told by his coach to hire us. And I thank the coach for that because together we create a lot of value. He's a very smart guy. And he said, my competitors, I can buy for two or three times profit in cash because they're small mom pods. They just want to get out. And when I put them in my. Then look at four wall profitability, that is you take out all the other costs because this was in a retail industry. And you bring it into your. He's this gigi buyer and he can actually recover a lot of that, probably half of that. So now he's down to paying from his perspective, Joe, because there's a multiple from the seller's perspective, which we talk about, but we also know there's a reduced multiple from the buyers. It costs the slm, it costs them less to buy you than the seller knows, because they're taking the synergies out. They're taking all the cost synergies out in this case, and they increase the sales. So there's sales synergies that the buyer will calculate and cost synergies. So in this case, you could buy them from a ma and pa sales, one or two storefronts, maybe up to. To 10 or 20. And he would bring those into his operation and those he would be effectively buying for say, one and a half times the profit. We then found a strategic that was in Japan that offered seven to nine times. So we're saying, and we have a document saying we're going to buy this whole operation for seven to nine times. We're hearing nine times, and we actually got it to 10 times. And he's able to buy them for that much smaller amount. So that entire delta times, all the purchases he could do, he's able to keep. And we were able to provide a currency because the buyer is saying, I'm going to buy at this level. We can tell the sellers, hey, this is for real. He's selling to these guys. We're the advisor. We have the contract so he could buy those people with very little money because we give them the first cash out of that sale. And so he was able to make a huge increase in the value. His competitor came to us. Remember, we had dinner, sorry, lunch in New York. And I said, you know, you have no money to buy this. Why are we having lunch? And he brought three more people. So we had to expand the table. And I had put the synergies. I had a small piece of paper because it was the Harvard Club in New York and not allowed to have papers out. And I took the paper out and I said to them, you know, we can't put paper down here, but you guys are making 30 million of EBITDA. Our client's making 30 million, but I think we can find another 30 million of EBITDA if we were to combine the two of you and then sell to the strategic. And we did that and got it up to 90 million of EBITDA before it was sold. And so I'm not going to give you the outcome of the numbers, but it was massive.

Wow.

Hundreds of millions of dollars. Not the full.

And so they're looking at, well, we're hoping we're going to split $40 million, but now we're hundreds of millions.

Yeah, that's so fast. And right now that business is making almost 200 million of profit. Really? Yeah.

Wow. That is true.

And the client still owns a piece of it that we negotiated for it the last month. Minutes.

If an entrepreneur is looking to sell their company, how should they think about their team dynamic and leadership team? Because everyone has people that work for them. They have different individuals. I imagine in most cases, the leadership team, or whatever you want to call it within any organization, it's not just the person who owns it that is having to make decisions or work with whoever they're working with.

Well, I guess I would, off the top of my head, say three things. First of all, look at your management team as a team that will be able to operate the business without you. That's what a buyer wants to see. So whatever you can do to increase the strength of your management team and whatever you can do. And as one of the coaches that I respect a lot says, good isn't good enough. It needs to be great. You need to have a great management team. And so if you're on the fence, you know, they always say that you never fired anyone too early. If there's somebody that is really not performing in your management team, you're looking forward. Well, at any rate, I would Say a coach would say, you should act on that. But certainly if you're going towards a sale, you've got to take the weak players out, replace them with strong players as far ahead of time as you can so that they're really strong. When you can imagine, imagine this. The buyer comes in and you're sitting at a table, which is the way it happens. And that's the management presentation is what they call. It's one of the stages in the sale process. Your management has to be able to answer every question about the business. You can observe it from the side, but you can't answer the questions. Imagine that you'd have a cfo, you'd have a coo, you'd have an IT lead. Whatever you need for that business, Joe, to operate such that management team can be perceived as operating without, even if you're helping them a little, you want to be able to sit through that management presentation and convince the buyer that this team can operate the business independently. So that's the first thing. The second thing is, well, I guess the first is have a really strong team. Secondly, make sure you can present them as operating separately from you. And thirdly, Joe, they need to be incented. So we will not take a mandate on if the CFO and the CEO of the organization and maybe other parts of the management team are not incented. They need to be on that hockey stick, too. They need to win when you win as the seller. So you want to think about what's meaningful. I've seen all different levels. Maybe it's a million dollars or $2 million, or maybe it's enough if you're in another part of the world, just to pay off their mortgage completely so that when they go home and tell their spouse, I'm doing extra work and the CFO is doing extra work, is likely going to lose their job. That there's enough of a win there. And the CEO potentially as well. Although the entrepreneur often wants to take them with them. They need to win in the transaction, Joe, so that when you're not there, that you will know they're making the right decisions and answering the questions. They need to get through the due diligence in the end and at the beginning to get that buyer to fall in love. And I guess the last thing I would say about your management team is that you want to be thoughtful and careful about when and if you tell them. And that's in each case, it's independent. It depends on the outcomes you want and what kind of a deal you're looking for and how important the management team is to that. In most cases you want to involve the CFO and the CEO, but you want to be really careful about how far the knowledge goes because people will leave if they think there's not a future for them. And then you're stuck trying to sell a company with a hobbled management team. So you have to be very careful. On the other hand, if they find out halfway through your process you have been honest with them, you've got a problem. So it takes experience to know when and how to involve the management team. But your advisor should help with that.

What's the ramp up time before someone's going to literally, you got people that are watching this right now and they're thinking, okay, if I really want to sell my company, how much Runway do I need? Need in order to properly prepare myself? What's the, you know, obviously the minimum. I mean, because the maximum you can be preparing for this for 20 years, right?

Yeah. A process to strategics takes say nine months on. I mean you can do some in six months if they're quick, if you already have them identified or even less. We've done them in less if they're identified and they're ready to go, but it can take a year. That's the process of actually running it. And if the client's not ready and nothing's ready, it might take a bit more than that. If clients start preparing a couple of years in advance, they get the management team set, they get to make sure the statements are audited. If private equity is going to be involved, which we don't advise up front, but then you do a quality of earnings maybe. And there's other preparatory steps that you can do in terms of getting the data room ready and doing all kinds of other work ahead of time. So that when you get to the kickoff meeting, you're going out to market. You as the client can focus on the creativity of the interaction with the buyers, not on the preparation stuff. You have to have all your contracts in place, all your leases, all the basic stuff. Your CFO will often do that. The challenge with getting the whole team to do that is they'll start wondering what's going on. And never hold the meetings at your office because they see a business card from an M and a person. And that's not going to end well.

Right, Exactly.

And it is also prudent with your management teams to have a story for them that is we're going to go out making acquisitions, we're going to bring a Bunch of bankers in, they're going to be wearing suits, and they're going to try to assess and ask a whole bunch of questions to pull money together to make an acquisition so that your career is going to be better here. That's often what our clients are ready with when they're challenged on when to pull the trigger of telling the team so the team knows there's a strategic transaction going to happen. And then right at the end, it reverses. And as long as everybody's paid well and everybody's rewarded, they'll be all right with that, usually.

So I guess, sort of, because I could talk for you for another two hours and stuff, but I want to make sure as we bring to a close that we've got some of the fundamentals down that people would need to know. And I mean, I really think in terms of next steps, like, I wanted to speak to a lot of people that will watch this or listen to it, have businesses that are very contingent in their minds on them.

Yep.

Like, for instance, you take me as a personality to a degree, even though I've always done my best. I don't want to build Genius Network around me. I don't want to be known for Joe Polish. I want it to be known for the people that are in Genius Network. And it is a business that's heavily contingent upon me. I mean, I lead the groups, I run that sort of of stuff. And there's a lot of people that are even. You know, even though I have equity in a few companies and I'm part owner of different things that have nothing to do with me operationally, for the business that most people know of me, I'm the one running it. And there's a lot of authors, a lot of coaches, a lot of speakers, a lot of people who. They're the main, you know, they're the front person. They're. As you know, I have some marketing friends. They call it the Dancing Bear. How do you position and sell a Dancing Bear business? Because I think a lot of people. Well, I don't think I could ever sell my company because if I'm gone, the company's there. But you've seen this all the time. So how does someone think about that?

Yeah, that's a great question. It's going back to understanding, and this is a practice. I didn't realize that. Not that many people have. But finding somebody that understands strategic buyers and thinking about it yourself as well. Think about if, again, we were talking about that sale to a strategic buyer. Think about a buyer that would be able to take all the limitations in your business if you were to go away and do a SWOT analysis on your business, the weaknesses and the threats to your business that they would be the opposite of that they would actually be able to like there's only so many hours in the day for Joe. Well, what if it was a business that had global distribution for marketing and ideas that could be productized? What if there was a big group that was the best in the world at that and you decided you're going to retire in five years? Well what. And again we were having conversations last few days about clients very much like this in New York has a very large, almost a billion dollar business but it is reliant on him. And so the question that we're talking about that the strategic about is can in your example Joe come in and you know, take enough chips off the table that it's worthwhile that you're even if it all went wrong, you'd be happy. But that there's a five year period up until the time you're going to want to retire. Like in my case with the purchaser of my business, I stayed 10 years, I had a three year commitment and a lot of people say well that's an earn out and you can't trust that. But if you're good, if you're really good, if you've got intellectual property, you've got strengths that you know that would be unique in a distributed world of as I'm saying, person that could productize as an example because I know a little bit about your work, then you could have enough upfront that you're happy with that transaction. You could tell you test it this way. I think if it was me, I would look at all my clients, be able to proudly say now we're part of this global organization that does X, Y and Z and all of your members and say now you have this much more to offer. I have this much more to offer you as a member of the network because now we're global. And at the same time before you retire you can see from a legacy standpoint, as I've seen others do, that you've got the intellectual property captured, you've got it protected and it's being distributed in the world. So you're having a bigger impact.

I love it, I love it. That's super valuable. Imagine it's now after the sale. And let me say this too, I think at this point anyone that is really thinking about selling their business, I think you've given them enormously valuable advice and wisdom. Secondly, I think you've definitely made the point it's crazy to try to do this without an advisor. And third, if they've never thought about doing this at all, they're probably thinking about doing that. So let's just fast forward that you actually made this happen. It's after the sale. And what should entrepreneurs be prepared for?

That is a great question and I, I would highly advise and I've just recently coming out of our Abundance 360 event last week had one of our fellow IPOers say use him as an example. I really want to sell my business but I'm a bit afraid I'm not sure what I would do after and that is a huge issue. And so I think people need to be completely prepared for what they need to do after and they should have a coach. So I'm actually introducing them to a coach coach who will meet with him in LA and help him along. But I think that having a clear vision. So Cameron Harrell's vivid vision I think was that or painted picture. I can't remember. He'll shoot me for no, no.

But Cameron's, you know Brian Scudamore, you know from 1-800-GET junk as the founder they, they started which Cameron was the COO and they went through that whole process. I mean they're both friends of mine and Cameron has been a longtime Genius network member. He runs the COO alliance but he created Vivid Vision. He wrote a whole book on it. It's really cool. I've done interviews. People can watch that.

No, I love Cameron. Love you Cameron. Cameron is fantastic. That idea of a vivid vision for what you would do after the sale is important to be really clear on before you go into the sale process. And so in this particular client's case he wants to create a foundation so that all the learning he's had of helping employees be higher performers and be more comfortable at work he wants to create something that will be something like an employee recognition and support foundation so that he can take that out to the world. So he may focus on that or he may decide and he's deciding right now to only sell to a strategic that would bring him in to take his cultural passion and apply that to a much larger like multi billion. We're looking at a $20 billion organization that will be a natural buyer and we've talked about this, him and I. If you could take your experience from a sub $100 million deal, hopefully we'll get him 100 million. But we'll see. And you could take the impact that you've had with all of those lives, and what is your massively transformed purpose in this case is to affect hundreds of millions of people's lives through their work being more sustaining and more fulfilling and more rejuvenating actually coming from their work. And so if he could take that to a $20 billion global organization and be their chief cultural officer and design that, which also will benefit them in attracting high talent, you know, better talent, with our next generation who are more interested in those kinds of things, that would fulfill his own massively transformative purpose, as our friend Peter demanis says. And so he. So that's an example. But in all cases, and he has to choose between the two, or maybe he could do both. But in all cases, you, as an entrepreneur or as a business seller, should be very clear and have Cameron Herald's vivid vision. Your own vivid vision of what you're going to do after before you go into the process of selling the business. And the more energy you can give that, the more clarity you can give that, the more substantive planning you can give that, the more comfortable you'll be getting your deal done.

Totally. And by the way, one of the things that I really try to do with me being a genius networker is not only connect people with the people, but with the ideas, with the strategies, and even things like vivid vision. That's what ingenious network. We have networks of people that. One of the members is a gal named Jennifer Hootie who writes vivid visions with people. She'll do an interview process. She'll lay it out, she'll do all the graphics. And. And people are like, well, I want a vivid vision. I don't know how to do it. Well, you can read. You can learn how to do it by reading Cameron's book. Or if you just want a who, we have the who that can actually do it.

She's brilliant. I think she's wonderful. Yeah. Yeah. And I actually have a client we're going to work with now that will probably sell the world's largest corporation. And he has worked with her and loved the vision that she had laid out for him.

Yeah. So the whole point is there's a lot of stuff to be done.

And he sat beside me at Genius now.

Oh. Which is awesome.

He's one of your guys.

Which is awesome. We try to do that. We try to connect people so that when you get a room full of industry transformers, you don't even need props. You just need smart people. With ambition and you need to have great conversations and then amazing things.

Congratulations, Joe, on your work. Genius Network is genius.

Thank you. I think the most genius thing that I've ever done because people ask, are you a genius? I'm like, I would never call myself a genius. If there's anything that I've done that's really smart is I've been able to just curate enormously smart people and bring them together.

And yeah, you should be proud of that. It's an incredible success.

I am. Thank you. Thank you.

Okay.

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