Part 3 - Why Selling Your Business Could Be Your Best Move

Welcome to this edition of the Million Dollar Mastermind podcast. This is where we pick the brains of high achievers from all walks of life and get their hard earned real world insights on winning. I'm your host, Larry Wydell.

Now talk about, let's compress the time frames from when you started hiring people to when you made this sale. You know, you had something big enough to actually sell. How long was that?

So I took offers on the sale with a smaller, it took about five years before people would buy it, but I just wasn't at the number that I wanted. And so it was really from the first hire to the day that we sold was about eight and a half years. Now I wasn't, in the first few years I wasn't even thinking about selling the business. I didn't even know what selling a business was. I, it was like a foreign concept to me at that point. But what happened was a few years in, a friend of mine that I had met on some top producer trips was a little bit further along with me and he was out of Austin, Texas and he sold his business. And then I heard the number, $50 million and I thought, holy hell, hello people. People will pay that much money for what we're doing, for what we're building here, you know. And then he walked away from it day one. Now I didn't do that. I sold half and then stayed. But it was an interesting concept. And so then I started learning about EBITDA and, and different industry multiples and those concepts. So basically.

Yeah, explain that because that doesn't come up. Yeah, that doesn't come up that often on this.

Yeah, so when I started looking at, you know, when people price businesses, they're looking at earnings and earnings is EBITDA earnings before interest, taxes, depreciation and amortization. And when people, when you start looking at that, you can find out different industries have different multiples and financial services actually can have a really strong multiples depending especially if they have renewal based income. And so in ours, you know, it's at the top, it's like 18x. So that's like the top platform companies. But you know, in the middle we're talking about 10, 11x at where we were based on our size. So you start thinking you can basically, you know, get, if you could get 10 years worth of your earnings for your business tomorrow. And earnings, you know, closely relative to net revenue is a little bit different. But if you're like, let's say I netted $5 million last year and somebody said I'll give you 10 years worth of that tomorrow for your business. But then there's then the concept of the fact that you don't. You're paying capital gains tax on that earnings too. So if you're at a 37% federal tax bracket and capital gains is 20, so yes, you're getting 10 years worth of it, but you're also paying almost half the taxes. So it's almost, it's almost like you're getting an extra few couple of years out of that tax break too. So it can be, it can get to the point where it's difficult to turn down. And you, you now ego can enter the equation because when you start building something great, you're thinking, you know, I don't want to sell this. I'll build it bigger and bigger and bigger. But, you know, everybody has a point where they think, I better lock in some of this success for my family. Unless they have no family and their ego is all they're married to, then, then maybe they never sell.

Right.

But you know, you start getting those offers, it's difficult to turn some of them down.

You made the statement that you got excited from learning the things you learned in this process. And you said one of the reasons rationales for selling was, I see how this works now, and I see some other industries, some other places I could put this to work and maybe build it half the time. Talk about that.

Yeah. So different businesses or different verticals or niches or whatever you want to call it, they all have different problems. Some. Sometimes you have a problem with finding people, sometimes you have a problem with marketing, sometimes you have a problem with margins or inventory, or there's just different types of problems based on different niches. But once you understand that these problems can all be solved through technology and digital marketing and all these different concepts, then you can take the knowledge you learned on one vertical and it might not be a hundred percent applied to another, but it's, let's call it 80, 90%. All I have to do is then go in and fill in those few gaps and I could do things faster because my first several years I was just learning this stuff, right? Like I was learning about having keyman dependency issues or having having a replicable charted process or all these different things. Like if I was going into a business now, in the future, starting a whole new one, I would start out with a lot of fundamental things. And it's not that I recommend everyone do that, because when you don't know what you don't know, you Just got to go out there and do some shit. You got to make the money come in. But now that I wouldn't be.

Well, it's making money coming in yourself on the front end that shows you how to develop your systems and your.

Processes and that's right.

But it also teaches you how to teach them.

That's right. That's right. Yeah. And so, and, and now like if I was going to go and start a different vertical in the future or a different business, I don't need the money off of the business either. So there's not as much haste involved in me going out and creating the revenue necessarily. I can take a little bit of time to make sure I have the right fundamentals in place so that I could, when I start pumping the revenue, it's scalable, fast, and I have a process. And of course, like Mike Tyson says, everybody's got a plan until they get punched in the face. Well, once I get punched with something, okay, let's figure that out and rebound and keep scaling. But basically the concept would be if I was going to go into another vertical, I would have a five year plan to turn around and be able to sell that business. Because that's, that's now I see myself as having the ability to go in and build those businesses and then sell them again. And it might be that I build one eventually and don't want to sell it, but I would build it to sell. And then if you build the business with the idea that you're going to sell it, you're probably building a business that operates without you. And so at some point if I can't sell it, at least I've built a good business that can then operate without me so that I can start to build in that mid level management or that executive that runs it. And I just sit around, sit back as the investor, which is really what everybody's trying to get to. Right. It's right having your money work for you. So I'm never gonna stop doing stuff like this though. Cause I enjoy that part of it. I do, I do enjoy trying to help other people learn those concepts faster.

For you, you talked about from Ty to tie company different kinds sales events or award trips or things like that where you're off with peers from other parts of the country. Where's your ongoing learning come from, would you say? Continuing it, just listening to tapes, podcasts, read books and solving problems as they come up one by one.

I would say there's always a little bit of early on. It's funny that you asked this because the other day someone asked me how often I listen to podcasts now. And I think that I'll listen to very specific content now. Like I'll, if I, if there's something I want to learn, I will go find exactly that and list to it. So I'm not as much now listening to long form content, although I did in the beginning. And I think a lot of that's because you didn't know what you're looking for. You needed to listen to a lot of content to find those things that you were looking for. But then the next level for me, I think was going to a lot of networking events. And look, I'll be the first to admit there's a lot of events that aren't great. But if you just understand that when you go to the event, it's not as much always about what's on stage or who, what they're selling. It's about meeting the other people there and learning from those people. So I would go to industry events or even if they weren't exactly in the industry, like I might have been Medicare health insurance focused, but I'd go to a life insurance industry event or an annuity like Finra Financial Services, Financial Advisor events. And what I was really looking for was marketing ideas and operational ideas. And eventually I started looking for private equity groups and building those contacts. And I built a lot of friendships with people that we would then share information. And so now a lot of people, people can skip that and they can do things like join a mastermind, join a take a course, join a mastermind. And not all masterminds and courses are created equal, but they're extremely valuable. What I was having to do back then, it felt like, was build my own mastermind one person at a time. And I still have these friendships. A bunch of these guys now have sold their businesses. It's funny, like, how many of the friends that I made back then at these events were all kind of chasing the same thing. And now several of us have actually sold our businesses. Several of us sold 100% of the business, but we were all on that journey together. Yeah, if you go, I go to any other circle. It's pretty rare that somebody sold a business, right? But in the circle that we built ourselves, a bunch of us did it because we all began to work towards the same goal, right? So it's amazing how if you can build yourself a circle of people aiming towards something, how far you all pull each other in the same direction.

For those of you who are sick and tired of fooling around and are dead serious about wanting to move up fast. I've got something especially for you. I've combined the best insights from over 40 years in business and making $70 million in income and compressed them into a free webinar. That's right, it's a free resource. If you want to find out exactly what, what the concepts are that I use in coaching million dollar earners, Register now@widelawnwinning.com you'll discover the five part framework used by so many to reach their financial, personal and professional goals. You can find that link in this episode's show notes.

And I don't think on the way up you realize how common an idea that is in all areas of life. Like for me I bore quickly. So I'm interested in a thousand things and I've been involved in a thousand things in my life but I'll always. My formula is to find the absolute best I can find and go pick their brain and go get the best equipment, the best advice, the best person and if possible get one on one time with. It's amazing how many people that you can get to give you and if you can't get them to give you the time, arrange a consult for a relatively small amount of money you can get almost the top of just about any world and then in an hour you can get again if you hit them with a pepper with the specific questions you can get probably all the advice you can use for the next year or something. But people if you're in fishing, you know, you're Mississippi, you're fishing and hunting, well, you're going to get your best, you know, the, the guys in the best store. You're not going to go to the crappiest gun store or fishing store. You're going to go to the best. The guys have been doing it for 30 years. They know where all the honey holes are and you know, mastermind similar type thing and. But do that in the ideas, do that in business, right?

And there's this myth that people that have, have found immense success or have some sort of number that seems big to someone. Like somebody would look at ours and they might think like oh well Justin made $35 million this year or whatever that is. Like why would he talk to me? First of all to me that's like first bite at the apple like there's all these other days. But second of all, I get such a great amount of satisfaction of helping other people and talking about it and doing things like this. That it's not, it's not like somebody makes a lot of money and they just go sit on the beach forever. I can only sit on the beach for a day or two before I get bored out of my mind and want to go do something else. And so I just think if just because someone is willing to give you advice doesn't mean that advice isn't valuable. It's. Some people enjoy that part of it. And you're right. I mean, after we, after we had that liquidity event in March of this year, I spent $260,000 on masterminds and personal coaching from people that were, that, you know, have done things that I not, it's not all money related. Some of them had built online presences that were much larger than mine. Some of them had done that, but then also had exited businesses for 150. So it was always like, what can I learn by getting around these people and joining these masterminds that they were paid?

So let's review that for just a minute. You make the sale, you know, it's coming in, it's behind you now. And then what did you do? You started looking, started saying, now I've got some resources and I've got a little more time maybe and I want to learn more. So how did you go about finding the people that again in your niche that you were, would really be the most help to you?

So I went at this time and I, in this, maybe I felt like I was pretty, I had become a whale in my niche as far as an individual goes with some businesses in it that were larger than ours. But there weren't really people that I was, I knew of that I could learn much from other than the people that I already get information from because we have a friendship at this point.

Yeah.

So I, I actually went broader and just started looking for people that I had followed online or just some of the, the big personalities out there that had masterminds. And we joined one called BMLP that meets a few times a year in person, does monthly classes online, has a curriculum. But one of the cool things is you join this community of business owners that the business owners that are in it are, you know, doing 50, 60, 70, $100 million a year in revenue. And so the members of the Mastermind are just as valuable as the people leading the mastermind to build relationships. You know, they all know something that you don't know. Like there's just so many things to learn. They all know something and, and they're so willing to Share, because most of them aren't competing with one another anyway. They'll be in completely different. There'll be Landscape Architects&H VAC companies and accounting firms and all kinds of stuff. I had one guy who was a private plane broker and I learned lot about that from him. Just like the way his process and stuff and. But you learn from these people and, and you never know. Sometimes you'll learn some things that you might not ever use, and then other times you'll learn things that are just directly, practically applicable. But it also becomes a group of your friends because who the hell else, you know, once you reach certain levels, every level of success that you reach, you know, you have to develop friendships with people that understand that. You know, I live in a community that's. There's a lot of surgeons in my neighborhood and I love surgeons. If I need a good surgeon, I'm glad I have friends that are surgeons that I think are good. But we don't speak the same language. Not that they're not very successful people and good, great people, but, you know, being a business owner and selling a business and doing all that, it puts you in this different, this different category. And sometimes you got to go out and find those communities. They're not always going to be right in your backyard. So that's why I do it, that it's always learning. It's, what am I going to do? Hire a therapist? You know, they're not going to be able to teach me anything. Most of the time I need.

I think that's why a lot of these super famous celebrity entertainer, whatever, they got the therapist, because they, they don't have people they can talk with, interact with. They don't. And the great thing about being an entrepreneur in business, when you get an idea, you can try it. But I've got my thing about why billionaires bitch. Because the ones that have sold out, they're smarter than the rest of us because otherwise they wouldn't have been able to become a billionaire. However they did it, they obviously, if they weren't before on the way up, once they got there, by that time they were probably pretty smart. And they see things. And when you see things, you want to fix it because it bothers you more than other people. It's like that means. But if you sold out. Bill Gates went back to his office the day after he sold out and, you know, work around his office and everything, and he, he was in there getting some papers together and shuffling, returning phone calls and he heard the guys he had left in Charge talking outside of his door, some new ideas and everything. And it was something he had been involved in up until the day before. And so he wanted to go. He went out and he said, there's one thing about what you're talking about. Bum, bum, bum, bum, bum is another thing you might think about. When he gave him a couple other ideas, he went back in his office and he said, I could tell they just roll their eyes like I'm, I'm history, care less what I thought. They're in charge now.

That's the way it is. I mean, I think I've heard similar, similar kind of story. I mean, you think about all those, all the documentaries you watch about, like, Steve Jobs and, and getting the way he came out of Apple and came back in, and then Tim Cook taking it over and everything. It's the same thing. And I do enjoy reading about those paths of those people and aspiring to that, because I just feel like for people that accomplish great things, in pursuit of that next hurdle or task or project becomes the purpose and it drives you. It gives you the happiness, the sense of fulfillment. That's what you're always chasing, this idea that somebody's going to make money and then go and sit somewhere and do nothing. I haven't found people that make an exceptional amount of money, typically, especially if they, if they earned it and they built something to do it, they want to build the next thing or they want to do like they need some kind of purpose or project. Even the billionaires you're talking about, a lot of times they, they start some kind of huge foundation like the Bill and Melinda Gates foundation or so many of these presidents and things like, they don't just go sit around and do nothing.

Well, it's a thing about, you need to give and it's what you've done. Well, with this, and I'm sure many other things, is you put yourself in position to continue to stay inspired because the easiest thing is to get bored and get into a rut and get better, or you just kind of grind to a halt. Unfortunately, if you're in a leadership position, there's no way of stopping that from spreading to your organization. So you're darn well better. Make sure if you're in charge of something and people actually see you, hear your voice, look at your face, see your eyes, you darn well better be inspired about life and excited about what you're doing, because you're either going to inspire people or you're going to drag them down and there's just no way to hide it. The saddest people say, well, I haven't tried. Not good right now, but you know, I'm keeping. Nobody knows. No, it's like everybody knows.

Everybody knows.

Everybody always knows if there's something wrong, you know what I'm saying? And so keep doing things. This is why I would encourage you going Forward at your 36 years old, and I'm 76. Okay. Yeah. I would encourage you follow your instincts and don't let yourself feel, ever feel guilty for taking time to do whatever in the world it is you get in your mind that you want to do that you think would be fun. You think it would be a change, it'd be interesting, it would be fun. Whatever you think that is, do it. And you don't have to tell anybody. Tell them if you want, but, you know, if you get criticized for it, they just don't know what they're talking about. But the byproduct of whatever it is is it renews you and so trust. You keep trusting your instincts because they've, they've worked out pretty good so far.

I, I'm telling you and I, and I think like, even having conversations like this and just getting around people who can help, that's why I'm such a big believer in getting around the right people and digesting the right information, keeping yourself in a positive head space, thinking about the future. And then there's so much good information out there and good, you know, leaders out there that they can help you not have to go through the hurdles of the past. Because I can imagine, like so many people in history that have dealt with things that now there's information on readily available on how to speed past that and get onto the next level without having to go through it in a more difficult way. So I appreciate that too, because, yeah, there's times where it's. Like I told my wife the other day, we could live anywhere right now. We can do. We can. The way we run the business, the way we can do, like, why do I feel you feel this, like, this inherent desire to be like, oh, I have to stay in this one location. I have to do these different things. But no, like, we can go and experience anything in life, so why would we wait? Obviously take care of my responsibilities, but we've built ourselves in a position where we can take care of those responsibilities while also living life to the fullest and doing it both at the same time.

Right.

So.

Right. It's only, you're only limited by how you, what you can figure out. The more you figure out, the more you can enjoy. And so you don't have to stay, you don't have to be limited. And congratulations on your accomplishments. I think that it's going to be fun to see what happens to you going forward because you're getting exposed to more and more great ideas and that should come out somewhere that's gonna. Somewhere down the road that's probably gonna come out in some other kind of accomplishment where you're putting. Creating something, putting other great people to work, accomplishing other great things. And so proud of you and appreciate you taking the time. I always give my guests chance to give the last word. And so what would you say? That you'd like people to walk away from this? That as a last thought?

Yeah. Well, just like you just said, you're only limited by what you can figure out. And so every step of the way so far, what. What I have been able to accomplish has been just kind of looking at the world 10ft in front of me and that horizon just keep going, you know, outwards. So tackle that goal that's right in front of you, and in the process, don't be afraid to move that goal post further down the road, because I truly believe that progress towards something bigger than yourself over time is really what life's all about. It's not about X number of dollars or this award or that award. It's about figuring things out, helping other people. If you want to keep a little score with money and different things on the side, that is helpful. But make it about that process. And if you guys get a chance, you can check out some of my stuff on justinbrock.com okay.

That's where they'll find it, right? Dustinbrock.com hey, thanks so much, Justin. This has been great.

Thank you, Larry.

Thank you for listening to the final part of this episode of the Million Dollar Mastermind podcast.

Great ideas, don't care who use them. If you're motivated to move up in a big way.

Right now, I've created a free training.

Video to remove the mysteries on how.

To set yourself up for big success. This is the information that has changed.

So many of our lives and it.

Can have the same impact on you. And the video is completely free. You'll find it@wearlyllonwinning.com join us over there.

And thanks for being part of our community.