A business owner who is the main revenue generator faces a problem: buyers won't pay much for a company that depends entirely on him. The speakers walk through a real example where the owner doesn't even know his profit margin, making the business nearly impossible to sell.
I just had a great conversation with this guy the other day, and he says to me, he says, I'm. I want to sell my business eventually. Like, I want to sell my business. I said, okay, phenomenal. So talk to me. You know, what's your number one thing? I'm recruiting. Okay, great. What are your splits? 80. I pay them 80 and I get 20. Okay, so what's your profit margin then? He didn't know his profit margin, but he had to sell. He himself sells a ton, a ton of homes. So the final question I asked him was, how are you going to sell your business if you are the number one money maker? You're. No one's going to ever buy your business. It isn't worth anything. After that was said, the phone was silent, and he couldn't get off the phone fast enough with me, and he didn't want to have the further conversation. And I was truly there to help because I can help him now based on the stuff that I learned. But I Out. I called him out in a way I didn't even really mean to call him out. I just asked the right questions and could not believe the answers. Shocking.
Yeah. And just so everyone gets it, you know, So a business conversation in any business, I can ask three questions to a business owner. And like, at the end of those three questions, I'm either, like, leaning in because there's something I can gain from, from and learn, or. Or I am, like, stepping back. And so for anyone that doesn't realize it, if you're paying out 80%, how much do you have left? 20%. Out of the 20% you have to cover leads, administrators, overhead, phone, rent, rent. You know what I mean? So you are not making any money. I promise you, that guy is losing money on his business and he's making up for it in production.
But he was very, very proud of all the agents that call him to be on his team. It's like, well, of course they do.
Yeah, sign me up.
