Simple Steps to Build a Sellable Business and Create Life-Changing Wealth with Carrie Kerpen

We don't start businesses because we think we want to sell them. You think about it like, I'm doing this because I'm passionate about it. I'm going to go into it and.

I'm going to be able to.

It's going to be great. And then, oh, by the way, if I sell it, it's an afterthought. But the reality is it's a real opportunity to make life changing wealth if you go about it the right way. Even if you're building a lifestyle business, they can take a lifestyle business and turn it into a life changing ass. Foreign.

Welcome to the earn your happy podcast.

Thank you so much, Lori. I'm so excited to be here with you.

It is so much fun to have you here in person. There's nothing like an in person podcast.

Well, the last time I saw you was in person and you were wearing like a really cool neon outfit and you were on stage and I was like, she is just the baddest there is. Like, I just, I mean. Oh, so stop. Go on. I'm so happy to be reunited. I, I just, I'm in awe of.

Oh my gosh. Well, you totally rearranged your schedule to be here. You're like on a world tour right now. You guys having a book out is, is no joke. Like, you are on, you're. You're in a marathon right now. Well, a massive sprint.

Yes, a massive sprint. It's a sprint and it is just go, go, go for right in this moment. But sometimes we have those moments, right? Sometimes you have like the speed and then the slow.

I think that's so important for people to hear because they see people out on their book tours and like, oh, my God, that's the dream. It's incredible. And let me tell you, my dream did not actually feel good.

I know, it's pretty, it's actually pretty grueling. You're right. It's tough. And it's. You also, like, you can feel very exposed too because like you're, you're just, you're constantly talking about the book. You're constantly like, me, me, me, my book, my book, my book. It's, it's, it's definitely. It feels awkward, but, you know, it's. But what's wonderful about it is getting to be with people like you. Yeah.

Oh, my gosh. Well, this is amazing for me as well. I love when people have a book because I'm like, yeah, I get to sit and really like talk about where they're at too. And, and I know that journey of bringing a book to life is absolutely massive. It changes who you are, it changes you on the other side. But in order for someone to even want a book, it means that they have had a message in their life or a journey that they've been on that is like, this is a huge part of my entire story. Like, and it's so important for women to know. And I know that with your book the Whisper Way, it's about helping women make life changing money and selling a business so that they can have life changing money and completely, you know, have freedom and build things to sell. And I think that growing up I did not understand the concept of building something to sell.

That's right.

I didn't even, even starting businesses. I didn't understand that at all. So why don't we start there of what, what was like the moment where you're like, I have to write this book.

Well, the moment that I had to write this book was after the grueling 14 year journey of building an agency at first together with my husband, and then me taking it across the finish line and just feeling really, really alone in the process and feeling like, just like you said, like, we don't start businesses because we think we want to sell them.

Yeah.

It's like people flip houses. But you don't think about it like flipping businesses.

Right.

You think about it like, I'm doing this because I'm passionate about it. I'm going to go into it and.

I'm going to be able to, it's.

Going to be great. And then, oh, by the way, if I sell it, it's an afterthought. But the reality is it's a real opportunity to make life changing wealth if you go about it the right way. Even if you're building a lifestyle business. That's the thing. Like I want to, I want, especially for women, I want them to understand that they can take a lifestyle business and turn it into a life changing asset. I love that.

So my biggest question for you then is what types of businesses can actually be built to sell?

Every single business can be built to sell.

Really?

Including personal brands? Yes. Wow.

Because we hear opposite a lot of the time. We hear if your brand is built too much around you, you're not going to be able to sell it.

It's not to say if your brand is built too much around you, you will be worth either significantly less or very little. But that's not to say that if you build a brand around you, but you have systems to support that. And you have programs to support that that can be transferable, then it is a highly monetizable asset at exit. So it's not really about, oh, it's you and you're the brand, Lori. It's about what's behind the brand. It's about what people are buying. And are you able to create that in a way that it could be transferable to another person's personal brand? Does that make sense? Yeah, totally. Yeah. So it's like, it's really almost any business if you incorporate the. The right pieces can be made into a. A truly sellable asset.

Okay, I think we need to start talking about the right pieces.

I'm ready.

Okay. Do we start with the end in mind?

We always start with the end in mind. But, Lori, I don't know if you know that. Whisper stands for the seven tenets of building the most highly sellable business.

Okay.

And it does start with the end, because it always starts with why. So each letter corresponds with one of the pieces needed to build a sellable business. And we start with why. So why do you want to sell it? Is it because you are done or dead inside? Is it because you want to sell it for a hundred million dollars? And if you want to sell it for a hundred million dollars, why'd you get to that number? Why'd you pick it? Totally, like, what. What's the significance? And figuring out and understanding your why is the most important piece as we get into building this. Because once we know why, if we say, okay, I know my number, and I know why I want that number to be my number, then we can build against that, and we can go to the H, which is how. And how is about really understanding multiples. Understanding how businesses are valued today, how a personal brand is valued versus a coaching business versus a product business like Glosi. You look at any of those things, they're all valued differently. So understanding the multiples and how to work within them is really important. So that's your why and your how.

Just for anyone with multiples. Because I know when I first started, I was like, okay, multiples.

You got it.

What exactly does that mean for everyone? If they were to be like, okay, how do I find out what the multiple of my personal brand is?

Yeah. Yep. So generally, businesses are valued on a multiple of ebitda. And what's ebitda? It's earnings before interest, taxes, depreciation, and amortization. But don't even think about that. Think about it like you're valued on a multiple of what you Earn at the end of the day. So if your business does $3 million and you make a million dollars at the end, that's your profit.

Yep.

You're going to be worth a multiple of that. Okay. The market determines that multiple. So in other words, there's a range for every type of business. I'll give you an example. Let's say you have a consulting agency. You're going to be worth somewhere between four to eight times your earnings. So in that same example, that business is worth between 4 and 8 million dollars. Now, if you are really smart and planning with the end in mind, you will build a business that is worth 8 and probably beyond versus if you're not thinking about this stuff and you don't put the practices in place, you're going to be at the four or way below. Okay. So the idea is to understand your multiples and then work towards getting to the top of the range or even beyond. Because at the end of the day, Lori, the reality is businesses are worth whatever someone will pay for them. Meaning if no one wants your business, your business is worth nothing. If everybody wants your business, the multiples could go out the window. But how, how you find multiples is easy. There's a lot of places you can go to. They got acquired dot com, that's a great content site that has all kinds of multiple reports, pitchbook a lot. You can even just literally Google like your type of business, like hair salon multiples. And you can go, it'll come right up for you. All right, next one is income. So all income is not created equal. You could that same example I gave you, somebody who's doing $3 million of revenue. It's not always the same value. Because if it's $3 million from one client and one client goes away. Oh, that's very different than $3 million from lots and lots of different clients.

Interesting.

Yeah. If you strengthen your income and you understand how to diversify your revenue, really important think about how to like, de risk everything. Everything in selling a business is like, how do I make sure that someone buying this feels like they're buying something that they can carry on?

Yeah.

And if you build your income that way, it's really the best way to do it. I like to say you keep your income red, recurring, expected and diversified, meaning we can forecast it with ease. We know that clients or products repeat sales and we know that we have more than one way to make money. Whether it's something like if you're selling at more than one retailer or you have you Know, lots of different products that you offer.

That's so interesting because I've heard of a few companies.

Yeah.

That, you know, they were huge. They were doing so incredible. Like, one of them comes to mind and, and they were in Starbucks and that was where a lot of their business came from. And it shut off and it just.

Made them kind of diversification is so, so, so important.

So you could be having a huge income come in that could look amazing. You could be really excited.

You could think you're the bomb. Yeah. It doesn't matter if, if it's one retailer or one client or, you know, or one product. And then all of a sudden, AI comes in and wipes that product right off. You have to diversify. And the thing is, there's so many ways to do it. For every business, there are so, so many ways to do it. But it's important to look at. So you've got your, why, your how, your income. Okay, then we've got your secret sauce. That's what makes you different. That's what, that's the thing. Like, if you can build a moat, if you can build something that really, truly makes you different, that's what, like, sort of throws the multiples completely out window. And the problem with the secret sauce is we all like to say we're different. We're different because we're different, because we're the best people. We're different. But, like, really looking at. How can you quantify that secret sauce? If you can think about. So, like one example, when we had our agency, we used to survey our customers. So our brand promise was we were a social media agency. We were one of the first. We started in 2007 and one of the. What we determined was our. Our secret toss was that we offered faster service because you had to be fast in social media from the smartest in social, because we didn't do anything but social media with likability guaranteed, because that was our name. And so we surveyed.

No pressure.

No pressure. You have to always be likable. So we, we surveyed our clients every six months and we said, do you still find us? Are we faster than the other agencies you work with? Are we the people you go to right away when you have a question on, like, the nuances of social and like, do you truly still like working with us? And we would hold ourselves accountable to that to make sure that what we were saying made us different actually wasn't bullshit, if that makes sense.

Totally.

So. So the secret sauce, when you have something that really makes you very Special. That's what's going to help really elevate you towards the much higher end of that multiple.

What would you say to someone who's like, I don't know what my secret sauce is. Like, I know there's something there. My community is like, you know, super deep. Like, I know these things I'm doing, these masterminds or these events, or this is special. But how do I quantify?

So there's a bunch of exercises in the book for this, but one of the things that I recommend is, you know, start by asking your customers what they think makes you different. Then take a look at your employees and ask them if you have employees, what do you. Why are you here? What is it that. What is it that inspires you, that motivates you? Like, start surveying. And then this is, like, a little different. I think I look at the competition, and then I look for the white space that they're not in. Like, I look at what they say, their secret thoughts, and I'm like, okay, it's anything but that. Like, I'm going to not be that. I have to be my own angle, and I have to find that white space to really tap into that will make me totally, totally different. An interesting thing that I did with the next business when I launched the whisper group, was I built an exit readiness advisory practice exclusively for women. So I teach women how to build soluble businesses, and then ultimately I help them sell it. At the time, everybody thought I was crazy for. For doing that. Just women, you know, that. Oh, do you just work with women? I said, no. Well, I mean, I'll always help you. But primarily, I wanted to build that focus. And then I also wanted to add in women who had exited to help advise these women. That created a moat that nobody else could. Like, nobody else could touch. Because we built that largest community, the largest community of exited female founders. It couldn't be replicated. And so when I found that, I was like, okay, this is the secret sauce for that business.

Yeah.

Wow.

Okay.

That's fun.

Okay, what's the next level?

Profit. Okay. Okay, go into profit. You got. We're measured on profit. Revenue is vanity. Profit is sanity. You want to make sure that your profit is where it's at. Then you've got your executive team or your ecosystems, if you're a solopreneur. And then the last piece is really about your roar factor. That is your confidence. That is how you're going to sit in a room in due diligence in a room which is almost always filled with men tearing apart your business to shreds. And you have to be able to stand there and take it and fight for the business, because otherwise you will come out earning much less than you thought you were going to earn.

Oh, interesting. Okay. Share more about that so people can understand.

Okay. So when you go to sell your business.

Yep.

You're ready. You go, you get a valuation, you think you know what you're worth. As I told you before, you're worth really what the market will bear. You go out, you say, okay, I want to sell my business. Now you start getting offers. You get an offer that dazzles you. You're like, this is great. This is gonna be amazing. You get a letter of intent. That's a letter that's gonna say, oh, you're worth this much. Yay.

We love you.

We love your business. Okay. You sign it, you get into due diligence. That's when they start to rip apart your books and look at everything that's there and say, this actually isn't what I thought it was. So I'm gonna adjust that offer. So what I want and teach women to do is before the loi, go through all the negotiating, go through every piece of the finances, go through everything that you can to present it as clearly as possible and make that loi as detailed as possible to protect you from getting any kind of reduction in your sale value.

How do they. How do they do that before? Like, how do we build?

Yeah.

With that particular portion in mind.

Yeah.

How do we start?

So you know that the way that you do that is to know your numbers early and often. Having a really keen understanding of your P and L, making sure that you understand in your business, like, stuff you run through the business that isn't really used for the business, which everybody. Everybody does. But, you know, you really want to have a clear understanding. You want to have a clear understanding of your customer acquisition costs, of what an acquirer is going to need to. Once they take on that business, what are they going to need to build that business going forward? And I think having those ideas are really, really important. So, like, just really before you go in, say to yourself, if I were buying this business tomorrow, what would I need to keep it going? If I weren't here, what would I need? I'm handing it over. What would they need? To be able to really take it over and make money? Okay.

This makes total sense because you are about to give it away. You're not going to be a part of it.

Yeah.

Are you still going to have a business, is it still going to be great for them being able to pitch how it's going to be great for them?

And if the answer is no, you're probably not ready to sell.

Right.

That's the whole point. It's like, I want you to think about your business as like, okay, I'm going to hand this over to somebody eventually. Are they going to be able to make money from it? And the reality is, is that when you're doing those things, you're making more money, you're having better systems, you're figuring out the way that you can actually extract yourself a little bit from the business. And now it's worth a heck of a lot more anyway, so. So you're making more, you're having a better life, and longer term, you're able to sell it.

Yeah, it's funny, I just had a call today with my team and I'm like, as we're adding new things that we have to do and like, we have to make sure we have SOPs for every single.

Every single thing.

That's hard when you're small. It is. Because they're already overloaded. My team's already overloaded because as a startup, you start, you know, pretty.

I know, Pretty scrappy. I know.

And I'm still in the first year. But at the same time, like, you and all the other women who are helping this journey are in my ear of like, no, you don't want to have to go, go back and do this. So even though it's a lot of work right now, like, get it done.

Now you need to get it done, and then you need to update it as you evolve, because you're going to evolve so much. Like, that's the whole thing. It's like, there's like, we push sometimes so much to have, like, everything be perfect, but in reality, it's just get it out there, get it written, get it started, and then you'll evolve. You'll evolve. But if you make it a part of the practice very early, you're going to see that that's to. Going. Going to make a huge difference, huge difference in how you're valued.

Are there, are there practices in your book that you teach people how to get those in place?

Yes. Great. Oh, yes.

Tell me a little about that.

Well, it's really important to be able to have, like, I mean, SOPs we talk about all the time. It's like manuals, like if you were hit by a bus, right? It's like, well, how does this business run? How does it operate? What are the tools? What are the best ways to get. You know, it's almost like the. Do you ever have. My. My mom is very into this because we have. My dad died when I was younger and my mom was like, I am going to write down for you everything that if something happened to me, here's every password, here's every life. Here's what I want. Here's all of it. You. You basically need that end of life binder, but for your business, you need it for your business, you need all those systems. You need everything that. That's there because that's really important. Because otherwise what happens is either you'll sell it and you'll be like on their consulting for a little while and it'll be a hot mess because they don't have what they need and they'll be. It's just very, very, very unpleasant. Or you leave and it completely falls apart.

You don't want that.

You don't just look. You don't. It looks bad, it feels bad. It's all of it. And a lot of times you have some money tied up in the back. It's not like you're always getting everything up front.

Yeah. Oh, my gosh. I mean, we definitely learned that now we're getting systems in place, not just in. Taught us so much about business. But Chris's dad had passed.

Yeah.

And he did a lot of. Thankfully, he had a lot of stuff written down. But, man, we just watched the whole family struggle trying to figure things out. And I'm like, to my husband, I'm.

Like, do we have everything?

Well, it's true. I'd be lost without some of the.

Things that you do.

And also now in my business, I'm.

Like, no, it's true.

Insane.

Because. Especially because all businesses come to an end. Right. It's just whether it's on your timeline or on a timeline that's unexpected. Right. There's divorce, death, there's all of those things. Disability, There's a million, like, very depressing reasons that businesses end. So you want to be able to chart the course of that business from day one, envision what you want it to be, and then work backwards.

Yeah.

You know, it's really. It's if it's very, very powerful. It's something that we did with our business. We built it. We had no, you know, no money in the bank at all. And we were able to, 14 years later, really do very well. We able. We sold for eight figures. It was a great exit. Was it. Was it was a dream.

Honestly, I'm gonna dig deeper into that.

Because I want to know exactly how that all looked. Yeah.

This is also vital because so many people feel so handcuffed by one person in their business. Like, I know even for me, in the beginning, I'm like, oh, my God, what would I do without this person? And especially personal brands, we can find our people, and we're like, I don't even know how this part of the business operates.

What would I do?

How would I replace this person? And that actually doesn't feel great. Like, it's you to have those systems in place that someone could come in and be able to take over.

I learned this the hard way through likable. For many years, I was running the agency and. And, you know, was very, very people focused. An agency is all about people. They're the pressure. That's it. So it's the people. The people are the product, and that's it. So I would get these people that I would feel like I could not live without. And then, you know, like, all people, they leave. Something happens. You know, eventually they'd leave, and I'd feel like, oh, my gosh, I can't live without this person. One thing that I really learned from a very young age, I remember I was the top salesperson at Radio Disney. And I looked and I was, you know, I was young and running around and. And selling media. And my husband, when he. Before he was my husband, he worked there too. And we were competing against each other. It was, like, very. It was, like, fun and adorable and, you know, the whole thing. And we got, like, really big for our britches. You know what I mean? Like, we thought we were the bomb. And one day, our mentor came in, and she looked at us dead in the face. Now imagine we are, like, the top salespeople, and Radio Disney was an unsellable product. You could not hear it. It was before the days of digital. You would turn on the radio in the office with the person you were selling advertising to. Yeah, they couldn't hear it like, it was. There was no service as an AM radio station. Am. Okay. This is the old days, okay. She looked at us and she said, I want you to know everyone is replaceable. So, okay, so to me, first of all, I felt like there was no way I was replaceable. But, yeah, one thing was that lesson carried with me so that I remembered every time, either I had to make a change or somebody left or I couldn't imagine anything without them. I would remember that voice and the reality Is, you know, we ran that business 14 years. We had a lot of people come and go.

Yeah.

We had good people stay a very long time. But the reality is everyone was replaceable. Sometimes we would get hit with even. And that's for clients, too.

Totally.

Everything is replaced. Everyone's replaceable. And just, you know, remember that. Don't make it totally reliant on the people. Build the systems. And everyone is replaceable. Yeah.

And I feel like you enjoy the people more that way, actually, because there's not so much pressure on one person to carry the business.

So much pressure and so much anxiety around. Oh, my gosh. What if they leave? What if, what if? What if? Just let it be like they're in your life. I just remember one time I looked out at my staff, and I was thinking to myself, because they were the best. They were the best. I remember thinking like, these are the good old days. Like, this is. I can't. I can't lock myself into this. I can't freeze it.

Yeah.

But I can appreciate it. I can appreciate how great they are and know that I can build systems so that when they leave because I don't own them, then eventually I will still have something that is as valuable. I love that. Okay.

I don't think we've done E yet.

Exact team. That's your team. Well, actually, it's funny. Yeah. So it was your. It's your why, your how, your income, your secret sauce, your profit, your exec team. Okay, so that is really. Or ecosystem if you're a solopreneur.

Yep.

Okay. So your executive team is all about the people who are irreplaceable. It's all about understanding and building systems for them, but taking care of them, too. And if you want that person, like, let's say the person you can't live without.

Yeah.

Like, if you want that person to be with you until the end, it's creating structures and incentives for them to stay with you until the end.

For sure. Oh, my gosh. I. I learned that the hard way, too. Like, if you want an A player, they need to be able to grow.

Yeah.

And so you need to grow.

They have to grow. I mean, we did at Likable. We did a great program with phantom equity. I don't know if you've ever heard of phantom equity. Okay. So there's all kinds of things with equity. And when you raise, we. We bootstrap that business, and we, like, just really clawed our way to the end, and we didn't want to open up a formal Equity program because there's. There's tax ramifications for them. It's challenging. Yeah, you have all kinds of stuff of equity, but phantom equity just means if and when we have an event and we sell and you're still here with us, you will get this incentive. Whatever the equity is. It can either be a percentage or anything like that. And so we did have a few people that we had till the end. And then I will tell you that when we did that phantom equity and when we got our check and we gave them money, it was the best feeling in the whole world.

I dream of that.

It's the best feeling in the whole world because that's all we want at the end of the day. Like, when you think about, like when I talked about why, it's like for me, my why for making a lot of money was not about things. I was never about things I was about. I need in my life to be able to be generous. It's important to me to be able to help other people. It's important to me to help my team. It's important to me to give back. And I knew that about me. And so for me, like, that was really, really important that I was going to be able to sell that business and give these folks some money that would be like, really meaningful to them.

Yeah, that was really. That is like a dream for me.

Yeah.

Like, I literally can't wait.

I know. It's the best feeling. It's the best feeling in the world.

Feels more exciting.

Right. But. But that's a motivator for you. That's my point. Everybody's why is not always the same.

Totally.

And so it's like that's. And I do think that that is uniquely female too. It's like so many of us, like dream of, like. And we care so much when we sell. A lot of times, we don't always take the highest offer. Most monetary. We don't take the most monetary beneficial offer. Often we go with who we think will protect our team.

That makes total sense to me.

It's more than just about the money. Yeah.

Because it's going to continue on and that's what you're going to live with.

Exactly.

And there are certain points where you get a certain amount of money and it's like it's life changing enough. You're not necessarily gonna see, like.

Well, don't get, don't get me started on that. I feel so strongly about that. You have no idea. I saw the. The co. Founder of Loom, this piece about how he. They. I don't know. They sold for like $900 million. And he walked away with this, you know, huge sum and he was law. Oh, it was, they had, they raised all this money.

Okay.

So he probably netted $60 million.

Okay.

And he was feeling lost and somebody on the Internet commented, like an advisor, like, how sad he only netted 60 million from his business. And I wanted to be like, how sad he only netted 60 million from his business. What planet are you on, you guys? Like, what. What planet are we on that if we think somebody raises funds and sells and makes like, maybe not as much as the total value of the business, but makes like it's enough. Like you life changing, you're smart with.

It, especially if you're going to be able to live off of what you.

Just did and whatever that for you. Yeah. For some people that's $10 million. For some people that's even less. Like, it depends on your own lifestyle. And that for me is like, you have to put your blinders on with like the, the judgment and, and the fear of like, what's enough? Like really think about for you, what's enough. And I think that's part of how I help founders get to where they want to be.

I love that and something that. Because my husband just loves numbers. He just like thinks in numbers.

Yep.

One of the most fun things is to talk about even like smaller exits, whatever that looks like. But we've done like, you know, of course, what if you only get 2 million?

Right. 8 million. What if you get 12 million figure exits? There's 7 figure exits. Totally.

All of them to go. The understanding of like, once you start tapping into bigger money, bigger money makes more money money.

That's right.

And so it's like the understanding of the place where you're like, no, you could actually just live off of what that money makes. Not necessarily at the really small amounts, but like, you can start really making some good money.

You totally can. You can totally. Or you can decide. The other thing is sometimes we feel like almost jailed by our businesses. Like, you feel so stuck in them and like, sometimes it's better to just say, okay, I'm going to take this smaller exit now. I don't, I don't need to sell for eight figures. I'll sell for seven. Okay. And then I'm going to take that money and I'm going to invest. I'm going to take some of it and I'm going to put it away, make sure I'm safe and I'M gonna take some of it and I'm gonna invest it in something else that I'm really passionate about.

Yeah.

Because sometimes you feel like dead inside with your business. You know, that's when I sold, when I sold likable. I sold because I knew with an agency you're gonna have an earn out, so you're gonna have to work for the acquirer for a little while. So I felt down and like, not that excited about the business anymore, but not dead inside because I felt like if I were gonna. If I sold when I was dead inside and I went to an acquirer, I'd have nothing to give them. Hmm. And if instead I sold the business when I maybe, like, knew I was getting ready to be done, but I wasn't totally done, I could still be really valuable to them and I would still hit my metrics. And that's it. With that timing in terms of, like, you can't really totally time and exit in terms of the market, but you can time and exit in terms of your own bandwidth and your own ability to, like, really feel good about it.

So, like, you mean time it, like, really be like, okay, I should start.

Looking, I should start looking.

What's the time?

Start looking before you're miserable.

Yeah.

Nobody likes a tired, sad founder. Nobody wants. Why do they. Why do they want to buy that business? If you're tired and sad, why do they want to inherit something that makes them tired and sad?

Totally.

They want to inherit potential. They want to buy something where you're feeling good and you're like, okay, I see where this can go. And so I had enough in me to be like, you know what? I. I think this could be really valuable for you and I'm going to help you get there. And I have enough steam to do it. Yeah. Even though I knew I was passionate about something else, but I felt like for me, I was. I was passionate enough to like, really help them as much as possible, which was good.

Okay, so what's the time frame like? Okay, we're starting to. We're starting to feel like maybe we want to sell. What's that time frame look like for selling and how did you know personally? You've kind of hinted around some things, like your business is ready to sell at this point. Yep. What do you have to have in place and what's that time frame?

Okay, so the first thing when we talk about knowing when you want to sell is understanding what your number is and if you're able to get there with where you are today. Okay, so if you say my number is, I'm going to use low numbers now just for, just in case we have people. So I'm going to say My number is $5 million. I just want to sell business for $5 million. And maybe based on the, how the valuations, your business is worth $1 million. What you're going to want to do is set a plan over a period of time of how to get it to that 5 million dollar valuation. Now you already know that it's going to be based on the multiples and you're going to know what you need to earn to get to that multiple. So you're going to be able to do that fairly simple math to say, okay, in three years, I think I could get to 5 million by these steps. Okay, so first you're going to have a plan to get you to the space where you want to be. But things don't always go according to plan. Sometimes they go wildly better than plan. Sometimes they really don't go well at all. And so what you want to do is just really evaluate and level set with yourself and check in and see how you're feeling. Now you want to make sure that you're doing that often enough that it you're not. You don't get to a place where you're in the pits of despair. Because if you're in the pits of despair, what I'm going to. And I get a lot of founders who call me, I mean women call me all the time with this stuff. Because we really were not taught any of this, by the way. No, we're not taught any of this.

No, I don't know any, none of this before I started business. And you know what, I had to go to dinner with a bunch of.

Men I, I know all the time. That's exactly right. And so my idea with the whisper group was to create a bunch of women that are there that I know. I know. Everyone always says, everyone who sells their business is like, how did I not, how did you not exist then? But it's like really, you want to make sure that you're checking in with yourself on that process and like how you can go, how, how well you can do. But if a founder, this is what I was saying, if a founder comes to me and is like dead inside and done, I'm going to tell them just instead of going to sell, if they can take a pause, try and regenerate, give it one last go, like, get inspired, see if we can get you there. And then let's get you to exit. Otherwise, you can sell. If you're a tire founder can sell, you're just going to sell for a lot less. And I just. I don't want that for you. I don't want that. I don't want that for any women. Like today, first of all, the stats are nuts. I will just tell you honestly, Lori, fewer than. It's less than 1% of businesses that are sold are female founded. Wow. And when they do sell, they're capturing like 1% of exit value. Wow. It's really hard. And a lot of it is because we don't know this. We don't know. We don't know it's possible. You have a. You have an interior design firm. Okay, I'm. I'm done. I'm just gonna close it. They all close it. And there's just such an opportunity. You. You could sell an interior design firm. You could sell a coaching practice. You. You can sell all of it. We just don't know. Because unless you're exposed to that room full of men that has done it before, you're not getting that education. And so for me, that's my real vision for what I want to see for women. I. I want to create a way that they can get educated about this stuff, that they don't have to feel afraid of it. So many of us feel, like, afraid of numbers or we say like, oh, my accountant, my husband, you know, whoever just does that part. But, like, the reality is it doesn't have to be scary. And it's. It's a really good opportunity for women to get more money, which gets us just really, at the end of the day, more freedom.

I'm so glad you're you. You have such an approachable way about you in such approachable vibe. Like, you. You literally need to be everywhere.

Like, this is so.

Truly, it's so vital because I have been searching for you for a while. Truly, I have. Because even some of the women in this. And I'll be totally honest, I know.

They'Re intimidating as I know.

Like, they make me feel like I can't talk to them or I should know everything. And I'm like, this doesn't feel. I come from a very different industry where we share everything.

Yes.

And I was like, this doesn't feel friendly.

Yes.

It feels scary.

Well, because I think the reality is there's finance and financials. Right. Which is a tough. I mean, those are. It's just, it's just numbers. Right?

Right. It's.

There's. There's no. No warmth in the numbers. Right. But there's warmth in the journey, the experience, the process. Most people, 80% of their net worth is tied up in their business. I'm talking to somebody, potentially, who 80% of their net worth is sitting across from me, and they're nervous and freaking out. So you have to be able to be approachable. You have to be able to understand them, and you have to be able to stand in their shoes. And that's why, for me, I wanted our advisors all to be women who have sold businesses. That was essential for me. That was. That was like a. A must do.

So how do we know, okay, we have a business? We're like, okay, I feel like I might be building to sell. This sounds good.

Yep.

Who do I shop this to? Where do I find that?

Okay, there's no shortage of people who are willing to sell your business anywhere. From an investment banker who is very big and fancy, a broker who sells your business out of the trunk of their car. Like, there's, like, it could be anybody. There's. There's lots and lots of people who sell businesses you want to look for when you're looking for somebody to help you.

Yeah.

I think there are really three areas. The first is you want to make sure that they've done deals like yours before. You want industry expertise, I think, you know, and that's not. Everybody says that. There's a lot of people who say, oh, we service all businesses. We work with all businesses. For me, I want to know that, you know, my space totally. It's really important. The second thing is, I want to make sure that your fee structure is something that works for a business of my size. So one thing that I remember was when I was getting approached a lot in the beginning, so we were a social media agency. We were fast growing, and, like, it was really. It was exciting. And so investment bankers were all over us because at the time, there were no social media agencies. They were like, you guys, okay, it was 2007. Nope. There was no social media anything. So it was like we were ahead of the curve. And so I remember they used to come to me and be like, okay, come back to me when you're 20 million in revenue. Come back to me when you're 20 million in revenue and you're 5 million in EBITDA. Well, I certainly felt small. I wasn't even at 10 million in revenue yet. And so people like that who make you feel small. Exactly what we talked about before. Like, you're talking something, you're like, no, like that. For me, it's about making sure that they do deals in your size and the fee structures. Right. So an investment banker is going to be, you know, minimum between a half a million to a million to touch you, but that they will often, if they can find a strategic positioning, what they'll tell you is they'll be able to get you millions more. So you really, really have to trust that investment banker to be able to do.

They get paid when it sells.

They get paid on an investment bank. A lot of it is paid when it sells. But there's a large retainer, large investment up front. A broker out of the trunk of the car is only charging you on contingency.

Okay.

So that's like a cheapie. But then there's the middle. There's an M and a advisor and they'll charge you something during the process and then they charge you mostly at the end.

So what you do is you help people like you help people sell. So you get a fee.

Yes, yes.

So you'll take businesses you believe in.

Because you obviously want to get 100%. You take businesses you believe in. But most of what my work is focused actually before you exit, it's when you want to get exit ready. You want me to help you say like, okay, you're worth exactly what we talked about with the ebitda. Yeah, I do evaluation and say, okay, Laurie, your business today is worth X. Your number for your. Y. Your, your. Your Y. Wh. Y is Y. I need to get you there. So what's the path to get you there and what's the timeline and what's realistic within your valuation range and what do we need to do to get there? So I help you craft a roadmap and then I hang around and like later in life, if you want help selling, I help you sell. But like I invest very early.

I'm trying to figure out who you like, what you do with that roadmap. Are you marketing? Are you street? Like, what are, what's the ways that you create that roadmap?

It's all of the areas of whisper. So I say, okay, your income, here's how we diversify your income, here's how we make sure. Okay, your secret sauce. Here's what we need to do there. So it's all of the angles of that ultimately it comes from the client. It's because we learn about their business, we're more consultative. Okay. We don't execute it. We just really give you.

Okay, you're giving that.

We give you the map to get there and the metrics you need to hit along certain times.

Okay, interesting. And what is R?

R is roar.

Okay.

R is compliments. So it's your why, your how, your income, your secret sauce, your profit, your exec team, and your roar factor. And I wanted to build something that felt like it was not girly, but told through a female lens. And for me, that's how I really felt about Whisper. Like, it was, like, serious but mysterious. It was thoughtful, but it was also playful. And it was like all of those elements together make it feel like. Because this stuff is scary, if you're not a finance person, it feels scary. I wanted to really democratize that process. And I.

You know, for me now, I feel. I feel much more comfortable now. But I will tell you, it is. It's taken me, like, two years to feel comfortable because of the way people. I just think the way that people approach it.

Yeah.

And you have to be willing to say constantly, I don't know what that means.

Yeah. You have to always say, please explain.

This to me, or you're going to ask questions and you're going to be lost anyway. Hearing someone speak for an hour and you literally have to continually say, I don't know what that means. I don't know what that means. That was huge for me.

Yeah. Especially, I mean, you. You raise funds. Yeah. Yeah. I mean, that's like. It's like a whole other. Whole other ball game. I mean, I remember when I was exiting, they were talking about working capital. And working capital in its explanation is fairly simple. It's like, what. How much money do you need left in the business to run the business for, like, a month if no money? Because you're collecting money every month.

Yep.

Money comes in, money goes out. You need a certain amount in there. The way that people talk about working capital and the calculations feels very, very, very confusing. And I remember for me, I was afraid to ask. Like, it was towards the end. And like, I. I felt afraid to be like, we. What? We. What is this number actually going to be? And why is it that number? And probably if I had been able to ask more questions or felt less, like, afraid of looking dumb. Yeah. I probably would have done a little better there. I mean, I think so. Interesting.

So, I mean, because there's phrases, too, in business that you guys will learn that mean different things to different people. Yeah, some people will. I. I've even heard some people, like, define EBITDA differently.

Oh, yeah.

And then some people.

Oh, there's different terms of ebitda so you. It could be like ebit or it could be right. They. They calculate what. What matters to them. They can calculate totally differently.

And like, working capital, that could pro. Could that be calculated differently or is that always the same?

Okay, there's a calculation and. And people determine the net based on a variety of different factors. So, like, you get in this legal document, like, working capital is your accounts receivable, cash in the bank, minus this minus. And it's a. It's like a form. It's a formula. And the formula can be manipulated.

Oh, my gosh. I always had, like, even down to, like, people asking me different margins. Margins can be like, exclude certain things, including certain things.

And how do you calculate the margin? And different people do it differently and different businesses do it differently. And so the idea is to be able to explain how your business works and how your margin works. So totally you can explain that you're in great shape.

Yeah. And go in with that confidence of, like, I know everyone's different. Here's how we.

Yes. Yeah. That's how we're calculating it.

Yep.

Yeah, exactly.

I love that. Okay, so let's go back to your business.

Okay.

You had Likable for how many years?

14.

14 years.

Okay.

Social media agency, before social media, did this have a. Did this have a multiple on it? Like, did they have to define what their category was?

No. So no. Well, 14 years later, social media agencies were a big thing, so. Got it. Okay, so I'll tell you. I'll tell you two things on, like, so if you will figure out how to do that. So, like, I'll tell you how likable started, and then I'll tell you about the multiple and how we got to where we were. Okay. Okay. Like, we'll start it on my wedding day.

Okay.

My husband is a larger than life personality. Okay. He wanted everyone he's ever known to come to his wedding. I don't mean, like people from high school. I mean, like, hello, earn your happy podcast listeners. I'd like you all to watch me marry my bride. Oh, my gosh. What? I mean, like, wow, is it larger than life personality? Okay. And I knew there was nowhere we were going to hold such a wedding or afford such a wedding. We were kids with babies at the time, and we had to get creative, so we ended up pitching a minor league ballpark. Okay. We said we're gonna call it our field of dreams. We're gonna buy our sponsorship for the night. We're gonna resell in sponsors. I told you we were Both from Radio Disney. We knew all about selling in sponsors, so we said, okay, we're going to sell in sponsors in between innings. So, like, instead of Pepsi tossing T shirts, 1-800-Flowers is going to toss bridal bouquets, and it's going to be cute and campy and fun and adorable. We're going to raise money for charity. We're going to pitch the media, okay? They were like, you guys are nuts, but try it. So then, of course, I immediately panicked, and I was like, oh, my God, I'm having a wedding on a baseball field. But we did. We were married in front of 5,000 of our closest friends, family, and baseball fans. And we had this massive press event and raised over $25,000 for the anesthes. He's awesome. But because the press event was so successful for those brands, they came to us and said, like, we would bet on you. We had no idea what we were doing. We were not entrepreneurs at all. We just said, okay, maybe we'll start a word of mouth marketing agency. And that was in 2007. And Facebook opened beyond the college market in 2007. And we said, holy cow. Social media is going to be the fastest form of word of mouth. Let's pivot and call ourselves a social media agency. Wow. So because we did early, we grew really quickly. So you start winning, like Neutrogena, and you start winning GE and you start winning all of these clients. We had no idea how to execute. Yeah, we fumbled our way through over and over and over again. But we grew and grew and grew. We built a great culture. We were super happy. Dave left the business about six years later to raise funds and launch a tech startup and to diversify, as we say, in part of our income. And I took the business through to exit and ran it for another seven years. Business was a little different when I took it over than when he and I started it together. Because in 2007, nobody was doing social media. In 2013, everyone and their mother was doing social media. And you could relegate it to, like, your nephew or your intern or anybody. And so I had to get really creative. And I ended up tapping into, really leaning into the. The power of my network and women. I started a podcast called all the Social Ladies and interviewed women at the brand level, and as a result, tripled my network and doubled the business. And then was like, all right, it's time. And at that time, I was an agency, so we were valued really, I think at. Also, we sold. Okay. The other important thing we sold in 2021 and multiples were nuts in 2021. So multiples change with time.

Yeah.

So if, if the market's bad, the multiples can shift down. So you have control to some extent over where you fall in your multiple range. So if you're a strong business, you fall to the top, bad business, bottom. But the actual range is determined by the market. In 2021, the market was nuts in a great way. And so I wasn't thinking about that when we sold, but boy, am I glad I sold them.

Yeah.

Because we were able to get. So we got the top of the multiple. Top of the market. So.

Well, really, can you share what you sold for?

It was great. I can only say eight figures. I'm not allowed to share what I sold for, but I can can tell you that it was. I could. It was. I will say agencies were valued between eight, four to eight times ebitda. And I was on the high end of that range.

Nice.

And you bootstrapped that.

Right.

We started with, we started with the $10,000 from the wedding. That's it. Wow.

So you.

We self finance it. We own the whole thing. Everything. Yeah, we own the whole thing. And, and we were married and partners, so it was just our house. It was, it was a fantastic stick. First company exit in. It exceeded our expectations. It was really.

Wow, that's amazing. That's really exciting. You. And were you building that to sell from the beginning or did you not think about it?

So once Dave left. Yeah, Dave was the face of that business. I told you, larger than life. He was a New York Times bestselling author. He was everything. Okay. And there, there I was like an operator. I was a really good operator. And so once he left, I was like, okay, here's a couple things I know about this business now. One, social media is no longer new. Two, we invested so much in growing, we're not super profitable right now. Three, every leader I saw in the space was loud, extroverted and male. Okay. It's none of those things. So this is the Gary Vaynerchuk era. I came up in the exact same time. It's like Gary is like, like, everybody loves Gary. How can you not? So it's like, okay, they're all, this is what the world wants. And here I am, just me. And so I decided at that point I did a couple things. So the first thing I did was say, okay, I don't want to tell my own story. I'm too shy. You know, I'm going to tell the stories of others. That's when I started all the Social Ladies podcast. But the other thing that I did was read Built to Sell by John Warlow and set an exit plan to sell. So I said from that point, I became obsessed with. Exactly. That's very early. And I knew that I was going to get to a place I wanted to be able to get to an eight figure exit for me with an agency. I felt like I was never getting to nine and I wasn't going to be at the top end there. But I knew that if I could be valued at eight figures over $10 million, I felt like I would be in a great space. And then I went far beyond that. So that was, it was, it was something that I had set for myself as a personal goal. And I was.

That's incredible as an agency and that's incredible for the time and that's incredible as a woman. That's incredible for all the things.

Thank you.

And that's really thinking way beyond where you were at. Like a first front. That's a front runner. That's insane. There had to be a lot that you had to work through. A lot of fears and a lot of confidence that you had to.

Yes.

Work up to what started you wanting to do this for other women.

When I went through the sales process, I felt insanely alone. Okay, so Dave is now off running the other businesses. They didn't want to talk to. To him because I was going to stay for the earnout. So it had to be just me as the founder. Okay, okay, so it's me. It's high pressure, it's high stakes, it's intense, it's crazy.

And you had kind of had him at home to talk to before. Like, yes, I feel that way with Chris.

Like, oh, God, yes. Oh, yes. But it was really scary because again, it was a bulk of our net worth together. And yet I could only be the one in the room negotiating.

Oh, my gosh, I was so sweating.

I was so alone and so scared. And I found myself saying like, okay, what woman? Oh, also it was very tense on the relationship because of all of that. It was so hard. Dave and I, we like, live for each other. We, we're. We are.

But that stuff can.

Kicked our ass. And so I found myself being like, okay, who do I know in this vast network I had built this huge network of women through all the social aids and all of it, who do I know who sold the business? Nobody. And that's when I realized that I needed to start going through that and find the needles in the haystack and find women who have exited and bring them together and make them accessible to women who are looking to exit. Because I needed that person in my life to be like, did this happen in your marriage? Did this happen when you were. When they're talking about working capital? Like, what, what is that? And what was your experience with this? Did you feel uncomfortable when you were those rooms? Like, there was not. I couldn't find it. I couldn't find it. And that's why I decided I wanted to build the largest network of exited female founders. So that's the Whisper Collective, and that's, that's where we source our advisors from.

Okay, so tell me all about the Whisper collective, who, who you know should be a part of it. What does that look like?

All that fun stuff. So the Whisper Collective is a group of women who have sold their business in some capacity. So some of them have had humongous exits. We've had women who've had large nine figure exits. We have women who had even six figure exits in that collective. So if you have sold a business and gone through that unique and bizarre experience, you apply to join the collective within the collective. It's a community that is just based on shared experience. We have events, we have a lot of really great opportunities within the collective with, with all of that stuff. But we also have opportunities to advise. And so you can say, okay, I want to advise women who are in the beauty space. I want to advise women who are in the agency space, and we match you up. And then for Rev Share, as part of their advising, they do all of the work. It's our, our whole goal at the Whisper Group and through the collective and the advisory practice is to get as much money in the hands of women as possible. And it's all motivated by freedom. So if I can get women who've exited, I'm happy, happy, happy, happy to give them advisory work and help them continue to build their net worth. And I'm happy to have the women who are being advised exit for a ton of money.

Explain Rev Share to people so they know if someone's like, okay, I need some help. What does Rev share mean?

Do it.

Is that a part of my company? Yeah, explain.

No, no. It's a revenue share between the Whisper Group and the advisor. So in other words, you sold your business.

Yep.

You may not want to work again, right?

Yep.

But you may be really motivated to give back.

Right.

And talk to other women. However, at the Whisper Group, we don't believe in running like a Charity organization. We want to make sure that they are able to be compensated. So what happens is somebody comes in to exit, they pay the whisper group, and we then pay the advisor to help advise them. That's a record we share so they get a portion of what we do.

Got it.

Okay. It's like having multiple coaches under. Under one group.

That's exciting. Okay. I'm so excited that you're sharing this because nobody is talking about this. Nobody. I actually have really close girlfriends right now who have really large businesses who want to sell, but they don't necessarily have a lot of guidance on it.

So I'm.

I just. I just kind of told you on the side. I'm going to drop you into some group texts and make sure that you get a ton of intros, because I think that you. I think after this year, you're going to totally change the way people look at business. So I know you're exhausted, but from your.

From your mouth. From your mouth. I. I mean, this. This is. I. This is how I feel about this, Lori. I feel like this is my life's work. Like, when I ran Likable, it was Dave's vision with me together, it was our baby. And then there I go, and then I was running it by myself. I'm, like, not into it anymore. And this. When I felt. Into this space, like, I just felt like my heart and all of the things were aligned. Like, I felt in complete alignment in this way. And so I just. I hope a lot of people. I hope a lot of people learn about it. I hope I can help people. I'm excited.

So the first thing for people to do. Yeah, Smartest thing, obviously. Listen to this podcast. Tell her how amazing she is. Next thing, though, is to read the book.

Read the book.

It'll give you. It'll give you all that you need to know about your business. Like, okay, when. When can I sell? What do I need to really look at? At this phase, I know you'll go through phases of, you know, the business and where they're at and all the things. So if you guys have any questions left, left for after this podcast, which I know you do, because I still do. They're in the book. They're truly in the book. So we're gonna do a book giveaway. So what we're gonna do is. And you've also got really cool merch, so we can talk about that, too.

I do have cool merch.

Okay. I love this sassy merch.

Yeah. I'm really sad that I don't have the sassy merch here. I might have one in my car.

So I need some sassy merch for sure.

You do.

So the book, what we're going to do is for anyone who shares this first. The first 10 people to share this on social media.

Yep.

And tag you.

Yeah.

And myself. And say what their biggest takeaway was from the podcast. So what is your social handle at Carrie Kerben?

Okay.

At Carrie Kerben, I'm going to send a book and I'm going to reshare your story. So it's also so great because she gets to see who's listening and you guys get a free book. So make sure.

Right.

If you're listening, doesn't matter when, like, just stop right now. Take a screenshot, tag her. Tag me. Let us know what your biggest takeaway was from this episode. And I'm gonna send you a book. We'll DM you and we'll get your address and all the fun stuff, but tell us about your merch, too.

Okay, so I. I started by building merch for the collective. I wanted to do. I really am, about. About these women who've exited have been through this bizarre, unique experience. And I want to make the collective interesting, vibrant, exciting. It's my first year of building a community. It's the first time I've ever done it. So I was like, okay, I need really cool merch. And I started thinking about, like, what are good slogans for folks who've exited? And then I started coming up with acquired, not retired. And then I came up with FU money, which is exited female founder. Eff. So, okay, so it's exit female family money. Because I don't care what you actually sell for. Like, whatever your FU money is, is fine. So. Okay, that is so good.

I love your acronyms. They're so.

I'm a big acronym girl. But F you money I wore in the airport. I swear to God, that thing is going to go like, people love the F you money.

Yeah, woman.

Oh, I walked around with F you money and then, like, acquired on a Beanie and lax.

I would come up to you.

Yeah. People were definitely like.

Like, I'd be like, you're my type of girl.

No, I know.

Tell me what you do.

You'd be friends. No, I'm telling you, it's good merch. And then I have, like, future exited founder stuff for kids. And I have, like, all. All kinds of stuff that's really, really fun. But. But primarily, I think the FU Money collection, I think we have to give. I think we have to give some of your listeners some fu. Money. Merch. I think we need to do that. We have to do it. Okay, I'm gonna do that one. I'm getting. Okay. Amazing. So, you guys, you tell me what you'll keep sharing is.

Is what we normally do is once that 10 is there. We, you know, you don't get the free book anymore. But what we'll do is I will keep sending. How many do you want to do? You want to do five?

I'll do five.

Three. Okay, so I'm gonna send her the other five. So keep sharing the stories. Yeah, you are gonna get some merch.

That's right. And you can check it out@whispersmerch.com, actually, if you want to look at it, because you want that money shared over over there, you could go ahead and get it.

Okay. Amazing. Well, I'm so grateful for you. Thank you so much for coming on the show.

Thank you, Lori, for having me.

I love that.

You're my first stop. You're my first stop. Oh, my God. You are the official first stop. I landed at lax. I came down to you. Now I'm going back up north, and, like, for real, we're creating all the good. I feel it. I feel it.

This is, like, this is so important. And you're. You're such good energy. Like, I know that this is going to be the best experience for you.

So thank you so much for coming on. Are you guys.

Go check it out. We linked everything up in the show notes below. And make sure you share that story so that you can get the free book. And until next time, earn your happy.

Bye, everyone.