MBA1648 Must Read: Before the Exit by Dan Andrews

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Hey, welcome to the $100 MBA Show. Your go to podcast for straightforward business advice every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of the $100 MBA, a complete business training and community online and Today's episode is a must Read Episode on our Must Read Episodes I share with you a book that I've read that has influenced me as an entrepreneur. I share with you its takeaways, its insights and why you should read it too. Today's must Read is Before the Exit by Dan Andrews. The subtitle for this book is Thought Experiments for Entrepreneurs. What kind of thought experiments? Well, there are things for you to consider before you decide to sell your business. The problem with selling your business is that it doesn't happen that often. Even the most successful entrepreneurs will probably only do it a handful of times, so you don't get many reps. There's not a lot of practice here. So the author of before the Exit, Dan Andrews, shares his experience of selling his business, some of the things he wish he considered before doing so, and just honestly shares some of his regrets and what he would advise his former self to do if he had to do it all over again. There are so many great, great nuggets in this read, even if you are not looking to sell your business. In fact, in a way, this book is a great way for you to deal with the struggles of your business, the frustrations of your business without Giving up. So let's get into it. Let's get down to business. In 2015, the author of today's must read, Dan Andrews and his business partner sold their product business. They had a small team of 15 people and they were able to sell the business for a multi seven figure amount. Now, Dan says he doesn't regret selling the business, but he does regret some of the decisions he made along the way or even how he went about selling the business. One of the things that he shares in the book are some of the takeaways or some of the findings he gathered when interviewing other entrepreneurs that sold businesses. And the interesting thing is that when people sell a business, it's not because they're like, I'm selling this business because it's the optimal time to sell and I'm going to cash in and I'm going to make all this money. Most people say they sold their business because they were just tired, they were just run down, they're ready to move on, they just weren't enjoying the process anymore. And that's not a good place to be when you're selling your business. Why? Because you're just not going to get top dollar. You're in a vulnerable place. So in this book, Dan Andrews shares five thought experiments for you to go through. Five things for you to consider scenarios that hey, what if you did this instead? Or what if you did this before you sold? And the names of these five experiments are the Lifestyle Ladder, the Mock Tax rebate with the Mediocre CEO, the Hidden Upsides, the Cash Conundrum, and finally the Dirty Secret. Now, I wouldn't be doing Dan Andrews justice if I went deep into what these thought experiments are, how to do them. He does a great job explaining how to actually set these up in your mind and make sure you consider them before you exit. They're designed to give you clarity and confidence as you think about selling your business. Now I want to say that the reason why this book is so helpful is that it's so different from other business books that talk about selling your business. This book is not about how to get the the most money for your business or how to negotiate a deal or even when is the best time to sell. It actually deals with a far greater important matter when it comes to selling your business. You and the emotional side of things, your identity after you sell, really understanding why you want to sell. And maybe you can solve that problem that's causing you to sell without selling. This book is actually about making sure you're making the right Decision. When it comes to selling your business and presenting some alternatives, a lot of people don't consider other options. I'll share one with you. Many people sell their business because they're just tired of the day to day work they have to do. Managing people, being on top of everything and just the daily pressures of growing and expanding and looking over your shoulder when competition is looming. So they say, you know what? I want to wash my hands of this and I want to sell this business. Cash out. But one of the things that people forget about when you sell your business is that you probably are selling your greatest asset. It's your money maker. It's the thing that has the most value probably in your life. We're talking monetary value, of course, you really should think twice before just giving it up. One alternative is, why don't you just remove yourself from the business? I know that sounds over simplistic, but plenty of people do it where they just say, you know what, I don't want to do this business anymore. I'm going to hire a CEO. I'm gonna hire a president of operations or a president for my company to take over and I'm not gonna work anymore. I'm basically gonna retire. I'm gonna give this person a salary, maybe I'll give him a slice of profit share, have some sort of bonus scheme. And this person's gonna be fresh blood. They're gonna come in and guess what? I have a money making machine on my hands. Any profits I make can go into my pocket. I can maybe work out if I can pay myself a salary as a director resident once a month and the rest of my days, I could be semi retired, I can work on other projects. This is actually an option a lot of people do. Why? Because they just can't sell their business. Maybe they don't find the right buyer, maybe they can't find the right price. So instead of just saying, okay, I'm a slave to this, they say, no, I'm going to leave the business and I'm going to hire somebody to take over. And what this does is it turns your mindset from being a business owner into an investor. And this is really one of the gems of this book. You got to start looking at your business as an investment. How much time and effort and capital you've put into this business, are you getting your return on investment? If not, change things around and remove yourself from the business as if you were an investor, as if you were buying this business. Imagine you were buying your own business. What would you do. Maybe you would just say, hey, I'll hire somebody to run it, a new CEO and I will get a return on my investment. You can do this with your own business and earn profits and earn a healthy wage. And guess what? You still keep the asset. You still own the most valuable thing you've built, stressed out and don't want to be in the minutiae of the business. Problem solved. You got somebody instead of you. And here's a little secret. You might be surprised. He or she might do a better job than you are doing right now because you're burnt out. Or maybe he or she is better at taking your business where it is right now to the next level than you are. You're a good starter. You're a good person to bring the business to where it is today. But maybe you want to start something new. Maybe you want to start a new project. Or maybe you just want to take a break for a year or two. Here's your solution. And there's more solutions in this must read book before the Exit hey Fidelity, how can I remember to invest every month? With the Fidelity app you can choose a schedule and set up recurring investments in stocks and ETFs. Huh, that sounds easier than I thought. You got this? Yeah, I do. Now where did I put my keys? You will find them where you left them.

Investing involves risk, including risk of loss. Fidelity Brokerage Services LLC Member nyse, sipc.

Gas Snacks Tolls this trip is draining my wallet.

Yeah, but we'll be with family.

You're in a good mood. What's your deal?

What's my deal? I saved at Metro with no activation fees and I got one line of 5G for just $25 per month. Kept the phone I love and a 5 year price guarantee on my top.

Tuxt and data detour to Metro.

Get that more for your money feeling.

Only at Metro by T Mobile Just.

Bring your number $30 first month and 25 after with autopay not available if with Metro or T Mobile in the past 180 days.

Another thing that before the exit really helps you with is it really paints the picture of the process of selling your company. It took Dan and his partner over 500 days to sell his business. It's not something you can do, you know in a few weeks. It takes a long time to do due diligence and work out a deal so you have time to explore some of these thought experiments and options before you exit so you make sure that your making the right decision. There's also a lot of cost involved that a lot of people don't talk about when it comes to selling your business. Legal fees, taxes, your time, your effort, and of course your business. And a lot of people think, you know, I'm going to get this big payout and it'll be all worth it. Do the math, because sometimes it's simply not and the residual income that you get from the business is actually a better deal for you. He walks you through all that in the book as well. I highly recommend you check out before the exit Thought Experiments for Entrepreneurs by Dan Andrews. If you like audiobooks, I recommend checking out this book on Audible. Dan himself narrates it and it's really well done. Thank you so much for listening to the $100 NBA show. Make sure you hit subscribe right now so you never miss an episode. By hitting subscribe, you get our next episode as soon as it drops. It's absolutely free to subscribe and you can do it on any podcast app, whether it's Spotify or Stitcher Radio or Apple Podcasts. We're on every single one. Before I go, I want to leave you with this. In our day to day life as entrepreneurs, we're making important decisions. But there are a few huge decisions we make in our life. Selling your business is one of them. It's something that you have worked on for years, maybe even decades. You want to make sure you give yourself as much time and thought as possible to this decision. One of the things I've heard from a lot of entrepreneurs who sold their business, they actually told me this directly is when you sell your business, it's almost like an identity crisis. You you don't really know what to do with yourself. You really need to have a plan after you sell your business. What you're going to do. A lot of your identity and who you are and your significance on this planet is tied into this thing you've been building for so long. So keep that in mind as well. If you do decide to sell, make sure you have something lined up for you to land softly into. Thank you so much for listening and I'll check you in tomorrow's episode. I'll see you then. Take care. Gas Snacks, tolls this trip is draining my wallet.

Yeah, but we'll be with family.

You're in a good mood. What's your deal?

What's my deal? I saved at Metro with no activation fees and I got one line of 5G for just $25 per month. Kept the phone I love and a 5 year price guarantee on my top.

Text and data detour to Metro.

Get that more for your money feeling.

Only at Metro by T Mobile Just.

Bring your number $30 first month and $25 after with autopay not available. If with Metro T Mobile in the past 180 days.