Intentional Growth

My guest today is Karim Marucchi, the CEO, and owner of Crowd Favorite. Today we discuss the misconceptions people have about web-based businesses, in particular, digital service businesses. Many people assume that because a digital business has no inventory there isn’t a way to sell it. Karim debunks that type of thinking. He explains how a service company, especially a digital company, can find the right buyer if they put the work in and build the best brand and service possible. We explore what makes a service business valuable and how to scale it effectively. Karim offers some great insight on how to build the best team for your niche. He also emphasizes the role of partnerships in digital business and how to make a business connection your ace in the back pocket. What you will learn about: Karim’s background in business. What are professional services? How digital services are similar to the restaurant industry. The 2 types of sales that digital founders do most often. The real value of a business. How to build a profitable reputation. How to overcome the hurdles in the digital business model. What successful business owners do in their business. Finding your strengths and building your digital business with them. How to build an effective communication system within the company. The way business culture evolves organically. How to find the right business partner. How to avoid burn-out. How to identify your musts in a sale process. The reasons owners sell their companies. The right reasons to sell a business. How to negotiate a smart earn-out agreement. Digital services is a tricky market. Since there’s very little that’s tangible about these businesses, valuing them can be difficult… but, as today’s guest notes, goodwill can be measured. Karim Marucchi talks about the similarities between digital services and restaurants in terms of goodwill, brand and staff and how to capitalize on those key elements. Would You Like Fries With That? Service, service, service. Restaurants might be a cheesy example to use (pardon the pun), but it’s a very visceral one which can provide concrete and familiar examples for us to better digest the intangible world of digital services. However, both require a high level of service where the customer is very rarely wrong. Why is that? Digital services are just that: digital. You can’t touch them, but they add value to every business and most individuals around the globe. Knowing this, there is an industry for each service created and if you’re in this type of business, you need to be able to cater your company to meet those needs. We’ve discussed adding recurring revenue to your business before, so imagine what’s possible if you begin employing digital services? If you know your niche, you can usually add a plus or upgrade (think: fries) to that client’s portfolio. What’s for Dinner? As Karim notes, no restaurant specializes in all kinds of foods. The same applies to digital services. While you may be able to do everything under the sun, your business should focus on the three or so things your business does the best. You go to Pierre’s for fine French cuisine, not Thai, though you could still get your fill here—even if that food doesn’t match your current need. Sometimes you have to say no, even though you’re hungry, to matching up with a business. Bringing in digital services you don’t need will not add to your company’s value but in fact cause more strife and issues. One-stop shopping doesn’t work in the business world! You need to branch out and find the best fit for your company, whether that’s operating or accounting software. With a digital environment, do the people you partner with truly matter? Yes. More than you might think, actually. Your Server Will Be Right With You So let’s take this back to the restaurant concept. We’ve all eaten out and had varied level of servers. The ones that sparkle tend to be the ones that draw us in and can encourage us to get extras for our meals—you want these guys to be your sellers or customer relations. You want engaging people on the front line to really pierce into your market. You wouldn’t want them to be your cooks, though, likely. So those who are generating the services you provide might not be the best people to sell them, but they are unparalleled when it comes to ingenuity and innovation. Find your strategic and creative thinkers and get them in the right spots. Each and every cog has a place in the mechanism. Work with your strengths and partner for your weaknesses. You don’t want to put people in a position to fail because they don’t have the right tools for the job. That’s frustrating on both parts and kills corporate culture. You can hire the right people, stick to your principles and grow your brand if you spend the time required to ensure you’re picking the right people. Dessert? You want people to want to stay with your business—staff and clients alike. This means hiring the right people for the right roles so that the company is solvent and growing, but isn’t sacrificing its engaging culture and high levels of retention. How do you do that in a digital environment? Fit, fit, fit. As much as service is what you do, fit is what you are. Your clients will stay if you’re providing services they need and the support for those services. Your staff will stay if they feel engaged and fulfilled in their roles and if they feel appreciated. You can’t exactly hang out at the water cooler in a digital services business to gauge culture and satisfaction. However, with the increasing number of digital or distributed companies, you can’t force the culture to grow in a certain direction. You can’t control it. You can provide the tools necessary to grow this culture (how many peer-to-peer share and messaging programs exist, after all?) and encourage positive interactions, but ultimately you need to be choosing the right people to filter down what the mission and goals are. From the top down, the message needs to be consistent and get to know each your staff. Karim talks about how he encourages 15 minute video calls for new staff with a random group of employees to get to know each other. This creates a sense of community without the water cooler. If done right, you can get the same dynamic of loyalty you get by being in the trenches together. So if you are a digital services company, take a look at your culture and the services you’re providing. Are you trying to be a one-stop shop (and therefore potentially missing on greater profits by focusing on one market niche)? Do you have engaged staff who are focused on growing the business and are loyal to it? When was the last time you checked these variables to see how much of an impact they have on your value? When you start to prepare to sell your business, you’ll see a stronger portfolio for having done that. Takeaways: Digital service businesses are very much like the restaurant business. Building a great reputation is what draws a buyer to your business. Make your business the best customer experience you can. A creative partnership is a strategic way to add value to your business and your brand. Plan for every possible whatever “what-if” you could have during an earn-out period. Write a contract that will benefit both parties. Links and Resources Karim Marucchi’s website Crowd Favorite About Karim Karim Marucchi is the Founder and Chairman of the VeloMedia Group, the parent company of boutique professional service organizations with offices in Los Angeles, Denver, Bucharest, Las Vegas, New York and Rome. Over the last twenty years he’s run startups, taken companies public, managed mergers and acquisitions, and led professional service organizations across the globe. Today he’s the CEO of Crowd Favorite, the first premiere WordPress agency for the Fortune 500, where clients such as Microsoft, National Geographic, DirectTV, Lexus, Facebook and major entertainment studios count among the company’s client roster

Mike Paton joins me today to talk about how EOS® (the entrepreneurial operating system) and Traction can help you accelerate your business. Mike is the “visionary” of EOS Worldwide. He is a consultant to the massive client base looking to EOS® to identify the problems and strengths of their businesses. He shares what his job entails and how someone like him can help a struggling business. As an adopter of EOS® in my own business, I highly recommend this operating system for small businesses. It is a great tool. Mike and I explain the two-year process that businesses go through to get their business into a healthier state. EOS is not a quick process, but it is totally worth the time and resources invested in it. You will learn about: Mike’s book with EOS Worldwide’s founder called Get a Grip. Mike’s business background. What is EOS? How to use EOS in your business? The 6 components of the EOS process. The importance of working with the “big picture” in mind. Common results Mike sees with his clients. Why EOS works. How to clarify roles within the company. What is the integrator role in a company? What is the visionary role in a company? Finding and maintaining passion in the business. How EOS works for family businesses. Why EOS is a great option for businesses. We’ve talked in the past about making things easier in your business by using all the tools you have available to you. Today we’re talking specifically about EOS, or Entrepreneurial Operating System, as a way to free up some of your time and help you run your business more efficiently. Not every company is a good fit for EOS, of course, but our guest today (Mike Paton) says it’s important to pick just one operating system to work with so everything aligns in the software world and also between the humans who use those systems. Transparent Operations Mike identifies six key areas to assess when looking at implementing an EOS®. Typically once EOS® is in place, if there are issues in these key components, you’ll see evidence of that pretty quickly and therefore be able to get to the root of the problem. In Mike’s own words, here are the 6 key components of EOS® in order to gain Traction® that you should evaluate: Vision — Getting everybody on the same page with where you’re going and how you plan on getting there; People — Making sure you have great people in your business so you can achieve your great vision; Data — Running the business on a handful of objective numbers rather than the feelings, egos and emotions that so often are the basis of decisions in an entrepreneurial company; Issues — Because when your vision, people and data components are strong, your organization is transparent. This means all your problems, challenges and obstacles are smoked out. You need to be good at issues resolution at this point. Get good at recognizing, prioritizing and resolving your issues for the long-term greater good; Process — Getting the most important stuff in the business done the right and best way every time, even when you’re not there to manage everybody closely. It creates consistency and scalability; and, Traction — The art and science and bringing a vision down to the ground and ensuring that everybody executes on it. While you might be having a “well no kidding” moment relating to doing the due diligence on your company, it’s worth mentioning that these items rarely get looked at closely or objectively enough without outside counsel. So, really: where are your weaknesses? How can you fix or address them? The EOS® and Traction Business Model is Simple, Not Easy Mike admits that the concept behind EOS® is simple; however, the implementation is hard. You need to be very diligent on how you implement EOS® and Traction®. How do you get your partners or team back on track if their vision no longer matches up to yours? Is your conflict resolution a little lackluster? When you start looking at your business with a critical eye to improving it, do you see a lot of risks? Well guess what? Your potential buyer will see those as well. Implementing one type of operating software program that can streamline your operations (yes, hence the name EOS®) will help you decrease the actual and perceived risks. Oftentimes, simply acknowledging an issue can take the bite out of it and thus make it seem like less of a risk to a buyer. If you choose an EOS®, great. If not, great. The importance is to start streamlining things where you can. The sooner you’re able to identify your issues, the sooner you can start targeting and fixing them. Plus, having a head’s up on a potentially problematic financial situation six months sooner can make all the difference in the world! Same with if you’re struggling in another, perhaps intangible way such as with brand appeal. The more time you have to take action, the more effective that action will be. Essentially, having an ‘at a glance’ of potential issues for your company will allow you to perform triage to improve how your business operates and hopefully also your bottom line, making you more appealing to a buyer. After all, this is a podcast about ensuring a successful life after the sale of your business. Moving from Integrator to Visionary (Little Pieces at a Time) You might not be ready to sell your business today, but eventually you will need to exit or transition your company. No matter what you decide to do, it is always a good idea to get things in order. Sounds grim, but it’s not. If you sell, you’ll get more money for a less risky and more profitable business; if you pass it on to the next generation, they’ll have a more finely tuned machine to grow with. Either way, get to know your 6 key components and start working on the ones you’ve identified as weak. This is also the other side of EOS®. While it helps you take care of the integrity of your business, it also helps you secure its legacy and your peace of mind. We work so hard at building our business and making it stable because it’s our passion, our baby. So now that we’ve grown it to such a size that it is too big for just our two hands, we need to rely on other people. But sometimes that has meant we’ve given up the very reason we started the business: we are the visionary! We see it, we build it. But not we’re running it in the day-to-day operations. We’re no longer doing just big vision stuff; now we’re doing payroll or inventory or customer relations. If that’s what you love to do, read no more. If that’s not what got you into this business in the first place, then consider this other aspect of EOS®: it helps things run more efficiently and can point out those areas you clearly need outside help, which frees up your own time to start looking at what makes you happy and what your passions are. Whether you use this information to sell and start something new or simply to carve out the role that more appeals to you is up to you. Either way, becoming more of a passive owner (someone who works on not in their business) should be one of your top goals so you can regain your sense of achievement and fulfillment. Are you working in the role that fulfills your passion? Try looking at those 6 key areas if not. Takeaways: I have one big takeaway from this episode. First of all, everybody needs an operating system to effectively run their business. EOS is not an easy process, but the work is totally worth it. Our company has greatly benefited from this operating system and we are a better and happier company for it. Links and Resources GEXP Collaborative Get A Grip: How to Get Everything You Want from Your Entrepreneurial Business by Gino Wickman and Mike Paton EOS Worldwide Mike’s email

My guest today is Sabina Teshler. Sabina is the founder and current chairperson of SET Creative. SET is a consulting agency for businesses wanting to take their brand recognition to the next level. The company was sold to WPP as an attempt to bring SET to a wider audience. The choice was the right one and now Sabina works to keep her business culture the same as it was when she was CEO. During today’s show, we discuss how Sabina and her business partners decided to sell the business. She explains why she chose to sell the business when it was “on top” and why she recommends that to any entrepreneur. She stresses the importance of building a good team and knowing which direction you want to move in as a company. Her confidence in her team and business is inspiring. SET Creative is a rare story that has a happy ending at the end of the sale. That’s not by accident. Sabina shares how she and her team negotiated and challenged their deal to their optimal outcome. Tune in to hear how to sell your business the right way. What you will learn about: Sabina’s journey to entrepreneurship. The importance of meeting the client’s needs. The difference in “working on the business” and “working in the business.” The importance of hiring the right team. Building an executive leadership team that will add value to the business. Why Sabina and her partners sold SET Creative. How the sale affected the company’s vision. When to create an exit plan. When to call an advisor. How to negotiate a favorable deal. The importance of knowing what questions to ask. Why you need to be able to “walk away.” The 3 assets Sabina and her team brought to the negotiations. The deal structure that Sabina negotiated. Why business owners should expect some turn-over after a sale. Sabina’s new role as a cultural leader. What Sabina would have done differently during the negotiations. Sabina’s advice to the listeners. Today we are talking to Sabina Teshler who has gone through a rather successful exit which she managed to keep in line with her own vision and needs. Not only that, but she got the full value she was looking for to keep her solvent for the future. It wasn’t rocket science that allowed her to achieve all these things; rather, it was preparing early and not being afraid to sell when the time was right. Prepare For a Business Exit Early Sabina is not the only person who has told you that preparation is key in life and business. However, perhaps her story of being prepared equalling lots of cash and a happy business transition will be the motivation you need to start your own preparations today. When you start thinking about the integral aspects of your business that add to your life, the key things you want to continue when you’re gone and other such considerations, you can figure out what you want and need to get out of your eventual exit. Bo Burlingham talks about this in his book Finish Big because so many people undervalue how important knowing what you want and why you want it is when you go to sell your business. You will see greater happiness knowing what you’re after and going for it from the start than if you sell without the end in mind and suddenly find yourself in a position where you’re left feeling unfulfilled or even with regret. Timing The Sale of Your Sale When is the best time to sell your business? You’ll hear a hundred answers about this. But one thing many business owners tend to shy away from is selling their business when it is at its prime. Sabina is a great example of why you should not be afraid of doing this. Waiting for your business to level out (or even when it takes a negative turn) can actually hurt the bottom line you get for your business in the end. If you sell when it is still growing, or has reached an all-time high, you can secure a higher number because you are showing the strength and stability of your product, service or brand. There is more money to be made, essentially, and the buyer can readily see that. Reducing the buyer’s risk improves your business’ appeal—and while we know this to be the case, oftentimes we still won’t sell our business at a peak because we want to reap the benefits. You need to have a wider frame of reference, though. How much longer do you want to keep working in your business at this level? How much longer can you continue to grow your business with the current resources available to you? It’s all timing. Before you start to see the downturn that inevitably comes from hitting multiple ceilings, you can secure yourself a really well-structured deal that saves the elements of your business you care about the most while passing the reigns over to a company that can continue to grow and develop your business. Plus, for many of us, we’re not rid of our business when we sell it. Many owners stay on to help with the transition and others stay on in other capacities because there is an interest in product development or some other factor that really resonates with the entrepreneurial spirit. It does take a bit of due diligence, determination and the ability to look inside and be introspective so you can figure out what you need from an exit and therefore when you need to do the exit. You may also want to bring on an advisor or other person you can rely on to provide great council in areas that you may be weak. The Trusted Partner in a Business Exit For Sabina, her trusted partner was her husband. While your life partner might not be your ideal business partner, both relationships are of equal commitment and importance. Find someone who has the same goals as you, shares your vision and is accountable to you and the business so that the investment is equal on both sides. Conversations need to happen early and often to ensure everyone is on the same page as the business continues, particularly as it nears the point of sale. Aligning your goals before you sell helps you position your business for the right company (one that shares your goals) to purchase you. This comes back to the first point about preparing for a sale with your end game in mind: if you know what you want your business to look like when you’ve exited it before you enter the sales process, your negotiations will go much better and you’ll have a happier outcome for all. Not All Business Sale Contracts Are Made the Same Part of your negotiations is looking after your interests, both personally and professionally. So aside from getting the dollars you want out of the sale, you also want to protect your original vision so the business continues in a similar fashion after. Sabina was very adamant about continuing her business after the sale as it was before because the culture was very important to her. This was part of her considerations during the negotiation process. As she says, “Not all contracts are made the same” and you can challenge and negotiate contracts differently to make sure you achieve your desired outcome. And, if you’re not going to get what you want out of the deal, walk away. Sounds easy, but if you’ve prepared for your exit and have the right team/advisors in place, you actually can walk away with no harm done—and with a better idea of what your business is valued at and what you need to do to get what you want. So ask yourself the hard questions and get yourself into a better position to start drafting ideas for what you want from a sale so you can always be prepared to sell if the opportunity presents itself. Takeaways: Always have an exit plan. Sell your business when it is on top so you are bringing more to the table. Call the right advisors to create the right team to sell your business and plan the most favorable exit for yourself you can. Call advisors. The right advisor will bring value to your company and help you make the right decisions for your business. They will also help you find the right questions to get the exact outcome you want from the sale. Know what you want out of the deal. Ask the questions that will lead to that outcome. It is important that you are always in the position to be able to walk away from the deal when your needs and wants aren’t being considered. Links and Resources SET Creative WPP Sabina’s email About Sabina: Sabina Teshler is a member of the Women’s Presidents Organization and in 2014 was named Enterprising Woman of the Year by Enterprising Women Magazine. She began her career as a retail consultant and quickly developed a reputation for delivering results. After becoming a top account executive at Ivey Performance Marketing she realized there was a need in the market for a creative agency that would provide an experience tailored to each individual client and she founded SET in 2009. Sabina is dedicated to driving the success of SET through delivering exceptional work and leading a diverse and highly creative team.

My guest today is Loren Horsager, the CEO and co-founder of Mobile Composer. Loren has been working in software development for 25 years. Mobile Composer helps identify software development opportunities for companies to target niche areas of their market. All industries can benefit from a software application. Loren shares how software can increase value to a business, especially when it comes time to sell. Mobile Composer helps clients sit down and actually plan their software development in a logical and constructive manner. He discusses his company’s process of finding the specific niche that will benefit the client. In today’s online world, establishing a source of recurring revenue is key to attracting good quality buyers. Mobile technology done right gives a business a leg up on their competition. You will learn about: Loren’s software development background. What Mobile Composer does for their clients. Why pivoting into software begins with your market. Common issues companies have when developing a SaaS product. The importance of planning all aspects of software. How to measure an increase in value to a business. How to build a product that is maintainable and adaptable. What do your company do for recurring revenue? If you answered “nothing”, you’re not the only one. However, our guest today says that developing a recurring or passive income source for your business can triple your value—so maybe it’s time to look into what avenues are available for you to expand into and allow you to tap into this revenue stream. Lorne Horsager has been in software development for 25 years and knows his stuff. The examples he gives within the show of various industries and the way they provide SaaS or other recurring revenue services are well-rounded and can really spark your imagination of what is possible. Here are some key things to focus on when looking for a passive revenue source within your business. Know What You Do As with anything regarding your business, you really need to know what you’re about before you can go dumping money into a new product or service. If your company doesn’t typically use software, it can be even more daunting to develop some SaaS to help retain clients or improve your services. However, the end investment is worth it both financially and personally as it tends to save you a ton of time on the back-end (think automatic scheduling, billing or other similar rote service you do daily). Your client and your staff will thank you for streamlining some of the more tedious tasks. If you are a subscription-based service or already have recurring revenue, no one needs to tell you just how valuable it is to have that predictable revenue ticking over each month without you having to actively seek out new business. Everyone’s dream, right? But there are always avenues you haven’t thought to explore or packages you have yet to create. So it comes back to knowing your business. Know who you’re selling to and the present market conditions. Take stock of your employees and your operational efficiency. What elements of your business could be improved through software in some way? If you can’t come up with anything, ask your staff! They run the front lines and deal with all those daily headaches that you no longer wish to (good work on that, by the way). If your front desk workers think a queue system and online database scheduler would save you time and money (and help deliver services faster and more efficiently), look into buying or developing that. Perhaps you have clients who routinely get key services performed. They may be open to regular billing to save time. Either way, it doesn’t hurt to look into what elements of your business can be streamlined with SaaS. Build to Suit, but Plan the Route You want to have something that matches your market niche and is individual to your business, of course. However, you don’t want to force a product out that isn’t ready. You need to ensure that what you’re developing is necessary (courtesy of your above research) and that it is as bug-free as possible. Shoving something out into the market that is a huge headache to use or has tons of issues is going to do the exact opposite you want it to and taint your future endeavours in the SaaS arena. If your business isn’t able to create its own software program, that’s okay. You can hire out for this service from many freelancers or contractors, no problem. Technology is a very in-demand market right now and there are tons of people who know just how to help you build your product. If, however, you’re able to do it on-site, that’s even better since you have less concern over NDAs or delivery dates. Where’s the Value? Whether you’re developing the product to simply streamline your business on the back-end or you want to sell a new service to your clients for a passive revenue stream, SaaS adds to your business’ value. Not only does recurring revenue provide much-needed cash flow, it also shows potential acquirers that there is less risk in buying your business because the present revenue model isn’t contingent on you as the owner being there to continue to drive sales through loyalty or your specific skills. As Ken Sanginario always says, you want a predictable, transferable and sustainable business. Recurring revenue is an excellent way to show that your future cash flows will stay strong because they’re not going anywhere (with a little TLC from you and your team to ensure those services stay current and necessary, of course). So take a long and thorough look at your business. Do your due diligence and see if there’s an area where you can improve your cash flow through SaaS and therefore increase your value in the market. After all, we want to set you up for a successful and happy Life After Business and this is just one of the more valuable ways we can help you do that. Takeaways: Know your business, know your customers, and know your market. Every business has a niche that can be served better by technology. However, you need to know what needs to focus on and how to solve the problem. Creating a mobile SaaS product is a lot easier now. Don’t be afraid to explore this avenue in your business. Plan, plan, plan and plan some more! Don’t push development just to get ahead of the competition. Build the software right and consider the future of your industry when you plan the product. Don’t be in a hurry and offer an awesome product! Links and Resources Mobile Composer Loren’s email About Loren: Loren Horsager, Mobile Composer CEO, and founding partner has 20+ years of experience building teams to deliver software solutions, and manage consulting organizations. A visionary who understood the tremendous business potential of mobile technology early on, Loren regularly presents about how companies can develop and execute on mobile strategies. He is a recognized expert in Microsoft and Xamarin development tools.

My guest today is Bill Casey. Bill is the Vice Chair of the Transaction Advisory Services department of EY (Ernst & Young Global Limited.) He has been an employee of EY for 35 years and has seen many market changes come and go. Bill has an MBA and a background in audit, a solid career choice he believes for anybody wanting to get into the financial sector. During today’s show, we discuss the 2018 M&A Firepower Report. Bill shares some of the trends emerging in this year’s report. We speculate what that could mean for the economy and how American tax reforms are affecting the trends. Bill also gives some foolproof advice for business owners thinking about selling in 2018. We cover the traits that are making companies attractive to buyers and how a seller can make their company more enticing in this current climate. You will learn about: Bill’s financial industry background. The M&A Report basic overview. How markets are blending their services to better serve the consumer. The benefits of embracing technology in business. How to create good synergy to attract a buyer. The role data analytics is playing in business planning. How to prepare for a seller’s exit. The reasons sellers are selling to private equity firms. The 3 factors to consider during a sell, other than the price. Know what you want to accomplish with your sale. Why cash deals are becoming more common. How to build a great team to run your company. The main thing a seller should focus on when selling. How to align your team regarding the future of the company. Strategies a seller and a buyer can use to achieve alignment. Bill’s advice to future sellers. What are the key things you should do to prepare your company for acquisition? Bill Casey, with his 35 years at EY, says it all comes down to due diligence (or reverse due diligence). This isn’t just your run-of-the-mill due diligence, however. You need to take a close look at your company’s operations from both the tangible and intangible aspects. Dual Merger and Acquisition Due Diligence At this point in the game, every entrepreneur knows about due diligence—at least in terms of the financials. So before you think about selling your business, make sure your books are in order. You need to know them inside and out, including where your weaknesses are, liabilities, potential legal kerfuffles and the state of your assets before you pass the business on. No buyer wants to acquire a company that is riddled with unknowns or risks that could potentially impact the future earnings or cash flows of its acquisition. But that’s not where your due diligence should stop. You need to evaluate your intangible assets as well. Things like goodwill, customer/client retention, your employees and even your reputation and company culture all add (or detract!) from your business’ value.  Brand names have power and impact the market, just by reputation alone. Does your company do that? Do people vie for positions at your company when they come up because you are so well-known for a cool company culture or how you treat your employees? These and other intangibles impact your intrinsic value just as much as your tangible assets do. Build the Value of Your Business by Building Up Your Intangibles There is a lot you can do with tangible assets, and your financial team can help you sort out the various things you should focus on (past-due accounts, landing a few new clients, etc.). For the intangible assets, however, you may need to get creative. You’ll need to focus on things like building up your company’s social and cultural presence, reputation and vision. When you decide to sell, part of your due diligence will be to ensure that the things that make your company so special, and so valuable in its uniqueness, will carry their weight into the new arrangement. This is why doing your due diligence before you start the sales process is vital. You’ll need time to make things right or improve what you have to drive a better deal. Identifying the aspects of your company culture which drive the most value gives you even more chips at the negotiation table while allowing you to identify any potential counterpoints. The thing with intangibles is: they often come down to fit. Do the intangibles (and their quality) of the acquirer and acquiree match up? Is it the Business Buyer the Right Fit? Knowing what you want out of a merger or acquisition is vital to the success of the transaction. You need to know if you want to stay on or get out completely, what you want to happen to your employees and the style of acquisition you’re looking to see—do you want your company to carry on in a similar fashion as when you ran it, or does it matter to you if you get absorbed into another entity almost entirely? The last thing you want is seller’s remorse because you made the wrong deal. Once you know what you’re looking for from your exit and in the company you eventually sell to, you can work diligently to get the result you want. Find out the strengths and weaknesses of the acquiring company, particularly in terms of the cultural aspects and how they will impact your company. Integration is the hardest aspect of any merger or acquisition because there are so many elements to get right. The buyer may have a stronger culture in some areas and you may have some points in your favor in others. Figuring out which areas can complement each other can save you both a lot of headaches—particularly if you want to see something of your legacy live on. The tricky part about this is putting it all together in your sales pitch. Sell Your Company, Don’t Just Sell it Once upon a time, you were your company’s strongest advocate. Maybe you still are? (That’s a discussion for another time.) Either way, someone needs to be the salesperson that gets your company the best deal possible. This means that you need to really sell it, as they say. So how do you do that? Take everything you learned in your dual due diligence—your strongest numbers, your brand’s strength, etc. —and use this information to showcase your business and justify the price and terms of the deal. Maybe you’re not your own best salesperson. The proof, as they say, is in the pudding. It’s time to bring in some of your employees to speak to the quality of the company. After all, part of your success is because of the stellar team you’ve generated—and, if you have the A-team on your side, no company is going to risk losing them! Either way, at some point, you’ll need to include your management team in your plans. They’ll need to know what is coming down the pipes so there are no shocks or surprises that make them do something rash. If you’ve taken care that your employees will be looked after once the sale is completed, they can help smooth the process over even more than you can. Let them help you make the sale and get the terms you want. Use all your assets to secure the deal you deserve for the company you worked so hard to build. Takeaways: Bill really stressed the importance of due diligence. Be prepared to sell before you even find a buyer. Doing your homework will build a trust level and professionalism that will make any deal you come to that much smoother. Hire the right people for your team. Build a great company culture and you will attract high-quality buyers. Team members should be on the same page as you and be able to carry on the business in a way that would make you proud. Know what you want out of a business deal. If you want to stay involved in the company, make sure you know what that would entail for you. If you know what you want to do after the sale, it will make choosing the right buyer easier. You need to know what questions to ask. Links and Resources: EY Transaction Advisory Services Bill Casey on LinkedIn 2018 M&A Firepower Report: Life Sciences Deals and Data About Bill: William (Bill) M. Casey is the EY Americas Vice Chair of Transaction Advisory Services (TAS), which helps organizations raise, preserve, invest and optimize their capital. Bill advises clients on capital strategy, mergers and acquisitions, public company spinoffs, IPOs and securities offerings. Bill has led some of the largest client engagements of Ernst & Young LLP, including cross-border transactions for major multinational corporations and leading private equity firms. Over the last decade, he has worked to help double the talent and revenues of TAS practices in EY Americas member firms, which now include more than 3600 professionals based in the United States, Canada, Mexico, Central and South America. Bill is fluent in English, Spanish and Portuguese and a competitive triathlete. (EY.com)

My guest today is Rob Dube. Rob has been a successful businessman since high school. He and his business partner have been running their businesses together ever since. Now Rob is the president and co-founder of imageOne. imageOne is a print managed business that began as a toner cartridge refurbishing company. It has since become one of the top companies in the Top 25 Small Businesses in America on the 2017 list of Forbes Small Giants. Rob has developed a strong relationship with his employees and himself through the practice of meditation. Unlike most of my guests, Rob sold his business in 2004 and bought it back in 2006. During today’s episode, we discuss why Rob bought back imageOne and how he runs it better now. We also discuss Rob’s new book, Donothing, and his journey to discovering the benefits of meditation. Rob has developed a constructive relationship with numerous business leaders, including author Bo Burlingham. Bo is a wise business writer who has helped many business owners build better companies. Rob shares how Bo’s work has helped him restructure his business and personal life.  Rob has figured out how to fortify his business and business culture, if anything can be taken away from this episode, it’s business is a constant learning experience. You will learn about: Rob’s early business experience. The bumps and setbacks along the way to imageOne. How Rob was able to find his company’s focus. The events that led up to the 2004 sale. The reasons why Rob and his partner bought imageOne back in 2006. How Bo Burlingham’s book Small Giants helped Rob restructure his company. The 6 qualities of “small giant” businesses. Rob’s relationship with Bo Burlingham and what he has learned. Other books and tools that have helped Rob build his business. The long-term goals for imageOne. How meditation has helped Rob get focus and clarity. Silent retreats, what are they? Rob’s leaders silent retreat event. Rob’s advice to listeners. How often do you do… nothing? With so much on your plate, it can be hard to find a quiet moment just to breathe. Today’s speaker, however, recommends doing just that. His success, and many others who have been on this show, derives from those moments he is able to clear his mind of the endless barrage of questions  and concerns that run through his head from the moment he awakens to the time he falls asleep. Why is this, exactly? Focus. Being able to clear your mind and be present in the moment helps you gain focus and perspective to better tackle the things that matter in life. The Value of Nothing Rob Dubé is no stranger to building and exiting a company. In fact, he has built and exited the same company he currently owns today. Rob re-purchased the successful print managed business he sold after only 18 months of being an employee, rather than entrepreneur. His painful process of reaching that decision was helped along by meditation—by doing nothing. It hit him one afternoon, when his family was out enjoying the nice weather and he was sitting inside, bordering on tears, from his anxiety over the stress of the office. Sound familiar? Even if you’re telling yourself you’re not that stressed out, that your business is fantastic and smooth-operating and you wouldn’t change a thing… chances are, you could benefit from taking a breather. And that’s exactly what Rob did. By sheer instinct, he sat down and meditated. He focused on his breathing for several moments before returning to his day. While this didn’t solve his problems, it allowed him to clear his thoughts and process things more efficiently. Doing nothing—whether it’s by traditional meditation, prayer or simply taking a moment and breathing—can give you the edge you need to break through a complex problem. Every Problem Has a Solution Rob had a surprise offer for his company, ImageOne, after he and his partner successfully got a contract with a hospital, beating out a larger competitor. This competitor then contacted the pair and they eventually settled on a deal—one which included three-year work contracts for both Rob and his partner, Joel. During the first 18 months of their three-year contract, the pair discovered just how challenging their new roles were going to be. Trying to re-train a group of 500 copier sales reps was a very difficult task, one which Rob found didn’t fit his skill set or the vision he had when he started the company. So, he and Joel decided to pay the new CEO a visit. During that visit, they discussed the issues as they saw them and expressed concerns with compatibility. The result of that meeting was Joel and Rob being offered the business again. The two decided to re-purchase the business to keep true to their principles and focus on being a successful small giant—a book which inspired Rob’s actions, and continues to do so to this day. Small Giants Can Finish Big? Bo Burlingham was a huge influence on Rob’s decision at the time. As part of Rob’s journey to lower his anxiety, he began attending conferences and even retreats focusing on meditation and silence, as well as some on building better businesses. In fact, it was at a Zingerman’s conference that Rob met  Bo Burlingham. The two kept in touch, and now Rob works closely with Bo on his various presentations around the country each year and has even been featured in Bo’s books. While Rob’s focus is on being a small giant, and is doing so quite successfully, he still has a way to go before finding out if you can stay true to the values of Small Giant and still manage to finish big. In the meantime, he focuses on being transparent, governing his business with an employee-first mindset and generating a company culture that has impact in a community and would be missed if it closed. Finding fulfillment in business by sticking to your principles is something many entrepreneurs strive for. Achieving this while maintaining good profit margins is the gold standard, however. What Rob has found, through being more mindful, is that it is doable if you approach it correctly. He has learned much from his time with Bo and his other pursuits for continuing education—both personally and professionally. Never Stop Learning To that end, let’s consider Rob’s intellectual journey. Not only did he focus on taking courses, attending conferences or reading the right books related to business, he also focused on what helps him be a better and more effective person. Rob attended Zingtrains to increase his customer service and corporate culture, he read a multitude of books designed to provide insight and he networked and contributed to his business community to improve his business acumen. His business profits from his dedication and actions, and his continued improvement keeps his small giant on track to finishing big. On a more personal note, Rob’s emotional and mental journey should be trumpeted as well. You can take all the business courses you want, but they won’t make you a better leader or help you manage your work-related stress if you are not self-aware. Rob enjoys meditating (as does his mentor, Bo) and recommends everyone should do it daily—you just need to find the right amount and time for yourself. It can be as little as two minutes each day, or you can emulate Rob and do 45 minutes when you first wake up and 20 minutes right before bed. Either way, this meditative practice will help you focus your thoughts and clear your mind so you can tackle your problems and find more effective solutions. Find the path that helps you help yourself and your business the very best and plan it out. As one of Rob’s mentors used to say, “Vision without execution is just hallucinating.” You need to see it, plan it and execute it. Takeaways: Rob has spent a lot of time on investing in himself, his business, his vision, and the community he and his company serve. He also finds useful tools and practices to help make all those investments better. Rob prioritizes his company culture to create a great place for his employees to work. He is really making a difference in his employees’ lives. Meditation is the key to a clear head and better understanding of a purpose and values. Links and Resources imageOne Donothing: The Most Rewarding Leadership Challenge You Will Ever Take by Rob Dube Forbes Small Giants 2017: America’s Best Small Companies Rob’s email Rob on LinkedIn Rob on Twitter Rob on Facebook Rob on Instagram Small Giants by Bo Burlingham Silent Leader Retreat Finish Big: How Great Entrepreneurs Exit Their Companies on Top by Bo Burlingham The Great Game of Business, Expanded and Updated: The Only Sensible Way to Run a Company by Jack Stack Focus: The Future of Your Company Depends on It by Al Ries About Rob: From Blow Pops to Forbes Best Small Companies! Rob started his first business in high school selling Blow Pops out of his locker. For the last 27 years, he’s served as President and Co-founder of imageOne, ranked as one of the Top 25 Small Businesses in America on the 2017 list of Forbes Small Giants. Throughout Rob’s entrepreneurial journey, he’s developed an unwavering passion for delivering extraordinary experiences that positively impact the lives of his team members, the goals of their customers, and the fabric of the community… A unique approach to business that has driven the company to success in its industry, and as a top workplace. imageOne is the leading organization in Managed Print Services and Document Software Solutions, and is well-known as an exceptional company, receiving local and national recognition for its multi-award-winning culture. Rob is an avid meditator of 13 years, the author of donothing™ : the most rewarding leadership challenge you will ever take (set for release in early 2018), and organizer of the donothing™ leadership silent retreat.

Today I dive into the topic of tax reform with my guest, James Markham. James is the Global Tax Middle Market Leader for EY (Ernst & Young Global Limited.) We discuss this exciting time in U.S. business history. Some people are thrilled about the upcoming tax reform (it takes effect this year) and others are scared stiff. James and I try to take some of the confusion and misunderstandings out of the new tax laws. So, hopefully, we are able to ease your mind about the new changes. If you have plans to sell your company this year or you are just a little nervous about the 2018 tax reform, join us to get some perspective! You will learn about: What does tax reform mean for U.S. business owners? Where to go to get accurate information about the 2018 tax reform. Why you need to check, check, and triple check your analysis to make the right decisions for your business. What the tax reform means for PE firms (private equity.) The changes that will change “the game” in the long run. Expect a boom in international business interest. Why this is a good time to review your current business deals and revise them accordingly. Why high tax areas will suffer from this new tax reform. New financial caps that will take effect with the new reform. Make sure you are ready! The 3 highlights James has for the audience. This week we’re talking taxes. Typically on the show, I like to cover topics that help owners survive the selling process, particularly in terms of what comes next. Today, we’re going to talk about how taxes impact the sales process, why making a quick choice to save some money now could negatively impact your sale price and what you can do to minimize the risks of changing your tax strategy. 2018 Tax Reform: Exceptions, Exemptions and Expenses Tax laws have changed, and we need to keep up. While some changes are exciting and titillating, they are rather complicated. Things cannot continue as they were, right down to that weekly round of golf you play with your top clients on Thursday afternoons. Essentially, you are no longer going to be able to entertain your clients like you used to. The new tax laws stipulate that you can expense meals, but not the entertainment that often goes alongside them. While many of us groan at the initial thought, the impact is actually much greater than simple inconvenience on our parts, personally, as the business owner. While trying to cater to high-end clients by taking them to one of the top golf courses in the area or out on the boat along the beach is very common and oftentimes expected on the clients’ part, you can no longer expense this. So your golf club membership, sail boat, box seats, etc. now much be paid out-of-pocket. Can you still afford these expenses? Will the businesses you used to frequent (and pay for out of the company’s coffers) survive after having lost your usual patronage? One other change that will have a definite impact on your business is the ability to 100% expense a purchase immediately—but is that going to be the game-changing tax break you’re looking for? Well, maybe. But maybe you’d rather have the tax break over the course of several years. On either side, your expensing choice comes down to what you and your business need. The impact of these changes will be far-reaching. While it’s not possible to predict all of the effects we will see on our community, or our country, we can at least better inform ourselves and possibly protect the integrity of our businesses. Making Sense of the 2018 Tax Reform Chaos Congratulations, you have entered the bonus round where every question comes quickly and wrong answers are penalized heavily. Before now, you’ve been able to expense nearly anything in the name of your client; now, you need to reign in your entertainment expenses if you want to avoid nasty fees when you hand in your deductions next year. There is a way around these nasty expenses—one which will allow you to find the loopholes. Hire a Tax professional! As James self-deprecatingly said, “Now is a good time to be an accountant.” You need to be in contact with the people who understand the law and work with it the closest. James and EY actually work with people who worked at the IRS and who understand the changes from the ground up. While not every accountant can claim that level of intimacy, all have more knowledge about what your taxes can do for you and can guide you through the tricky and complex wording of the new tax laws. You’ll want to do this for two reasons: one, on a personal level, you’ll want to protect yourself at tax time and ensure you’re doing everything you can (and claiming everything you can) to give yourself the best outcome possible—your tax rate has dropped from 35% to 21% as an individual, and while that is good on its own, it can also be more multilayered; and two, on a business level, you’ll want to keep your business in as good of standing as possible—particularly if you’re looking to sell in the next 3-5 years. James has some further cautionary points for business owners looking to sell in the next 3-5 years. Sometimes changing how you operate (S-corp or C-corp, for example) can impact your selling price because your taxation (and value or cash flow) will change. This is a very intricate bit of taxation law, however, and the best people to help you figure out what’s best for you is to talk to your accountant and your M&A intermediary. Your accountant can help you structure your books, based on what are the best taxation options available, and your M&A advisor can show you where to dial in your efforts to make your business more appealing. Before making any major moves, one way or the other, you should consult with your advisors so you don’t make a costly mistake. We can avoid some stiff fees or taxes if we structure our taxes properly, in advance. Until these changes are second nature, we need to be looking to those who have the most experience and industry expertise to give us better footing for the long-run. Takeaways: The new ability to make a 100% expense purchases will be a huge game changer in business! Most of these changes will shake up the business world and you need to be prepared for them. Don’t make a change to your business structure just for a tax benefit. A sudden change can make you undesirable to outside buyers. Don’t make a major business decision or change without consulting a professional tax expert. You need to plan your next move, don’t try to navigate this change with your gut. Plan, plan, plan, and plan so more! Plan until you are sure you have a solid strategy going forward. Links and Resources: EY.com About James: James Markham is the EY Global Tax Middle Market Leader, after serving as the EY Global Tax Leader – Strategic Growth Markets for the past few years. He has 33 years of experience and concentrates on tax, accounting for income taxes, acquisitions, joint ventures and foreign expansion planning. He helps companies with tax minimization strategies, especially in mergers and acquisitions and international expansion. James has a master’s degree in Tax and an undergraduate degree in Accounting from Brigham Young University. He is a member of the American Institute of CPAs.

My guest today is Rob Walling. Rob is a serial entrepreneur that built one of the most successful ecommerce marketing platforms on the market, maybe you’ve heard of it… Drip. We discuss Rob’s early entry into the world of business and how he became a giant in the tech space. He lives by 3 main principles that have guided him on his entrepreneurial journey. He shares why these principles are so important to him and how he came to the conclusion he needed them. Let Rob’s insights help you take a closer look at your own principles and what drives you! You will learn about: Rob’s early years selling goods to his classmates and what he learned from it. How Rob found his way into the world of coding and software development. How DotnetInvoice started it all. The system Rob developed to keep his companies and his profits growing. The 3 principles Rob looks for in any business endeavor. How Rob found purpose in his work. The purchase of HitTail and how it changed things for Rob. Why Google was a driving force to sell HitTail. Drip’s origin story. The best advice Rob has ever gotten. The decision process for selling Drip. Separating business from emotion and how Rob kept his mind on his goals. Rob’s advice to the listeners. Today’s guest shows us just how important knowing yourself really is in terms of business success and happiness. Rob Walling has built and sold two successful businesses while sticking to his principles and ensuring he’s getting the dollars he needs to live the life he truly wants. Through hard work, education and self-knowledge (including acknowledging your limitations!), you can achieve the freedom you need when the time comes to exit your business. Principle Is Principle It might seem like common sense to say that money matters, and rightly so. However, Rob’s own principles of freedom, purpose, and relationships have enabled him to achieve his business and life goals. Living by his principles got him the principle he needed to back his investments, build his companies and live the life after business he wanted. Rob learned the value of money at a young age, and discovered his entrepreneurial spirit in eighth grade. He was opportunistic — he saw a market niche he could exploit and went to town. He became a salesman at his school. He would purchase items, marked them up and sell them to his peers. Many entrepreneurs start out in a very similar manner: they have a need that is not being fulfilled and they find a way to fulfill it. He wanted to be able to help out at home and have the financial freedom to buy the things he wanted. This motivation carried him into his next adventure, and his first big success, by showing him that you can make money if you have the right market niche and the drive to capitalize on it. Find Your Niche Rob went out and tried and failed at multiple small businesses after college, but nothing really gained traction until he went back to his roots: he found software that fit a niche market in online invoicing to purchase and grow. He saw the opportunity to do something in a field he understood and was able to get into it without having a ton of capital behind him — he had neither family money to draw from nor an investor funding him. His main goal here was freedom. He wanted to earn enough money to get by each month without slaving away at something he didn’t enjoy. And, courtesy of his previous experiences, he knew he wasn’t built to work for someone else. Enter the next phase of an entrepreneur’s development: the need to be in control and work for yourself. This is a key component to Rob’s principle of purpose. To live a purpose-filled life, he needed to be in control of what he was doing, where he was going and how he was going to get there. It’s All About the Journey Finding your purpose is a journey all on its own. Never mind the hundreds of other little journeys you take alongside it. Most of us haven’t yet discovered what our purpose is, but guess what? That’s part of it, too. You need to try and fail, sometimes repeatedly, to truly figure out what makes you tick. Rob is very insightful and pays attention to his mental and emotional needs. He takes courses and reads about personality types so he better understands himself and how he functions, both as a business man and on a more personal level. This generates a greater understanding of the types of things that he will enjoy doing in his life and what he will derive satisfaction and fulfillment from. If you’re unsure what your purpose is, it’s time to start working on it. Read, or listen to audio books, designed to expand your understanding of yourself, your business and your lifestyle. Find out what makes you tick and work to uncover as much information as you can about that so you can better enable yourself to capitalize on those things. With great purpose comes great satisfaction, and it makes the transition out of business a lot easier. Relish in Your Relations You may find this has already been happening to you, but if you haven’t, you need to start focusing on developing relationships so you can develop yourself. Having purposeful (to draw on our terms) and genuine relationships in your life build the world around you. This pertains to your business life and your personal life, because neither one can be done alone. In business, you will have tons of relationships. From the front-line worker to an angel investor, you are bound to develop and need to cultivate specific relationships to be successful. In your personal life, it is rare that we run through life without someone (or someones) by our side to help push us through those particularly difficult emotional and mental hurdles life so lovingly places in our path. Oftentimes for us entrepreneurs, these individuals cross over between our business and personal lives and are able to provide us with key insights and advice. Getting Principle for Your Principles Eventually, however, we all need to exit our business. Rob had wonderfully successful exits from both of his biggest businesses by sticking to his principles. He built the financial aspect up enough that not only was he earning enough monthly to live a good life, but he also was able to exit the business without a large concern for his financial well-being after the sale. He ensured he was working in things that kept his interest and spurred him for personal and professional growth, but also made sure that he had a large amount of self-knowledge to have purpose outside of his business so that upon exit he didn’t suddenly crash and burn. And, Rob built relationships within his business that generated lots of buy-in and motivation from his staff, but he also looked after his relationships in his personal life (both friends and family) so that he had amazing people to turn to when he was finished with his businesses to keep his life full and interesting. Rob recognized the need for professional assistance during the sale process and brought in a trusted lawyer and a really good broker to help him get the type of deal he needed to feel okay with selling his company. As a serial entrepreneur, Rob had less attachment to his business than someone who focused only on one business (their baby) from day one; however, this process is emotional for anyone and Rob is the first to admit that the one thing he didn’t do very well during the sale process was take a step back and relax. He allowed himself to get too tied into what was going on with the sale and stressing himself out with worry and anxiety over making the right choices and ensuring he was getting the right results from the sale. His best advice here is to trust in your team and learn to calm yourself down during the process because —if you’ve built the quality relationship you need to in order to ensure you have the right people working with and for you — you can potentially damage yourself, your business or your relationships from your unusual and stress-motivated behavior. So the question he wants you to consider today is: What are your principles? And the follow-up to that is: Are you living by your principles to ensure maximum success in life, business and life after business? Takeaways: Rob stuck to his principles whenever he had to make a decision. He was self-aware enough to search his own wants and thoughts and find what he needed. Rob’s principles are freedom, purpose, and relationships. It’s great to see him living his truth. Rob is a master long-term planner. Nothing he did was done flippantly or hastily. He always researched his next move and carefully made the right choice for him and his business. Selling a business is stressful. Rob did a remarkable job explaining the turmoil and struggle that comes with the negotiating process. He also made a good argument for having a top-notch financial team at your disposal. Links and Resources Rob’s Website and Blog Rob on LinkedIn Start Small, Stay Small Startups For the Rest of Us Podcast Zen Founder Podcast Drip Leadpages HitTail About Rob: Rob is a serial startup founder, angel investor, and author. He has sold a few companies, wrote a bestselling book, been interviewed in the Wall Street Journal, Forbes and Inc., received a Wikipedia page, and reached hundreds of thousands of people through hundreds of interviews, talks, books and articles.

Do you know what role your business plays in your life? Building a business is like building a safety net; not only can you build your financial freedom, but you can also change your life and the lives of the people around you while having fun and enjoying yourself. Today we’ll be talking to Marcelo De Fuentes. He started his own market research company after getting laid off in the 1990s. He’s going to talk to us about how he built the company and how he sold it. We’ll also discuss what Marcelo’s life was like post-sale. Sit back, relax, and enjoy the insight that Marcelo shares. You will learn about: When and why Marcelo decided to be an entrepreneur, as well as how he jumped in with both feet. The benchmarks Marcelo met while growing his business. Some of the goals Marcelo wanted to reach as he continued to invest in is company. What it meant to Marcelo to create a valuable company, as well as how he invested in his employees to build human capital. What influenced Marcelo’s views on what would define a valuable company. Why Marcelo went down the route of partnering with someone else, as well as how the partnership transpired. Details of the negotiation process and how the deal progressed with an agreed-upon formula. What Marcelo learned from two other companies who wanted to buy the company. What it was like going from being a solo entrepreneur to becoming a partner, as well as how the rest of the process to a sale unfolded. Some of the mixed emotions that Marcelo went through as he sold his business. How Marcelo created a personal safety net after he sold his company by continuing to create value and grow. Some of Marcelo’s current goals and projects. Altruism and business go together far better than most of us realize. As entrepreneurs, we’re often so focused on getting our business up and running and performing well that we don’t stop to think about the impact we’re having on our community, or the world at large. Is it our responsibility to do so? Marcelo De Fuentes argues that yes, it is, particularly as we look to the future. However, Marcelo assures us we can still have good profit margins while creating a more positive work and living environment. Altruism and the Entrepreneur You’ve noticed that market gap and have built a bespoke business which perfectly fills that niche. Good for you! But are your employees happy? Do you have a good ecological impact? How big is your carbon footprint? What are you doing to further the society around which you’ve built your business? Let’s not get too crazy, here, by trying to tackle all these points. Instead, we’ll look at the impact Marcelo’s business model had on his business and how that is now applying to his newest venture, Fundary, and what that company is enabling an entire country to do. It’s About Your People, People We’ve heard this before: company culture and employee happiness is tantamount to business success. We’ve studied why, we have entire departments devoted to securing a functioning workplace and we even acknowledge that most people prefer companies that offer bonuses and benefits. But all those things cut into our bottom line, don’t they? Marcelo shows us in today’s podcast exactly how it was that his company was the strongest in the market research industry because of how much he gave back to his employees. He ensured his first liners, as he calls them, received owner status in the company and therefore received a share of the profits. Not surprisingly, his people first focus created more energy and buy-in from his employees who then worked even more diligently for him and grew the company. This is not a unique model, but it is very underrated. So much so that when Marcelo sold the company, this structure was abandoned within two years. As an owner, you are responsible for your employees. We feel this very keenly when we first start our business because we know each employee’s name and face intimately. Don’t lose sight of this as you grow, however, since these employees can make or break your business. When they’re doing well and happily engaged at work, your company does well also. While you could cut compensation packages for your employees and earn a little more for yourself or key (often higher-up) employees, you are undermining the positive impact you can have on your work culture and community. Do Better Marcelo is a great example of doing better for the sake of it. After he sold his company and realized he wasn’t going to be able to convince them to look after his employees the way he had (by keeping the business model the same), he knew he needed to do something else. As with most entrepreneurs, Marcelo turned around and started a new company in pretty short order. This time, he took what he had learned while running his first business and applied it to making this one far more altruistic. Not only did Marcelo get into recycling and became the top private recycling company in Mexico, he also started a business venture called Fundary which supplies capital to business owners (or aspiring business owners) so they can grow — and he’s doing this in lieu of bank accounts. Did you know that only 37% of Mexicans have bank accounts? Yeah, I didn’t either. Crazy! But the economy can’t really grow if people don’t have either the capital or the credit to help build it, so Marcelo stepped in when he saw that need and created a business capable of helping people who do not have access to fair credit succeed. Not only that, he has managed to create this as a win-win scenario: investing or being invested in, everyone gets something out of the peer-to-peer exchange. Effectively, this program is giving the resources necessary to create new enterprises in areas where traditional banking models are either not available or ineffective. Working for change is the change in working we need to see in the world today. Marcelo recognized the ability to utilize technology to level the business playing field. What is your business doing for your employees? Your community? Your country? Take a close look at how things are going. Is there room to make some small changes that can have huge impacts? Are you working with people who share your progressive and altruistic vision? Pick the Right Business Partner As Marcelo discovered, sometimes the partner you bring on is not the partner you need. He ended up using his capital partner as an exit opportunity so he could move onto bigger and better things. He did this because his partner had a different vision for the company and started taking away some of the compensation structures that Marcelo stood firmly behind. There are tons of options available for capital sources and even for partners. One of the conversations that needs to happen earlier on in the partnering process is that of mutual future vision. The partner Marcelo needed was someone who shared his passion for helping his country and others who are struggling to achieve their business and financial goals. When this person came along, Marcelo was able to jump straight onboard to develop their mutual passion into a feasible business plan. Whether you’re listening today because you’re struggling with the idea of exiting your business or you’re considering what other options you have in front of you, try to consider Marcelo’s call to action for us entrepreneurs to give back in order to get ahead. https://fundary.network/ Takeaways: Having the ability to be true to yourself and who you are is essential. Success is about the people, the culture, and your employees. Take the time to build a community and treat your employees well. Understanding your company’s value and focusing on long-term sustainability will help you position your business in the right place for a successful sale. Links and Resources: Solidity Financial Email Marcelo: marcelo.defuentes@fundary.com Marcelo on LinkedIn Fundary Ziklum About Marcelo: Marcelo De Fuentes has been an entrepreneur since the age of 23. He became the founder and owner of MERC-GfK, a market research company, in 1991. In 2011, he became the president and co-founder of Ziklum, today’s biggest TetraPak recycling company in Mexico. In 2016, Marcelo co-founded Fundary, one of the first companies in LATAM within the Fintech sector that uses blockchain, smart contracts, and cryptocurrencies for peer-to-peer lending. In 2017, he co-founded Muvu, a mobility solution company based on a proprietary algorithm that solves the financial problem of the car tax deduction. Marcelo’s personal interests include ecology, graphene, alternative energies, reading, motocross, wine, friends, and, most importantly, his family.

What does a great exit look like? How do you accomplish one? Geoff Green is on the show today who is the author of The Smart Business Exit. Geoff started off his career as an M&A attorney and has been a business advisor, value building advisor, and exit strategist for over 30 years. We talk about the different variables needed to build a sustainable business that is highly transferrable and valuable. Geoff explains how navigate all the variables that go into accomplishing a great exit that includes being happy in your life after business. You Will Learn About: Geoff’s journey from an M&A lawyer to a business and exit advisor What is involved in a great exit How to take control as the business owner over the process of who you sell to and when you choose to sell Putting yourself in a good position emotionally to be happy post-sale and down the road The importance of starting or thinking about having a community outside your business The “uncomfortable truths” about your business What type of business owner you are Focusing on building a highly sellable business Getting into the mindset of thinking like a buyer and looking at your business differently Working out your renewed purpose In this podcast, Geoff Green talks about the absolute necessity of planning for your life after business — which could not be more perfect for this show. He spent ample time as a corporate lawyer and learned all about the inner workings of a deal. However, he noticed a distinct lack of planning for what happens after the exit… and that this was creating an undue amount of stress on business owners. When someone asks you “What are you going to do after you sell your business?” Do you have an answer ready? Do you feel happy and excited to exit your business? Well, you’re not alone if you answered negatively to both of those questions and felt a smidge of panic. Preparing for the Inevitable You’re going to exit your business some day or another, so why aren’t you preparing now? Time after time, we’re told to prepare early for the sale of our business so we don’t get nasty surprises during due diligence or negotiations. However, rarely are you asked, as an entrepreneur, “Have you planned for life after your business?” This is why I created this podcast, and why I’m grateful to host people like Geoff who truly understand the importance of thinking about what comes next. Since we know that we are going to have to leave our business eventually — and yes, maybe ‘over your dead body’ but one day even that will happen! — we need to embrace the planning process. You can even treat it like a business plan: what are your needs, what goals can you set to attain those needs, what action plans can you put in place to achieve those goals and what type of framework do you need to ensure your action plans are successful? The Uncomfortable Truth To borrow from Geoff’s book, The Smart Business Exit: Getting Rewarded for Your Blood, Sweat and Tears, you need to face some uncomfortable truths about exiting your business. The reality is that most of us have built up our businesses so well that they’ve enveloped our lives — and we like it that way! We like coming into the office and being a mover and shaker; we like knowing our employees, suppliers and customers well enough to socialize with them outside of work; we enjoy our business trips away with those same people because they’re just plain old fun to be around; and we really enjoy having this entity which, in many cases, defines us and gives value to our existence. However, when was the last time you stopped to think about why you started your business? Because I can guarantee you it wasn’t for the above reasons. Those are just perks that have come along with the hard work and relationship building that goes with building a business from the ground up. So, if you’re being honest with yourself, why do you get sweaty palms when you think about exiting your business? Chances are it’s because you realize everything you’re leaving behind. You don’t really have an action plan for what comes next and you’re leaving behind your entire community when you sell your business. This is where the planning process begins: accepting the fact that your relationships have to change and that you will need to put in the work to build your life after business, just like you did when you started out with your company all those years ago. Next Steps There is no quick fix for creating a life after business for yourself. Think back to the basics, however, and you’ll naturally start generating an action plan for yourself. Obviously you need to ensure you get enough money out of the deal to ensure your financial well-being (whether you’re retiring or looking for the next great adventure); you need to consider what you’re going to do with all your free time now that you can do anything you want; and you really should look at your social network and relationships — are they as strong as you want them to be with the people who matter to you most? Looking at the financial side can be complicated, but is very doable if you reach out to the right financial planner. You’ll need to know if you plan to invest  in another business or retire to cruise the coast of Monaco, but once you have a rough idea of how the next 30 years will go, you can start in on the financials. Remember, you now have to pay for all those owner’s perks (like those great ‘business’ ski trips!) which right now are absorbed by the business. Be honest about your spending. That brings us to our second concept: free time. What a novelty! You no longer have to be at the office by eight. You can do anything you want… provided you’ve planned the capital for it. What if you want to invest in another business or start a new one? Good for you! You have the time to do that now. Maybe that’s where your passion lies. However, if you’re ready for a break and want to enjoy the art of doing nothing, maybe it’s time to set more challenging goals like getting that eagle on the 7th hole. You have the opportunity now to think about what you truly enjoy doing and invest the only finite resource we all hold in equal measure: time. The last key factor to consider before you head off in the sunset is community. This is a huge change for most of us. We’ve made good friends with our supplier of 20 years and all of our employees who helped us achieve our dreams. While you don’t have to leave them all behind, you will need to find new things to talk about now that you no longer share the topic of the business. Think about the conversations you have with these people regularly: you’ll find the vast majority of what you talk about revolves around work (perhaps rightly so!). So if you do want to maintain these relationships, you’re going to have to find new common ground. However, there are tons of ways to meet new people and develop new social circles — some of which will include your new hobbies — so have some patience with yourself if you find you’re getting bored by ten o’clock and reaching for the phone just to ‘check in’ at the office and see what’s going on. So don’t be one of those business owners who is master of all but his or her future: plan for what comes next as effectively as you plan in your business and your exit will be the start of your next big thing, no matter what it is! Takeaways: Variable one of a great exit is freedom. Freedom is why we start our businesses, why entrepreneurs take the risk. Freedom comes in a couple different forms. One is financial freedom which includes being financially rewarded for all the blood, sweat and tears you put into your business. The other is freedom of time to do whatever you want when you want. There is also the freedom to surround yourself with the people you want to hang out with. All in all, it is the freedom to paint your own picture of what your life looks like after the sale. Variable two to accomplish a great exit is having a legacy. What is the legacy you want to pass on? What is it that you want to be remembered for after the sale of your company? This could be passing it down to your kids or making a mark in your community. It is up to you to decide. Variable three is your renewed purpose. What is next? What is your new purpose? Are you going to start a new company, consult other owners, or do something completely different? Your new purpose will make you happy and allow you to explore and grow as an individual post-sale. Links and Resources: Solidity Financial Geoff Green on LinkedIn GRG Momentum The Smart Business Exit website Buy The Smart Business Exit by Geoff Green on Amazon Finish Big by Bo Burlingham Built to Sell by John Warrillow About Geoff Green: For over 30 years Geoff Green has been helping business owners not only build great businesses, but also get rewarded for their blood, sweat and tears when they exit. Geoff has always been fascinated by innovation and strongly believes it’s the key to Australia’s future success as a nation. He was introduced to the heady mix of innovation, entrepreneurs and high growth businesses early in his career. Upon leaving law school Geoff joined a dynamic, fast-growing corporate law firm which evolved into Minter Ellison, now one of Australia’s largest rms. He was quickly captivated by the cut and thrust of mergers and acquisitions, stock exchange listings and the adrenalin rush of big business deals. He also soon realized the businesses he really liked working with were the entrepreneurial ones. Those owned by energetic and passionate entrepreneurs who were striving to achieve significant goals in their own business, as well as often making a real difference in the world. In 1998, after 15 years as a corporate lawyer, Geoff founded GRG Momentum, which quickly evolved into one of Australia’s first business advisory firms specializing in business exits. Working side by side leading entrepreneurs as they created real value in their businesses and then successfully exited them, Geoff learnt the key business exit strategies he has used for many years with his own clients. He also began to see two clear patterns with business exits. Firstly, most business owners, despite the huge sacrifices they made and risks they took, didn’t get well rewarded for their blood, sweat and tears on exit. Secondly, there were a small handful of business owners who did manage to sell their businesses for huge amounts, often for reasons that weren’t clear to anyone. A key step in Geoff’s lifelong fascination with innovation, high growth businesses and high value business exits was his first- hand experience with BSX (an alternative stock exchange he co-founded with Bendigo Bank and Computershare). BSX was established as a start-up business and sold within 5 years to NSX for $7.75 million, providing Geoff with unique insights into creating and exiting a high value business. Geoff has always been frustrated that most business owners don’t achieve good exit results when the time comes to move on from their business. For years business owners work hard, take risks, employ people, build great products and services and contribute to their communities. Private businesses also drive the development and commercialization of many of the innovative new products that enrich and improve our lives, families and communities. Geoff strongly believes that when the time comes time to exit business owners should be properly rewarded for their blood, sweat and tears. To help his clients, and business owners generally, Geoff released his first book, The Smart Business Exit: Getting Rewarded for your Blood, Sweat and Tears, in late 2014. Importantly, he wrote it specifically for business owners, not just their advisers. It’s packed full of useful information, case studies, stories and practical exercises and is one of only a few Australian books on business exits. The Smart Business Exit has been widely acclaimed and already provided invaluable assistance to many business owners exiting their businesses. It’s also the rst Australian business book to highlight the implications of the impending “business exit tsunami” as our baby boomer business owners head towards retirement. Following the success of The Smart Business Exit, Geoff decided to launch The Smart Business Exit hub to provide business owners and their advisers with easy online access to information about business exits and practical checklists, tools and programs to help them achieve a successful business exit. It’s fast becoming Australia’s “go to” website for business owners looking to exit their business. Geoff is regarded as one of Australia’s leading business exit strategists and thought leaders. His peers include highly acclaimed business exit authors and entrepreneurs such as John Warrillow and Dr Tom McKaskill. He is also a member of the international advisory board of The Value Builder System, a North American group developing one of the world’s largest and fastest growing networks of business exit advisers. Geoff provides strategic guidance to a number of private businesses in his roles as director and advisory board member. He is also a regular contributor to mainstream and online media, a popular guest on business webinars and podcasts and a highly engaging speaker on high growth business strategies and pro table business exits. When not working with entrepreneurs and strategizing about high value business exits, Geoff enjoys running, trekking (including Everest Base Camp in 2012), good wine and spending time with family and friends.