June 17, 2025 • 40 mins
In this episode of the Main Street Business Podcast, Mark J. Kohler and Mat Sorensen walk you through the full business lifecycle—showing you how to start lean, systemize operations, scale smart, and exit on your terms. Get ready for real-world strategies that actually work.
Here are some of the highlights:
- Mark shares his experience in the startup phase, emphasizing the importance of not suffocating the business.
- Mat highlights how scaling a business involves scaling people, not just systems.
- Mark & Mat discuss the challenges of duplicating oneself in the business and the importance of having a clear vision.
- The need for a balanced approach to scaling, including personal financial planning.
- The challenges of finding the right person to take over the business and the importance of understanding key performance indicators.
- The optimization phase, focusing on efficiency and systemizing to make money.
- How to evaluate your team and ensure you have the right people in place to support scaling the business.
- Start planning for your eventual exit, even if it's years away, by working on improving financials and operations.
- Grab my FREE Ultimate Tax Strategy Guide HERE!
- You don't want to miss this! Secure your tickets for the most significant business, tax & legal event of the year: Main Street 360
- Looking to connect with a rock star law firm? KKOS is only a click away!
- Are you ready to get certified in EVERY strategy I teach? Start your journey with a FREE 15-minute discovery call to explore the Main Street Tax Pro Certification.
- Check out our YOUTUBE Channel Here: https://www.youtube.com/markjkohler
- Craving more content? Check out my Instagram!
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to the Main Street Business Podcast with
your distinguished hosts, mark JKohler and Matt Sorenson.
Both are bestselling authorsand have over 25 years of
industry experience, with 10,000client consultations, making
them the leading tax and legalexperts in the nation.
Together, they'll unpack themost complex tax, legal and
financial strategies crucial forsaving more, stressing less and
(00:20):
building generational wealth.
Crucial for saving more,stressing less and building
generational wealth.
Today they're your personaladvisors, ready to break it down
for you and make the tax andlegal game easier than ever.
Here is Mark and Matt.
Speaker 2 (00:34):
I was in startup for five years.
I was suffocating my businessNumber two, optimization and
systemizing.
Speaker 3 (00:41):
You don't scale a business, you scale people.
People scale your business,you're people.
Speaker 2 (00:46):
People scale your business.
You're learning how toduplicate yourself, not replace
yourself.
Speaker 3 (00:49):
If you think you're the smartest person in your
business, you're staying inoptimization.
You will never scale.
Speaker 2 (00:53):
Now in the scaling phase, I'm making money.
Do I put pedal to the metal?
Is that always the best thing?
Speaker 3 (00:59):
The best advice I had was from a very successful
friend of mine who said livethree years behind your beads.
Speaker 2 (01:04):
Don't wait for the exit phase to start saving.
Now we get into the fourthphase.
This is where you replaceyourself.
Welcome everybody to the MainStreet Business Podcast.
My name is Mark Kohler, herewith the illustrious Matt
Sorenson talking about business,and this is I'm really excited
(01:26):
about today's topic, because weget to be vulnerable and talk
about all of the mistakes we'vemade in our life.
How do you feel?
Yeah, why not record it and putit out to everyone to hear?
Speaker 3 (01:34):
and listen to.
Why not?
I mean, you did it at the 360event just last week, an
incredible event, by the way.
If you missed it, I'm sure youcan, you, you can maybe check it
out, but people love this, soit was good.
Dived into this.
I think for any main streetbusiness owner, understanding
these different phases as youbroke them down is super helpful
and illustrative to know whatyou should be doing and thinking
(01:55):
about, where you're at.
Speaker 2 (01:56):
Yeah.
So let's lay these four out andwe'll set the table and we'll
talk about our life experiencein these four and Matt and I
doing 10,000 consultations withclients over the years.
Each of us we've seen clientsin every one of these phases and
we're going to describe and howthey blend.
It's not a bright line.
You're going to love this.
So okay, here they are.
Number one is startup andstructure.
(02:18):
Startup and structure.
I got an idea.
How do I structure it?
How long do I stay in startup?
Am I there too long?
Not long enough?
What does it look like?
How am I approaching that phase?
And that phase has differentfeelings and actions that need
to happen.
That's number one.
Number two is optimization andsystemizing.
(02:39):
I'm out of startup.
I'm starting to make money Now.
I got to get efficient.
I want to make money.
I got to get this figured out.
I'm making enough to maybe getby, but I'm really trying to
hone in on and dial in myproduct, my service, my team
members.
Number three is now scaling andsaving.
All right, the getting'sgetting good.
(03:01):
I figured it out generally.
Now I'm making money.
How much do I want to scale?
How long am I going to keepscaling and what am I doing with
my profits?
Where am I saving them?
I may put them back into thebusiness.
Too much, too little, and thatwhole.
There's a lot of issues therethat are very different than the
optimization, systemizationstage.
(03:22):
Now we're going hard, we'remaking money.
When do I come to the fourthstage, exit.
When is it the right time toexit?
How do I exit?
What does exit look like to me?
Is it my family members?
Is it a third-party sale?
Is it private equity or justcash flow until the day they
close the coffin and legacy whatkind of legacy do I want to
(03:42):
leave?
And those questions startcoming up.
And what's interesting to meand Matt, tell me your thoughts
is, as a person, you could be inany one of those phases of age
and you could be young exiting abusiness.
You could be older doing astartup.
This is the phases of business,not the phases of your life.
Speaker 3 (04:01):
Yeah, and I think knowing where you are in your
phase of life and what you want,your goals, your ambitions they
change from when you're youngerto older.
I'm not saying there's, likeyou know, stereotypes on that.
I think actually it's it'severybody's different, but I
think how you're going to attackthese things depends on where
you're at in life and your goalsand everything, and also your
(04:23):
timeline.
Let's be honest too, so I'mlike we're going to do this in
one podcast episode.
So let's see how it goes.
Yeah, let's see how it goes.
Do you want to start from thebeginning or you want to start
from the end?
Speaker 2 (04:35):
Yeah, let's start from the beginning, and I think
I'm going to share my story andsee what you think too.
I love what Matt said, but let'sput a couple other caveats on.
It is there's no bright lines.
You don't wake up one day andgo okay, I'm out of startup, I'm
in optimization, oh, I'm out ofsystemizing, I'm going to go to
scaling.
It's going to be gray, it'sgoing to be sometimes hard to
(05:01):
know when you've kind of movedinto the next phase, but when
you're there you'll know it.
And I like what Matt said too isyou see, if you can have an
ability to look at the forestand know where your business is
going, then you can make betterdecisions too.
When you're on your heads downand you're going to maybe make
more short-term decisions andfrustration when you go oh well,
my business, I know where it'sgoing.
That helps.
And the last thing I would sayis is that you could have
(05:23):
multiple businesses in any ofthose phases at any given time.
It's funny, matt, we've Mattand I are probably together on
about four, three to fourbusinesses and if we think about
it, we've got businesses inevery one of those phases, and
so you've got to be able to sitback and analyze this business
with a different mindset, basedon what phase it's in versus
(05:44):
another business that may be ina different phase.
Speaker 3 (05:47):
Yeah, and I think any of you that are entrepreneurs
many of you start to do a lot ofdifferent things and it can
actually be quite complicatedand very difficult to manage all
those businesses through thethings.
So there's going to be maybeone mistake, you know, but we'll
see here.
All right, here's my firstmistake in startup.
Speaker 2 (06:03):
So in the startup phase and Matt you're this is
I've uh, you missed thispresentation.
Speaker 3 (06:09):
Yeah, you flew in the next day.
Speaker 2 (06:11):
So you're you don't know where I'm going.
This is going to be fun.
I want to see your reaction inthe startup phase.
Here's the mistake I made.
I was in startup in my youngpractice as a lawyer, advisor
tax all of that before I metMatt.
I was there for five years.
I was in startup for five years.
Now, when we're trying to helpour tax pros in the Main Street
(06:31):
Tax Professional Program, I'mtrying to help them not make the
same mistakes I made and getout of startup.
In the first year, you knowlet's get out of startup and get
into optimizing right away, butI stayed there for five years
and what I was doing is I wassuffocating my business.
A lot of entrepreneurs say, oh,I quit my job or this and they
expect their business to supportthem.
(06:51):
And when you're doing that,you're living month to month on
your business and you're justpulling out profit as fast as
you can because you've got topay bills, you've got family
members, you're trying to takecare of, maybe a young family,
but you're not letting yourbusiness grow or thrive and
you're suffocating, you'restarving it, and I did that for
five years and there was somepoint in there.
Again, it's gray when you kindof move from one phase to the
(07:12):
next.
I got a client that gave memore stable income and I didn't
want to do it at the time butthen I knew I needed to because
it gave me some breathing room.
And once I had that more stableincome with a retainer with a
couple of clients, it allowed meto take the profit from this
other area and not just have tosuck it out to pay the mortgage
payment or whatever, and I wasable to build the business and I
(07:35):
was way and I was in startupway too long.
Speaker 3 (07:37):
Yeah, I think I think in.
Yeah, I mean, that's a greatexample.
Actually We've seen that a lotbecause you see people leave
their day job and go headfirstinto a business when probably
the most successful thing to dois start.
The side hustle is turn thekeep the main hustle, whatever
it might be, go after it 100%and I get that.
(08:04):
But I think I've seen moresuccess in the people that start
with the side hustle.
Frankly, you're not going to beas busy as you want to be on day
one when you go open up.
You're going to be twiddlingyour thumbs a lot and spinning
your wheels because you're likeI need customers Now.
If you can go turn it to dayone and turn on this business,
whatever it might be, and youhave sales coming through,
you've got revenue comingthrough that's going to support
(08:26):
you.
Fine, go all in.
But I think most businesseshave a little ramp up period.
That could be three months,that could be six months, that
could be three years, I don'tknow.
But I think that way you don'tsuffocate and starve the
business and kind of stunt itsgrowth, but let that business,
let that income you're making,be able to reinvest it and
(08:46):
slowly grow the business and getthe systems going and all those
things.
Oh, which brings us to phasetwo.
Speaker 2 (08:52):
I like that.
You just said that Once you'reletting the business breathe and
grow a little bit now you canfocus on optimization and
systems.
Phase two.
Now, in phase two, the mistakeI made and I was in there with
Matt in this phase we were nowpartners we were able to start
figuring it out.
What I discovered in theoptimization phase is you're
(09:15):
learning how to duplicateyourself, not replace yourself
At exit.
We're going to come to that alittle later.
At that point you have toreplace yourself.
You need to make sure that thisbusiness can run without you.
Well, right here, I'm stillrunning it, but I'm duplicating
myself in the systems.
I'm not doing everythinganymore.
What you find out in theoptimization stage is you're the
(09:35):
bottleneck, and so in ourpractice, it was like we've got
to start to learn how to hirelawyers, tax advisors,
paralegals and teach them how todo the systems properly.
And whether you're producing aproduct or a service, you're now
duplicating yourself, andthat's a tricky thing, and what
we would use the model of is athird, third, third.
(09:57):
We wanted a third to go out inpayroll, a third to go for
overhead, and we were shootingfor a third in profit.
And so when you're in thisoptimization phase, you're
really trying to keep your costsdown, get more product out and
so that you can scale whichwe'll come to that but here it's
figuring out how to be smart inyour business and duplicate
yourself.
(10:17):
I was in that phase for 12years 12 years of figuring that
out.
Now, on our main street taxpros, I'm trying to teach people
how to do that in maybe twoyears, maybe three, because
there's some school of hardknocks.
This is your superpower, you.
I don't know if you have amistake you made in this, but
Matt knows how to maybe developpeople a little quicker than I
(10:38):
do.
I don't know.
Speaker 3 (10:39):
Yeah, I think once you hit that phase you really
need to, as you're looking forpeople to duplicate, it all
becomes down to people as youstart to get into scaling.
You don't scale a business, youscale people.
People scale your business, andso you need to get the right
people that can go execute onwhat you want to do.
Get the people that have theright talent, obviously, build
(10:59):
the right team and that's where,like at Directed IRA, we've had
significant growth and it allcomes down to people and even
our other businesses that wehave, from Mainstream Business
Services to KKOS Lawyers andwe've had a title company in the
past.
I want to talk about that as amistake, maybe, but the
optimization here, duplicationof yourself it's going to be
(11:23):
people that do that.
We want systems and processthat those people follow and you
got to develop that too, butyou know what those people are
going to be developing thosesystems.
You might lay it down the firsttime, but there's going to be
iterations of that andimprovements on that new
technology.
When you think about a 12-yearcycle on that, all the different
ways that things changed overthe years.
What your customer needs arehow you deliver for them.
(11:46):
Who's your competitor.
What are they doing?
I mean, you've got to stay upto speed on all that, but the
people matter.
Now here's the truth and reality, and you hear this advice all
the time you need to go hire aplayers.
Just go hire a players andyou're good.
Totally agree with that.
I agree with that 100%.
You can't afford A players inoptimization.
You won't get them.
You may get lucky and get someof them, and that's where I
(12:10):
think, where a lot of smallbusiness owners fail and why
they never get to scaling, isthey get the wrong people.
They get people that can do thejob, but they get people you're
going to stay there.
They're doing okay, yeah,you're making money, but they're
not people you're going tobuild a business with, and so I
think you get stuck there okay,so you're, I like.
Speaker 2 (12:30):
I know if we could put names to this, and we could
put several names, but in ourbusiness organization the
mistake we made was promotingpeople during our startup phase
in, uh, that weren't going tohelp us get out of optimization.
They were, we knew at the time.
(12:52):
We didn't realize that theywere going to create a ceiling
for us.
Yeah and uh, they were in thatrole way too long and once we
figured that out and had to makesome hard decisions, we were
able to get into the next phaseof scaling and we had to let
this person either go or putthem back into a role that was
(13:12):
best for them but not best forthe company.
And some people may stay inoptimization forever.
You're cool, just don't beupset when you can't scale
because you're like yourbrother-in-law is still your
head of this or your aunt's thehead of that, and you're like,
and you're bitching and moaningbecause you can't scale.
Speaker 3 (13:28):
Well, you've kind of made your bet and you know, and
I think the classic thing is islike you know you need to hire
your first assistant.
That's typically the first.
You need to hire your firstemployees and your assistant and
that makes sense.
But then that person might turnin what you in a small business
, it turns into your officemanager and you're like is this
the president of my company as Igo into scaling?
It's probably not Okay andmaybe it is.
(13:49):
Maybe that person's incredibleand amazing and has this
unleashed potential you neverknew of and was this A player
that you found and you hired asan assistant?
I'm just saying it's typicallynot the case.
So have some reality checksthere of where you're trying to
go.
Now.
You might be like you know whatI want to stay small, I'm okay.
I'm not trying to scale.
I've got to this 10 person teamI have.
(14:11):
I like my, the way I work.
I can control the ship.
It's what I love and that'sokay.
I'm still the smartest personin the room all the time and
know everything.
Cool but that.
But you will never get out ofthat.
If you think you're thesmartest person in your business
, you're staying in optimization.
You will never scale.
Speaker 2 (14:29):
You know, the example , I think, of this too is pastry
pub.
Yeah, pastry pub is a littlerestaurant and our main street
town where Matt and I were inthis optimization phase for a
long time and he would serve thefood to everybody at their
tables and we would ask himsometimes like, don't you want
to do a second?
It was an incredible restaurant.
Speaker 3 (14:47):
Great food.
We're like do you get anotherlocation?
Speaker 2 (14:50):
down the road or down the next city in town.
We tell him, go to St Georgewith your business, and he's
like no, I'm happy right here.
I love to come to work.
I love the interaction with thecustomer.
I know I could duplicate myselfand duplicate this restaurant,
but I would not have, I wouldnot enjoy it, and he knew it.
Speaker 3 (15:07):
Yeah, but I think sometimes and we don't know the
rationale here, but I thinksometimes the mindset is no one
could do what I do.
Ooh yeah.
Speaker 1 (15:15):
I'm so great.
Speaker 3 (15:16):
I'm so amazing that I couldn't no one could do this
down there.
It wouldn't be the same.
Speaker 1 (15:21):
Yeah.
Speaker 3 (15:21):
And you know you think of, obviously, restaurants
and all the multiple cases likethat's.
If you're thinking ofrestaurant, that's how you're
scaling a restaurant RightMultiple locations.
You know it's not like buildinga bigger restaurant.
So every business has adifferent like growth thing as
you look at scaling.
But I think there's some thingsthat hold a business back.
Maybe it's some mindset stufflike this, but it always going
(15:43):
to become people.
I'm just.
I'm just.
It's just like there's nothingI can emphasize more in this.
Getting into scaling and havingsuccess in scaling is that it's
people.
That will be the determinationof whether you do this how you
can recruit, how you can attract, how you can retain, how is the
culture there that the peopleactually work and function in is
like the night and daydifference.
Speaker 2 (16:05):
Yep.
Okay, now you're kind ofbleeding into scaling, and it is
again a fine line because asyou're optimizing and
systemizing you're you might getthe right people.
Or all of a sudden, you're intoa scaling mode and you're like
holy crap, what do we do next?
The last point I want to makehere, though in startup and in
optimization, a lot of peopleare paying too much in tax.
They're not structured properly, which can hold them back.
(16:28):
And then this phase.
If you see that you're in thisstartup or optimization phase,
this is where spending a littlemoney like some may say one step
back, allows you to go twosteps forward.
And so, having a good taxstrategy plan, meeting with the
tax lawyer once a year, makingsure your entities are right,
what payroll you're taking, howam I paying my kids?
(16:48):
Am I saving the right tax?
Your number one cost in thisoptimization, systemization
phase will probably be taxes.
And so if you're in these twophases and we just keep our head
down, you're not going to getto the scaling.
Make an appointment, talk to ifit's not our tax law firm, fine,
but we're a boutique for theMain Street business.
(17:08):
Have that annual meeting.
Where am I at?
And ask them I want to scale.
I was listening to Mark andMatt.
We've got 13 lawyers that areamazing, that know this
principle, because we'reteaching every day and we are
trying to duplicate ourselveswith good lawyers.
Ask them how do I get out ofthis and where do I go next?
(17:29):
And I'm paying too much in tax.
What's my structure and whatshould it be so I can go into
the scaling phase?
Speaker 3 (17:36):
Yeah, I think the number one expense you have as a
business owner, once you starthaving success, is taxes.
That will be your number oneexpense line and the whole
ability of you to be able togrow is to make enough income to
live a lifestyle you want.
We're all working hard, butalso have money to redeploy into
the business, and if you don'tgot the tax structure right,
you're just leaving money on thetable and you're, and you're,
(17:57):
and you're starving yourbusiness as we come back to what
was earlier and you're, youknow you're depriving yourself
of actually enjoying some ofthis wealth.
Speaker 2 (18:05):
Now in the scaling phase, again being vulnerable
and transparent Once we got intothe scaling.
So you've duplicated yourself.
Speaker 3 (18:13):
I've duplicated myself.
You've got some systems.
You've got some we're startingto make money.
Speaker 2 (18:18):
We're starting to make money, and this is Matt and
I.
I'm using a couple of ourbusinesses.
We have now had maybe two tothree different business
ventures at this point and nowthis is about eight years ago.
We're starting to scale.
We figured some things outseven, eight years ago.
Again, there's no bright linein this.
We're starting to scale.
What do I do?
My approach was and this iswhere I'm being vulnerable I put
(18:50):
every dollar back into mybusiness, back into every
business.
I could Even some of thebusinesses that Matt and I were
not 50-50 in.
I would be putting money backinto the business, back into the
business, as a farmer would say.
I was land rich, cash poor, Iwas not funding my 401k as I
should have, I was not fundingIRAs as I should have, and I
thought it was all aboutbusiness.
I felt I was my best bet, and alot of business owners think
that they're like I'm just goingto put money back into my
business.
I know I can get a betterreturn there.
That's a very scary thing.
(19:10):
Now, luckily and generally, Ididn't have a disability.
I didn't have a businessfailure.
Knock on wood, yeah, but I didnot put away money into
retirement as quickly as Ishould, or buy rental properties
, as I should have been mypartner here.
I would see him doing that andI'd sometimes give him crap and
(19:31):
I'd be like, dude, let's putmore money in here or there, and
Matt's like, nope, I'm going tomax out my 401k every year.
I'm going to max out my Rothevery year.
I'm going to buy a rentalproperty once in a while, and
not that.
I thought that was a bad thing,but it wasn't my choice and in
retrospect I wish I would have.
And so, during scaling, one ofthose things is where do I take
my profits?
I'm scaling, I'm making money.
(19:52):
Do I pedal to the metal?
Is that always the best thing?
Do I just freaking turbo?
Maybe not.
There's a pace to scaling thatwe need to be mindful of as well
.
Speaker 3 (20:05):
Yeah, and I think that's probably one of the most
difficult decisions you have asyou're starting to scale is.
You know?
You're starting to have somesuccess in your business, you're
making some good money.
You want to have a lifestyle.
Your family's probably like allright, can we like get off the
rice and beans deal here?
Speaker 2 (20:20):
You know, let's let's like some people go too hard on
the lifestyle too.
Speaker 3 (20:23):
Exactly.
And then they start beingflashy with their money.
They're buying the cars theyshouldn't be and not affording,
and so the best advice I had wasfrom a very successful friend
of mine who said live threeyears behind your means, so like
what you're making now, don'tlive like that.
Live like you did three yearsago and then kind of so you
(20:46):
eventually reward yourself, youeventually get there, but you
don't Rush to it.
Too many entrepreneurs theywant to have some flash.
They think it makes them looksuccessful.
They may even think that's astrategy.
In my business, to attract morecustomers or to sell more is to
have this look.
I don't know, I don't buy intothat, but I think that they end
(21:06):
up basically wasting money.
On the other hand, you've gotpeople that invest every penny
back into the business.
That could be the rightdecision actually.
Okay, I'm not saying that'swrong.
Speaker 2 (21:14):
Yeah, yeah.
But you got to know, go in withyour eyes wide open.
Speaker 3 (21:17):
Yeah, go in with your eyes wide open and just realize
you're bearing a lot more risk.
You're putting all your eggs inone basket and, on the other
hand, is trying to take somemeasured things off the table,
which is what I would do.
Is you know, try to take somemoney off the table, be
reasonable in spending, goinvest in these other assets.
Because when we talk about thetrifecta and this is one of the
things we do with our clients iswe go over operations versus
(21:38):
assets and we separate yourbusiness and investment life.
We say, over here you'reoperating business, you're
making money, which is typicallyan S corporation for tax
optimization and over here we'rebuilding assets.
This might be rental properties,investment portfolio, 401k,
other private things.
You're investing in Assets,create income, and over here, my
(22:02):
operational business is my assworking for me, okay, so what do
I want?
Do I want my assets working forme?
Do I want me working for me?
And so there's another way tothink about this on your
business is trying to createassets that create revenue
themselves.
Now, maybe that revenue can'tand that and those investment
returns can't beat what I can doin my business.
And that's where it's thisdifficult question, where I can
say it's not wrong or right, butI do like and I've just 10,000
(22:26):
consults with clients ofbusiness owners is not every one
of them gets to scaling andexit, sadly enough, or their
exit is very paltry.
It's not what they had hopedfor and and they haven't saved
and they're they're kind of introuble there in their sixties
and they want to hang it up andthey just can't get there.
Speaker 2 (22:45):
Yeah, and another way of saying this to you is don't
wait for the exit phase to startsaving.
While you're scaling, youshould be saving, because you
may not get to exit and again,all of a sudden, you wake up and
it's scary that you don't havea savings account, but you have
(23:06):
this business, that you'restrapped in, buckle up.
This is your retirement and theexit may not come, and a time
to sale is further out than yourealized, but you don't have
this other pool of assets makingmoney for you to let you
breathe, and so it's aprecarious area.
And so, in this phase, doingthose planning sessions with an
(23:27):
advisor that has seen everyphase and can help you find that
balance it is balancing in thisphase.
This is why it creates a lot ofnervousness.
People that are kind of peoplethat are smarter are scared the
most in the scaling phasebecause they're like I don't
know how long this is going tolast.
I want to get the getting whilethe getting's good.
Am I putting too much money inmy business?
(23:48):
Should I be deploying it overhere?
And they're nervous, andrightfully so, because it's a
wonderful feeling to be makingmoney and it's a scary feeling
to be making money becauseyou've worked so hard, you know
how precious that time is.
Speaker 3 (24:05):
Yeah, and let me just give an example here too of of
this, probably one I don't knowit's a mistake, but a tough
decision we had to make was wehad a title company, so called
investor quality title, iq title.
We've had that, you know greattitlecom Great name and um but
what we were doing is we had alot of real estate investor
clients in our law firm and andtitle companies didn't serve
(24:25):
real estate investors very well.
So we're like, well, we can doa title company.
So we went and got the licensesthe title and escrow licenses
and we opened two offices, onein Salt Lake city, one in
Southern Utah where our law firmoffice was.
This was 10 plus years ago andwe optimize that pretty quickly
because neither marker I didclosings.
We went and hired twoexperienced escrow officers in
(24:46):
each office, had a lot ofexperience.
They'd both done thousands ofclosings, had good reputations
in both towns, had someconnections too and we're like
we can feed you, we can feed thework in here from our clients
and the work that we're doingand it was going great it wasn't
the best timing, okay, this was2007, all right.
(25:07):
And what happened was is thereal estate market fell off a
cliff.
Now, initially we pivotedquickly and had some big wins
because we knew how to do shortsales and that was the only
deals happening.
And if you're a real estateagent or someone buying or like
a lender, like first Americantitle was like, ah, we don't do
short sales, all the big oneswere like, eh, we don't do this.
Well, that lasted for like twomonths, because then they're
(25:27):
like that's all that's happening, right now we better do those
because.
And so then we were backcompeting with the big dogs and
it was a very limited deal flow.
And so some type of businessesare cyclical.
You could be in theconstruction industry, Maybe
you're a real estate agent,Maybe you're in title and escrow
.
That business can be somewhatcyclical.
So we were in that Now we wereweathering the storm.
(25:49):
We actually weren't losingmoney, but we weren't making a
lot either.
And I looked at that business atthe time and I thought do we
want to go to scaling next inthis?
Do we really want to force ourtime and effort from our other
businesses that we could maybeput more money into and grow?
And at the time I was like I donot want to scale this.
(26:10):
I learned enough about thebusiness to say not the business
to scale, not recurring revenue, you have to get a new customer
every week and a closing newweek to fund it.
Sure, you can get relationshipsand try and build those, but
you got to nurture those.
And then the business issomewhat cyclical.
And so knowing what businessesand when to hold them and fold
(26:31):
them, so to speak, and whatbusinesses to optimize and scale
and put your time and moneyinto, is just as critical, and I
will say this sometimesdeciding to shut down a business
is the best financial decisionyou can make and not put more
time or money into it.
And maybe you got to pivot yourservices or how you're offering
it.
The strategy in the business iscritical too, I mean.
(26:52):
So I don't know, I just want todrop that out there as we get
into scaling of like we couldunpack that forever, but make
sure you got a winner, make sureit's going to be worth your
time and money.
That business would have beensuccessful.
I'm not saying that, but Ithink there was better things we
could have spent our time doing, which is what we've done, and
I think that was the rightdecision.
Speaker 2 (27:09):
I do too.
And now you're in.
This is a great point.
Shutting down may be a form ofexiting, and so now we get into
the fourth phase and you'reready to exit.
And what does that look like?
And you're also talking aboutyour legacy more.
What do I want to leave to myfamily?
What do I want to leave in mycommunity?
What does this business looklike when I'm gone?
(27:32):
Or my assets?
Your estate planning becomeseven more critical.
Right now, it's our estateplanning special month.
We offer a discount.
We want to help all of our MainStreet business owners get
their estate plan done, nomatter what state you're in.
You do not have to use a localattorney to do this.
You just need to use anattorney that understands you
and your business.
So please call KKOS Lawyers.
(27:52):
Up to $500 off on the rightpackage for you.
Kkoslawyerscom there.
You go Down there in the shownotes for sure.
So get your.
This is another time to reviewyour estate plan through this
whole process, because if youtap out early, you know what.
Where's your business going tofall and is it going to take a
(28:13):
backseat and actually lose a lotof the value that you were
building along the way?
You just want to have abusiness continuation plan
conversation in that process.
So in the exit phase, this iswhere you replace yourself.
See, before you were trying toduplicate yourself.
I need to get myself out of theway, get the right people so I
can scale properly, boom,bada-bang.
(28:34):
Now I need to replace myself asthe visionary, maybe the manager
, the CEO, the president, andbecause if you're going to exit
to a family member or a thirdparty, they don't want you
around on day two usually I meanat the end of this process they
want to buy a business that'sgoing to move forward without
(28:55):
you having to be there Now.
They may want to pay to have youthere for a specific reason,
but your family that's going tomove forward without you having
to be there Now they may want topay to have you there for a
specific reason, but your familythat's going to buy the
business are like mom, dad, bye,stay out of our way.
We have our own vision here andyou want them to have their own
vision.
So during the exit and legacyphase, now you're replacing
yourself and that can be hard,it can be very emotional and
finding the right person that'sgoing to run this business when
(29:18):
you're not there and you'restill going to make the right
amount of money.
You've got to startunderstanding KPIs,
understanding EBITDA and how toreally know the finances of your
business and do all the littlethings you should have done
before on your business to makeit profitable when you're not
there.
Speaker 3 (29:33):
Yeah, yeah, I think this is, I mean so much to be
said here.
Everyone's going to have adifferent reason for exiting.
This might be there could be asituation in your life, there
could be a divorce, there can bethe businesses and it's just in
a tough spot.
It could be the exact righttime to sell.
(30:00):
Yeah, there could be like acompetitor that wants to buy you
or a private equity firm.
You can hire an investment bankor a business broker and go run
a process and market it forsale.
Speaker 2 (30:07):
You got another dream .
You want to go?
Do you got bored.
Speaker 3 (30:10):
Yeah, you got bored, you're ready to move on to
something else, or you haveother businesses you want to
focus on.
I mean, there's just a lot ofdifferent reasons why this could
come up.
But the other thing to plan forwe want to think about legacy
too.
Here is how you're going toexit, and this is something that
Mark Fetzer is an attorney inour office that helps a lot of
clients buy and sell businessesand going through those issues.
(30:32):
And how am I getting out ofthis business?
What is the tax ramifications?
What does this look like as theoffer comes in and making sure
you have a lawyer Okay, if thebuyer of the business has the
lawyer, that lawyer is not yourlawyer.
When you're selling yourbusiness.
Okay, you're going to need yourown lawyer to help you through
that process, particularly ifyou're selling business for
seven or eight figures or more.
You know we're out of like thehundreds of thousands of dollars
(30:55):
.
So you've got to have a lawyer,okay.
Speaker 2 (30:56):
Let's not be cheap.
Yeah, and we did such a goodpodcast series on this.
Yes, about four to six monthsago.
Speaker 3 (31:01):
Yes, yeah, and what I'll say too is, I do think,
just from the business side ofthings.
So go back to that podcast andjust know Mark Fetzer's the guy
if you need help at KQS Lawyersexiting.
I think legacy is important andwe can.
There's obviously the legalcomponents of it, but this has
(31:22):
been for many people like yourbaby, right and so for.
This is almost like a child forany of us business owners.
If you've built this businessand it's been you know a lot of
the customers, you know the teammaking sure you're working with
someone that that, whether it'sthe right family member that's
going to take it over, the rightbuyer, whoever it may be, that
someone that you feel is goingto carry on that business and
(31:44):
something that you value, it'snot about the right price.
You can get as much as it is,and that's important, don't get
me wrong.
But also like this is the rightpartner for this in some ways,
even though you might be goingoff into the sunset.
I think is really important too.
Speaker 2 (31:59):
And in that podcast that Matt and I go through the
three steps to prepare to sellyour business.
There's a due diligence phase,there's the closing and all that
.
But I guess I'll just emphasizethis here briefly and I
recommend all of you to go therethat are thinking exit is you
start to really work on thebusiness.
In this phase you're scalingyour head's boom let's make as
(32:23):
much money.
Now you start having a verydifferent look at it.
You're looking at the financialstatements more than you've
ever looked before.
Speaker 3 (32:30):
And you're learning what EBITDA means.
Yeah, what does EBITDA mean?
As a business owner, you'relike what's the net income?
What money am I taking home?
How much am I paying tax onMm-mm?
You don't think like that.
When you're in exit mode,you're thinking what's the
EBITDA?
You're thinking not, can Iexpense everything in this
business, like you know, allthese quasi-personal business
expenses?
No, we want to think aboutthat's not an expense, I want to
(32:53):
into EBITDA.
So this is like when you if youdon't mind when someone's going
to look to buy your business,they're looking at EBITDA.
This is the what's the cashflowcoming out of?
this business Earnings beforetaxes depreciation amortization,
basically what it is you thinkof your net income.
It's like what's the take-homepay that whoever owns this
business, what's the profit thatthey get?
(33:15):
All right Now, if there'scertain one-time expenses, some
of the things that are likequasi-personal expenses on your
books the company's been payingfor, those get added back into
EBITDA, which adds more netincome and more profit.
So a business owner can say,ooh, I'm actually going to get
the benefit of that when I buythe business.
So that's where you startreally focusing on that, because
(33:36):
that's what every buyer isgoing to look at.
Yeah, and what I Can.
I say one more thing Sorry, Ikeep cutting off.
Yeah, yeah, no, you bring it asa business owner.
For so long you've been trainedto like I want my P&L to show as
little profit as possiblebecause that's going to the IRS
and that's on my tax return whenyou're in exit mode.
(33:56):
We're not doing that.
Okay, that's not what you'redoing.
You might have it's.
You know the financials you'reobviously filing your tax return
on.
We still want to expenseeverything as possible, but you
have another set of financialsthat hits this EBITDA number.
That's adding back a lot ofthis stuff.
To show true, profit.
Speaker 2 (34:10):
Yeah, no, I love it.
And and what and this isinteresting because we have a
different point we're going tomake here is that as you start
analyzing those financialstatements and you're looking
for this EBITDA and la la la andthe profit, what happens is
you're also starting to reallylook at what are these key
performance indicators?
How long is a customer with me,how long are they staying, and
(34:30):
what value are we adding?
And all of a sudden, as youstart to really hone in on eking
out the profit, you're startingto learn more about your
business you never knew beforeand you're having this new look
of oh my hell, I wish I wouldhave been doing that three years
ago.
Or I wish I would have beendoing this five years ago and,
oh my word, I didn't even knowthat was such a driver of my
(34:51):
profit bottom line.
And with this new set of eyes,sometimes business owners are
like oh wow, I just doubled thebottom line and I'm getting so
efficient in replacing myself.
I don't know if I want to sell.
I'm just going to sit back andcollect revenue the rest of my
life and I'll let my family sellthe damn thing or whatever, and
that's okay.
Again, you really start to workon your business Like you've
(35:16):
never worked on it before froman outside point of view, and it
opens a new perspective for theexit.
Or you may say I can.
I can do three more years ofthis, because this is a little
easier now that I've spent thetime I wish I would have years
ago, and so it's really anenlightening yeah.
Speaker 3 (35:35):
Cause I think when you do that, you start looking
at the business like an investor, like some outside party you
know, because you're thinking of, well, someone's going to buy
this, what are they going to belooking at?
And I think if you talk to anyinvestment banker or business
broker that's worth their salt.
Most of them are going to tellyou you should be preparing to
sell your business two yearsbefore you actually go to market
to sell the business and youshould be working with them and
(36:03):
getting the financials in order,getting the stuff in place that
a buyer is going to look for,that you're going to get the
optimal price, and also drivingsome of the easy things where
you can create more revenue,which is going to create more
profit, which is what you'regoing to sell.
Looking at your pricingstrategies, looking at your cost
structure when a lot ofcompanies go through scaling,
they get a little sloppy intheir expense management.
(36:27):
They go from like buying pizzafor everyone to having like a
freaking kitchen and a cafe witha chef in the office building
because they've gotten big.
Employees are all flying firstclass instead of business class
or instead of like coach,whatever it is.
Speaker 2 (36:37):
you know regular I don't know what they call that.
You're not flying back therevery often, are you?
What do they call it back there?
I don't know.
Speaker 3 (36:44):
Oh, the truth hurts.
Speaker 2 (36:45):
I don't want to see those people, not even in my
peripheral.
Speaker 1 (36:50):
And I put that little sheet up, you know, oh my gosh.
Speaker 3 (36:53):
That was a joke.
Speaker 1 (36:54):
That's.
Speaker 3 (36:54):
Brian Regan.
Okay, I don't think this guy'sgot a big head.
That's a Brian Regan quote.
He's a comedian, it's a wholebit so but anyways, I just think
that having a littlepreparation and foresight before
immediately going to sell andmaybe spending a couple of years
working on that is for a lot ofpeople that we've talked to and
clients over the years.
They found that very valuableand they've actually made more
(37:14):
money.
Speaker 2 (37:24):
Yeah, found that very valuable and they've actually
made more money.
Yeah, absolutely Well.
In summary, hopefully this hasbeen very enlightening and I
want to finish with this it'snot a race.
There's not a right way ofdoing this.
You may spend more time in onephase or another and, like I was
just saying here, you may getto exit and realize exit for you
is getting it to a point whereit just creates long-term
cashflow.
That's an exit in a sort of way, that where you're not having
to be in the business every day.
(37:44):
So, no matter what phase you'rein, you get to choose.
You get to choose how long youwant to be there.
And my point today is justrecognize where you're at.
Make it not a race it shouldnot be full of pressure and sit
back and work on your businessonce in a while and don't expect
your business to do more foryou.
(38:04):
And sometimes we're so stressedbut when we sit back we're like
oh, here's why I'm in thisphase.
I know I can get there andhere's what I need to do.
I need to learn some new skills.
I need to hire some differentpeople there, and here's what I
need to do.
I need to learn some new skills, I need to hire some different
people, I need to make some,maybe some hard decisions, and
there's no right or wrong wayper se.
It's your destiny.
You get to choose, and we justhope that we've shared something
(38:27):
that'll help you through thatprocess.
Speaker 3 (38:30):
Yeah, wow, I love this.
This was interesting.
We kind of did somethingdifferent and I know you've had
some incredible thoughts that Iwas just felt like I was
commentary today, you know justlike the color commentary.
I should have had a little moreorganized thoughts on this, but
um, but you know what?
Owning a business is one of themost stressful but amazing
things out there, and any of youbusiness owners know that.
(38:50):
It can add a ton of stress anddemands on your life and you
miss out on things that youwanted to, whether it's friends
or family or other goals youmight have.
But it's also pretty fulfilling, and the things that you can
build and be proud of, the thebusinesses, the customers you
can serve, the people you canwork with is, um, is pretty
special, um and so, but I thinkthese phases are helpful for
(39:10):
people, no matter where you are,how to get to the next one, if
that's what you want, and youknow we all are.
You know the hero in our ownstory, so to speak, and what
we're trying to achieve.
So thanks everyone for tuningin.
We'll be back with anotheramazing episode of Main Street
(39:31):
Business Podcast.
See you then.
You Thank you.
Welcome to the Main Street Business Podcast with
your distinguished hosts, mark JKohler and Matt Sorenson.
Both are bestselling authorsand have over 25 years of
industry experience, with 10,000client consultations, making
them the leading tax and legalexperts in the nation.
Together, they'll unpack themost complex tax, legal and
financial strategies crucial forsaving more, stressing less and
(00:20):
building generational wealth.
Crucial for saving more,stressing less and building
generational wealth.
Today they're your personaladvisors, ready to break it down
for you and make the tax andlegal game easier than ever.
Here is Mark and Matt.
Speaker 2 (00:34):
I was in startup for five years.
I was suffocating my businessNumber two, optimization and
systemizing.
Speaker 3 (00:41):
You don't scale a business, you scale people.
People scale your business,you're people.
Speaker 2 (00:46):
People scale your business.
You're learning how toduplicate yourself, not replace
yourself.
Speaker 3 (00:49):
If you think you're the smartest person in your
business, you're staying inoptimization.
You will never scale.
Speaker 2 (00:53):
Now in the scaling phase, I'm making money.
Do I put pedal to the metal?
Is that always the best thing?
Speaker 3 (00:59):
The best advice I had was from a very successful
friend of mine who said livethree years behind your beads.
Speaker 2 (01:04):
Don't wait for the exit phase to start saving.
Now we get into the fourthphase.
This is where you replaceyourself.
Welcome everybody to the MainStreet Business Podcast.
My name is Mark Kohler, herewith the illustrious Matt
Sorenson talking about business,and this is I'm really excited
(01:26):
about today's topic, because weget to be vulnerable and talk
about all of the mistakes we'vemade in our life.
How do you feel?
Yeah, why not record it and putit out to everyone to hear?
Speaker 3 (01:34):
and listen to.
Why not?
I mean, you did it at the 360event just last week, an
incredible event, by the way.
If you missed it, I'm sure youcan, you, you can maybe check it
out, but people love this, soit was good.
Dived into this.
I think for any main streetbusiness owner, understanding
these different phases as youbroke them down is super helpful
and illustrative to know whatyou should be doing and thinking
(01:55):
about, where you're at.
Speaker 2 (01:56):
Yeah.
So let's lay these four out andwe'll set the table and we'll
talk about our life experiencein these four and Matt and I
doing 10,000 consultations withclients over the years.
Each of us we've seen clientsin every one of these phases and
we're going to describe and howthey blend.
It's not a bright line.
You're going to love this.
So okay, here they are.
Number one is startup andstructure.
(02:18):
Startup and structure.
I got an idea.
How do I structure it?
How long do I stay in startup?
Am I there too long?
Not long enough?
What does it look like?
How am I approaching that phase?
And that phase has differentfeelings and actions that need
to happen.
That's number one.
Number two is optimization andsystemizing.
(02:39):
I'm out of startup.
I'm starting to make money Now.
I got to get efficient.
I want to make money.
I got to get this figured out.
I'm making enough to maybe getby, but I'm really trying to
hone in on and dial in myproduct, my service, my team
members.
Number three is now scaling andsaving.
All right, the getting'sgetting good.
(03:01):
I figured it out generally.
Now I'm making money.
How much do I want to scale?
How long am I going to keepscaling and what am I doing with
my profits?
Where am I saving them?
I may put them back into thebusiness.
Too much, too little, and thatwhole.
There's a lot of issues therethat are very different than the
optimization, systemizationstage.
(03:22):
Now we're going hard, we'remaking money.
When do I come to the fourthstage, exit.
When is it the right time toexit?
How do I exit?
What does exit look like to me?
Is it my family members?
Is it a third-party sale?
Is it private equity or justcash flow until the day they
close the coffin and legacy whatkind of legacy do I want to
(03:42):
leave?
And those questions startcoming up.
And what's interesting to meand Matt, tell me your thoughts
is, as a person, you could be inany one of those phases of age
and you could be young exiting abusiness.
You could be older doing astartup.
This is the phases of business,not the phases of your life.
Speaker 3 (04:01):
Yeah, and I think knowing where you are in your
phase of life and what you want,your goals, your ambitions they
change from when you're youngerto older.
I'm not saying there's, likeyou know, stereotypes on that.
I think actually it's it'severybody's different, but I
think how you're going to attackthese things depends on where
you're at in life and your goalsand everything, and also your
(04:23):
timeline.
Let's be honest too, so I'mlike we're going to do this in
one podcast episode.
So let's see how it goes.
Yeah, let's see how it goes.
Do you want to start from thebeginning or you want to start
from the end?
Speaker 2 (04:35):
Yeah, let's start from the beginning, and I think
I'm going to share my story andsee what you think too.
I love what Matt said, but let'sput a couple other caveats on.
It is there's no bright lines.
You don't wake up one day andgo okay, I'm out of startup, I'm
in optimization, oh, I'm out ofsystemizing, I'm going to go to
scaling.
It's going to be gray, it'sgoing to be sometimes hard to
(05:01):
know when you've kind of movedinto the next phase, but when
you're there you'll know it.
And I like what Matt said too isyou see, if you can have an
ability to look at the forestand know where your business is
going, then you can make betterdecisions too.
When you're on your heads downand you're going to maybe make
more short-term decisions andfrustration when you go oh well,
my business, I know where it'sgoing.
That helps.
And the last thing I would sayis is that you could have
(05:23):
multiple businesses in any ofthose phases at any given time.
It's funny, matt, we've Mattand I are probably together on
about four, three to fourbusinesses and if we think about
it, we've got businesses inevery one of those phases, and
so you've got to be able to sitback and analyze this business
with a different mindset, basedon what phase it's in versus
(05:44):
another business that may be ina different phase.
Speaker 3 (05:47):
Yeah, and I think any of you that are entrepreneurs
many of you start to do a lot ofdifferent things and it can
actually be quite complicatedand very difficult to manage all
those businesses through thethings.
So there's going to be maybeone mistake, you know, but we'll
see here.
All right, here's my firstmistake in startup.
Speaker 2 (06:03):
So in the startup phase and Matt you're this is
I've uh, you missed thispresentation.
Speaker 3 (06:09):
Yeah, you flew in the next day.
Speaker 2 (06:11):
So you're you don't know where I'm going.
This is going to be fun.
I want to see your reaction inthe startup phase.
Here's the mistake I made.
I was in startup in my youngpractice as a lawyer, advisor
tax all of that before I metMatt.
I was there for five years.
I was in startup for five years.
Now, when we're trying to helpour tax pros in the Main Street
(06:31):
Tax Professional Program, I'mtrying to help them not make the
same mistakes I made and getout of startup.
In the first year, you knowlet's get out of startup and get
into optimizing right away, butI stayed there for five years
and what I was doing is I wassuffocating my business.
A lot of entrepreneurs say, oh,I quit my job or this and they
expect their business to supportthem.
(06:51):
And when you're doing that,you're living month to month on
your business and you're justpulling out profit as fast as
you can because you've got topay bills, you've got family
members, you're trying to takecare of, maybe a young family,
but you're not letting yourbusiness grow or thrive and
you're suffocating, you'restarving it, and I did that for
five years and there was somepoint in there.
Again, it's gray when you kindof move from one phase to the
(07:12):
next.
I got a client that gave memore stable income and I didn't
want to do it at the time butthen I knew I needed to because
it gave me some breathing room.
And once I had that more stableincome with a retainer with a
couple of clients, it allowed meto take the profit from this
other area and not just have tosuck it out to pay the mortgage
payment or whatever, and I wasable to build the business and I
(07:35):
was way and I was in startupway too long.
Speaker 3 (07:37):
Yeah, I think I think in.
Yeah, I mean, that's a greatexample.
Actually We've seen that a lotbecause you see people leave
their day job and go headfirstinto a business when probably
the most successful thing to dois start.
The side hustle is turn thekeep the main hustle, whatever
it might be, go after it 100%and I get that.
(08:04):
But I think I've seen moresuccess in the people that start
with the side hustle.
Frankly, you're not going to beas busy as you want to be on day
one when you go open up.
You're going to be twiddlingyour thumbs a lot and spinning
your wheels because you're likeI need customers Now.
If you can go turn it to dayone and turn on this business,
whatever it might be, and youhave sales coming through,
you've got revenue comingthrough that's going to support
(08:26):
you.
Fine, go all in.
But I think most businesseshave a little ramp up period.
That could be three months,that could be six months, that
could be three years, I don'tknow.
But I think that way you don'tsuffocate and starve the
business and kind of stunt itsgrowth, but let that business,
let that income you're making,be able to reinvest it and
(08:46):
slowly grow the business and getthe systems going and all those
things.
Oh, which brings us to phasetwo.
Speaker 2 (08:52):
I like that.
You just said that Once you'reletting the business breathe and
grow a little bit now you canfocus on optimization and
systems.
Phase two.
Now, in phase two, the mistakeI made and I was in there with
Matt in this phase we were nowpartners we were able to start
figuring it out.
What I discovered in theoptimization phase is you're
(09:15):
learning how to duplicateyourself, not replace yourself
At exit.
We're going to come to that alittle later.
At that point you have toreplace yourself.
You need to make sure that thisbusiness can run without you.
Well, right here, I'm stillrunning it, but I'm duplicating
myself in the systems.
I'm not doing everythinganymore.
What you find out in theoptimization stage is you're the
(09:35):
bottleneck, and so in ourpractice, it was like we've got
to start to learn how to hirelawyers, tax advisors,
paralegals and teach them how todo the systems properly.
And whether you're producing aproduct or a service, you're now
duplicating yourself, andthat's a tricky thing, and what
we would use the model of is athird, third, third.
(09:57):
We wanted a third to go out inpayroll, a third to go for
overhead, and we were shootingfor a third in profit.
And so when you're in thisoptimization phase, you're
really trying to keep your costsdown, get more product out and
so that you can scale whichwe'll come to that but here it's
figuring out how to be smart inyour business and duplicate
yourself.
(10:17):
I was in that phase for 12years 12 years of figuring that
out.
Now, on our main street taxpros, I'm trying to teach people
how to do that in maybe twoyears, maybe three, because
there's some school of hardknocks.
This is your superpower, you.
I don't know if you have amistake you made in this, but
Matt knows how to maybe developpeople a little quicker than I
(10:38):
do.
I don't know.
Speaker 3 (10:39):
Yeah, I think once you hit that phase you really
need to, as you're looking forpeople to duplicate, it all
becomes down to people as youstart to get into scaling.
You don't scale a business, youscale people.
People scale your business, andso you need to get the right
people that can go execute onwhat you want to do.
Get the people that have theright talent, obviously, build
(10:59):
the right team and that's where,like at Directed IRA, we've had
significant growth and it allcomes down to people and even
our other businesses that wehave, from Mainstream Business
Services to KKOS Lawyers andwe've had a title company in the
past.
I want to talk about that as amistake, maybe, but the
optimization here, duplicationof yourself it's going to be
(11:23):
people that do that.
We want systems and processthat those people follow and you
got to develop that too, butyou know what those people are
going to be developing thosesystems.
You might lay it down the firsttime, but there's going to be
iterations of that andimprovements on that new
technology.
When you think about a 12-yearcycle on that, all the different
ways that things changed overthe years.
What your customer needs arehow you deliver for them.
(11:46):
Who's your competitor.
What are they doing?
I mean, you've got to stay upto speed on all that, but the
people matter.
Now here's the truth and reality, and you hear this advice all
the time you need to go hire aplayers.
Just go hire a players andyou're good.
Totally agree with that.
I agree with that 100%.
You can't afford A players inoptimization.
You won't get them.
You may get lucky and get someof them, and that's where I
(12:10):
think, where a lot of smallbusiness owners fail and why
they never get to scaling, isthey get the wrong people.
They get people that can do thejob, but they get people you're
going to stay there.
They're doing okay, yeah,you're making money, but they're
not people you're going tobuild a business with, and so I
think you get stuck there okay,so you're, I like.
Speaker 2 (12:30):
I know if we could put names to this, and we could
put several names, but in ourbusiness organization the
mistake we made was promotingpeople during our startup phase
in, uh, that weren't going tohelp us get out of optimization.
They were, we knew at the time.
(12:52):
We didn't realize that theywere going to create a ceiling
for us.
Yeah and uh, they were in thatrole way too long and once we
figured that out and had to makesome hard decisions, we were
able to get into the next phaseof scaling and we had to let
this person either go or putthem back into a role that was
(13:12):
best for them but not best forthe company.
And some people may stay inoptimization forever.
You're cool, just don't beupset when you can't scale
because you're like yourbrother-in-law is still your
head of this or your aunt's thehead of that, and you're like,
and you're bitching and moaningbecause you can't scale.
Speaker 3 (13:28):
Well, you've kind of made your bet and you know, and
I think the classic thing is islike you know you need to hire
your first assistant.
That's typically the first.
You need to hire your firstemployees and your assistant and
that makes sense.
But then that person might turnin what you in a small business
, it turns into your officemanager and you're like is this
the president of my company as Igo into scaling?
It's probably not Okay andmaybe it is.
(13:49):
Maybe that person's incredibleand amazing and has this
unleashed potential you neverknew of and was this A player
that you found and you hired asan assistant?
I'm just saying it's typicallynot the case.
So have some reality checksthere of where you're trying to
go.
Now.
You might be like you know whatI want to stay small, I'm okay.
I'm not trying to scale.
I've got to this 10 person teamI have.
(14:11):
I like my, the way I work.
I can control the ship.
It's what I love and that'sokay.
I'm still the smartest personin the room all the time and
know everything.
Cool but that.
But you will never get out ofthat.
If you think you're thesmartest person in your business
, you're staying in optimization.
You will never scale.
Speaker 2 (14:29):
You know, the example , I think, of this too is pastry
pub.
Yeah, pastry pub is a littlerestaurant and our main street
town where Matt and I were inthis optimization phase for a
long time and he would serve thefood to everybody at their
tables and we would ask himsometimes like, don't you want
to do a second?
It was an incredible restaurant.
Speaker 3 (14:47):
Great food.
We're like do you get anotherlocation?
Speaker 2 (14:50):
down the road or down the next city in town.
We tell him, go to St Georgewith your business, and he's
like no, I'm happy right here.
I love to come to work.
I love the interaction with thecustomer.
I know I could duplicate myselfand duplicate this restaurant,
but I would not have, I wouldnot enjoy it, and he knew it.
Speaker 3 (15:07):
Yeah, but I think sometimes and we don't know the
rationale here, but I thinksometimes the mindset is no one
could do what I do.
Ooh yeah.
Speaker 1 (15:15):
I'm so great.
Speaker 3 (15:16):
I'm so amazing that I couldn't no one could do this
down there.
It wouldn't be the same.
Speaker 1 (15:21):
Yeah.
Speaker 3 (15:21):
And you know you think of, obviously, restaurants
and all the multiple cases likethat's.
If you're thinking ofrestaurant, that's how you're
scaling a restaurant RightMultiple locations.
You know it's not like buildinga bigger restaurant.
So every business has adifferent like growth thing as
you look at scaling.
But I think there's some thingsthat hold a business back.
Maybe it's some mindset stufflike this, but it always going
(15:43):
to become people.
I'm just.
I'm just.
It's just like there's nothingI can emphasize more in this.
Getting into scaling and havingsuccess in scaling is that it's
people.
That will be the determinationof whether you do this how you
can recruit, how you can attract, how you can retain, how is the
culture there that the peopleactually work and function in is
like the night and daydifference.
Speaker 2 (16:05):
Yep.
Okay, now you're kind ofbleeding into scaling, and it is
again a fine line because asyou're optimizing and
systemizing you're you might getthe right people.
Or all of a sudden, you're intoa scaling mode and you're like
holy crap, what do we do next?
The last point I want to makehere, though in startup and in
optimization, a lot of peopleare paying too much in tax.
They're not structured properly, which can hold them back.
(16:28):
And then this phase.
If you see that you're in thisstartup or optimization phase,
this is where spending a littlemoney like some may say one step
back, allows you to go twosteps forward.
And so, having a good taxstrategy plan, meeting with the
tax lawyer once a year, makingsure your entities are right,
what payroll you're taking, howam I paying my kids?
(16:48):
Am I saving the right tax?
Your number one cost in thisoptimization, systemization
phase will probably be taxes.
And so if you're in these twophases and we just keep our head
down, you're not going to getto the scaling.
Make an appointment, talk to ifit's not our tax law firm, fine,
but we're a boutique for theMain Street business.
(17:08):
Have that annual meeting.
Where am I at?
And ask them I want to scale.
I was listening to Mark andMatt.
We've got 13 lawyers that areamazing, that know this
principle, because we'reteaching every day and we are
trying to duplicate ourselveswith good lawyers.
Ask them how do I get out ofthis and where do I go next?
(17:29):
And I'm paying too much in tax.
What's my structure and whatshould it be so I can go into
the scaling phase?
Speaker 3 (17:36):
Yeah, I think the number one expense you have as a
business owner, once you starthaving success, is taxes.
That will be your number oneexpense line and the whole
ability of you to be able togrow is to make enough income to
live a lifestyle you want.
We're all working hard, butalso have money to redeploy into
the business, and if you don'tgot the tax structure right,
you're just leaving money on thetable and you're, and you're,
(17:57):
and you're starving yourbusiness as we come back to what
was earlier and you're, youknow you're depriving yourself
of actually enjoying some ofthis wealth.
Speaker 2 (18:05):
Now in the scaling phase, again being vulnerable
and transparent Once we got intothe scaling.
So you've duplicated yourself.
Speaker 3 (18:13):
I've duplicated myself.
You've got some systems.
You've got some we're startingto make money.
Speaker 2 (18:18):
We're starting to make money, and this is Matt and
I.
I'm using a couple of ourbusinesses.
We have now had maybe two tothree different business
ventures at this point and nowthis is about eight years ago.
We're starting to scale.
We figured some things outseven, eight years ago.
Again, there's no bright linein this.
We're starting to scale.
What do I do?
My approach was and this iswhere I'm being vulnerable I put
(18:50):
every dollar back into mybusiness, back into every
business.
I could Even some of thebusinesses that Matt and I were
not 50-50 in.
I would be putting money backinto the business, back into the
business, as a farmer would say.
I was land rich, cash poor, Iwas not funding my 401k as I
should have, I was not fundingIRAs as I should have, and I
thought it was all aboutbusiness.
I felt I was my best bet, and alot of business owners think
that they're like I'm just goingto put money back into my
business.
I know I can get a betterreturn there.
That's a very scary thing.
(19:10):
Now, luckily and generally, Ididn't have a disability.
I didn't have a businessfailure.
Knock on wood, yeah, but I didnot put away money into
retirement as quickly as Ishould, or buy rental properties
, as I should have been mypartner here.
I would see him doing that andI'd sometimes give him crap and
(19:31):
I'd be like, dude, let's putmore money in here or there, and
Matt's like, nope, I'm going tomax out my 401k every year.
I'm going to max out my Rothevery year.
I'm going to buy a rentalproperty once in a while, and
not that.
I thought that was a bad thing,but it wasn't my choice and in
retrospect I wish I would have.
And so, during scaling, one ofthose things is where do I take
my profits?
I'm scaling, I'm making money.
(19:52):
Do I pedal to the metal?
Is that always the best thing?
Do I just freaking turbo?
Maybe not.
There's a pace to scaling thatwe need to be mindful of as well
.
Speaker 3 (20:05):
Yeah, and I think that's probably one of the most
difficult decisions you have asyou're starting to scale is.
You know?
You're starting to have somesuccess in your business, you're
making some good money.
You want to have a lifestyle.
Your family's probably like allright, can we like get off the
rice and beans deal here?
Speaker 2 (20:20):
You know, let's let's like some people go too hard on
the lifestyle too.
Speaker 3 (20:23):
Exactly.
And then they start beingflashy with their money.
They're buying the cars theyshouldn't be and not affording,
and so the best advice I had wasfrom a very successful friend
of mine who said live threeyears behind your means, so like
what you're making now, don'tlive like that.
Live like you did three yearsago and then kind of so you
(20:46):
eventually reward yourself, youeventually get there, but you
don't Rush to it.
Too many entrepreneurs theywant to have some flash.
They think it makes them looksuccessful.
They may even think that's astrategy.
In my business, to attract morecustomers or to sell more is to
have this look.
I don't know, I don't buy intothat, but I think that they end
(21:06):
up basically wasting money.
On the other hand, you've gotpeople that invest every penny
back into the business.
That could be the rightdecision actually.
Okay, I'm not saying that'swrong.
Speaker 2 (21:14):
Yeah, yeah.
But you got to know, go in withyour eyes wide open.
Speaker 3 (21:17):
Yeah, go in with your eyes wide open and just realize
you're bearing a lot more risk.
You're putting all your eggs inone basket and, on the other
hand, is trying to take somemeasured things off the table,
which is what I would do.
Is you know, try to take somemoney off the table, be
reasonable in spending, goinvest in these other assets.
Because when we talk about thetrifecta and this is one of the
things we do with our clients iswe go over operations versus
(21:38):
assets and we separate yourbusiness and investment life.
We say, over here you'reoperating business, you're
making money, which is typicallyan S corporation for tax
optimization and over here we'rebuilding assets.
This might be rental properties,investment portfolio, 401k,
other private things.
You're investing in Assets,create income, and over here, my
(22:02):
operational business is my assworking for me, okay, so what do
I want?
Do I want my assets working forme?
Do I want me working for me?
And so there's another way tothink about this on your
business is trying to createassets that create revenue
themselves.
Now, maybe that revenue can'tand that and those investment
returns can't beat what I can doin my business.
And that's where it's thisdifficult question, where I can
say it's not wrong or right, butI do like and I've just 10,000
(22:26):
consults with clients ofbusiness owners is not every one
of them gets to scaling andexit, sadly enough, or their
exit is very paltry.
It's not what they had hopedfor and and they haven't saved
and they're they're kind of introuble there in their sixties
and they want to hang it up andthey just can't get there.
Speaker 2 (22:45):
Yeah, and another way of saying this to you is don't
wait for the exit phase to startsaving.
While you're scaling, youshould be saving, because you
may not get to exit and again,all of a sudden, you wake up and
it's scary that you don't havea savings account, but you have
(23:06):
this business, that you'restrapped in, buckle up.
This is your retirement and theexit may not come, and a time
to sale is further out than yourealized, but you don't have
this other pool of assets makingmoney for you to let you
breathe, and so it's aprecarious area.
And so, in this phase, doingthose planning sessions with an
(23:27):
advisor that has seen everyphase and can help you find that
balance it is balancing in thisphase.
This is why it creates a lot ofnervousness.
People that are kind of peoplethat are smarter are scared the
most in the scaling phasebecause they're like I don't
know how long this is going tolast.
I want to get the getting whilethe getting's good.
Am I putting too much money inmy business?
(23:48):
Should I be deploying it overhere?
And they're nervous, andrightfully so, because it's a
wonderful feeling to be makingmoney and it's a scary feeling
to be making money becauseyou've worked so hard, you know
how precious that time is.
Speaker 3 (24:05):
Yeah, and let me just give an example here too of of
this, probably one I don't knowit's a mistake, but a tough
decision we had to make was wehad a title company, so called
investor quality title, iq title.
We've had that, you know greattitlecom Great name and um but
what we were doing is we had alot of real estate investor
clients in our law firm and andtitle companies didn't serve
(24:25):
real estate investors very well.
So we're like, well, we can doa title company.
So we went and got the licensesthe title and escrow licenses
and we opened two offices, onein Salt Lake city, one in
Southern Utah where our law firmoffice was.
This was 10 plus years ago andwe optimize that pretty quickly
because neither marker I didclosings.
We went and hired twoexperienced escrow officers in
(24:46):
each office, had a lot ofexperience.
They'd both done thousands ofclosings, had good reputations
in both towns, had someconnections too and we're like
we can feed you, we can feed thework in here from our clients
and the work that we're doingand it was going great it wasn't
the best timing, okay, this was2007, all right.
(25:07):
And what happened was is thereal estate market fell off a
cliff.
Now, initially we pivotedquickly and had some big wins
because we knew how to do shortsales and that was the only
deals happening.
And if you're a real estateagent or someone buying or like
a lender, like first Americantitle was like, ah, we don't do
short sales, all the big oneswere like, eh, we don't do this.
Well, that lasted for like twomonths, because then they're
(25:27):
like that's all that's happening, right now we better do those
because.
And so then we were backcompeting with the big dogs and
it was a very limited deal flow.
And so some type of businessesare cyclical.
You could be in theconstruction industry, Maybe
you're a real estate agent,Maybe you're in title and escrow
.
That business can be somewhatcyclical.
So we were in that Now we wereweathering the storm.
(25:49):
We actually weren't losingmoney, but we weren't making a
lot either.
And I looked at that business atthe time and I thought do we
want to go to scaling next inthis?
Do we really want to force ourtime and effort from our other
businesses that we could maybeput more money into and grow?
And at the time I was like I donot want to scale this.
(26:10):
I learned enough about thebusiness to say not the business
to scale, not recurring revenue, you have to get a new customer
every week and a closing newweek to fund it.
Sure, you can get relationshipsand try and build those, but
you got to nurture those.
And then the business issomewhat cyclical.
And so knowing what businessesand when to hold them and fold
(26:31):
them, so to speak, and whatbusinesses to optimize and scale
and put your time and moneyinto, is just as critical, and I
will say this sometimesdeciding to shut down a business
is the best financial decisionyou can make and not put more
time or money into it.
And maybe you got to pivot yourservices or how you're offering
it.
The strategy in the business iscritical too, I mean.
(26:52):
So I don't know, I just want todrop that out there as we get
into scaling of like we couldunpack that forever, but make
sure you got a winner, make sureit's going to be worth your
time and money.
That business would have beensuccessful.
I'm not saying that, but Ithink there was better things we
could have spent our time doing, which is what we've done, and
I think that was the rightdecision.
Speaker 2 (27:09):
I do too.
And now you're in.
This is a great point.
Shutting down may be a form ofexiting, and so now we get into
the fourth phase and you'reready to exit.
And what does that look like?
And you're also talking aboutyour legacy more.
What do I want to leave to myfamily?
What do I want to leave in mycommunity?
What does this business looklike when I'm gone?
(27:32):
Or my assets?
Your estate planning becomeseven more critical.
Right now, it's our estateplanning special month.
We offer a discount.
We want to help all of our MainStreet business owners get
their estate plan done, nomatter what state you're in.
You do not have to use a localattorney to do this.
You just need to use anattorney that understands you
and your business.
So please call KKOS Lawyers.
(27:52):
Up to $500 off on the rightpackage for you.
Kkoslawyerscom there.
You go Down there in the shownotes for sure.
So get your.
This is another time to reviewyour estate plan through this
whole process, because if youtap out early, you know what.
Where's your business going tofall and is it going to take a
(28:13):
backseat and actually lose a lotof the value that you were
building along the way?
You just want to have abusiness continuation plan
conversation in that process.
So in the exit phase, this iswhere you replace yourself.
See, before you were trying toduplicate yourself.
I need to get myself out of theway, get the right people so I
can scale properly, boom,bada-bang.
(28:34):
Now I need to replace myself asthe visionary, maybe the manager
, the CEO, the president, andbecause if you're going to exit
to a family member or a thirdparty, they don't want you
around on day two usually I meanat the end of this process they
want to buy a business that'sgoing to move forward without
(28:55):
you having to be there Now.
They may want to pay to have youthere for a specific reason,
but your family that's going tomove forward without you having
to be there Now they may want topay to have you there for a
specific reason, but your familythat's going to buy the
business are like mom, dad, bye,stay out of our way.
We have our own vision here andyou want them to have their own
vision.
So during the exit and legacyphase, now you're replacing
yourself and that can be hard,it can be very emotional and
finding the right person that'sgoing to run this business when
(29:18):
you're not there and you'restill going to make the right
amount of money.
You've got to startunderstanding KPIs,
understanding EBITDA and how toreally know the finances of your
business and do all the littlethings you should have done
before on your business to makeit profitable when you're not
there.
Speaker 3 (29:33):
Yeah, yeah, I think this is, I mean so much to be
said here.
Everyone's going to have adifferent reason for exiting.
This might be there could be asituation in your life, there
could be a divorce, there can bethe businesses and it's just in
a tough spot.
It could be the exact righttime to sell.
(30:00):
Yeah, there could be like acompetitor that wants to buy you
or a private equity firm.
You can hire an investment bankor a business broker and go run
a process and market it forsale.
Speaker 2 (30:07):
You got another dream .
You want to go?
Do you got bored.
Speaker 3 (30:10):
Yeah, you got bored, you're ready to move on to
something else, or you haveother businesses you want to
focus on.
I mean, there's just a lot ofdifferent reasons why this could
come up.
But the other thing to plan forwe want to think about legacy
too.
Here is how you're going toexit, and this is something that
Mark Fetzer is an attorney inour office that helps a lot of
clients buy and sell businessesand going through those issues.
(30:32):
And how am I getting out ofthis business?
What is the tax ramifications?
What does this look like as theoffer comes in and making sure
you have a lawyer Okay, if thebuyer of the business has the
lawyer, that lawyer is not yourlawyer.
When you're selling yourbusiness.
Okay, you're going to need yourown lawyer to help you through
that process, particularly ifyou're selling business for
seven or eight figures or more.
You know we're out of like thehundreds of thousands of dollars
(30:55):
.
So you've got to have a lawyer,okay.
Speaker 2 (30:56):
Let's not be cheap.
Yeah, and we did such a goodpodcast series on this.
Yes, about four to six monthsago.
Speaker 3 (31:01):
Yes, yeah, and what I'll say too is, I do think,
just from the business side ofthings.
So go back to that podcast andjust know Mark Fetzer's the guy
if you need help at KQS Lawyersexiting.
I think legacy is important andwe can.
There's obviously the legalcomponents of it, but this has
(31:22):
been for many people like yourbaby, right and so for.
This is almost like a child forany of us business owners.
If you've built this businessand it's been you know a lot of
the customers, you know the teammaking sure you're working with
someone that that, whether it'sthe right family member that's
going to take it over, the rightbuyer, whoever it may be, that
someone that you feel is goingto carry on that business and
(31:44):
something that you value, it'snot about the right price.
You can get as much as it is,and that's important, don't get
me wrong.
But also like this is the rightpartner for this in some ways,
even though you might be goingoff into the sunset.
I think is really important too.
Speaker 2 (31:59):
And in that podcast that Matt and I go through the
three steps to prepare to sellyour business.
There's a due diligence phase,there's the closing and all that
.
But I guess I'll just emphasizethis here briefly and I
recommend all of you to go therethat are thinking exit is you
start to really work on thebusiness.
In this phase you're scalingyour head's boom let's make as
(32:23):
much money.
Now you start having a verydifferent look at it.
You're looking at the financialstatements more than you've
ever looked before.
Speaker 3 (32:30):
And you're learning what EBITDA means.
Yeah, what does EBITDA mean?
As a business owner, you'relike what's the net income?
What money am I taking home?
How much am I paying tax onMm-mm?
You don't think like that.
When you're in exit mode,you're thinking what's the
EBITDA?
You're thinking not, can Iexpense everything in this
business, like you know, allthese quasi-personal business
expenses?
No, we want to think aboutthat's not an expense, I want to
(32:53):
into EBITDA.
So this is like when you if youdon't mind when someone's going
to look to buy your business,they're looking at EBITDA.
This is the what's the cashflowcoming out of?
this business Earnings beforetaxes depreciation amortization,
basically what it is you thinkof your net income.
It's like what's the take-homepay that whoever owns this
business, what's the profit thatthey get?
(33:15):
All right Now, if there'scertain one-time expenses, some
of the things that are likequasi-personal expenses on your
books the company's been payingfor, those get added back into
EBITDA, which adds more netincome and more profit.
So a business owner can say,ooh, I'm actually going to get
the benefit of that when I buythe business.
So that's where you startreally focusing on that, because
(33:36):
that's what every buyer isgoing to look at.
Yeah, and what I Can.
I say one more thing Sorry, Ikeep cutting off.
Yeah, yeah, no, you bring it asa business owner.
For so long you've been trainedto like I want my P&L to show as
little profit as possiblebecause that's going to the IRS
and that's on my tax return whenyou're in exit mode.
(33:56):
We're not doing that.
Okay, that's not what you'redoing.
You might have it's.
You know the financials you'reobviously filing your tax return
on.
We still want to expenseeverything as possible, but you
have another set of financialsthat hits this EBITDA number.
That's adding back a lot ofthis stuff.
To show true, profit.
Speaker 2 (34:10):
Yeah, no, I love it.
And and what and this isinteresting because we have a
different point we're going tomake here is that as you start
analyzing those financialstatements and you're looking
for this EBITDA and la la la andthe profit, what happens is
you're also starting to reallylook at what are these key
performance indicators?
How long is a customer with me,how long are they staying, and
(34:30):
what value are we adding?
And all of a sudden, as youstart to really hone in on eking
out the profit, you're startingto learn more about your
business you never knew beforeand you're having this new look
of oh my hell, I wish I wouldhave been doing that three years
ago.
Or I wish I would have beendoing this five years ago and,
oh my word, I didn't even knowthat was such a driver of my
(34:51):
profit bottom line.
And with this new set of eyes,sometimes business owners are
like oh wow, I just doubled thebottom line and I'm getting so
efficient in replacing myself.
I don't know if I want to sell.
I'm just going to sit back andcollect revenue the rest of my
life and I'll let my family sellthe damn thing or whatever, and
that's okay.
Again, you really start to workon your business Like you've
(35:16):
never worked on it before froman outside point of view, and it
opens a new perspective for theexit.
Or you may say I can.
I can do three more years ofthis, because this is a little
easier now that I've spent thetime I wish I would have years
ago, and so it's really anenlightening yeah.
Speaker 3 (35:35):
Cause I think when you do that, you start looking
at the business like an investor, like some outside party you
know, because you're thinking of, well, someone's going to buy
this, what are they going to belooking at?
And I think if you talk to anyinvestment banker or business
broker that's worth their salt.
Most of them are going to tellyou you should be preparing to
sell your business two yearsbefore you actually go to market
to sell the business and youshould be working with them and
(36:03):
getting the financials in order,getting the stuff in place that
a buyer is going to look for,that you're going to get the
optimal price, and also drivingsome of the easy things where
you can create more revenue,which is going to create more
profit, which is what you'regoing to sell.
Looking at your pricingstrategies, looking at your cost
structure when a lot ofcompanies go through scaling,
they get a little sloppy intheir expense management.
(36:27):
They go from like buying pizzafor everyone to having like a
freaking kitchen and a cafe witha chef in the office building
because they've gotten big.
Employees are all flying firstclass instead of business class
or instead of like coach,whatever it is.
Speaker 2 (36:37):
you know regular I don't know what they call that.
You're not flying back therevery often, are you?
What do they call it back there?
I don't know.
Speaker 3 (36:44):
Oh, the truth hurts.
Speaker 2 (36:45):
I don't want to see those people, not even in my
peripheral.
Speaker 1 (36:50):
And I put that little sheet up, you know, oh my gosh.
Speaker 3 (36:53):
That was a joke.
Speaker 1 (36:54):
That's.
Speaker 3 (36:54):
Brian Regan.
Okay, I don't think this guy'sgot a big head.
That's a Brian Regan quote.
He's a comedian, it's a wholebit so but anyways, I just think
that having a littlepreparation and foresight before
immediately going to sell andmaybe spending a couple of years
working on that is for a lot ofpeople that we've talked to and
clients over the years.
They found that very valuableand they've actually made more
(37:14):
money.
Speaker 2 (37:24):
Yeah, found that very valuable and they've actually
made more money.
Yeah, absolutely Well.
In summary, hopefully this hasbeen very enlightening and I
want to finish with this it'snot a race.
There's not a right way ofdoing this.
You may spend more time in onephase or another and, like I was
just saying here, you may getto exit and realize exit for you
is getting it to a point whereit just creates long-term
cashflow.
That's an exit in a sort of way, that where you're not having
to be in the business every day.
(37:44):
So, no matter what phase you'rein, you get to choose.
You get to choose how long youwant to be there.
And my point today is justrecognize where you're at.
Make it not a race it shouldnot be full of pressure and sit
back and work on your businessonce in a while and don't expect
your business to do more foryou.
(38:04):
And sometimes we're so stressedbut when we sit back we're like
oh, here's why I'm in thisphase.
I know I can get there andhere's what I need to do.
I need to learn some new skills.
I need to hire some differentpeople there, and here's what I
need to do.
I need to learn some new skills, I need to hire some different
people, I need to make some,maybe some hard decisions, and
there's no right or wrong wayper se.
It's your destiny.
You get to choose, and we justhope that we've shared something
(38:27):
that'll help you through thatprocess.
Speaker 3 (38:30):
Yeah, wow, I love this.
This was interesting.
We kind of did somethingdifferent and I know you've had
some incredible thoughts that Iwas just felt like I was
commentary today, you know justlike the color commentary.
I should have had a little moreorganized thoughts on this, but
um, but you know what?
Owning a business is one of themost stressful but amazing
things out there, and any of youbusiness owners know that.
(38:50):
It can add a ton of stress anddemands on your life and you
miss out on things that youwanted to, whether it's friends
or family or other goals youmight have.
But it's also pretty fulfilling, and the things that you can
build and be proud of, the thebusinesses, the customers you
can serve, the people you canwork with is, um, is pretty
special, um and so, but I thinkthese phases are helpful for
(39:10):
people, no matter where you are,how to get to the next one, if
that's what you want, and youknow we all are.
You know the hero in our ownstory, so to speak, and what
we're trying to achieve.
So thanks everyone for tuningin.
We'll be back with anotheramazing episode of Main Street
(39:31):
Business Podcast.
See you then.
You Thank you.
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