March 18, 2025 • 32 mins
Justin Goodbread opens a window into the hidden world of business exits, revealing why 80% of entrepreneurs never successfully sell their companies despite having most of their net worth tied up in them. From his first landscaping company at age 15 through multiple six, seven, and eight-figure exits, Goodbread shares the counterintuitive strategies that transform businesses from jobs into valuable assets.
Whether you're just starting your entrepreneurial journey or considering your exit strategy after decades in business, this conversation will fundamentally shift how you view your company's potential value and legacy.
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Episode Transcript
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Speaker 1 (00:00):
Welcome to the Everyday Millionaire Show with
Ryan Greenberg and Nick Kalfas.
Alright guys, welcome back toanother episode of the Everyday
Millionaire Show.
We're here with JustinGoodbread, coming from Tennessee
.
How are you doing, justin man?
I'm good.
How are you Good?
Good, saw your bio.
(00:22):
Pretty impressive stuff withsome of the uh business dealings
that you've had.
Can you give us kind of like anelevator pitch on who you are
and where you're at sure?
Speaker 2 (00:33):
uh, born and raised in south georgia, I started my
first business when I was 15scaled it sold it.
Started another one there, 22scaled it sold it.
Now.
Businesses later all startedand sold for six, seven, eight
figure exits.
The company who acquired mylast one.
They said, hey, good bread,come be the CEO.
The president of this nationalfirm Took that firm from mid
(00:54):
eight figure valuation to a ninefigure valuation in 19 years
and then walked them through atransition.
So that's kind of the businessjourney.
But outside of that man, I'm adad, I'm a husband, I'm a
country boy at heart, born andraised on a dirt road, live on
the gravel road in EastTennessee with a beautiful
spread and I look at themountains, like to write, like
(01:14):
to do a little bit of everything, so I'm hoping we can add some
value for the audience today.
Speaker 3 (01:18):
Awesome.
What was the first businessthat you sold?
Speaker 2 (01:20):
It was a landscape company.
I mean, who doesn't start overwith a landscape company, right?
A lawnmower and a truck, that'sa landscape company, right.
I scaled that thing from zeroand we ended up doing pretty
well.
We had over 40 employees by thetime I was 22.
And then my wife and I we justgot married and we relocated
back to Tennessee my wife's halfFilipino and we dealt with some
(01:41):
racism in the deep south that Ididn't like and I didn't want
to raise our family around thatany longer, and so we relocated
after that particular event andcame to East Tennessee and kind
of set roots down here in theKnoxville area.
Speaker 3 (01:54):
Awesome.
Yeah, so that's how I started.
Also, I started out with asmall landscaping business still
have it to this day and then Igot involved in real estate.
But that's interesting.
I'm always curious to learnabout people who grow business
with the sole intention ofselling them.
Speaker 2 (02:10):
Well, actually I didn't grow them with the
intention of selling them.
It was very unique.
The landscape company that wasgoing to be like my dream job,
right, I mean, who doesn't wantto cut grass on a big commercial
mower the rest of their life?
I mean that is beautiful.
Speaker 3 (02:25):
But you know god, it is kind of peaceful, though.
You have your headphones onheadphones and then you're just
jamming out on the mower.
Speaker 4 (02:28):
I, too, started a landscaping company.
It was my first job at a at ahigh school, so that was awesome
.
That was dude.
The the season when you're justmowing and the grass is you
know the smell of fresh grass Idon't know something about it,
yeah absolutely yeah, so that Ididn't.
Speaker 2 (02:43):
I didn't start to sell them.
Just life events happened, um,even the most, even my, my big
company that I started, westarted from scratch, scaled it,
49 months later exited.
And I wouldn't have exitedexcept somebody offered me three
times what it was worth.
And it was like you know, ifyou had a piece of real estate
and it was three times theappraised value, why in the
world wouldn't you sell it?
Take the capital, take thefunds and then reposition and do
(03:05):
something else.
Have them some more fun.
Speaker 3 (03:08):
But when you sold that business so obviously the
first business, the landscapingyou didn't grow with the
intention of selling but didthat kind of motivate you to buy
your next one with theintention of buying it, to sell
it.
Speaker 2 (03:19):
No, I never bought a business.
I've never been on that side ofthings.
So the next one after movinghere to East Tennessee, I came
into the world of insurance andbuilt a really big book and then
went through a business divorceand as part of that business
divorce that you know, if we'vebeen in business for any length
of time, that happens and partof that business divorce we
ended up selling the book out.
So that wasn't intended.
(03:39):
My consulting business Istarted a consulting practice
called Dental Management Groupto help dentists buy businesses
and scale them and sell them.
And a national firm reached outand said, hey, good brand, we
see what you're doing, we'll payyou this much money.
It was ridiculous price, nointention to try to build it, to
sell it.
And then the last threecompanies I kind of combined
(03:59):
into one holding company.
It was a financial planningfirm, a business consulting firm
and a national media firm andthe way I orchestrated it was
very unique.
And a big national financialfirm said, hey, we want it and
they made a ridiculous price ofone on it.
I was like, okay, well, I mean,I'd had to work for another two
decades to reach this statusbased on the run rate, so why
not sell it?
And then the national firm,once they bought me, they said,
(04:21):
hey, based on what you did, I'ma pretty major shareholder in
that company.
And they said, hey, could youscale our company with the
intention of selling it?
I'm like, yeah, we can.
So we were, like I said,mid-eight-figure business.
I stepped into that presidentrole.
The CEO gave me fullconstraints, full, unconstrained
.
He said do what you need to do,make this thing valuable, and
went to work, got my C-suiteinvolved and we took that
(04:42):
company, doubled its value in 18months and then we had a
bidding war based on that.
So that one I did end up tryingto scale it, to sell it.
Now, during that whole process,I've literally coached hundreds
of business owners who's like,hey, I'm tired of my business,
how do I move the value up so Ican liquidate it and go do
something else or retire, dowhatever else they might want to
do.
Speaker 3 (05:05):
Yeah, I feel like a lot of business owners who maybe
don't have that mindset.
They kind of just let theirbusiness go to waste,
essentially, and just get out ofit without capitalizing on the
opportunity to potentially sellit.
Speaker 2 (05:18):
You're exactly right.
Here's an interesting statistic.
So if you're a business owner,I have real estate.
Now I have a real estatebusiness, right.
So we all have different typesof businesses.
But here's an interestingstatistic.
There's roughly 32 millionbusinesses in the United States
right now.
Roughly Out of those 32 millionbusinesses in the United States
, only 20% of them, more thanlikely, would transact.
In other words, they'll sellthat business from their current
(05:39):
owner to a child, a keyemployee, somebody external.
Here's where it gets sad.
Statistically speaking,according to the Exit Planning
Institute, which is the leaderin this particular field, 80% of
our net worth as businessowners the chuck of the truck,
the landscapers, the HVAC guys,the nurses, the doctors who have
nurses, various people 80% ofour net worth is our business.
(06:00):
So what happens is is thatbecause we're not building our
business as an asset to wheresomebody wants to come in and
buy it from us, instead we builtit as a job.
We end up working until we'reliterally, physically or
mentally dead, and then we'relike enough's enough.
As you mentioned, they justclosed the business down, and so
therefore, what happens is thatbusiness owner who's used to
whatever the standard of livingis because of their income from
(06:23):
the business, plus, you know,paying their vehicle, paying
their cell phones or trips,everything else that runs
through the business they haveto take a major, major pay cut.
And so whenever I startedseeing that happening and I
started teaching business ownersit's not hard to scale a
business and build it wheresomebody would want to pay you
for it.
But, more importantly, asbusiness owners, we got to
understand we have this highlyilliquid asset that unless we
(06:45):
build up substantial type ofassets outside the business ie
real estate portfolios, and mostpeople don't then you have this
business that you're ultimatelygoing to have to make a hard
decision Are you going to worktill you die?
Are you going to sell it andtake a pay cut?
And that's the reality of thesituation.
That breaks my heart.
It shouldn't be that way.
Speaker 1 (07:03):
What's the number one thing that you would do?
You said you doubled the valueof a company.
Speaker 2 (07:14):
If that was your intention to double the value of
a company.
What would be some of the firststeps that you'd take?
The very first step well, itdepends on the size of the
business, right?
It depends on the size of thebusiness.
So if it's the average Americansmall business out there, I
would say the very first thingwe have to do is get the owner
out of the business.
And so I challenged thebusiness owner, and we can walk
through processes on how to dothis, but I challenge them.
Hey look, my goal is, within thenext six months year, whatever
the business structure is, Iwant you to literally not go to
(07:37):
work.
Turn your cell phone, turn youremails, whatever it may be,
turn it off for 30 to 60 daysand not go to work.
And whenever I say that, theireyes get really big and like
you've lost your ever-lovingmind dude, are you smoking crack
?
I'm like no, we've got to getthis business where it can
operate without you.
And so what that forces thebusiness owner to do is to build
systems and processes, all thattype of language that we often
hear from business sense, but itforces them to actually look at
(08:00):
their business through the lensof an investor.
So that's the very first thingthat I would focus on.
That usually adds more valuethan anything else in the
company.
Number two is recurring revenue.
Every business can haverecurring revenue Every business
can.
And so how do we find thatrecurring revenue model and
create in the business againwhile decentralizing the owner,
and then from there there'sactually 256 metrics that a
(08:22):
business can adjust.
That moves the value up forwhat we're talking about.
Speaker 1 (08:27):
Yeah, so do you go in there with a strategic plan on
each business?
Do they have a different planin place to scale it or bring it
to that new value?
Speaker 2 (08:39):
The process that I like to follow is a little bit
more structured than that.
Yes, we end up with a strategicplan, but it's more
value-centric.
So the very first thing we'regoing to identify is what's the
current value of the business?
What's it appraised for today?
Softwares that can do that,different technologies back of
the napkin can determine thatvalue.
But then what we're looking foris what's called the value gap.
(08:59):
So let's say, hypothetically, abusiness is worth a million
dollars today's value.
Well, what is supporting thatappraisal?
Well, what's supporting it isall the underlying asset quality
of the business.
So how can we adjust the assetquality of the business and move
the appraisal up withoutgenerating any more revenue?
That's what's called a valuegap.
So, for example, I was talkingjust today with a lawyer who has
(09:20):
a really nice size practice.
You could do this with a HVACcompany, a landscape company, a
doctor, it doesn't matter.
What we did is we appraised thebusiness and it came in about
2.1 mil.
But if we made some adjustmentsto the quality of the business,
like you would with, like abond, if you made a better
quality, he actually could havea $3.2 million value practice
without any additional revenue.
(09:41):
So that's what's called a valuegap.
So what the business owner istrying to figure out how to do
is how do I increase my valuewithout having to work harder,
because we're already busy, wedon't need anything else to do.
So what the strategy is isidentify the value, identify the
value gap and then ultimately,to your question.
Then you're going to devise astrategic plan.
I like that terminology.
(10:02):
We're going to use a strategicplan solely focused on driving
value, not on trying to get moresales, not on trying to get
more clients, not any of thatstuff.
We're going to focus on gettingvalue, and what happens is is
we get efficiency.
So we were talking about alandscape company.
I think we would recognize thatthe average water hose puts
about eight to 12 gallons aminute out of a water hose.
What's interesting is imagineif we tried to hook a water hose
(10:24):
up to a fire hydrant.
It won't work.
It'll actually blow the hose topieces because it cannot handle
the velocity or the pressure ofthe fire hydrant.
So the same is true of business.
What we want to do is we wantto increase the velocity.
We want to allow the clientexperience to speed through that
business faster and take allthe bottlenecks and the friction
out, and once we do that, thenwe can focus on getting more
(10:46):
revenue, more sales, and that'swhere the magic of value
accelerates.
Speaker 1 (10:52):
Wow.
Speaker 4 (10:56):
That was well said.
So you know you talk about likethe value and adding assets and
things of that nature.
What are some ways that abusiness can add those deep
assets that you're talking aboutor that you like to see to
raise that value gap?
Speaker 2 (11:08):
Perfect question, love that question.
So whenever we look at a value,let's do a little bit of
teaching so we can understandwhere I'm going to head with
this, because not all of us dealwith value on a daily basis.
So value is, in a simplifiedform, is comprised of two parts.
Think of a quarter, heads andtails.
You have the revenue component,let's say EBITDA, or let's say
(11:30):
earnings or net operating income.
There's some sort of a revenuenumber and then you have a
multiple and I'm keeping thissuper simple for us to deal with
through audible type ofstructure.
So the multiple could be two,it could be four, it could be 25
, based on the industry.
Every industry has a differentmultiple range.
So let's say, hypothetically,the revenue number we're going
to use is a million dollars andlet's say, hypothetically, the
(11:51):
multiple is two.
That means that business valueis worth $2 million, a million
times two.
So we want to drive thatmultiple up.
So what's comprising of themultiple?
The multiple is consistent uponboth tangible and intangible
assets.
A tangible asset, for example,like in a landscape company,
would be the truck, the mower,the blower, it would be all
(12:11):
those things that we canactually physically see that
appears on the balance sheet ofthe company, the intangible
assets, all the things thatmakes that company
hyper-efficient.
There's four key areas ofintangible assets in a company.
You have human capital,structural capital, social
capital, and I just went blank.
I'll bring it back to that, butlet's walk through these.
(12:33):
Human capital is how strong isyour team?
So, whenever we want to improvesocial quality, we want to have
a team that's best in class.
We want to have employees thatshow up on time.
We want to have employees thatcan teach others.
We want to have leaders.
We want our employees to beable to go to a national
conference and speak directly tothat national conference as
best in class.
That is highly sought after.
(12:53):
We all know how hard it is toget employees.
We know that Finding people whoknow how to work hard to stay
true to their word is aboutimpossible today, especially
with, as we've seen, some of theyounger generation.
So whenever a company islooking from the outside in,
they say, hey, my goodness, thiscompany has a best in class
team.
These employees arewell-structured and they're
well-trained.
They're going to add more valueto that.
(13:14):
You have structural capital.
Structural capital is howefficient is the company?
So, for example, let's say wewant to put a marketing strategy
out to hire a new landscaper ornew clients for our landscape
company.
What's that funnel look like?
And can I walk that prospectiveclient all the way to a sale
consistently with the exact same, repeatable results?
That's a structure.
Some might call it a workflowor process.
(13:37):
Right, so human and structuralcapitals are typically the two
that drive the most values andmy brain's skipping me as I'm
late in the day here, but I'llbring the other two up as we
talk.
Speaker 1 (13:47):
Great.
So what do you say to somebodythat would argue that the team
is only as good as the leader?
So what's kind of like theprocess in figuring out if the
team is self-sustainable withoutthe owner of the business
operating?
Speaker 2 (14:04):
Typically it's the owner who says that.
Typically, and typically theowner who says that has I'm
going to be very raw andauthentic here has an ego,
complex and they're probably theworst part of the business
Everything probably.
If they say that more thanlikely they're the problem with
the company and they won'trelinquish control.
So it's an ego and it's lack ofleadership is what that is.
(14:26):
The reality of the situation isthat, yes, you may have bad
apples on the team or you mayhave team members which are not
performing at the level to whichthe company could perform at,
but they're not going to improveabove the leadership capability
of that company.
So in a business there's eightareas of business.
Planning is one of them.
We've talked about strategicplanning.
The second big key isleadership, and you have to have
(14:48):
the business owner designed andskilled in such a way that
they're backing themselves outof that business every single
day.
So when I'm talking with abusiness owner who thinks that
way and that's typically whereit comes from what I'll
typically do is walk themthrough a series of exercises.
So, for example, at the end ofthe day, as we're driving home
exhausted, tired, whatever yourjob has been doing, pull your
(15:09):
cell phone out, go to chat, usean AI, whatever you want to use
and just dictate exactly whatyou did that day, everything you
did.
And then, for that particularday, you've got to find one item
you're not going to do tomorrowand you're going to relinquish
that item, and after a period of30 days, you're going to come
up with 30 tasks that you aredoing.
That's probably not your hourlyrate or your hourly level that
(15:29):
you need to hire somebody elsefor.
And so whenever you startlooking at it from the owner
position of how can I take whatI'm doing and how can I shift it
to somebody else, two thingsare going to happen.
Number one is you're going tomove your mindset and, as the
owner position, you're going tomove your mindset up to where
you take on the jobs within thecompany that truly require the
pay which you're making.
Most of us work beneath our paygrade as owners.
(15:52):
So that's the first thing it'sgoing to do.
The second thing it's going todo is it's going to force you or
the team to identify the areasof the company that they need to
build systems around to makesure you, as the owner, have the
team structured for theirmaximum efficiency.
So whenever I hear that, it'stypically that the owner is the
problem.
Typically the owner viewshimself as the patriarch or
(16:13):
matriarch of the business, towhere they know everything, and
that is sad.
I'll give you a real lifeexample.
When my coach was pushing on meduring my growth of some of my
companies, he told me he saidgood bread, you can sell ice to
an Eskimo.
You got to quit selling.
Quit selling your business.
You need to have a sales guy.
Okay, quit selling yourbusiness.
You need to have a sales guyOkay, or sales gal.
So I can remember putting upstructures in place.
(16:34):
It took us about 90 days tobuild out the sales scripts, all
the different type of syntaxesfor our particular avatar.
And lo and behold, lo andbehold, the biggest client in my
history called in and Icommitted that I was not gonna
take any more calls.
Guys, I gotta tell you I'msitting here on the desk.
I'm sitting in the office, onthe desk floor, on the floor in
(16:57):
the sales guy's office, with awhiteboard about the size of a
piece of notebook paper and alittle eraser board and as he's
on the phone, I asked him to puton speakers so I can help you
Now I'd already trained him for90 days.
But I'm sitting on the floorand I'm like okay, the client
asked this question.
Here's your answer.
He looked at me about two, threeminutes in that call and he
(17:17):
looked at me with daggers in hiseyes.
I'm like pissed off, like I'mgoing to rock your world,
gabriel, if you don't get out ofmy office.
Like I mean, he was ticked, heturned his chair, turned away
from me and I'm like how dareyou?
Sorry, dog, I'm the one whotrained you how to do this.
I've been trying to make sureyou're successful.
This is a six-figure deal.
It's a big deal.
It could pay multiple people'ssalaries.
We got to land this thing.
We got done.
He landed the sale Clientshappy was with us for five, six
(17:39):
years.
When he got done, he hung thephone up and he turned around to
me and he pointed his finger atme.
I'll never forget it, guys.
He pointed his finger and hesaid good bread, you ever do
that again, or if you ever doubtmy abilities, my resignation
will be the next thing thatfollows.
Now, this is a top stud of anemployee.
I'd already invested time andenergy into him In that moment,
(18:00):
what he was saying and what weultimately discovered is is that
my ego and my self-centerednesswas the problem that fell into
multiple areas of the companyand my coach ended up saying hey
, goodbread, you're beingself-centered in sales.
Hey, goodbread, you're beingself-centered in sales.
Hey, good bread, you're beingself-centered in product design.
Hey, good bread, you're beingself-centered in management.
(18:21):
And ultimately, by releasingand backing out of that, that
drove the value of the companysuper high and it became an
asset that somebody wanted tobuy.
Speaker 4 (18:45):
Nice, the control for the listeners out there that
are in this position, wherethey're, it's just them, they're
the owner operator.
How do you coach them intogetting to that position where
they can relinquish that controland getting through the fear
mindset of like, how can Iafford an employee?
Speaker 2 (19:03):
Yep, yeah.
So it's not the employee andit's not the business owner here
, it's the.
It's the way in which you'reprocessing business.
So here's business 101.
If we want to scale ourcompanies, we need to have one
person to whom we can serve andto whom we can serve best.
We call it an avatar.
I like to shoot my bow and arrow, so this is a picture that I
(19:26):
think most of us recognize ifwe've seen the Olympics or seen
people shoot a bow and arrow.
When I pull my bow back and Ihave that arrow knocked, I'm
looking at the bullseye of thetarget.
My dad taught me this littlestatement.
He said aim small, miss small.
And so if I'm aiming at thatbullseye of the target, the wind
may blow my arrow off, but it'snot going to miss by much
because I'm aiming at somethingso tiny.
We see this in the Olympics withour Olympic shooting team, what
most business owners do, andthis is where we fall so quickly
(19:50):
in business and this is wherewe run through what's called the
valley of despair.
We run into this turmoil as wego out and work with anybody and
everybody who will fog a mirror.
That's how it typically starts.
That's how I started when I was15 until my coach at that point
said time out, you're going tohave these problems.
What I've learned to do is I'velearned to say who is the best
person, put a face with it.
(20:11):
Who is the best person that Ican serve?
It may be if we're in thelandscape, we're using that as
an example, because that's kindof we all have a little
commonality there is.
It may be a neighborhood or ahouse type.
It may be, you know, on a golfcourse and each house you know
is a quarter acre lot and weknow that we're going to mow and
blow and deal with theirrigation and prune the shrubs
and put down mulch.
That's our bread and butter,our core type of a client.
(20:33):
If we focus on that type ofclient, we would probably then
avoid the 17-acre mow.
We wouldn't probably want to gomow 17 acres because it
wouldn't be as efficiently.
So in every business we have anavatar type that we want to use
.
Here's where the magic happens.
I'm coming to your question now.
The very first thing is, beforewe ever go and worry about our
processes, our marketing or oursales or even employees, which
(20:54):
is part of operations we have tomake sure our entire company is
centered to deal with thatclient, that particular avatar,
which means that our operationshas to be set up to make sure
that whenever we see that avatar, they know that we can solve
their problems, they know thatwe can deliver best-in-class
service better than any of ourcompetition.
That's the operations sidebefore we've hired anybody.
(21:14):
The second thing we have to dois we have to make sure our
communication when it comes toselling that individual.
So, whether it's walking up toa door and saying, hey man, I'm
cutting your neighbor's yard,let me explain to you why I'm
the best person to mow yourgrass.
Or let me explain why I'm thebest person to mow your grass.
Or let me explain why I'm thebest person to fix your AFGAC.
Or I'm the best doctor there isbecause you are my identical,
you're my ideal avatar.
So that's our sales process.
(21:35):
And then we have to make surewe understand the way in which
they buy and make decisions.
That's our marketing side.
It could be one-to-one, itcould be through social media,
et cetera.
Okay, so once we have ourstructure built for our company,
then what we have to do asbusiness owners is make sure
that anybody we hire is equippedto serve that avatar.
So the very first person thatwe would hire is our direct
(21:58):
opposite.
So if I'm going to use a DISCmodel, we can use a Myers-Briggs
.
We can use 16 personalities, wecan use whatever type of
personality profile you want touse, but for DISC, most of us
have seen that now, at somepoint in our life, I'm a high
dominant person, which means, asyou can tell, I'm a driver, I
drive and I move forward reallyfast.
The opposite person to me is mywife.
She's not a driver.
(22:18):
She's a little slower than mein terms of her drive and
passion in life, but she'sreally good at checklist.
I'm not.
She's really good at coming inand writing down organizational
structure.
So the very first person that Iwould want to hire is someone
directly opposite my personalityprofile.
Typically it's a spouse or asignificant other or the people
(22:40):
we're attracted to in ourrelationships, the ones that we
would probably consider ourmates or our life companions.
So that would be the very firstperson we would hire.
And then, as we build the team,what we're trying to do is to
balance the personalities withinthat team.
See, what most of us do is,first of all, we don't know who
we're going to serve and wehaven't built the company to
serve them through ouroperations, our sales, our
marketing.
And so then what we do is we goout and we find the people who
(23:03):
are just like us because we likethem.
They may be boisterous or theymay be loud, they may be
detailed, whatever theprofession is.
We hire people that areidentical to us because we
understand them, and all we'vedone is we've taken that
merry-go-round or that balancingthing that we're trying to
balance, and we've tilted itultra-heavy to one side and now
the company's on operationefficiently.
(23:23):
So the way that we solve theemployee problem is making sure
that, number one, the businessis built for that specific
avatar, and then number two, ismaking sure the team is weighted
to serve that avatarspecifically.
Speaker 1 (23:36):
Awesome.
So you've built and soldmultiple businesses.
What would you say?
The hardest part of the exit isoh Lord.
Speaker 2 (24:03):
Well, it's like taking it's.
It's like having a birth and adeath in the same time.
It's like hearing fingernailson a chalkboard.
It's one of the hardest thingsyou'll ever go through in your
life.
I'm not exaggerating.
That's your baby, if you will,and you've got people from the
outside trying to uncover theskeletons in the closet.
They're trying to find out whythey shouldn't pay you what you
think the business is worth, andso there's tricks along the way
.
That's why you need a reallygood team of experts around you
(24:24):
to help you in that area.
The single hardest thing isemotional control.
I'll explain this.
So I'm the guy I literallyteach at the Exit Planning
Institute.
I'm one of the faculty membersand we train attorneys, cpas,
financial advisors, businesscoaches how to help their
clients through their owndiscipline, scale and exit their
companies.
I love teaching that, but I'mthe guy who's teaching it and
(24:48):
I'm selling my company that Istarted from, you know, 49
months previously.
It reached an unbelievablevalue and I'm sitting here going
holy cow.
What am I going to do now?
Because we all see our businessas almost like a baby of ours.
We birthed it, we went throughhard times, we think about it
nonstop.
We're up at night.
It's literally a passion and welike it and it's fun.
(25:09):
It's literally a passion and welike it and it's fun, it's
exciting and it's sexy and itkeeps us motivated and it gives
us something to release in.
And other times we want tochoke it and it's like I'm done.
You went throwing the towel andyou know self into the sunset.
So it's this bittersweetrelationship.
Guys, whenever I signed thatfinal sales document, it was 11
o'clock at night and I wasexpecting there to be like pomp
and circumstance, like thefireworks go off.
(25:30):
I mean, I was expecting theangels to open up in heavens and
sing the hallelujah chorus.
Obviously, that didn't happen.
It was opposite.
It was actually the opposite.
I pushed literally enter on myphone, document signed and
instantly.
Did I just mess up?
Did I just screw this thing up?
I just literally walked awayfrom a business that I knew
(25:54):
everything about.
That's selling rapidly.
Holy cow, justin, you lost yourever-loving mind.
That is the hardest thing.
Now it's quickly overcomewhenever you look at the bank
account the next day.
Quickly overcome, okay, but inthat moment it is stinking hard.
It's the emotional identitythat we have that we look at
this business and we end upknowing everything about it.
Speaker 1 (26:13):
It's hard for us all right, I know um, we have
another one in a couple minutes.
You guys have any morequestions?
Speaker 4 (26:23):
nick chase um, I think if, if someone, just real
quick, if someone is wanting tostart from scratch, justin, and
they want to scale a businessand they're thinking how in the
world could I scale a businessto sell it, what are the first
(26:43):
two or three steps and whatmindset do they need to have?
Speaker 2 (26:47):
Yeah.
So let's do a mindset first.
Henry Ford made this amazingstatement.
He said if you think you can orthink you can't, you're correct
.
We know what the Ford emblem istoday.
The mindset is, first of all, isthat you have to be willing.
If you're going to start andscale a business, you have to be
willing.
As our coaches perhaps said tous as athletes in our high
school or college days leave iton the field.
(27:08):
You got to be willing to gobankrupt.
You got to be willing to facehumility.
You got to be willing to loseeverything for your dream,
everything.
And without that tenacity andthat vim and vigor, you're going
to get blown away and the windsare going to hurt you.
So that's the very first thingI would say.
Now, if I'm going to build ahouse, what would we do?
We would go to an architect andhe would draw us a house plan
(27:29):
that's very detailed, that'slaid out everything for us.
The same is true for business.
Oftentimes we're businessowners because we see we're at a
W-2 job or maybe we just sold acompany and now it's like we're
going to go out and start andwe see this entrepreneur journey
that's overly glamorized onsocial media almost falsely.
These days it's like it's allgood, no bad, and we all know
that's a farce.
(27:50):
We all know how painfulbusiness is.
So the very first thing I woulddo and candidly I'm doing now
as I'm restarting a coachingbusiness teaching business
owners how to rapidly scale.
I'm restarting a coachingbusiness, teaching business
owners how to rapidly scale, asI spent the first six months of
this journey working with mycoach, who's helping me build
that architectural drawing tolook at who specifically is the
(28:10):
avatar?
How specifically do we reachthem?
What specifically do you needto design operations?
We had this concept and we knowkind of where we're doing.
This is powerful.
Here's why, whenever I did thiswith my firm that scaled in 49
months, we did a pro forma inplace before we ever launched
the company and, guys, that oneexercise put an additional
million and a half dollars in mypocket.
(28:32):
Whenever I got to the closingtable, I had three different
firms there that wanted to buythe company and I said, guys,
let me show you something.
Your values are too low.
All three of your values aretoo low.
Here's why, 49 months ago, herewas my pro forma projection and
presently, today, we're only$30,000 off on total NOI, net
operating income.
We're actually $30,000 abovewhat I projected, which means
(28:53):
that my forward projection forthe next four or five years is
spot on the money.
You need to throw anothermillion and a half dollars on
the offer.
The money you need to throwanother million and a half
dollars on the offer, and theydid, because I did the planning
on the front side before I justwent out haphazardly and tried
to, as I often say, charge hellwith a water pistol.
It allowed for greater returnon the backside.
So if you want to start abusiness today, find just
somebody who can help you crafta good, solid strategy that can
(29:16):
help you put together theframeworks which you move
forward.
I'm not talking about someacademic business plan from some
Ivy League education.
Just screw all that.
I'm talking about real worldknowledge that you can say
here's how you would rapidlyscale a landscape company,
here's how it works.
And then, once you make thedecision, man, burn the boats
and charge hell with a waterpistol.
Get out there and bust it.
Make it happen.
Speaker 3 (29:35):
So if you're scaling a business with the intention to
sell it, should you try to exitit as the owner during that
process, or should you just waituntil you're ready to exit it?
Speaker 2 (29:46):
The best time to sell a business.
So we all have seen thisproverbial J curve in our head,
right?
So a J curve turns into an Scurve and what that means is is
when we start a business, we'regoing to go through the valley
of despair, which is where weend up regretting what we did
and do.
We make a decision and all of asudden the business turns and
it starts growing in profits andrevenue and et cetera, and then
it begins to grow exponentially.
It just happens in the natureof business, mostly because we
(30:07):
outlast our competition and weget better at our job.
This is kind of what happens.
But then at some point we'regoing to go into atrophy.
So the J curve turns into an Scurve.
We can kind of see that in ourmind's eye as I'm trying to
communicate this.
The absolute best time to sellthe company is when it's in the
rapid growth phase of that area,before it starts to turn over
long before.
(30:27):
So typically, whenever we'reidentifying it, we want the
owner to begin backing out of itfirst and show that the
business can operate without theowner present, and then we want
to sell it while it's still inrapid expansion mode.
Why?
Because it causes the multipleto be much higher during that
exponential growth phase than itdoes when we go into atrophy.
And where the devastation is ismost business owners wait until
(30:50):
that.
Business curves until they nowfeel tired or they feel weary.
And the buyers, they're sharks,man, they know what they're
doing.
They're going to be like no man.
Okay, I know you think it'sworth a million, so we're going
to do these little fancy thingslike put ad backs and claw backs
and earn outs and all theseother things in place to make it
, because we don't think you'regoing to be able to do this,
neither can't do you.
Honestly, we're not going topay you what you think a
(31:11):
business is worth, and it endsup hurting the value.
And so it's very devastatingfor business owners if they
don't plan and exit properly,scale properly and exit properly
.
Speaker 1 (31:23):
That's good advice.
All right, justin, weappreciate your time today and
insight.
We'll be in touch with you.
Know posts and all thatcollaboration stuff through your
social medias.
Can you give us kind of howpeople can get in touch with you
?
Where can they find you online?
Speaker 2 (31:40):
Absolutely so.
I love connecting with peopleon Instagram.
I live my life now openly onInstagram, so I'm the only
Justin Gerber in the world youcan recognize me as an ugly
skint head, ball-headed guy.
It looks like you can find mepretty easily.
So find me on Instagram.
And for those business ownersout there, we actually offer a
free strategy call.
For those business owners whoare like dude, I got to get out
(32:01):
of this thing, I'm stuck, I wantto scale this thing at eggs.
And we have a free strategycall.
You can go to justingoobreadcomand our team will hop on them.
We can help you, we can serveyou, we will Awesome.
Speaker 1 (32:11):
I appreciate that.
Sweet Thanks, Justin.
Thank you, Justin.
Speaker 2 (32:14):
Hey guys, y'all rock it out, y'all do good work.
I love listening to you guys.
Thank.
Welcome to the Everyday Millionaire Show with
Ryan Greenberg and Nick Kalfas.
Alright guys, welcome back toanother episode of the Everyday
Millionaire Show.
We're here with JustinGoodbread, coming from Tennessee
.
How are you doing, justin man?
I'm good.
How are you Good?
Good, saw your bio.
(00:22):
Pretty impressive stuff withsome of the uh business dealings
that you've had.
Can you give us kind of like anelevator pitch on who you are
and where you're at sure?
Speaker 2 (00:33):
uh, born and raised in south georgia, I started my
first business when I was 15scaled it sold it.
Started another one there, 22scaled it sold it.
Now.
Businesses later all startedand sold for six, seven, eight
figure exits.
The company who acquired mylast one.
They said, hey, good bread,come be the CEO.
The president of this nationalfirm Took that firm from mid
(00:54):
eight figure valuation to a ninefigure valuation in 19 years
and then walked them through atransition.
So that's kind of the businessjourney.
But outside of that man, I'm adad, I'm a husband, I'm a
country boy at heart, born andraised on a dirt road, live on
the gravel road in EastTennessee with a beautiful
spread and I look at themountains, like to write, like
(01:14):
to do a little bit of everything, so I'm hoping we can add some
value for the audience today.
Speaker 3 (01:18):
Awesome.
What was the first businessthat you sold?
Speaker 2 (01:20):
It was a landscape company.
I mean, who doesn't start overwith a landscape company, right?
A lawnmower and a truck, that'sa landscape company, right.
I scaled that thing from zeroand we ended up doing pretty
well.
We had over 40 employees by thetime I was 22.
And then my wife and I we justgot married and we relocated
back to Tennessee my wife's halfFilipino and we dealt with some
(01:41):
racism in the deep south that Ididn't like and I didn't want
to raise our family around thatany longer, and so we relocated
after that particular event andcame to East Tennessee and kind
of set roots down here in theKnoxville area.
Speaker 3 (01:54):
Awesome.
Yeah, so that's how I started.
Also, I started out with asmall landscaping business still
have it to this day and then Igot involved in real estate.
But that's interesting.
I'm always curious to learnabout people who grow business
with the sole intention ofselling them.
Speaker 2 (02:10):
Well, actually I didn't grow them with the
intention of selling them.
It was very unique.
The landscape company that wasgoing to be like my dream job,
right, I mean, who doesn't wantto cut grass on a big commercial
mower the rest of their life?
I mean that is beautiful.
Speaker 3 (02:25):
But you know god, it is kind of peaceful, though.
You have your headphones onheadphones and then you're just
jamming out on the mower.
Speaker 4 (02:28):
I, too, started a landscaping company.
It was my first job at a at ahigh school, so that was awesome
.
That was dude.
The the season when you're justmowing and the grass is you
know the smell of fresh grass Idon't know something about it,
yeah absolutely yeah, so that Ididn't.
Speaker 2 (02:43):
I didn't start to sell them.
Just life events happened, um,even the most, even my, my big
company that I started, westarted from scratch, scaled it,
49 months later exited.
And I wouldn't have exitedexcept somebody offered me three
times what it was worth.
And it was like you know, ifyou had a piece of real estate
and it was three times theappraised value, why in the
world wouldn't you sell it?
Take the capital, take thefunds and then reposition and do
(03:05):
something else.
Have them some more fun.
Speaker 3 (03:08):
But when you sold that business so obviously the
first business, the landscapingyou didn't grow with the
intention of selling but didthat kind of motivate you to buy
your next one with theintention of buying it, to sell
it.
Speaker 2 (03:19):
No, I never bought a business.
I've never been on that side ofthings.
So the next one after movinghere to East Tennessee, I came
into the world of insurance andbuilt a really big book and then
went through a business divorceand as part of that business
divorce that you know, if we'vebeen in business for any length
of time, that happens and partof that business divorce we
ended up selling the book out.
So that wasn't intended.
(03:39):
My consulting business Istarted a consulting practice
called Dental Management Groupto help dentists buy businesses
and scale them and sell them.
And a national firm reached outand said, hey, good brand, we
see what you're doing, we'll payyou this much money.
It was ridiculous price, nointention to try to build it, to
sell it.
And then the last threecompanies I kind of combined
(03:59):
into one holding company.
It was a financial planningfirm, a business consulting firm
and a national media firm andthe way I orchestrated it was
very unique.
And a big national financialfirm said, hey, we want it and
they made a ridiculous price ofone on it.
I was like, okay, well, I mean,I'd had to work for another two
decades to reach this statusbased on the run rate, so why
not sell it?
And then the national firm,once they bought me, they said,
(04:21):
hey, based on what you did, I'ma pretty major shareholder in
that company.
And they said, hey, could youscale our company with the
intention of selling it?
I'm like, yeah, we can.
So we were, like I said,mid-eight-figure business.
I stepped into that presidentrole.
The CEO gave me fullconstraints, full, unconstrained
.
He said do what you need to do,make this thing valuable, and
went to work, got my C-suiteinvolved and we took that
(04:42):
company, doubled its value in 18months and then we had a
bidding war based on that.
So that one I did end up tryingto scale it, to sell it.
Now, during that whole process,I've literally coached hundreds
of business owners who's like,hey, I'm tired of my business,
how do I move the value up so Ican liquidate it and go do
something else or retire, dowhatever else they might want to
do.
Speaker 3 (05:05):
Yeah, I feel like a lot of business owners who maybe
don't have that mindset.
They kind of just let theirbusiness go to waste,
essentially, and just get out ofit without capitalizing on the
opportunity to potentially sellit.
Speaker 2 (05:18):
You're exactly right.
Here's an interesting statistic.
So if you're a business owner,I have real estate.
Now I have a real estatebusiness, right.
So we all have different typesof businesses.
But here's an interestingstatistic.
There's roughly 32 millionbusinesses in the United States
right now.
Roughly Out of those 32 millionbusinesses in the United States
, only 20% of them, more thanlikely, would transact.
In other words, they'll sellthat business from their current
(05:39):
owner to a child, a keyemployee, somebody external.
Here's where it gets sad.
Statistically speaking,according to the Exit Planning
Institute, which is the leaderin this particular field, 80% of
our net worth as businessowners the chuck of the truck,
the landscapers, the HVAC guys,the nurses, the doctors who have
nurses, various people 80% ofour net worth is our business.
(06:00):
So what happens is is thatbecause we're not building our
business as an asset to wheresomebody wants to come in and
buy it from us, instead we builtit as a job.
We end up working until we'reliterally, physically or
mentally dead, and then we'relike enough's enough.
As you mentioned, they justclosed the business down, and so
therefore, what happens is thatbusiness owner who's used to
whatever the standard of livingis because of their income from
(06:23):
the business, plus, you know,paying their vehicle, paying
their cell phones or trips,everything else that runs
through the business they haveto take a major, major pay cut.
And so whenever I startedseeing that happening and I
started teaching business ownersit's not hard to scale a
business and build it wheresomebody would want to pay you
for it.
But, more importantly, asbusiness owners, we got to
understand we have this highlyilliquid asset that unless we
(06:45):
build up substantial type ofassets outside the business ie
real estate portfolios, and mostpeople don't then you have this
business that you're ultimatelygoing to have to make a hard
decision Are you going to worktill you die?
Are you going to sell it andtake a pay cut?
And that's the reality of thesituation.
That breaks my heart.
It shouldn't be that way.
Speaker 1 (07:03):
What's the number one thing that you would do?
You said you doubled the valueof a company.
Speaker 2 (07:14):
If that was your intention to double the value of
a company.
What would be some of the firststeps that you'd take?
The very first step well, itdepends on the size of the
business, right?
It depends on the size of thebusiness.
So if it's the average Americansmall business out there, I
would say the very first thingwe have to do is get the owner
out of the business.
And so I challenged thebusiness owner, and we can walk
through processes on how to dothis, but I challenge them.
Hey look, my goal is, within thenext six months year, whatever
the business structure is, Iwant you to literally not go to
(07:37):
work.
Turn your cell phone, turn youremails, whatever it may be,
turn it off for 30 to 60 daysand not go to work.
And whenever I say that, theireyes get really big and like
you've lost your ever-lovingmind dude, are you smoking crack
?
I'm like no, we've got to getthis business where it can
operate without you.
And so what that forces thebusiness owner to do is to build
systems and processes, all thattype of language that we often
hear from business sense, but itforces them to actually look at
(08:00):
their business through the lensof an investor.
So that's the very first thingthat I would focus on.
That usually adds more valuethan anything else in the
company.
Number two is recurring revenue.
Every business can haverecurring revenue Every business
can.
And so how do we find thatrecurring revenue model and
create in the business againwhile decentralizing the owner,
and then from there there'sactually 256 metrics that a
(08:22):
business can adjust.
That moves the value up forwhat we're talking about.
Speaker 1 (08:27):
Yeah, so do you go in there with a strategic plan on
each business?
Do they have a different planin place to scale it or bring it
to that new value?
Speaker 2 (08:39):
The process that I like to follow is a little bit
more structured than that.
Yes, we end up with a strategicplan, but it's more
value-centric.
So the very first thing we'regoing to identify is what's the
current value of the business?
What's it appraised for today?
Softwares that can do that,different technologies back of
the napkin can determine thatvalue.
But then what we're looking foris what's called the value gap.
(08:59):
So let's say, hypothetically, abusiness is worth a million
dollars today's value.
Well, what is supporting thatappraisal?
Well, what's supporting it isall the underlying asset quality
of the business.
So how can we adjust the assetquality of the business and move
the appraisal up withoutgenerating any more revenue?
That's what's called a valuegap.
So, for example, I was talkingjust today with a lawyer who has
(09:20):
a really nice size practice.
You could do this with a HVACcompany, a landscape company, a
doctor, it doesn't matter.
What we did is we appraised thebusiness and it came in about
2.1 mil.
But if we made some adjustmentsto the quality of the business,
like you would with, like abond, if you made a better
quality, he actually could havea $3.2 million value practice
without any additional revenue.
(09:41):
So that's what's called a valuegap.
So what the business owner istrying to figure out how to do
is how do I increase my valuewithout having to work harder,
because we're already busy, wedon't need anything else to do.
So what the strategy is isidentify the value, identify the
value gap and then ultimately,to your question.
Then you're going to devise astrategic plan.
I like that terminology.
(10:02):
We're going to use a strategicplan solely focused on driving
value, not on trying to get moresales, not on trying to get
more clients, not any of thatstuff.
We're going to focus on gettingvalue, and what happens is is
we get efficiency.
So we were talking about alandscape company.
I think we would recognize thatthe average water hose puts
about eight to 12 gallons aminute out of a water hose.
What's interesting is imagineif we tried to hook a water hose
(10:24):
up to a fire hydrant.
It won't work.
It'll actually blow the hose topieces because it cannot handle
the velocity or the pressure ofthe fire hydrant.
So the same is true of business.
What we want to do is we wantto increase the velocity.
We want to allow the clientexperience to speed through that
business faster and take allthe bottlenecks and the friction
out, and once we do that, thenwe can focus on getting more
(10:46):
revenue, more sales, and that'swhere the magic of value
accelerates.
Speaker 1 (10:52):
Wow.
Speaker 4 (10:56):
That was well said.
So you know you talk about likethe value and adding assets and
things of that nature.
What are some ways that abusiness can add those deep
assets that you're talking aboutor that you like to see to
raise that value gap?
Speaker 2 (11:08):
Perfect question, love that question.
So whenever we look at a value,let's do a little bit of
teaching so we can understandwhere I'm going to head with
this, because not all of us dealwith value on a daily basis.
So value is, in a simplifiedform, is comprised of two parts.
Think of a quarter, heads andtails.
You have the revenue component,let's say EBITDA, or let's say
(11:30):
earnings or net operating income.
There's some sort of a revenuenumber and then you have a
multiple and I'm keeping thissuper simple for us to deal with
through audible type ofstructure.
So the multiple could be two,it could be four, it could be 25
, based on the industry.
Every industry has a differentmultiple range.
So let's say, hypothetically,the revenue number we're going
to use is a million dollars andlet's say, hypothetically, the
(11:51):
multiple is two.
That means that business valueis worth $2 million, a million
times two.
So we want to drive thatmultiple up.
So what's comprising of themultiple?
The multiple is consistent uponboth tangible and intangible
assets.
A tangible asset, for example,like in a landscape company,
would be the truck, the mower,the blower, it would be all
(12:11):
those things that we canactually physically see that
appears on the balance sheet ofthe company, the intangible
assets, all the things thatmakes that company
hyper-efficient.
There's four key areas ofintangible assets in a company.
You have human capital,structural capital, social
capital, and I just went blank.
I'll bring it back to that, butlet's walk through these.
(12:33):
Human capital is how strong isyour team?
So, whenever we want to improvesocial quality, we want to have
a team that's best in class.
We want to have employees thatshow up on time.
We want to have employees thatcan teach others.
We want to have leaders.
We want our employees to beable to go to a national
conference and speak directly tothat national conference as
best in class.
That is highly sought after.
(12:53):
We all know how hard it is toget employees.
We know that Finding people whoknow how to work hard to stay
true to their word is aboutimpossible today, especially
with, as we've seen, some of theyounger generation.
So whenever a company islooking from the outside in,
they say, hey, my goodness, thiscompany has a best in class
team.
These employees arewell-structured and they're
well-trained.
They're going to add more valueto that.
(13:14):
You have structural capital.
Structural capital is howefficient is the company?
So, for example, let's say wewant to put a marketing strategy
out to hire a new landscaper ornew clients for our landscape
company.
What's that funnel look like?
And can I walk that prospectiveclient all the way to a sale
consistently with the exact same, repeatable results?
That's a structure.
Some might call it a workflowor process.
(13:37):
Right, so human and structuralcapitals are typically the two
that drive the most values andmy brain's skipping me as I'm
late in the day here, but I'llbring the other two up as we
talk.
Speaker 1 (13:47):
Great.
So what do you say to somebodythat would argue that the team
is only as good as the leader?
So what's kind of like theprocess in figuring out if the
team is self-sustainable withoutthe owner of the business
operating?
Speaker 2 (14:04):
Typically it's the owner who says that.
Typically, and typically theowner who says that has I'm
going to be very raw andauthentic here has an ego,
complex and they're probably theworst part of the business
Everything probably.
If they say that more thanlikely they're the problem with
the company and they won'trelinquish control.
So it's an ego and it's lack ofleadership is what that is.
(14:26):
The reality of the situation isthat, yes, you may have bad
apples on the team or you mayhave team members which are not
performing at the level to whichthe company could perform at,
but they're not going to improveabove the leadership capability
of that company.
So in a business there's eightareas of business.
Planning is one of them.
We've talked about strategicplanning.
The second big key isleadership, and you have to have
(14:48):
the business owner designed andskilled in such a way that
they're backing themselves outof that business every single
day.
So when I'm talking with abusiness owner who thinks that
way and that's typically whereit comes from what I'll
typically do is walk themthrough a series of exercises.
So, for example, at the end ofthe day, as we're driving home
exhausted, tired, whatever yourjob has been doing, pull your
(15:09):
cell phone out, go to chat, usean AI, whatever you want to use
and just dictate exactly whatyou did that day, everything you
did.
And then, for that particularday, you've got to find one item
you're not going to do tomorrowand you're going to relinquish
that item, and after a period of30 days, you're going to come
up with 30 tasks that you aredoing.
That's probably not your hourlyrate or your hourly level that
(15:29):
you need to hire somebody elsefor.
And so whenever you startlooking at it from the owner
position of how can I take whatI'm doing and how can I shift it
to somebody else, two thingsare going to happen.
Number one is you're going tomove your mindset and, as the
owner position, you're going tomove your mindset up to where
you take on the jobs within thecompany that truly require the
pay which you're making.
Most of us work beneath our paygrade as owners.
(15:52):
So that's the first thing it'sgoing to do.
The second thing it's going todo is it's going to force you or
the team to identify the areasof the company that they need to
build systems around to makesure you, as the owner, have the
team structured for theirmaximum efficiency.
So whenever I hear that, it'stypically that the owner is the
problem.
Typically the owner viewshimself as the patriarch or
(16:13):
matriarch of the business, towhere they know everything, and
that is sad.
I'll give you a real lifeexample.
When my coach was pushing on meduring my growth of some of my
companies, he told me he saidgood bread, you can sell ice to
an Eskimo.
You got to quit selling.
Quit selling your business.
You need to have a sales guy.
Okay, quit selling yourbusiness.
You need to have a sales guyOkay, or sales gal.
So I can remember putting upstructures in place.
(16:34):
It took us about 90 days tobuild out the sales scripts, all
the different type of syntaxesfor our particular avatar.
And lo and behold, lo andbehold, the biggest client in my
history called in and Icommitted that I was not gonna
take any more calls.
Guys, I gotta tell you I'msitting here on the desk.
I'm sitting in the office, onthe desk floor, on the floor in
(16:57):
the sales guy's office, with awhiteboard about the size of a
piece of notebook paper and alittle eraser board and as he's
on the phone, I asked him to puton speakers so I can help you
Now I'd already trained him for90 days.
But I'm sitting on the floorand I'm like okay, the client
asked this question.
Here's your answer.
He looked at me about two, threeminutes in that call and he
(17:17):
looked at me with daggers in hiseyes.
I'm like pissed off, like I'mgoing to rock your world,
gabriel, if you don't get out ofmy office.
Like I mean, he was ticked, heturned his chair, turned away
from me and I'm like how dareyou?
Sorry, dog, I'm the one whotrained you how to do this.
I've been trying to make sureyou're successful.
This is a six-figure deal.
It's a big deal.
It could pay multiple people'ssalaries.
We got to land this thing.
We got done.
He landed the sale Clientshappy was with us for five, six
(17:39):
years.
When he got done, he hung thephone up and he turned around to
me and he pointed his finger atme.
I'll never forget it, guys.
He pointed his finger and hesaid good bread, you ever do
that again, or if you ever doubtmy abilities, my resignation
will be the next thing thatfollows.
Now, this is a top stud of anemployee.
I'd already invested time andenergy into him In that moment,
(18:00):
what he was saying and what weultimately discovered is is that
my ego and my self-centerednesswas the problem that fell into
multiple areas of the companyand my coach ended up saying hey
, goodbread, you're beingself-centered in sales.
Hey, goodbread, you're beingself-centered in sales.
Hey, good bread, you're beingself-centered in product design.
Hey, good bread, you're beingself-centered in management.
(18:21):
And ultimately, by releasingand backing out of that, that
drove the value of the companysuper high and it became an
asset that somebody wanted tobuy.
Speaker 4 (18:45):
Nice, the control for the listeners out there that
are in this position, wherethey're, it's just them, they're
the owner operator.
How do you coach them intogetting to that position where
they can relinquish that controland getting through the fear
mindset of like, how can Iafford an employee?
Speaker 2 (19:03):
Yep, yeah.
So it's not the employee andit's not the business owner here
, it's the.
It's the way in which you'reprocessing business.
So here's business 101.
If we want to scale ourcompanies, we need to have one
person to whom we can serve andto whom we can serve best.
We call it an avatar.
I like to shoot my bow and arrow, so this is a picture that I
(19:26):
think most of us recognize ifwe've seen the Olympics or seen
people shoot a bow and arrow.
When I pull my bow back and Ihave that arrow knocked, I'm
looking at the bullseye of thetarget.
My dad taught me this littlestatement.
He said aim small, miss small.
And so if I'm aiming at thatbullseye of the target, the wind
may blow my arrow off, but it'snot going to miss by much
because I'm aiming at somethingso tiny.
We see this in the Olympics withour Olympic shooting team, what
most business owners do, andthis is where we fall so quickly
(19:50):
in business and this is wherewe run through what's called the
valley of despair.
We run into this turmoil as wego out and work with anybody and
everybody who will fog a mirror.
That's how it typically starts.
That's how I started when I was15 until my coach at that point
said time out, you're going tohave these problems.
What I've learned to do is I'velearned to say who is the best
person, put a face with it.
(20:11):
Who is the best person that Ican serve?
It may be if we're in thelandscape, we're using that as
an example, because that's kindof we all have a little
commonality there is.
It may be a neighborhood or ahouse type.
It may be, you know, on a golfcourse and each house you know
is a quarter acre lot and weknow that we're going to mow and
blow and deal with theirrigation and prune the shrubs
and put down mulch.
That's our bread and butter,our core type of a client.
(20:33):
If we focus on that type ofclient, we would probably then
avoid the 17-acre mow.
We wouldn't probably want to gomow 17 acres because it
wouldn't be as efficiently.
So in every business we have anavatar type that we want to use
.
Here's where the magic happens.
I'm coming to your question now.
The very first thing is, beforewe ever go and worry about our
processes, our marketing or oursales or even employees, which
(20:54):
is part of operations we have tomake sure our entire company is
centered to deal with thatclient, that particular avatar,
which means that our operationshas to be set up to make sure
that whenever we see that avatar, they know that we can solve
their problems, they know thatwe can deliver best-in-class
service better than any of ourcompetition.
That's the operations sidebefore we've hired anybody.
(21:14):
The second thing we have to dois we have to make sure our
communication when it comes toselling that individual.
So, whether it's walking up toa door and saying, hey man, I'm
cutting your neighbor's yard,let me explain to you why I'm
the best person to mow yourgrass.
Or let me explain why I'm thebest person to mow your grass.
Or let me explain why I'm thebest person to fix your AFGAC.
Or I'm the best doctor there isbecause you are my identical,
you're my ideal avatar.
So that's our sales process.
(21:35):
And then we have to make surewe understand the way in which
they buy and make decisions.
That's our marketing side.
It could be one-to-one, itcould be through social media,
et cetera.
Okay, so once we have ourstructure built for our company,
then what we have to do asbusiness owners is make sure
that anybody we hire is equippedto serve that avatar.
So the very first person thatwe would hire is our direct
(21:58):
opposite.
So if I'm going to use a DISCmodel, we can use a Myers-Briggs
.
We can use 16 personalities, wecan use whatever type of
personality profile you want touse, but for DISC, most of us
have seen that now, at somepoint in our life, I'm a high
dominant person, which means, asyou can tell, I'm a driver, I
drive and I move forward reallyfast.
The opposite person to me is mywife.
She's not a driver.
(22:18):
She's a little slower than mein terms of her drive and
passion in life, but she'sreally good at checklist.
I'm not.
She's really good at coming inand writing down organizational
structure.
So the very first person that Iwould want to hire is someone
directly opposite my personalityprofile.
Typically it's a spouse or asignificant other or the people
(22:40):
we're attracted to in ourrelationships, the ones that we
would probably consider ourmates or our life companions.
So that would be the very firstperson we would hire.
And then, as we build the team,what we're trying to do is to
balance the personalities withinthat team.
See, what most of us do is,first of all, we don't know who
we're going to serve and wehaven't built the company to
serve them through ouroperations, our sales, our
marketing.
And so then what we do is we goout and we find the people who
(23:03):
are just like us because we likethem.
They may be boisterous or theymay be loud, they may be
detailed, whatever theprofession is.
We hire people that areidentical to us because we
understand them, and all we'vedone is we've taken that
merry-go-round or that balancingthing that we're trying to
balance, and we've tilted itultra-heavy to one side and now
the company's on operationefficiently.
(23:23):
So the way that we solve theemployee problem is making sure
that, number one, the businessis built for that specific
avatar, and then number two, ismaking sure the team is weighted
to serve that avatarspecifically.
Speaker 1 (23:36):
Awesome.
So you've built and soldmultiple businesses.
What would you say?
The hardest part of the exit isoh Lord.
Speaker 2 (24:03):
Well, it's like taking it's.
It's like having a birth and adeath in the same time.
It's like hearing fingernailson a chalkboard.
It's one of the hardest thingsyou'll ever go through in your
life.
I'm not exaggerating.
That's your baby, if you will,and you've got people from the
outside trying to uncover theskeletons in the closet.
They're trying to find out whythey shouldn't pay you what you
think the business is worth, andso there's tricks along the way
.
That's why you need a reallygood team of experts around you
(24:24):
to help you in that area.
The single hardest thing isemotional control.
I'll explain this.
So I'm the guy I literallyteach at the Exit Planning
Institute.
I'm one of the faculty membersand we train attorneys, cpas,
financial advisors, businesscoaches how to help their
clients through their owndiscipline, scale and exit their
companies.
I love teaching that, but I'mthe guy who's teaching it and
(24:48):
I'm selling my company that Istarted from, you know, 49
months previously.
It reached an unbelievablevalue and I'm sitting here going
holy cow.
What am I going to do now?
Because we all see our businessas almost like a baby of ours.
We birthed it, we went throughhard times, we think about it
nonstop.
We're up at night.
It's literally a passion and welike it and it's fun.
(25:09):
It's literally a passion and welike it and it's fun, it's
exciting and it's sexy and itkeeps us motivated and it gives
us something to release in.
And other times we want tochoke it and it's like I'm done.
You went throwing the towel andyou know self into the sunset.
So it's this bittersweetrelationship.
Guys, whenever I signed thatfinal sales document, it was 11
o'clock at night and I wasexpecting there to be like pomp
and circumstance, like thefireworks go off.
(25:30):
I mean, I was expecting theangels to open up in heavens and
sing the hallelujah chorus.
Obviously, that didn't happen.
It was opposite.
It was actually the opposite.
I pushed literally enter on myphone, document signed and
instantly.
Did I just mess up?
Did I just screw this thing up?
I just literally walked awayfrom a business that I knew
(25:54):
everything about.
That's selling rapidly.
Holy cow, justin, you lost yourever-loving mind.
That is the hardest thing.
Now it's quickly overcomewhenever you look at the bank
account the next day.
Quickly overcome, okay, but inthat moment it is stinking hard.
It's the emotional identitythat we have that we look at
this business and we end upknowing everything about it.
Speaker 1 (26:13):
It's hard for us all right, I know um, we have
another one in a couple minutes.
You guys have any morequestions?
Speaker 4 (26:23):
nick chase um, I think if, if someone, just real
quick, if someone is wanting tostart from scratch, justin, and
they want to scale a businessand they're thinking how in the
world could I scale a businessto sell it, what are the first
(26:43):
two or three steps and whatmindset do they need to have?
Speaker 2 (26:47):
Yeah.
So let's do a mindset first.
Henry Ford made this amazingstatement.
He said if you think you can orthink you can't, you're correct
.
We know what the Ford emblem istoday.
The mindset is, first of all, isthat you have to be willing.
If you're going to start andscale a business, you have to be
willing.
As our coaches perhaps said tous as athletes in our high
school or college days leave iton the field.
(27:08):
You got to be willing to gobankrupt.
You got to be willing to facehumility.
You got to be willing to loseeverything for your dream,
everything.
And without that tenacity andthat vim and vigor, you're going
to get blown away and the windsare going to hurt you.
So that's the very first thingI would say.
Now, if I'm going to build ahouse, what would we do?
We would go to an architect andhe would draw us a house plan
(27:29):
that's very detailed, that'slaid out everything for us.
The same is true for business.
Oftentimes we're businessowners because we see we're at a
W-2 job or maybe we just sold acompany and now it's like we're
going to go out and start andwe see this entrepreneur journey
that's overly glamorized onsocial media almost falsely.
These days it's like it's allgood, no bad, and we all know
that's a farce.
(27:50):
We all know how painfulbusiness is.
So the very first thing I woulddo and candidly I'm doing now
as I'm restarting a coachingbusiness teaching business
owners how to rapidly scale.
I'm restarting a coachingbusiness, teaching business
owners how to rapidly scale, asI spent the first six months of
this journey working with mycoach, who's helping me build
that architectural drawing tolook at who specifically is the
(28:10):
avatar?
How specifically do we reachthem?
What specifically do you needto design operations?
We had this concept and we knowkind of where we're doing.
This is powerful.
Here's why, whenever I did thiswith my firm that scaled in 49
months, we did a pro forma inplace before we ever launched
the company and, guys, that oneexercise put an additional
million and a half dollars in mypocket.
(28:32):
Whenever I got to the closingtable, I had three different
firms there that wanted to buythe company and I said, guys,
let me show you something.
Your values are too low.
All three of your values aretoo low.
Here's why, 49 months ago, herewas my pro forma projection and
presently, today, we're only$30,000 off on total NOI, net
operating income.
We're actually $30,000 abovewhat I projected, which means
(28:53):
that my forward projection forthe next four or five years is
spot on the money.
You need to throw anothermillion and a half dollars on
the offer.
The money you need to throwanother million and a half
dollars on the offer, and theydid, because I did the planning
on the front side before I justwent out haphazardly and tried
to, as I often say, charge hellwith a water pistol.
It allowed for greater returnon the backside.
So if you want to start abusiness today, find just
somebody who can help you crafta good, solid strategy that can
(29:16):
help you put together theframeworks which you move
forward.
I'm not talking about someacademic business plan from some
Ivy League education.
Just screw all that.
I'm talking about real worldknowledge that you can say
here's how you would rapidlyscale a landscape company,
here's how it works.
And then, once you make thedecision, man, burn the boats
and charge hell with a waterpistol.
Get out there and bust it.
Make it happen.
Speaker 3 (29:35):
So if you're scaling a business with the intention to
sell it, should you try to exitit as the owner during that
process, or should you just waituntil you're ready to exit it?
Speaker 2 (29:46):
The best time to sell a business.
So we all have seen thisproverbial J curve in our head,
right?
So a J curve turns into an Scurve and what that means is is
when we start a business, we'regoing to go through the valley
of despair, which is where weend up regretting what we did
and do.
We make a decision and all of asudden the business turns and
it starts growing in profits andrevenue and et cetera, and then
it begins to grow exponentially.
It just happens in the natureof business, mostly because we
(30:07):
outlast our competition and weget better at our job.
This is kind of what happens.
But then at some point we'regoing to go into atrophy.
So the J curve turns into an Scurve.
We can kind of see that in ourmind's eye as I'm trying to
communicate this.
The absolute best time to sellthe company is when it's in the
rapid growth phase of that area,before it starts to turn over
long before.
(30:27):
So typically, whenever we'reidentifying it, we want the
owner to begin backing out of itfirst and show that the
business can operate without theowner present, and then we want
to sell it while it's still inrapid expansion mode.
Why?
Because it causes the multipleto be much higher during that
exponential growth phase than itdoes when we go into atrophy.
And where the devastation is ismost business owners wait until
(30:50):
that.
Business curves until they nowfeel tired or they feel weary.
And the buyers, they're sharks,man, they know what they're
doing.
They're going to be like no man.
Okay, I know you think it'sworth a million, so we're going
to do these little fancy thingslike put ad backs and claw backs
and earn outs and all theseother things in place to make it
, because we don't think you'regoing to be able to do this,
neither can't do you.
Honestly, we're not going topay you what you think a
(31:11):
business is worth, and it endsup hurting the value.
And so it's very devastatingfor business owners if they
don't plan and exit properly,scale properly and exit properly
.
Speaker 1 (31:23):
That's good advice.
All right, justin, weappreciate your time today and
insight.
We'll be in touch with you.
Know posts and all thatcollaboration stuff through your
social medias.
Can you give us kind of howpeople can get in touch with you
?
Where can they find you online?
Speaker 2 (31:40):
Absolutely so.
I love connecting with peopleon Instagram.
I live my life now openly onInstagram, so I'm the only
Justin Gerber in the world youcan recognize me as an ugly
skint head, ball-headed guy.
It looks like you can find mepretty easily.
So find me on Instagram.
And for those business ownersout there, we actually offer a
free strategy call.
For those business owners whoare like dude, I got to get out
(32:01):
of this thing, I'm stuck, I wantto scale this thing at eggs.
And we have a free strategycall.
You can go to justingoobreadcomand our team will hop on them.
We can help you, we can serveyou, we will Awesome.
Speaker 1 (32:11):
I appreciate that.
Sweet Thanks, Justin.
Thank you, Justin.
Speaker 2 (32:14):
Hey guys, y'all rock it out, y'all do good work.
I love listening to you guys.
Thank.
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