E276: She Built a 7-Figure Practice in 2.5 Days a Week—Then Taught Everyone Else How to Exit

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
All of those need different mindset and asking someone to
shift mindsets with in every phone call, we used to
call them schizophrenic octopus. That's what an office manager needs
because you never know who's calling because there aren't designated
lines always. And those are those emotions that you're eliciting

(00:22):
in your in your employees. Those you you can't buy
those that that's just magnetic when you when you entice people,
or I should say, when you bring that up in
their world. Boy, that that's a magnetic field that you
just can't create by saying, oh, I'm going to pay

(00:43):
you more than anybody else. So it just means that
as the owner, if you're going to give someone free
rein to solve a problem, you have to paint a
very vivid picture of what result, what the outcome is,
and that has to include parameters like your patient can't die.

Speaker 2 (01:06):
Hello, and welcome to the How to Exit Podcasts, where
we introduce you to a world of small to medium
business acquisitions and mergers. We interview business owners, industry leaders, authors, mentors,
and other influencers with the sole intent to share with
you what it looks like to buy or sell a business.
Let's get rolling and now a moment for our sponsors.

(01:33):
This episode of How to Exit is brought to you
by Final Assent to Batique m and, a firm helping
lower middle market business owners achieve their ultimate exit a
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(01:55):
Final Assent specializes in preparing businesses for sale, building value,
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(02:16):
walk away with maximum value and a peace of mind.
Start your journey today at Final Assent that's www dot
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(02:38):
Learn firsthand from industry leaders who share their success stories.
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I want you to visit acquisition Afficionado dot com today.

(03:00):
Hell and welcome to the Hot Exit Podcast. Today, I'm
here with doctor Ruth man Shrek and she is a
dentist by previous trade, but she's also a business advisor
and really helps a lot of small businesses perfect their
business in such a way that it's sellable and scalable.
So I'm looking forward to having this conversation with you today.
And I didn't even ask you should I call you

(03:20):
doctor Ruth or you know what?

Speaker 1 (03:22):
Fine, I was doctored for thirty odd years, so I'm
I'm doctored out. I'm just good at Ruth Ruth.

Speaker 2 (03:30):
Okay, I can't say doctor Ruth. That'sout having the division
of the old doctor Ruth too, so like we're not
having that conversation with people. She's a teeth doctor. Wrong
side right right? So okay, that said, you've got a
lot of experience in this space. What caused let's start
with your origin story. Well, all we start there. What
started you down the path of Okay, I want to

(03:51):
help other business owners prepare and make it make their
businesses viable in the you know, buy and sell market.

Speaker 1 (03:59):
Well, I was. I had been practicing for a few years,
full time, five days a week. We had two little boys,
and then our daughter was born and she had a
very traumatic berth. She was in intensive care for about
six weeks after she was born, and when she came home,
she had to see like eight doctors every week and

(04:22):
that was not going to work with my five day
a week schedule. So I went to my team and
I said, we have to cram everything we do into
two and a half days a week because I have
to be here for this child. And we did it.
We In fact, the joke at our in our with
our team was that if it didn't require me to

(04:44):
pick up a hand piece or my dental license, then
I couldn't do it. It was all about developing systems and
hiring the right people, and we did it. We got
back up to the revenue that we had before, and
then we grew it. We never went back to five
days a week. We stayed at at two and a half.
It was wonderful.

Speaker 2 (05:05):
That's amazing. It's a testament to saying where they say,
what's the word I'm looking for? You know, necessity breeds creativity,
as I think.

Speaker 1 (05:15):
That's the phrase the mother of all invention.

Speaker 2 (05:18):
You know, I was telling you beforehand, I've been working
on this app and it's like, you know, it became
because I needed some something and somebody to talk to.
And I was like, and I caught myself creating all
these different prompts and stuff to make the AI tools
out there do it. And it was just a necessity.
I just wanted. I wanted. I wanted something and it
wasn't out there, so I built it. And there's something

(05:39):
that's an entrepreneur thing. You wanted something, you needed something
in your life, your children took priority, and you're like,
I've got to make this work, and you found a
way to do it. So I want to acknowledge you
that because that's not something everybody can do, but it
is an entrepreneurial trait.

Speaker 1 (05:55):
And I didn't even think about telling other people but
it except the doctor next door to us also a
dentist caught me in a hall one day and he said, Ruth,
where are you? You are never here, but you're still
the lights are still on, You're still paying the bills.
And he became my first coaching client, and he's the

(06:17):
first person I taught the process we have for really
streamlining your your business, whatever it is, and making it
self propelled we like to call it, so that it
runs on its own, you orchestrate instead of being a
part of everything that goes on in the business.

Speaker 2 (06:36):
And all the skills that you develop and doing that
are transferable to any industry.

Speaker 1 (06:43):
They are they are if you if you sell things,
if you provide a service, if you have people that
work in your business. All of these strategies that we use,
there's only five, and they're all applicable to making your
your life more what you want it to be. You know,
when we as entrepreneurs start out, we are looking for

(07:07):
something more than working for somebody else. We want some freedom.
We want time freedom, or location freedom, and our financial freedom,
all those things. So this is how you get to
that no matter how big, doesn't matter how big your
business is, these principles all apply and just make it
so much more fun.

Speaker 2 (07:28):
I meet business owners all the time through my clients
and through my own ventures and stuff, and I often
hear I'm talking about sixty seventy eighty hour weeks, and
i reflect back when I was in tech, and I'm
of the utmost confidence that you cannot be productive sixty
seventy eight hours a week there every single day. There

(07:50):
is a certain window which you can be highly productive
and highly effective, and everything else is kind of fluff
and doing things that probably people should be doing. Absolutely,
my favorite book I booked, probably I would say change
my life a lot, was Dan Sullivan's Who Not how
And now I think they ought to rewrite it and

(08:10):
say who and what not how like, because a lot
of times who could be AI. But that said, not
everything should be done by you in a small business,
and not everything. You know, you're not the best, as
much as you want to think you are. You're not
the best person to do all the different tasks.

Speaker 1 (08:28):
Well, you know, the majority of us when we if
we started from a scratch, we were wearing all the hats.
And it's really hard because you know you can do
it good enough to get it done, so it's hard
to relinquish that to someone else. I call it surrounding
yourself with experts. It's kind of the Henry Ford outlook

(08:51):
on business. Henry Ford never even graduated from high school,
and he he stayed in his lane. He had one
genius that was him, and he just surrounded himself with
experts that did everything else. And if you can't afford
an expert, you can at least afford a champion, even
if they're part time. A champion for your marketing could

(09:13):
be a teenager, you know, because they have social media
like nobody else does, you know. So a little creativity
is helpful to think about how can I surround how
can I find experts to work with me toward the
goals that I have for my company?

Speaker 2 (09:34):
Right now, having just had my wife go through some
dental stuff and I'm about to go through some dental
stuff on my own, there are certain things in the
dental practice that take a long time. Right, I'm thinking,
like root canals and stuff. Did you like, is there
things you just cut out? Like, look, we're just going
to refer those out. We're not going to do them.

Speaker 1 (09:54):
We had done that already. That's one of the really
nice things about dentistry is I can do all of it,
or I can do the only the parts that I like.
So I was surrounded by some others specialists, so it
made it easy for me to work in conjunction with
other specialists. So yes, ruth canals are not my favorite.

(10:16):
So my best friend is an end to honest, but
I love restoring implants. So a paridonis that places all
my insplants. We kind of design them together and I
love that part. So yes, for the most part, we
had narrowed it down to only the things that make
me smile, that make me happy to do and the rest. Yes,

(10:40):
we have a great referral.

Speaker 2 (10:42):
There's something to be said for that too, because if
you got to come in, if you only even if
you only had two days a week, but you had
out of those two days a week you had to
do ten items you just dreaded doing it would be
less efficient and less enthusiast. You would drag your feet
to do them. Well, it's just natural and human behavior.
If you did what you did and said, you know what,
I love doing X, Y and Z and everything else,

(11:04):
they can go either outsourced and we'll bring it outside dentist,
we'll refer it off or whatever. Then when I come in,
I'm excited to get there. I'm enthused by your customer
support seems to go up there, you know, because you're
more you know, positive. I've had a dentist work on
me and I could tell you hated his life and
you could tell you hated his job, but I never
went back to him after that. It is not a

(11:24):
comfortable feeling to be sitting underneath somebody, you know, looking
up when you know they don't want to be.

Speaker 1 (11:28):
There cause you're eight inches away from their fate.

Speaker 2 (11:31):
You can't.

Speaker 1 (11:32):
No one can be that good of an actor all
the time, right. And the suicide rate in the dental
industry is gigantic, and there's so much stress. People sit
down and and they just say I hate what you
do and I don't want to be here. And if
they don't say it, then you look at their hands

(11:53):
and it's the white knuckle hanging onto my chair. So
living with that stress every day is really hard on docs,
you know, and their staff.

Speaker 2 (12:06):
I'm not gonna pick you on you too much, but
they should to tell me. Tell people anybody who loves
being aist is a massachist. They want to hurt people.
They're correct. They love being a dentist, you know, like,
how could you love doing because I could just see that,
and somebody's sitting there there terrified to be in front
of you. They got white knuckles holding on the chair.
And if you're enjoying that, you probably had to have
some evaluation there.

Speaker 1 (12:26):
It's it's hard to get past that and focus on
how can I make this a fabulous experience for you.
Our medications are just our anesthesia. Oh my gosh, it's
so much better than it used to be, you know.
So there's there's not much of that that goes on
in a dental office anymore. The problem is when something

(12:46):
goes well, like if you have a root canal, everything
went well, it didn't hurt, you didn't even know what
they were doing. You don't tell anybody about it. But
if anything goes wrong, we tell the world.

Speaker 2 (12:58):
Oh yeah it, I bet you know. We all have
one of those experiences. I had one and I won't
say the dnnist name here because it's the national chain
and they might see my butt. But I ended up
with two five hour sessions back to back to get
a single route canal done. And I thought, you know,
I don't know anything. Any I don't know enough about
dentistry to know if they made a mistake and it's

(13:18):
what's taken so long, or if that sometimes they just
take that long. I have a weird genetic thing where
I have multiple more roots in certain teeth than others.
And you know that said, I never went back to
that place again. And to be honest, I love their
business model. Were probably shuld chat about it because it
was systematized. It kind of remembered reminding me a little

(13:41):
bit of a like a hair salon, right, meaning that
Dennis can rent different boozy hit. You know, there was
probably three rolls of ten. You know, there was thirty
dnists out of this facility. It's a national chain now,
but you know, my dnists basically just rented a cherry,
showed up and you know, did the dental work. And
I don't know if they shared all the other dental

(14:03):
hygienis and I forgot what part of you you know,
they probably shared some of that, but all the X
ray equipment, all this stuff, the franchise own that. But
he you know, he basically did his uran his chair thing.
There's there's a bunch of different ways to do it now,
That's kind of what got me interested in when when
that I told you there was a roll up potential
client and wanted to roll up dentist offices, and I

(14:25):
got to learn a little bit about the space and
dso's and that type of stuff got me interested in.
It's like, well, if you could turn more dentist offices
into that type of space to where it's more kind
of real estate like as far as the parent owner,
I'm interesting because I'm a prior real estate investor.

Speaker 1 (14:43):
It's it's not as easy as it seems to roll
down all these dentists together. It's a lot of a
type personalities to all work together. And and I'm guilty
of this too. When I got out of school, it
was like, man, I'm doing everything my way. I know
how it should be done. I taught at the dental school.
I know what the heck I'm doing, and I'm not
doing it the same way these other guys are doing.

(15:06):
So that's one of the wonderful parts about being a
private practice is I can do however I feel is
most appropriate for my patient. And if I want to
throw my margin, my profit margin out the window for
a client, I can do that because it'll be the
way I want it, and I'll be proud and I
will have cared for them the way they need. You

(15:28):
know that doesn't happen often, but sometimes it does. You
just say, too bad, this is what we're doing.

Speaker 2 (15:34):
And just for those guys listening out there, if you're
we have a lot of people doing roll ups and
acquiring companies out there. If you do the dso, you'll
have no control over what the dentist does. That's one
of the laws on every state has about DSOs and
MSOs is you can't as a business owner, you cannot
direct treatment. Let's jump into the other I know you're

(15:57):
not just in the DNNA space, and we talked about
this before the show started. Let's talk about some of
the things that we can do as a business owner
that you would recommend to make this more enjoyable to
own and eventually profitable to sell.

Speaker 1 (16:15):
I would suggest, especially if you own a service based business,
to start with systems, to make sure that your operating
systems are incredibly robust. So and I usually have people
start with their I call it the client journey. So
from the very first phone call, what has to be

(16:37):
how do you want that handled? What's the tone, what's
the impression you want that person to make, and every
step along the way that that client goes through all
the way to the end when they end up on
your keeping in touch with whatever. Your recall system is

(16:58):
delineated and someone's responsible for each step doesn't mean they
have to do it all, but is responsible for making
sure it's done the way the owner wants and that
there's communication between all the steps. So that's probably the
biggest thing that people can do is take the owner
out of all of those systems and run them through.

(17:21):
Just make sure everything is documented. And today the cool
part is it used to be we had to write
everything out in you know, long handbooks, and now a
lot of my clients it's all on video. You know,
it's all screen grabs, and if you forget how to
do something, you can just watch a video instead of
bothering somebody and say how am I supposed to do this?

Speaker 2 (17:42):
You know? Yeah, Loom is my friend. I use Loom
over and over. We're gonna have vas and people who
help with various businesses and projects. And I'm also extremely
adhd and don't like doing anything more than once or twice.
So the rule with themb is is I'll do it
the first time to solve the problem. The second time
I have to do it, I'm going to record a video,
and if it needs to be done a third time,

(18:03):
I'm sending that to somebody and saying, this is how
it's done. Here's what I want. You may improve upon it.
You don't have to do it my way. The end
result what I want is looks like this right. As
long as we get the end result, it looks as
good or better than what I've asked for. I don't
care how you do it right. That's a little different
In a lot of business, a lot of business, especially
in the dental practice, I can imagine it needs to
be done this way right.

Speaker 1 (18:24):
Right, So and if you have. What we're finding is
that some of the younger generations don't like to be
told what to do, which I totally appreciate. In fact,
I want them to think. I want them to be creative.
So it just means that as the owner, if you're
going to give someone free rein to solve a problem,

(18:45):
you have to paint a very vivid picture of what result,
what the outcome is, and that has to include parameters
like your patient can't die in the midst of all
of this, do you know what I mean? So, as
a dentist, telling somebody giving someone free reign to solve
the problem as they see best is very scary, But

(19:07):
it just means you have to paint the better picture.
You have to give them better parameters for them to
work within. They'll figure out that my way to do
it was the best way anyway, but the fact that
they got to it on their own keeps them engaged.
You know, there's so much struggle in small businesses about

(19:27):
keeping employees engaged, keeping them in your business, because if
you just tell them to come in and do this
exactly like this all day long like this, that's boring.
Nobody wants to do that. So I think that the
sooner we get better at and this is part of
building communication and the kind of leadership that you're going

(19:49):
to provide for kids that are that young. It just
makes a huge difference in your employee attention.

Speaker 2 (19:57):
Interesting. It reminds me I have little kids, a nine
year old and a fourteen year old, and the entire
their own, entire life, I've never been the data says, oh,
you can't do this that unless it's dangerous. Right, There's
been there's times where like in my kids know now,
Dad says, you probably shouldn't do something. If you do it,
it might hurt, right, Because usually I'm the kind of
guy that like look at him and go all right,
that that's gonna leave it up. But go for it, right,

(20:18):
you know, you know my my my mindset is like
I'm the guard rails. I'm I'm there to keep you
from going off the cliff. But you can rub against
the guardrails occasionally. Think of the long windy road. There's
guardrails in certain dangerous areas. My job is to keep
you on the road. Make sure you live through the process. Right,
You got to learn through some bumps and bruises of
your own. Like that said these I never even thought

(20:39):
about when you said, you guys, you know your client
can't die. I never even thought about the dentist. But
if you think about it, you guys are administrating and
it's and it's the diesiology. You have your best your
working and working on. Some people have infections in their
in their mouth, and the mouth is so close to
the brain in the head, that's a dangerous place to
get about infection. So you are working with stuff that
could be life threatening over time, right, and absent can

(21:00):
get into a brain. I know a young lady who
had to have major brain surgery and everything else because
she had an ear infection and got into her brain
and had to learn how to walk and talk and
everything over again. So that the head is a dangerous
place to have anything that's festering and infected and has
a problem. So rules and procedures are there for a reason.

(21:22):
That said, I love that you understand with today's Probably
in previous generations too, maybe not the last two, but
you go far back, and I'm sure there was a
rebellious generation like the current one we have now. It
was like, don't tell me what to do, just tell
me what you want. Right, This isn't the first one
that did that. Having that insight to say, look, here's
the end result. I need. I need great customer experience.

(21:44):
I need the client to go home alive and healing,
in better shape and happier than they were when they
walked in, right, you know, but.

Speaker 1 (21:52):
Just to take it outside and to include some of
the trades in this conversation. Do you talk to a
roofing company they don't call, you know, your customer doesn't
call unless something horrible has happened. Same thing with restore
restoration companies. They have a very upset in tears person
on the phone that they have to calm down and

(22:14):
walk them through the process because it's so new and
so different and so horrible to those people. So it's
it's not just that skill that we have in the
dental world is applicable to so many because we a
lot of businesses. When we encounter our clients, our customers,
they are not this is not their best day, you know.

(22:36):
And one thing in this because communication is my next
big piece that needs to be just top notch, is
what do you want your customer to feel at the
end of each engagement, Like when they get off the
phone that first phone call, how do you want them
to feel, you know? And when they're completely finished with

(22:59):
your finished with the project, they have the new roof,
how do you want them to feel and how are
you gonna pull that out of them? Because that's where
wonderful testimonials come from, you know.

Speaker 2 (23:12):
Yeah, And that comes to training your staff into a
little bit of what do people want in their communication? Right,
because there's different types of people. I am a lead follower,
get to the hell out of my way type of guy. Right,
And I don't want to see your insurance codes or
no this piece this procedure. I want to know what
do you need me to do? Right, Like what needs

(23:32):
to be done and how much is my insurance gonna
cover and how much is not gonna cover? Right now,
I'm one hundred percent disabled veteran they call I got
one hundreercent disability from them. But before that, I was like,
you know, it would drive me nuts when somebody goes, well,
you know, here's the fifteen line items and they give
me all these codes and insurance codes and stuff, and
they gotta cover ten percent. I don't need any of that.
Just like, tell me what you want to do that

(23:54):
you think should be done, and how much of it's
coming out of my pocket? And I'm gonna nod yes
or no. Right, We're gonna have to come up with
a payment plan, you know, whatever is going to take.
We're going to figure this out or you know, hey,
I got to call the wife. I'm going to spend
more than a thousand bucks. We have a role in
our family, like the five hundred dollars role if you're
going to spend more than five hundred bucks unplanned, you
probably ought to call the other persons on what you're
up to.

Speaker 1 (24:15):
Yeah, right, So the challenging part of that conversation you
just talked about is all the other people who don't
think like that. So we have to train our employees
not just to communicate the way we want to talk
to people, but all those other ways, because some people
can't understand or listen to what you're saying unless it's

(24:37):
got some kind of a story or a purpose to it.
You know, other people, There's just so many different ways
to package up and digest information and have them come
out feeling an emotion that is good, and you want
that emotion at the end. So there's a lot of
training that goes into equipping your employee to be able

(25:00):
to handle those conversations and guide people no matter what
I call them communication styles, No matter what communication style
they have what they need in order to understand and
process information, no matter what it is. Is your team
going to be trained so that they recognize and go oop,
this lady needs a story and I can tell her,

(25:21):
you know, a success story about how we helped somebody
else in her situation, get this all figured out, or
they know this is a high power exec. He's got
five minutes, you know, I have five minutes to make
him hand over his credit card and he just wants
the numbers and then to go to work. So that's
a great skill that we teach our team members and

(25:44):
they can take that on in their life. No matter
how long they either they stay and work with us
or move on, we've still equipped them. We've still been
a leader and encouraged their professional growth. The other piece
of communication is to make sure that the different I'll
call them in your business speak to each other. So

(26:04):
in the trades, it would be the salespeople are singing
the same song, using the same words as the marketing people,
same words as the crew chief who gets the crew
leader who gets to the house, and what they're providing

(26:24):
is exactly what marketing and sales told the people was
going to happen. And many times these silos don't communicate
except way up at the top, and they miss the
interaction with the client or the customer completely. So I
like more of a spider web in between those silos,
because they do start out as silos, but the communication

(26:47):
needs to be a web between them that happens way
before you get to the top, you know.

Speaker 2 (26:53):
If that makes sense. Absolutely. So we're at the phase
where we've got great onboarding or customer experience. We've got
some systems and processes, you know, starting to formulate, and
we're making sure that we have communications styles in there
for different types of community communicators, different types of the

(27:13):
way people listen and interact. What would be the next
phase that you would you address? Then?

Speaker 1 (27:18):
I would say to look at your team members themselves.
You want really high performing team members, and how you
get to them being high performing is different in every business.
Many infect a drywall company that I work with, they
want they want teenagers who know nothing about work, about anything.

(27:40):
They want to create the culture. They want to teach
them a work ethic, they want to teach them everything.
So they want newbies, you know, and they put in
the hours training them and teaching them because then they
get an end result that is exactly what they want
and they have way less churn of employees. You know,

(28:01):
other people. I'm sorry, go ahead, I was gonna.

Speaker 2 (28:04):
Say, you get I grew up. I grew up a
painter son, my father is a painter. We did cheat
rock and paint, you get lay way less variation in
the in the output to right, if if everybody, if
you bring people into their skill, they're gonna do it.
They're gonna revert back to what they've always done. If
you bring in people and say this is what I
want done and how I want it done, and at
least the outcome will be similar all the time. Right,

(28:26):
there's a big problem in the trades. So if you
bring on somebody that's very senior, same way if you
brought on a dentist and set them in the chair
that's been in the ministry for twenty five years. They
do things a certain way and when you go no, no, no,
I want it done, why you know why? That might
last two or three weeks and then they go back
to doing the things the way they've always done them.
It's there's a motor skill, a muscle brain memory that

(28:49):
just kicks in and they'll want to do what they've
always done.

Speaker 1 (28:52):
So I encourage people when they're when they're trying to
make a shift from the way they've always run their business,
which ends up being there's one person like in the
office who does twelve different things because she learned how
to do twelve different things and instead to have three
people in there, because you need to separate incoming calls

(29:15):
from customer service calls from dispatch calls. All of those
need different mindset and asking someone to shift mindsets with
in every phone call, we used to call them schizophrenic octopus.
That's what an office manager needs because you never know
who's calling because there aren't designated lines always. And so

(29:41):
I encourage people when you try to draw an org
chart to organize your team, to start with setting it
up the way by job description or by responsibility instead
of because we always start with names, and we have
owner at the top, and then Mary, and here's Tom
and here's and Mary and Tom both do four different things,

(30:03):
so you've you're not having an expert in an area
be responsible because they all kind of do it really well.

Speaker 2 (30:12):
You know, there's a thing inside of computers and humans
have a two called context switch. And anytime you change,
like I'm answering the phone back to back to back,
you know, taking an appointment request like people I got
to you know, I got a toothache request, and all
of a sudden, You've got fifteen people I need to call.
If I'm trying to pepper those in the middle of it.

(30:33):
That context switch is very disruptive to the human brain.
It's very disruptive even to some of the most advanced
computer systems in the world. And it's because there's already
certain things and conversations going on in your head. There's
certain things in your memory that have to be set aside,
and like you got to reformulate what you're about to
say to this new person, and then you get a
new call for the next tooth appointment. So there's definitely

(30:54):
inefficiencies in randomness.

Speaker 1 (30:57):
So yeah, and in the beginning, pardon me, when you're
starting your own business, you do them all and it
works because you make it work. But if you want
to scale, if you don't separate things, you're going to
burn through employees because it's no fun when it's not
your business, it's just a job. And that's crazy making,

(31:19):
you know. So if you want to scale, or if
you want to show a potential buyer an organized business
it's ready to go and self propelled, you got to
start thinking about job descriptions or responsibilities as opposed to
Mary does this and Tom does that.

Speaker 2 (31:37):
I see a lot of times in these businesses we
look at to buy. They have great employees, but they
may not have what I refer to as the right
butts in the right seats, meaning that somebody's doing something
because they've always done that, but when you really look
at it, they don't enjoy it anymore. They're not really
doing that great a job at it anymore, and they
really want to do something else, whether that's you know,

(31:59):
in so at your company or outside. I always jokingly
say there's no such thing as a bad employee, but
some employees would be better off or can somewhere else. Right,
you know, there's a right place and a right skill
set for most people. That said, it's really difficult sometimes
to work with these business owners and coach them and say, look,

(32:20):
you know John over there is. Yeah, he's a great guy. Yeah,
you promised his dad, who worked for you for thirty years,
that you would take care a little Johnny now that
he's working for you. But he's really the right guy
to lead your sales because he hasn't sold anything in
the last three weeks or the last six.

Speaker 1 (32:33):
Months, right, right. And the reverse of that is also true.
You So many businesses take their top seller and make
them director of marketing. So they don't know anything about
leading people, and they don't get to do what they
love to do anymore. You know. Now they're trying to

(32:56):
motivate people who aren't as good at it as they were.

Speaker 2 (33:00):
You know.

Speaker 1 (33:00):
It's it's we do it all the time. We just
take good people and promote them into a job that
they're not skilled for. So we have we have a
simple little test that we do. Actually that a mentor
of mine, a coach of mine, taught me years ago.
Uh to find out what people what are your employees?

(33:22):
What are their gifts and graces? So to speak? And
you just take out a sheet of paper and you
divide it into three columns, A, B, and C. In
the A column, you list everything in your job that
you love to do, like you could do it with
your eyes closed. You're good at it, you love to
do it. In the bees you put yep, I'm okay
at this doesn't ring my chimes, but but I get

(33:45):
it done well. C's are I hate this? I hate
doing these And if I'm a list maker, it's the
things that always stay there and get transferred off my
list from day to day today because I never get
around to doing it and have your employees go through
and just divvy up their skills that they and we're
just doing this by what I enjoy, you know, you

(34:07):
don't even have to be brilliant at it, and then
focus on how can we get rid of their ski ce's,
Give those to somebody who actually enjoys doing that, and
have them focus on their a's, you know, maybe some
bees and doing that that one thing of having them
focus gets people ninety percent more satisfied in their jobs.

(34:34):
That that's incredible research, I think, because being satisfied with
what you do, it's a huge motivator to get up
and go back and do it again tomorrow.

Speaker 2 (34:43):
I don't know if it was willingly and or unwillingly,
but you've similarly, you've developed something that's very similar to
a Japanese model of fulfillment called ikey guy. Yeah, okay,
So what am I good at? What does the world need?
You know? Those type of you know what people pay for,
right and where they overlap is where somebody should focus

(35:04):
their energies doing that Within employees, what are you really
great at? What do you really enjoy? You know, what's
most beneficial to the company and finding those alignments. It's
like whatever said earlier about the wrong butts and the
wrong seats. Yeah, a lot of times, if you've got
a big enough organization, Johnny doesn't need like we're talking
about Johnny be and the sales guy, he doesn't need
to leave the company, all right. He needs to become

(35:26):
a software engineer because that's what he's always wanted, and
you're holding him back because you want even sales because
sells pays more potentially if he was great at it.
But he's not great at it, right, So he's never
going to get the commissions he deserves. He's never you know,
he's never going to make the seals you need him
to make to make the company move forward, because that's
not his. It's the wrong button, the wrong seat at
the wrong timet. Right.

Speaker 1 (35:47):
So another good place to use this simple little test
is in your hiring process. You know, we have candidates
go through and list in this job description. You know,
it's all written out, tells you what you're going to
be doing. What parts of this do you like and
what parts are you don't like? Because then because nobody's
gonna like all of them, and if they're gonna lie,

(36:07):
I want to know about it now, but at least
why not see what they what they're really good at,
and what they enjoy doing the most. You know. It's
just a very helpful way. And then it starts a
conversation so you can speak to it, you know. And
when you start to talk to employees about what do

(36:27):
you like? What are what are you good at? How
can I help you be better at this? You are
showing concern and care for them. That isn't in every
business in America. You know, so many of the businesses
they just assume, oh my my team knows I love them.
We don't. We don't spend much time always helping them

(36:49):
grow professionally or personally. You know, either one of those
is going to produce a better employee for you, you know,
So it's well worth I know, it's time, it's money,
it's effort, but so worth it because turning employees is
really expensive.

Speaker 2 (37:07):
Right in the European model, they refer to turnover as revenue.
So every time I hear the word turnover, it kind
of throws it off a little bit here, you know, here,
for all my European listeners here, turnovers when people leave,
So a high turnover is not a good thing. Right,
And then this mergers and acquisitions phase. One of the

(37:28):
things that you have to be really careful for is
people are resistant to change. And if you buy a
company that didn't go through this process, didn't go through
making sure people are already fulfilled in their job, a
lot of times there's a good portion of that company
who are just one one little trick or one little
what am I worried for? Trigger? I guess is the
word I'm looking for to going to find something else anyway?

Speaker 1 (37:51):
Right, the work straw that broke the camel's back exactly.

Speaker 2 (37:53):
They weren't totally fulfilled, were satisfied where they were, and
you just threw a monkey wrench in and said the
only guy I'm hanging out here, my loyalty to the owners,
why I'm here, right, you know, I'm not miserable, but
I'm not happy and you're leaving, so I'm going to
go find something better. Addressing what she's talking about, Ruth here,
what you're talking about addressing that now is critical that

(38:14):
us as buyers make sure happened, that the employees feel fulfilled,
that they or you address it fast. Right, we have
all these trailing indicators that we look at when a
company's bought, that says how many employees left? Right? And
if I ever build a tool that if I've been
playing with LinkedIn's AI, if they ever let me really

(38:35):
see the inside of that, I'm gonna build a tool
inside of there that gives me a leading indicator, right.
And a leading indicator would be how many people are
updating their LinkedIn profile when you announce you're going to
buy or sell a company, right, Because that's leading this
somebody starts updating their profiles on I'm going to date
myself now. I don't know what the current job engines are,
like Monster or one of those jobs out there, one

(38:56):
of those tools out there that has resumes. That's a
pretty good inter that you need to communicate better and
figure out what's going on.

Speaker 1 (39:03):
And I even have I have this idea that's very
different than the way most most of the time when
you talk to a company when you're when owners don't
talk to their employees about the sale until it's all done,
and there's so many reasons about why you should do that.
I have a much different outlook on that. I would

(39:24):
like to start talking to employees ten years before and say, guys,
I'm not going to be here forever. Let's set this
business up so that it runs just the way you
want it, so you feel like you can be here
whether I'm around or not, you know, and start building
your people and your culture, because that's the next piece

(39:47):
that I want them to work on, is build a
culture that's so irresistible that people want to stay there.
My one of my sons came home from a job
interview and he said, well, I don't know, I don't
know if he's going to pay me, but I just
want to work there. I don't care what I do.
I just want to work in that company, you know.
And man, that's I called the guy and I said,

(40:09):
way to go. You know, you built a culture that's winsome,
that that's attractive to somebody who doesn't even care what
he does during you know, it's just I want to
be part of what they're doing. And that's really rare.
In the companies that I help get ready to sell.
Culture is at the bottom of what they're worried about.

Speaker 2 (40:30):
I've seen the opposite, right. I came from the tech industry.
I worked for Lockheed Martin design and firewalls and the
mission planning systems for the YouTube spy Plane. Went into
the defense, out of the defense contracting world into the
civilian world as a senior director of operations for Excite
dot Calm, the Excite portal, and I interviewed it some
of the other ones, and I'll say I interviewed at

(40:52):
one of the bigger anti virus, anti spam typic companies.
I ended up working for one of the startups in
that space, but I'm not going to say the name
because the guy turned out to be a real weirdo.
Uh and there's a lot of news about him. But
I have actually in the CEO's office to interview with
this job to be their director of operations run all
their operations. And I seen a coat rack with two

(41:15):
or three changes of clothes hanging up and a sleeping
bag underneath his desk, and I'm like, okay, what's going.
I just called him out and I was like, what's going?
Why do you have a sleeping bag underneath your desk?
Why do you why is there? Why do you have
three changes of clothes? You have three suits or three
shirts and ties or whatever you can call it on
your on your coat rack? Oh yeah, Like we get
busy with engineering and stuff. Sometimes we're here for days.
There's a shower in the gym. I was like, yeah,

(41:38):
I'm not doing that right. I already I had already seen,
you know, some of the world of the you know,
dot com startups and stuff like that, and that just
wasn't me.

Speaker 1 (41:45):
And those are those emotions that you're eliciting in your
in your employees. Those you you can't buy those that
that's just magnetic when you when you entice people, or
I should say, when you bring that up in their world. Boy,
that's a magnetic field that you just can't create by saying, oh,

(42:09):
I'm going to pay you more than anybody else.

Speaker 2 (42:12):
You know that there are some industries where it's tougher
than other. If you're a plumber and you deal with
sewage and sefting, you by definition have a shitty job, right,
So it's gonna be a little difficult, a little more
difficult to create a wonderful culture there. But you still,
I mean, it still is done right.

Speaker 1 (42:28):
Look that they do, they do, you know, and you
you absolutely need it because you have to encourage younger people.
If you want them to stay, you have to give
them something enticing more than just cleaning out pipes. There
has to be some growth, and I think culture is
the perfect place it and it goes right into leadership,

(42:51):
which is my next topic is is you have to
lead these people. It doesn't just happen on their own. People,
especially young people, want to fund follow someone who's doing
big things, and you can do big things, even in plumbing,
but it needs to be articulated, it needs to be

(43:13):
role modeled for them. Those are the biggest parts of
leadership and developing your employees. I think that's a huge
chunk of the responsibility of leadership in a business is
taking the team that you have and saying how can
I help you? What do you need to grow as
a person and then as a professional in my business.

Speaker 2 (43:36):
I think it's been about a year now, but maybe
even a year and a half ago. I talked about
four or five businesses in a particular space and three
of them out of the five is five or six.
Three of them out of the five I can remember
the name of the business. I'm not going to say
it on the show because I don't have their permission
to do so. When asked why they're getting out of
the business, they're saying. They're like, well, it's too hard
to hire people, and I'm not hiring this generation. They

(43:58):
don't want to work, and I don't know how to
deal with them. It's not true that they do want
to work.

Speaker 1 (44:03):
Keep saying that it's not true.

Speaker 2 (44:05):
They do want to work. You just don't know how
to work with them, right, Yeah. It is a different
mindset and it's a different skill set, and I have
actually I call them out on it's like, look, you know,
I would admit money that those people want to want
to sustain life, they want to work, they want to
do things. If they wanted to start something on their own,
you would never have them in your interview process to
start with. You just don't know how to work with

(44:26):
them and it doesn't fit the model that you've always done.
So now you're in this mode where you're either going
to adapt, die or sell the company, and you've chosen
to sell. Well, let's be honest about what's going on here,
right yeah, Yeah, and the next guy has to figure
it out because he can't buy your business, and a
declining market because you're refusing to hire people that you know,

(44:48):
makes it harder for you to sell. You may not
even be able to sell it because of that. Right, If,
as a buyer, if I can't see that you're sustaining,
growing and improving, unless I'm a turnaround expert and I
know exactly how I'm turning you around, I should run. Right.
There are people out there that are good at that.
I'm not one, right, and I don't currently have any
clients I would call turnaround experts. I have some people

(45:10):
I interview, I have some people I'm regularly chatting with
that hang out with me because you know in my
network that that's what they do. They turn around businesses.
But it is a skill set like you wouldn't believe.
These guys are ironclad warriors in their space and they
can look at something and know step by step what
has to happen. And it is a rare skill set
to have. And sometimes they still fail. Right, I know

(45:32):
a few where they bought it, they got it going,
and they end up happening to file bankruptcy and get
rid of it.

Speaker 1 (45:37):
You know our statistics for US businesses that go to
market that only twenty percent of them actually get sold.
Those are such horrible statistics that I just encourage business
owners before you get to the part where you put
your business on the market, to really take a look

(45:58):
at all the parts and make sure your business is
self propelled, that you have the team, that you have
all these things, because those turnaround guys are so rare.
You know, what's the odds that you're going to cross
paths or your broker's going to have one in his
back pocket that's going to fit with your design of

(46:19):
a business.

Speaker 2 (46:20):
I'm going to say two things about that eighty twenty rule.
It's it's not true. It's worse than it is. So
if the eighty twenty rule is that twenty percent of
the business that get listed never only only twenty percent
ever sell, that is absolutely true, and it's partially because
the other eighty percent, a large portion of those should
have never been listed. They weren't ready to sell. Right.

(46:41):
Business brokers are taking listings because they're getting listing fees
that they should have never taken and taking businesses to
market that are not marketable, and that's causing the problem.
The scarier part of that is is those business brokers
are still turning away businesses that there's there. Every business
broker has their own threshold and they have businesses that
they think are not marketable, and they're turning those away.

(47:03):
So the numbers are even worse than that, you know,
if you had you know, there's probably another ten or
twenty percent of businesses that went to them that they
just turned away to start with, right or you know,
so there's no it's it's it's an ugly process that
by the time somebody thinks they are ready to sell,
they usually need to sell right. They've waited too long.

Speaker 1 (47:25):
I know that that is the biggest When people ask
me for like a list of mistakes, the biggest one
is we wait too long. We think I'm ready to retire,
so that means my business is ready to sell, and
that couldn't be further from the truth. You know. It's
even from a numbers point of view, that the odds

(47:46):
of your revenue being trending in the right direction at
the right time when you decide you want to go
on permanent vacation, that's never going to happen, or hardly
ever happens, you know.

Speaker 2 (47:57):
So I think three year process for a good company,
it's a longer process for one that's just an independent
operator who thinks. See, I've met so many in the
pest control space. I bought a small pest control company.
I bought it way too small. As a matter of fact,
I kind of didn't even buy it. I bought a
list of customers and stuff, bought their equipment, and then

(48:19):
built in on my own because the one we were
looking at wasn't working. I talked to fifteen independent operators
that were you know, too small really that would just
be were going to buy their list and everybody, every
one of them thought they had something to sell. Yeah,
And I was like, you really don't, right, You have
a list of customers, some of which call you back
every spring because ants crawl out of the ground in

(48:39):
Oklahoma every spring, and you know, termites come back after,
you know a little bit, if you don't put permanent
treatment in the ground, if you're just spot training, which
they shouldn't be doing. But that said, you do have
recurring customers. You do have, you know, a book of business,
but you don't have anything else to go with the
element And a lot of that book of business is

(49:00):
they came to you because you are the lowest price
at the moment, in their moment of crisis. They like you.
And when I come in and if they don't, you know,
either don't like me, or they're going to put it
up for competitive bid again. Right, I'm fairly positive that
you know, out of a book of one hundred customers

(49:20):
and a single person operator, you're only going to keep
sixty seventy percent if you're perfect. So they don't have
anything to sell to. Where if you do what you're
talking about, and they spent the three or three years
to make a company run really well, the customers aren't
calling to John the owner every time they call, and
they're talking to Nancy at their front and desk and

(49:42):
a different texts coming out and dealing with the problem.
They don't they're not dependent upon the owner anymore. And
the owner dependency is such a critical problem with so
many of these small businesses. I've seen businesses that are
thirty forty fifty people doing four and a half million
dollars in revenue that are still so owner depending that
they can't they're not sellable, right.

Speaker 1 (50:03):
And it could be just the connections, you know, the
relationships that the owner has. It could be that the
owner is an amazing closer and all sales start with
the team, but he finishes all of them. Or it
could just be that he's marvelous, and the team is
there because he's there. You know, there's so many ways

(50:23):
and over an owner can overstep the bounds of what's
really healthy for a business. So yeah, that's a huge thing.
And the people I talk to, the people I coach
about getting ready to sell, they don't even think of that.
It doesn't all everyone's worried about their revenue, making sure
they have enough revenue to attract somebody's attention to buy.

(50:44):
And there's so much more that you have to offer
as an owner that just gets tossed on the table
and left there.

Speaker 2 (50:53):
Any One that keeps coming to mind was they did
auto detailing tempting, and then they would do some light
modification for like car radios and stuff. They were doing
I want to say six and a half seven million,
maybe even eight million dollars on their peak year a
year in revenue, decent profit margins and stuff. But when
I boiled down to it, number one, the owner was
wearing three or four hats. They were paying people out

(51:14):
of the register at the end of the day. That
was another big problem. But the other thing was when
I found out his sales process, right, the reason he
was trying to sell is you want to spend more
time playing golf. He was a golf what do you
call They call him golf pros. He did teaching. He
taught golf at two or three local golf courses. He
was a resident pro at two of our local golf courses.
And ninety percent of his clients are big auto dealerships

(51:38):
in want of their windows in the way he landed thems.
He'd take them out and give them free golf lessons, like, look,
I'm physically handicapped to the point where I use a
walker to walk more than one hundred feet. I you
know this not maybe not so much back then, but
the like I'm not and I don't play golf. I
might take him fishing, but the guy who loves golf
isn't gonna want to go catch, you know, a thirty

(51:59):
pound flag head handling, you know, dead fish on a hook.
So we have a problem here. You've built a cell
cycle that only you can do. Yeah, right, And when
you when it comes time when when one of these
clients are thinking about leaving, he takes them back off
of the golf course and they get to play eighteen holes.
That's a good time to have it. Build a relationship
something with somebody, you know, short of buying a bass

(52:21):
boat and taking them to the center of the lake saying
we're not leaving until you catch a monster fish. I
don't have anything where I have a captive audience for
long enough to have that conversation. So understanding your cell
cycle and your process that you've built and is that
transferable is a critical I didn't buy it, and my
client that was with me, he didn't He wasn't interested.

(52:41):
And I don't know if the guy ever was able
to sell because he had built something that only he
could do and it doesn't have to stay that when
the one thing I told him over and over again
before I left is like, it doesn't have to stay
that way. Bring in two sales guys. Have them start mirroring,
you know, doing some of what you do, but have
them build your book of business without you, right improved
that you have sustainable business, and then have them start

(53:03):
taking over some of these golf clients that don't need
you know, don't need you anymore. Right, Yeah, So there's
a way to transfer all that. So let's wrap this
up and we're gonna we're running long on time. I
looked at the time, I was like, we've already talked
for an hour. It's fun chatting with you. You're very
intelligent in the space. Tell me how do people work
If they've got their plumbing, their dental, their chiropractice, their

(53:25):
small business, they're doing four or five, they're doing under you,
under ten million. They're not ready for you know, an
investment banker. They're in that small to medium business realm
and they want some help. How do they reach out
and work with you?

Speaker 1 (53:37):
I would say go to self propelled biz dot com.
We have a resource there for them. It's a great
way to start that will also you'll get an email
from me and anyone that wants to work individually with me,
that's the best way is to reply to an email.
And we're all about it. We love to help people

(53:59):
one at a time because everyone's business is so different,
and yeah, that's the best way.

Speaker 2 (54:05):
And then if somebody can only remember one or two
things from today's show, what would you want them to
walk away with their takeaways?

Speaker 1 (54:11):
I would say that you need to look at your
business through the eyes of a potential buyer. What would
they want to see in your business and kind of
adjust where you are where you think that would be
because we build our businesses the way we want to

(54:31):
do business. And the biggest thing, the biggest change, is
to look at it from somebody else's perspective. Who doesn't
have your talents, your gifts, your graces and what would
they want to see in a business that they would buy?

Speaker 2 (54:48):
Awesome, Well, thank you for being here today. Hang out
for a few seconds after the show and we'll call
that a show. Cool.

Speaker 1 (54:55):
Thank you so much.

Speaker 2 (54:56):
Sponsored by dou julio. Look at a buyer, sell a
business filing. The right team is essential for success and
that's where du dilio comes in. Due Dilio is the
go to platform for hiring top M and A service providers,
including attorneys, deal advisors, and due diligence experts. With a
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and patique firms, they connect you with the expert you

(55:17):
need for a seamless M and A journey. Whether you're
acquiring your first business, growing your portfolio, or preparing for
a sale, du Dilio makes building your deal team easy
and efficient, and best of all, their matching service is
completely free. Visit doudilio dot com and as simble. You're
winning team today

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On Purpose with Jay Shetty

All Episodes

E276: She Built a 7-Figure Practice in 2.5 Days a Week—Then Taught Everyone Else How to Exit

Stuff You Should Know