October 19, 2024 • 19 mins
What’s Your Exit Strategy? opened my eyes to the future outside of running my business. While we tend to focus on staying strong and expanding, Linda Jensen offers us valuable advice so we can be ready for outside hurdles and what to do when it’s time to sell.
Often we see books, and valuable ones, helping small and mid-size business owners build and strengthen. There are also plenty of books about life after retirement. Ms. Jensen’s book is unique and important as she teaches us in a pleasantly unorthodox way how to prepare for the ending of one’s business whether it be preparing to sell it or setting up a succession plan. What’s Your Exit Strategy? also helps those whose businesses might be suffering from an economic downturn, aiding someone who needs to transition from that particular endeavor to another venture. As a business owner, I have always looked toward running my day-to-day operations, servicing clients and looking for new challenges. Reading Ms. Jensen’s book has me more prepared for when the time comes to cash in on the many years of hard work, navigate the hoops one must travel through and look toward a nice post-business ownership life.
This is not a typical procedural “how to” book. Inside What’s Your Exit Strategy?, the reader will find lessons learned from the successes and failures of others who told their stories as Ms. Jensen narrates and delves into relatable, even when unanticipated, potential situations. These true tales keep the attention of the curious business owner whose time, frankly, is valuable and perhaps would not want to labor through a droning instruction pamphlet.
What’s Your Exit Strategy? is an extremely valuable book for Boomer and Gen X business owners who need to look ahead to very serious concerns outside the confines of the work days from not only Ms. Jensen’s expertise, but also through the experiences of others.
Get the book here: Amazon.com: What Is Your Exit Strategy: Maximize Your Business Mindset. Minimize the Minefields: 9781948261890: Jensen, Linda: Books
Often we see books, and valuable ones, helping small and mid-size business owners build and strengthen. There are also plenty of books about life after retirement. Ms. Jensen’s book is unique and important as she teaches us in a pleasantly unorthodox way how to prepare for the ending of one’s business whether it be preparing to sell it or setting up a succession plan. What’s Your Exit Strategy? also helps those whose businesses might be suffering from an economic downturn, aiding someone who needs to transition from that particular endeavor to another venture. As a business owner, I have always looked toward running my day-to-day operations, servicing clients and looking for new challenges. Reading Ms. Jensen’s book has me more prepared for when the time comes to cash in on the many years of hard work, navigate the hoops one must travel through and look toward a nice post-business ownership life.
This is not a typical procedural “how to” book. Inside What’s Your Exit Strategy?, the reader will find lessons learned from the successes and failures of others who told their stories as Ms. Jensen narrates and delves into relatable, even when unanticipated, potential situations. These true tales keep the attention of the curious business owner whose time, frankly, is valuable and perhaps would not want to labor through a droning instruction pamphlet.
What’s Your Exit Strategy? is an extremely valuable book for Boomer and Gen X business owners who need to look ahead to very serious concerns outside the confines of the work days from not only Ms. Jensen’s expertise, but also through the experiences of others.
Get the book here: Amazon.com: What Is Your Exit Strategy: Maximize Your Business Mindset. Minimize the Minefields: 9781948261890: Jensen, Linda: Books
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:04):
Welcome to book Spectrum. I'm your host, Chris Gordini. On
book Spenttrum. We talk to authors who aren't necessarily full
time writers, but they come from occupations across the spanctrum.
We talked to people who are Dennis who wrote mystery books.
We've talked to advisors, We've talked to politicians, We've talked
(00:25):
to actors and actresses, and we also talk to business people.
And we are talking to somebody today. Her name is
Linda Jensen, and she prepares us for something. This is
this book, by the way, it's called What's Your Exit Strategy?
We all need to have an exit strategy and almost everything,
but do small business owners really have one? That's a
(00:45):
good question. So Linda Jensen is going to be here
with me to talk about that, and Linda, welcome to
book Spectrum.
Speaker 2 (00:52):
Thank you so much.
Speaker 1 (00:53):
Chris, Well, thank you. And as a small business owner myself,
I have a production company. Full disclosure here, I've been
extremely interested in this because the idea is, if you
are not working a job anymore, or let's just say
you want to move from one place to another, you
have an exit strategy or you presumably if you're a
(01:14):
nation going to war, you have an exit strategy, although
I don't think that's been very well done over the
last twenty to twenty five years. But that's another story
for another day. Let's focus on the small business person.
Speaker 2 (01:27):
Yeah, so, Chris, you know, I was passionate to be
writing this book because the majority of business owners do
not have this nailed down. You know, in my opinion,
they are so busy running their business. As you know,
as a business owner, there's so many things that can
come up in that day to day that probably the
last thing on their mind is actually what's going to
(01:51):
happen with an exit? Right, And I will tell you
my main motivation in writing this are really two important stats.
One is it only about twenty percent of business is
actually sell and if we think about the baby boomers
who own about fifty one percent of the businesses in
the US, that's a lot of businesses that are going
to be in transition over the next ten years or so.
(02:11):
And if the stats are only twenty percent of them
are going to sell, we could have millions of businesses
at risk. The other really important stat is the fact
that fifty percent of businesses close involuntarily. So that was
really the motivation to write the book.
Speaker 1 (02:26):
Well, you say closed involuntarily, and I'm pretty sure that
translates to dissolves or fails or we just get tired
of doing it. So there are a lot of reasons
for that. We still have to be ready for that too,
am I correct?
Speaker 2 (02:38):
We do and so and those really are what I
call the five d's in the book. Let's say a
husband and wife created that business and they get divorced.
That's a problem. Every one of this is a storytelling book.
By the way, every one of the advisors that we
talked to told me stories about folks they were working with,
business owners who were working with who drop while they
(03:00):
were trying to sell the business. So depth is another one.
What if you have a partner and you're in a disagreement,
what are there's some kind of dress like COVID or
you know, the Great Recession or war. You know, these
are the things that can happen involuntarily.
Speaker 1 (03:16):
Well, let's be fair, we don't always plan for those.
We kind of hope that we're going to be able
to run the business forever. You have to have that
pipeline of potential of customers. You have to have people
that are your general larger customers and hope you don't
lose them, to work hard to bring more people in
that sort of thing. Then you get help when you
need it. That's great, that's expansion. We have expansion strategies. Well,
(03:37):
A lot of us in the Boomer and Gen X
generations are well. We saw a lot of these businesses
kind of go poof during the COVID era, go poof
during the Great Recession, and even over the last couple
of years during the let's just say slower recovery. There
have been problems so as far as coming back, and
it hasn't been very easy. So here's another question for you,
(03:58):
and I want to get into the retirement an end
of this, But what are some of the things or
some of the stories. I don't want to give to
too much away because a lot of it's in your
book and these are real stories and real people that
you're telling. But what are a couple of things you
learned maybe that you were surprised about, that you found
that either somebody with the business was or was not
(04:20):
prepared for that kind of thing to happen.
Speaker 2 (04:24):
Well, know, I'll tell you a couple of quick stories.
So I think are kind of powerful. One is with
an M and a guy that I know. So the
difference between an M and a guy and a business
broker is usually business brokers kind of like a realtor.
They'll find a buyer, they'll pair you up, and they'll
sell the business. The M and a advisor really creates
a market for that business. It's in competition. And so
(04:46):
we have a story about this gentleman who got a
fifty two million dollar offer Chris to sell his business.
That's an offer we probably take, right, that's pretty success.
Speaker 1 (04:57):
I will, I'm there.
Speaker 2 (04:59):
Yeah. But he was smart and prudent enough to go
to this M and a advisor who he know, and
he says, hey, you know, Mike, do you think that's
a fair offer? Do you think I should take this?
And Mike is like, you know, I don't really know
if it's if it's the best offer you could get,
but could you give me a little bit of time?
He said, Okay, sure, you have some time. So Mike
(05:22):
went out into the marketplace and Chris, you won't believe this.
He found a buyer for seventy million. That's eighteen million
more right. Could you imagine what you could do with
eighteen million bucks.
Speaker 1 (05:34):
I could imagine I could do it the first fifty
two millions, So eighteen million is greaty if you know me,
it would be nice if I got one hundred thousand
for my business at least.
Speaker 2 (05:48):
I'll bet you could do that. Son. Then another another
story in the book is about a couple who are
doing really well. They had this business was thriving. There
you have five million in revenue. They thought, well, it's
just time to kind of do what we've always wanted
to do. Travel the world, play, have that fun. And
they go to sell the business and guess what the
business was worth zero? And the reason it was worth
(06:10):
zero is it basically created a job for themselves. And
so they connected with one of my strategic partners and
they turned it around and in three years, Chris, they
sold that business for twelve million.
Speaker 1 (06:27):
That sounds nice.
Speaker 2 (06:28):
That sounds nice.
Speaker 1 (06:29):
A lot of times when you're in when you're in
my line of work, you do kind of create work
for yourself. It's like, and I do enjoy doing what
I'm doing, the the production and the hosting and that
sort of thing. But there will be a time where
I'll be farm bringing more people into to handle that
at least I hope. So there's another issue as well though,
as far as an exit strategy. Now you're talking about
(06:49):
selling and buying the business in that respect, or being
ready for a kind of a recession or anything else
that happens. But there's another question I have and I
want to get into it. Let's get into it. We'll
get the personal under this first. With the financial end,
you just said, people are surprised sometimes about how they
can sell their businesses. But what about getting ready for
(07:10):
that sort of thing. How do you, let's say, ten
years before you retire, say maybe I should position myself
and position my business to get that exit strategy moving.
Speaker 2 (07:22):
Well, first of all, like we just said, your average
business owner isn't thinking about that. That's why the book,
That's why the awareness, right.
Speaker 1 (07:30):
I exactly, I agree with that, And the.
Speaker 2 (07:32):
Book really lays out the first half really lays out
a lot of the issues and the problems with creating
that excess strategy. The last half of the book outlines
a lot of resources. So the advice I would give
to that business owner is, hey, you know, be aware
that there's problems here. Business owners consistently Chris under the
(07:53):
overvalue what that business was worth. Every one of our
advisors talked about that, stories about the business owner always
thought it was worth X and it's not. And keep
in mind that the majority of their wealth is tied
up in that business. So they're going to need to
tap into that wealth and sell it successfully to have
(08:13):
a really good retirement off into the sunset, aren't they.
And so so that's another issue. And another issue is
the fact, I'll tell you a simple one, lots of
times business owners run some of their personal expenses through
the business. You know, I mean you need a team.
Another thing that business owners that don't realize is this
is really a team sport. And so if they if
(08:35):
they're if they get some good advice and they realize
that they really should have a team, that they're at
the center of that team. If you think about a wheel,
they're the hub and it gives them more control, Chris,
if they hire a team, because that team is working
for them. And you know, there's ways to let's say
you're going to sell that business in ten years, there's
(08:56):
ways to grow that business exponentially in ten years. I
lay that out in the chapter of the book of
You know what you can do to really grow that
business exponentially. By the way, there's another way you can
sell the business to your employees and have the business
become tax free. Can you imagine that? You know pay
day taxes, federal taxes, even payroll taxes, and when you
(09:21):
sell that business, you don't pay capital gains tax. So
there's a lot of things that the business owner is
just way too busy running their business that they don't
realize all these opportunities that are out there for them
that they could tap into.
Speaker 1 (09:37):
And you do this to help people along too. You've
done this for a very, very long time. This book
offers a lot of let's say, do it yourself information.
You did talk about a couple of the unexpected problems
that could come across you can come across and trying
to sell your business or getting ready for that exit strategy.
You do discuss a whole plethora of the well we'll
(09:57):
call them hurdles, things you have to that hopes you
to jump through to get to get things planned. I
used to work for an attorney. He was one of
those estate planners. If you're not a state planner but
a state attorney. I'm an elder law attorney. That's right.
He would say, No one plans to fail, They just
failed to plan. Let's say, let's let's talk about one
(10:19):
or two of the early hurdles you gave me, some
of the later ones, a couple of the early hurdles
that you discussed in the book, and how let's just
say how you might hold somebody's hand and coast them
along that way.
Speaker 2 (10:31):
You know, I would say that, you know, one of
the really big things that business owners don't think about.
Just like the couple I described, they couldn't sell the
business because it didn't run with it without them. Is
for a fair amount of business owners. I mean really
successful business owners that are earning millions and millions of
dollars a year, it has no worth because they've created
a job for themselves. We have a story in the
(10:52):
book that a guy who's seventy two years old, he's
an R and D company. Guess who does the R
and D him?
Speaker 1 (10:57):
Him?
Speaker 2 (10:58):
He has a great management team, he has all these
other people, but he hasn't mentored anybody else. Right then,
we have stories in the book about somebody who's you know,
they haven't done that. They have a stroke, they didn't
drop dead and then they'd never mentored that person to
take over. That can happen very young, by the way,
really very very young. We have another story in the
book about a gentleman whose nephew was his retirement plan,
(11:22):
that he was his succession plan. Guess what, the kid
dropped dead right, and so that kind of stuff happened.
So I will tell you I think I think the
best chapter in the book is about something called value acceleration.
This was methodology developed by the Exit Planning Institute, and
this is again putting the business owner into control because
(11:45):
they can hire somebody works in this value acceleration space
and guess what, Chris, they're always going to be ready.
They can sell, or they can say they can sell.
They could keep growing the company, or they can sell
the company. And that process is really bloiled down to
three kind of simple things. Number One, you want to
protect the profits of the business before you do anything else.
(12:05):
Number Two, you do a formal valuation and you really
know realistically what that business is worth. And the third
thing you do is you peg that business to best
in class. And the idea with value acceleration is to
get that advice, get these experts to come alongside of
you and grow your business. My main strategic partner in
(12:27):
the space, by the way, Chris. Last year their average
clients profits increase sixty five percent and their revenue forty
three They're on track this year to do even better.
And so even a very young business that's not that old,
if they're profitable and they want to grow, they can
still value from these things. And they have to realize
(12:49):
the minefields that are out there. They could undo them
if they've got a partner and they have a disagreement
where something else comes up. I'm trying to create awareness
in this book, awareness of the mind fields and awareness
of the resources that they can tap into.
Speaker 1 (13:05):
Lenda Jensen is with me. She is the author of
the book What Is Your Exit Strategy. Linda is a
certified exit planning advisor, and we're talking about this because
a lot of businesses, large, medium sciences and small business
owners are thinking, hey, you know, I'm going to do
this until retirement, but they think about what they're going
to do with retirement or something bad is going to happen.
Another point you bring up in the book, and it's
(13:27):
very important, is having a team of advisors. We're talking
one on one, and the book's great, but talk about
how important having a team or getting a let's just
say as the old as Friendlin Dylan or Roosevelt used
to put it a kitchen cabinet together to help with
your exit strategy.
Speaker 2 (13:45):
Yeah, you know, Chris and I do say in the book,
I can't know everything about everything, right, we just don't.
Speaker 1 (13:51):
Nobody can.
Speaker 2 (13:52):
We try. We try our best, right, all we could
do is our best. But guess what, you know, I
really believe hiring experts can have their weight in gold
because they can bring something to the table, like my
value acceleration experts. I'm talking about, right, tremendous value to
increase your profitability and your valuation of the company and
(14:12):
the multiple one you're going to sell it. But you
know you need that team of experts to because guess what, Chris,
that buyer is going to have their team and they're
really going to scrutinize your business. Okay, They're going to
look at the financials, they're going to look at the revenue,
they're going to look at you know, where you're going
lots of time. That buyer wants you to stay in
that business, and they might have certain metrics that they
(14:35):
want to have achieved before they're going to give you
the last payment. And so having that team of advisors
I believe puts the business owner in a stage where
they have more control if they would consider doing that.
And and I will tell you sometimes there's disagreements. You
get family businesses and there's issues that come up. You know,
(14:56):
one kid has been in there forever. He's the golden kid,
He's what makes cup happy, and the other kid just
wants cash out of the business. There are so many
variables that can happen when you're trying to sell a business.
And I think having you know, hiring experts is magical.
They can be at your profits and I think in
some cases it's really necessary to overcome those hurdles that
(15:18):
you're going to encounter.
Speaker 1 (15:21):
You talk. This book mainly covers the financial land and
the business end of the exit strategy. I want to
just take this to a different level. A lot of
people who a lot of people may not be prepared
for life after retirement. We can talk about the financial land,
but let's talk about the personal end. What let's say
a small businessman wants to say, I want to keep
my hands in what I'm doing. I want to consult or.
(15:43):
I want to run my business kind of turn key
a little bit while I'm retired semi or quasi retired. Here,
what are your thoughts about people who should be planning
for that?
Speaker 2 (15:53):
And you know that happens. I will tell you, Chris,
you have so many options. Right. To me, options are
a double edged sort. You have all these offs, but
they need facts that decide which often to take right.
You know, you need to be able to evaluate them,
and you know, and you're right, somebody you know the afterlife.
There's a chapter in the book about the afterlife. The
majority of business owners within a year of retiring are
(16:16):
unhappy because they didn't plan for what's next. And you're
exactly right. Somebody might want to go into politics. Somebody
might want to go into another business, you know. Somebody
might want to, like you're saying, use their skills to
be a consultant. Somebody might have this business run with
or without them until they drop dead. They've got a
succession plan, they've got a team that can take over
(16:38):
with or without them. Right, the guy has the limit
really with doing this planning. I think I think all
of this is really a blank page and that owner
is in the driver's seat to create whatever they want
in terms of future.
Speaker 1 (16:52):
I also want to stress of this book, what is
your agent strategy? Is not a straight how to book.
You don't go step by step like with the figures
and thanks like an IKEA manual. You do the how
to in a different way. You offer stories from people,
You offer the advice you gave to people. And why
(17:12):
did you want to arrange the book that way rather
than a hey, this is what you're doing with each chapter.
Speaker 2 (17:18):
We'll tell you. My main reason is there's a lot
of how to books out there, and if they worked,
I dare say that more than twenty percent of businesses
would be selling right fair enough. So my goal was
to engage the reader through stories in the hopes that
that reader will identify somewhat to these stories you see
(17:38):
and relate to these stories. And it's a very simple read, Chris,
I'm sure you read it before you interviewed me, and
it's really designed for a business owner. Just read, like
in the night, take two or three hours and just
read this and it outlines, like I said, all of
these issues that are facing them that they're most likely
not aware of. But then it gives them a lot
(17:59):
of resources and ideas on how to resolve these issues.
Speaker 1 (18:03):
Linda Jensen, thank you very much for being with us
on book Spectrum. Once again, is what is your exit strategy?
Where can our listeners here on book Spectrum find out
more about your book and about you and your services.
Speaker 2 (18:14):
Well, if they go to what is your Exit Strategy
dot com, that will just lead them to Amazon they
can buy a copy. If you want to know about
me more of the work that we do, especially about taxes.
My specialty is taxes. The whole idea is to save
a business tax dollars to increase their profits and their
multiple when they sell it, right, So that's my specialty.
(18:34):
So they can go to a website called lower Yourtaxes
Today dot com And my business is hard Financial Group
and that website is just heart like h Gart Financialgroup
dot com.
Speaker 1 (18:45):
Thank you very much again, Linda Jensen. What is the
most important thing you want to get or you want
your readers to get out of this book?
Speaker 2 (18:52):
I really want them to number one, realize there's potential
problems and minefield's out there. But number two tapping to
these valuable resources.
Speaker 1 (19:02):
Again, thank you very much, Linda Jensen, and as I
said before, the book is What's Your Exit Strategy? And
us in the gen X and some of us in
the boomer and even the millennials should be reading this
because if you have a business and you want to
maybe keep it for a little while longer after retirement
quasi retire, or if you want to outright sell it
(19:23):
or do something pretty good with it, this is the
book you need. What's Your Exit Strategy by Linda Jensen.
I'm Chris Gordani. Thank you for listening to books Spectrum.
Keep those pages turning.
Welcome to book Spectrum. I'm your host, Chris Gordini. On
book Spenttrum. We talk to authors who aren't necessarily full
time writers, but they come from occupations across the spanctrum.
We talked to people who are Dennis who wrote mystery books.
We've talked to advisors, We've talked to politicians, We've talked
(00:25):
to actors and actresses, and we also talk to business people.
And we are talking to somebody today. Her name is
Linda Jensen, and she prepares us for something. This is
this book, by the way, it's called What's Your Exit Strategy?
We all need to have an exit strategy and almost everything,
but do small business owners really have one? That's a
(00:45):
good question. So Linda Jensen is going to be here
with me to talk about that, and Linda, welcome to
book Spectrum.
Speaker 2 (00:52):
Thank you so much.
Speaker 1 (00:53):
Chris, Well, thank you. And as a small business owner myself,
I have a production company. Full disclosure here, I've been
extremely interested in this because the idea is, if you
are not working a job anymore, or let's just say
you want to move from one place to another, you
have an exit strategy or you presumably if you're a
(01:14):
nation going to war, you have an exit strategy, although
I don't think that's been very well done over the
last twenty to twenty five years. But that's another story
for another day. Let's focus on the small business person.
Speaker 2 (01:27):
Yeah, so, Chris, you know, I was passionate to be
writing this book because the majority of business owners do
not have this nailed down. You know, in my opinion,
they are so busy running their business. As you know,
as a business owner, there's so many things that can
come up in that day to day that probably the
last thing on their mind is actually what's going to
(01:51):
happen with an exit? Right, And I will tell you
my main motivation in writing this are really two important stats.
One is it only about twenty percent of business is
actually sell and if we think about the baby boomers
who own about fifty one percent of the businesses in
the US, that's a lot of businesses that are going
to be in transition over the next ten years or so.
(02:11):
And if the stats are only twenty percent of them
are going to sell, we could have millions of businesses
at risk. The other really important stat is the fact
that fifty percent of businesses close involuntarily. So that was
really the motivation to write the book.
Speaker 1 (02:26):
Well, you say closed involuntarily, and I'm pretty sure that
translates to dissolves or fails or we just get tired
of doing it. So there are a lot of reasons
for that. We still have to be ready for that too,
am I correct?
Speaker 2 (02:38):
We do and so and those really are what I
call the five d's in the book. Let's say a
husband and wife created that business and they get divorced.
That's a problem. Every one of this is a storytelling book.
By the way, every one of the advisors that we
talked to told me stories about folks they were working with,
business owners who were working with who drop while they
(03:00):
were trying to sell the business. So depth is another one.
What if you have a partner and you're in a disagreement,
what are there's some kind of dress like COVID or
you know, the Great Recession or war. You know, these
are the things that can happen involuntarily.
Speaker 1 (03:16):
Well, let's be fair, we don't always plan for those.
We kind of hope that we're going to be able
to run the business forever. You have to have that
pipeline of potential of customers. You have to have people
that are your general larger customers and hope you don't
lose them, to work hard to bring more people in
that sort of thing. Then you get help when you
need it. That's great, that's expansion. We have expansion strategies. Well,
(03:37):
A lot of us in the Boomer and Gen X
generations are well. We saw a lot of these businesses
kind of go poof during the COVID era, go poof
during the Great Recession, and even over the last couple
of years during the let's just say slower recovery. There
have been problems so as far as coming back, and
it hasn't been very easy. So here's another question for you,
(03:58):
and I want to get into the retirement an end
of this, But what are some of the things or
some of the stories. I don't want to give to
too much away because a lot of it's in your
book and these are real stories and real people that
you're telling. But what are a couple of things you
learned maybe that you were surprised about, that you found
that either somebody with the business was or was not
(04:20):
prepared for that kind of thing to happen.
Speaker 2 (04:24):
Well, know, I'll tell you a couple of quick stories.
So I think are kind of powerful. One is with
an M and a guy that I know. So the
difference between an M and a guy and a business
broker is usually business brokers kind of like a realtor.
They'll find a buyer, they'll pair you up, and they'll
sell the business. The M and a advisor really creates
a market for that business. It's in competition. And so
(04:46):
we have a story about this gentleman who got a
fifty two million dollar offer Chris to sell his business.
That's an offer we probably take, right, that's pretty success.
Speaker 1 (04:57):
I will, I'm there.
Speaker 2 (04:59):
Yeah. But he was smart and prudent enough to go
to this M and a advisor who he know, and
he says, hey, you know, Mike, do you think that's
a fair offer? Do you think I should take this?
And Mike is like, you know, I don't really know
if it's if it's the best offer you could get,
but could you give me a little bit of time?
He said, Okay, sure, you have some time. So Mike
(05:22):
went out into the marketplace and Chris, you won't believe this.
He found a buyer for seventy million. That's eighteen million
more right. Could you imagine what you could do with
eighteen million bucks.
Speaker 1 (05:34):
I could imagine I could do it the first fifty
two millions, So eighteen million is greaty if you know me,
it would be nice if I got one hundred thousand
for my business at least.
Speaker 2 (05:48):
I'll bet you could do that. Son. Then another another
story in the book is about a couple who are
doing really well. They had this business was thriving. There
you have five million in revenue. They thought, well, it's
just time to kind of do what we've always wanted
to do. Travel the world, play, have that fun. And
they go to sell the business and guess what the
business was worth zero? And the reason it was worth
(06:10):
zero is it basically created a job for themselves. And
so they connected with one of my strategic partners and
they turned it around and in three years, Chris, they
sold that business for twelve million.
Speaker 1 (06:27):
That sounds nice.
Speaker 2 (06:28):
That sounds nice.
Speaker 1 (06:29):
A lot of times when you're in when you're in
my line of work, you do kind of create work
for yourself. It's like, and I do enjoy doing what
I'm doing, the the production and the hosting and that
sort of thing. But there will be a time where
I'll be farm bringing more people into to handle that
at least I hope. So there's another issue as well though,
as far as an exit strategy. Now you're talking about
(06:49):
selling and buying the business in that respect, or being
ready for a kind of a recession or anything else
that happens. But there's another question I have and I
want to get into it. Let's get into it. We'll
get the personal under this first. With the financial end,
you just said, people are surprised sometimes about how they
can sell their businesses. But what about getting ready for
(07:10):
that sort of thing. How do you, let's say, ten
years before you retire, say maybe I should position myself
and position my business to get that exit strategy moving.
Speaker 2 (07:22):
Well, first of all, like we just said, your average
business owner isn't thinking about that. That's why the book,
That's why the awareness, right.
Speaker 1 (07:30):
I exactly, I agree with that, And the.
Speaker 2 (07:32):
Book really lays out the first half really lays out
a lot of the issues and the problems with creating
that excess strategy. The last half of the book outlines
a lot of resources. So the advice I would give
to that business owner is, hey, you know, be aware
that there's problems here. Business owners consistently Chris under the
(07:53):
overvalue what that business was worth. Every one of our
advisors talked about that, stories about the business owner always
thought it was worth X and it's not. And keep
in mind that the majority of their wealth is tied
up in that business. So they're going to need to
tap into that wealth and sell it successfully to have
(08:13):
a really good retirement off into the sunset, aren't they.
And so so that's another issue. And another issue is
the fact, I'll tell you a simple one, lots of
times business owners run some of their personal expenses through
the business. You know, I mean you need a team.
Another thing that business owners that don't realize is this
is really a team sport. And so if they if
(08:35):
they're if they get some good advice and they realize
that they really should have a team, that they're at
the center of that team. If you think about a wheel,
they're the hub and it gives them more control, Chris,
if they hire a team, because that team is working
for them. And you know, there's ways to let's say
you're going to sell that business in ten years, there's
(08:56):
ways to grow that business exponentially in ten years. I
lay that out in the chapter of the book of
You know what you can do to really grow that
business exponentially. By the way, there's another way you can
sell the business to your employees and have the business
become tax free. Can you imagine that? You know pay
day taxes, federal taxes, even payroll taxes, and when you
(09:21):
sell that business, you don't pay capital gains tax. So
there's a lot of things that the business owner is
just way too busy running their business that they don't
realize all these opportunities that are out there for them
that they could tap into.
Speaker 1 (09:37):
And you do this to help people along too. You've
done this for a very, very long time. This book
offers a lot of let's say, do it yourself information.
You did talk about a couple of the unexpected problems
that could come across you can come across and trying
to sell your business or getting ready for that exit strategy.
You do discuss a whole plethora of the well we'll
(09:57):
call them hurdles, things you have to that hopes you
to jump through to get to get things planned. I
used to work for an attorney. He was one of
those estate planners. If you're not a state planner but
a state attorney. I'm an elder law attorney. That's right.
He would say, No one plans to fail, They just
failed to plan. Let's say, let's let's talk about one
(10:19):
or two of the early hurdles you gave me, some
of the later ones, a couple of the early hurdles
that you discussed in the book, and how let's just
say how you might hold somebody's hand and coast them
along that way.
Speaker 2 (10:31):
You know, I would say that, you know, one of
the really big things that business owners don't think about.
Just like the couple I described, they couldn't sell the
business because it didn't run with it without them. Is
for a fair amount of business owners. I mean really
successful business owners that are earning millions and millions of
dollars a year, it has no worth because they've created
a job for themselves. We have a story in the
(10:52):
book that a guy who's seventy two years old, he's
an R and D company. Guess who does the R
and D him?
Speaker 1 (10:57):
Him?
Speaker 2 (10:58):
He has a great management team, he has all these
other people, but he hasn't mentored anybody else. Right then,
we have stories in the book about somebody who's you know,
they haven't done that. They have a stroke, they didn't
drop dead and then they'd never mentored that person to
take over. That can happen very young, by the way,
really very very young. We have another story in the
book about a gentleman whose nephew was his retirement plan,
(11:22):
that he was his succession plan. Guess what, the kid
dropped dead right, and so that kind of stuff happened.
So I will tell you I think I think the
best chapter in the book is about something called value acceleration.
This was methodology developed by the Exit Planning Institute, and
this is again putting the business owner into control because
(11:45):
they can hire somebody works in this value acceleration space
and guess what, Chris, they're always going to be ready.
They can sell, or they can say they can sell.
They could keep growing the company, or they can sell
the company. And that process is really bloiled down to
three kind of simple things. Number One, you want to
protect the profits of the business before you do anything else.
(12:05):
Number Two, you do a formal valuation and you really
know realistically what that business is worth. And the third
thing you do is you peg that business to best
in class. And the idea with value acceleration is to
get that advice, get these experts to come alongside of
you and grow your business. My main strategic partner in
(12:27):
the space, by the way, Chris. Last year their average
clients profits increase sixty five percent and their revenue forty
three They're on track this year to do even better.
And so even a very young business that's not that old,
if they're profitable and they want to grow, they can
still value from these things. And they have to realize
(12:49):
the minefields that are out there. They could undo them
if they've got a partner and they have a disagreement
where something else comes up. I'm trying to create awareness
in this book, awareness of the mind fields and awareness
of the resources that they can tap into.
Speaker 1 (13:05):
Lenda Jensen is with me. She is the author of
the book What Is Your Exit Strategy. Linda is a
certified exit planning advisor, and we're talking about this because
a lot of businesses, large, medium sciences and small business
owners are thinking, hey, you know, I'm going to do
this until retirement, but they think about what they're going
to do with retirement or something bad is going to happen.
Another point you bring up in the book, and it's
(13:27):
very important, is having a team of advisors. We're talking
one on one, and the book's great, but talk about
how important having a team or getting a let's just
say as the old as Friendlin Dylan or Roosevelt used
to put it a kitchen cabinet together to help with
your exit strategy.
Speaker 2 (13:45):
Yeah, you know, Chris and I do say in the book,
I can't know everything about everything, right, we just don't.
Speaker 1 (13:51):
Nobody can.
Speaker 2 (13:52):
We try. We try our best, right, all we could
do is our best. But guess what, you know, I
really believe hiring experts can have their weight in gold
because they can bring something to the table, like my
value acceleration experts. I'm talking about, right, tremendous value to
increase your profitability and your valuation of the company and
(14:12):
the multiple one you're going to sell it. But you
know you need that team of experts to because guess what, Chris,
that buyer is going to have their team and they're
really going to scrutinize your business. Okay, They're going to
look at the financials, they're going to look at the revenue,
they're going to look at you know, where you're going
lots of time. That buyer wants you to stay in
that business, and they might have certain metrics that they
(14:35):
want to have achieved before they're going to give you
the last payment. And so having that team of advisors
I believe puts the business owner in a stage where
they have more control if they would consider doing that.
And and I will tell you sometimes there's disagreements. You
get family businesses and there's issues that come up. You know,
(14:56):
one kid has been in there forever. He's the golden kid,
He's what makes cup happy, and the other kid just
wants cash out of the business. There are so many
variables that can happen when you're trying to sell a business.
And I think having you know, hiring experts is magical.
They can be at your profits and I think in
some cases it's really necessary to overcome those hurdles that
(15:18):
you're going to encounter.
Speaker 1 (15:21):
You talk. This book mainly covers the financial land and
the business end of the exit strategy. I want to
just take this to a different level. A lot of
people who a lot of people may not be prepared
for life after retirement. We can talk about the financial land,
but let's talk about the personal end. What let's say
a small businessman wants to say, I want to keep
my hands in what I'm doing. I want to consult or.
(15:43):
I want to run my business kind of turn key
a little bit while I'm retired semi or quasi retired. Here,
what are your thoughts about people who should be planning
for that?
Speaker 2 (15:53):
And you know that happens. I will tell you, Chris,
you have so many options. Right. To me, options are
a double edged sort. You have all these offs, but
they need facts that decide which often to take right.
You know, you need to be able to evaluate them,
and you know, and you're right, somebody you know the afterlife.
There's a chapter in the book about the afterlife. The
majority of business owners within a year of retiring are
(16:16):
unhappy because they didn't plan for what's next. And you're
exactly right. Somebody might want to go into politics. Somebody
might want to go into another business, you know. Somebody
might want to, like you're saying, use their skills to
be a consultant. Somebody might have this business run with
or without them until they drop dead. They've got a
succession plan, they've got a team that can take over
(16:38):
with or without them. Right, the guy has the limit
really with doing this planning. I think I think all
of this is really a blank page and that owner
is in the driver's seat to create whatever they want
in terms of future.
Speaker 1 (16:52):
I also want to stress of this book, what is
your agent strategy? Is not a straight how to book.
You don't go step by step like with the figures
and thanks like an IKEA manual. You do the how
to in a different way. You offer stories from people,
You offer the advice you gave to people. And why
(17:12):
did you want to arrange the book that way rather
than a hey, this is what you're doing with each chapter.
Speaker 2 (17:18):
We'll tell you. My main reason is there's a lot
of how to books out there, and if they worked,
I dare say that more than twenty percent of businesses
would be selling right fair enough. So my goal was
to engage the reader through stories in the hopes that
that reader will identify somewhat to these stories you see
(17:38):
and relate to these stories. And it's a very simple read, Chris,
I'm sure you read it before you interviewed me, and
it's really designed for a business owner. Just read, like
in the night, take two or three hours and just
read this and it outlines, like I said, all of
these issues that are facing them that they're most likely
not aware of. But then it gives them a lot
(17:59):
of resources and ideas on how to resolve these issues.
Speaker 1 (18:03):
Linda Jensen, thank you very much for being with us
on book Spectrum. Once again, is what is your exit strategy?
Where can our listeners here on book Spectrum find out
more about your book and about you and your services.
Speaker 2 (18:14):
Well, if they go to what is your Exit Strategy
dot com, that will just lead them to Amazon they
can buy a copy. If you want to know about
me more of the work that we do, especially about taxes.
My specialty is taxes. The whole idea is to save
a business tax dollars to increase their profits and their
multiple when they sell it, right, So that's my specialty.
(18:34):
So they can go to a website called lower Yourtaxes
Today dot com And my business is hard Financial Group
and that website is just heart like h Gart Financialgroup
dot com.
Speaker 1 (18:45):
Thank you very much again, Linda Jensen. What is the
most important thing you want to get or you want
your readers to get out of this book?
Speaker 2 (18:52):
I really want them to number one, realize there's potential
problems and minefield's out there. But number two tapping to
these valuable resources.
Speaker 1 (19:02):
Again, thank you very much, Linda Jensen, and as I
said before, the book is What's Your Exit Strategy? And
us in the gen X and some of us in
the boomer and even the millennials should be reading this
because if you have a business and you want to
maybe keep it for a little while longer after retirement
quasi retire, or if you want to outright sell it
(19:23):
or do something pretty good with it, this is the
book you need. What's Your Exit Strategy by Linda Jensen.
I'm Chris Gordani. Thank you for listening to books Spectrum.
Keep those pages turning.
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