1 00:00:00,280 --> 00:00:02,680 Speaker 1: Hello, and welcome to another episode of the Mark Mos Show. 2 00:00:02,680 --> 00:00:05,760 Speaker 1: We're always running through the changes that are happening in 3 00:00:05,760 --> 00:00:07,240 Speaker 1: the world right now. Of course, we're always looking at 4 00:00:07,240 --> 00:00:11,879 Speaker 1: through the lens of politics, finance, and technology, and today 5 00:00:11,960 --> 00:00:14,400 Speaker 1: I got something a little bit different for you. Today, 6 00:00:14,440 --> 00:00:17,200 Speaker 1: I want to talk about something else, another phenomenon that 7 00:00:17,200 --> 00:00:18,759 Speaker 1: I've been studying for over a dozen years, and this 8 00:00:18,880 --> 00:00:22,840 Speaker 1: is about a wealth transfer now that I guess fits 9 00:00:22,840 --> 00:00:25,880 Speaker 1: into you know, finance, of course, but it's a little 10 00:00:25,920 --> 00:00:28,040 Speaker 1: bit of a different angle now. Typically I talk about 11 00:00:28,040 --> 00:00:31,560 Speaker 1: wealth transfers in regards to the economic cycle booms and bust. 12 00:00:32,200 --> 00:00:34,519 Speaker 1: Whenever the market goes up really fast, it creates a 13 00:00:34,560 --> 00:00:36,320 Speaker 1: lot of wealth, and then the crash happens, and then 14 00:00:36,440 --> 00:00:39,159 Speaker 1: all that wealth transfers to somebody else, similar to what 15 00:00:39,200 --> 00:00:41,920 Speaker 1: happened to me in two thousand and eight. I built 16 00:00:42,000 --> 00:00:46,240 Speaker 1: up a massive amount of wealth leading into the boom cycle, 17 00:00:46,280 --> 00:00:48,560 Speaker 1: and then when the bust happened, I lost most of 18 00:00:48,600 --> 00:00:51,680 Speaker 1: that wealth and it got transferred to somebody else. So 19 00:00:51,880 --> 00:00:54,360 Speaker 1: booms and bus create these wealth transfer cycles, which is 20 00:00:54,360 --> 00:00:56,640 Speaker 1: why I study them. I want to make sure that 21 00:00:56,640 --> 00:00:58,720 Speaker 1: I'm always on the receiving end of this wealth transfer 22 00:00:59,320 --> 00:01:02,400 Speaker 1: other ways that these giant wealth transfers are through times 23 00:01:02,400 --> 00:01:05,280 Speaker 1: of wealth. So, for example, with bitcoin, I believe bitcoin 24 00:01:05,319 --> 00:01:07,480 Speaker 1: is one of the biggest wealth transfers that we have today. 25 00:01:08,080 --> 00:01:10,360 Speaker 1: And people that are early are making a lot of 26 00:01:10,360 --> 00:01:12,440 Speaker 1: money by owning bitcoin, and those that are missing are 27 00:01:12,440 --> 00:01:14,160 Speaker 1: going to come in later and it's going to be 28 00:01:14,160 --> 00:01:14,679 Speaker 1: too late. 29 00:01:14,560 --> 00:01:15,200 Speaker 2: For a lot of them. 30 00:01:15,600 --> 00:01:19,000 Speaker 1: So technology gives us that early adopters of technology allow 31 00:01:19,080 --> 00:01:21,640 Speaker 1: this wealth to flow to us. Another way that this 32 00:01:21,720 --> 00:01:23,039 Speaker 1: is going to happen, and what I'm going to talk 33 00:01:23,040 --> 00:01:24,560 Speaker 1: about today is something a little bit different than I 34 00:01:24,600 --> 00:01:26,840 Speaker 1: normally talk about, but it's going to lead to one 35 00:01:26,840 --> 00:01:29,760 Speaker 1: of the greatest wealth transfers in history, and that is 36 00:01:29,840 --> 00:01:34,240 Speaker 1: the largest segment of the population that baby boomers are 37 00:01:34,280 --> 00:01:36,920 Speaker 1: all retiring. They've been retiring for the last year, they 38 00:01:36,959 --> 00:01:41,120 Speaker 1: have about another dozen years or so left, and all 39 00:01:41,160 --> 00:01:43,520 Speaker 1: of this wealth, trillions of dollars of this wealth is 40 00:01:43,560 --> 00:01:48,400 Speaker 1: going to transfer, trillions of dollars, will be moving hands, 41 00:01:48,680 --> 00:01:51,560 Speaker 1: tens of trillions of dollars. And so when this much 42 00:01:51,640 --> 00:01:54,000 Speaker 1: money moves, all we have to do is get on 43 00:01:54,040 --> 00:01:56,400 Speaker 1: the receiving end of it. All right, I've been on 44 00:01:56,400 --> 00:01:58,960 Speaker 1: the giving end of it before, it's no fun take 45 00:01:58,960 --> 00:02:00,040 Speaker 1: it from me. You don't want to be there. And 46 00:02:00,160 --> 00:02:02,400 Speaker 1: so how can we do that, Well, we have to 47 00:02:02,560 --> 00:02:06,200 Speaker 1: understand what it is that they own, how are they're 48 00:02:06,240 --> 00:02:08,639 Speaker 1: going to be transferring it, and then how we can 49 00:02:08,680 --> 00:02:10,240 Speaker 1: get in the middle of it. So that's what I'm 50 00:02:10,240 --> 00:02:12,840 Speaker 1: gonna talk about today. Something a little bit different. If 51 00:02:12,880 --> 00:02:15,600 Speaker 1: you are a baby boomer and you own a business, 52 00:02:15,720 --> 00:02:19,200 Speaker 1: then this is for you. If you are a gen 53 00:02:19,360 --> 00:02:21,160 Speaker 1: X or a millennial that want to get one of 54 00:02:21,200 --> 00:02:23,440 Speaker 1: these business to flow to you, this it could be 55 00:02:23,480 --> 00:02:25,720 Speaker 1: for you. If you want to take advantage of this 56 00:02:25,800 --> 00:02:26,680 Speaker 1: transfer by. 57 00:02:26,560 --> 00:02:29,520 Speaker 2: Any means, then this episode is for you. 58 00:02:29,520 --> 00:02:31,079 Speaker 1: It's a little bit different than we talk about today, 59 00:02:31,320 --> 00:02:33,639 Speaker 1: But just for some stats to sort of frame this up, 60 00:02:34,120 --> 00:02:37,640 Speaker 1: baby boomers today make up about forty one percent of 61 00:02:37,680 --> 00:02:41,640 Speaker 1: small business owners or franchise owners all right. Now, there's 62 00:02:41,639 --> 00:02:44,200 Speaker 1: also the like sort of echo boom generation gen X 63 00:02:44,240 --> 00:02:46,640 Speaker 1: that also owns about a forty percent share as well, 64 00:02:46,800 --> 00:02:49,040 Speaker 1: But there's forty one percent that the baby boomers own. 65 00:02:49,280 --> 00:02:53,960 Speaker 1: Total is about twelve million businesses. Twelve million businesses that 66 00:02:54,000 --> 00:02:58,640 Speaker 1: will either be shut down, handed off to a kid, 67 00:02:59,040 --> 00:03:01,640 Speaker 1: or sold off. All right, those are the three options 68 00:03:01,639 --> 00:03:05,120 Speaker 1: that they have. This is tens of trillions of dollars 69 00:03:05,120 --> 00:03:07,359 Speaker 1: of wealth that's going to be passed off, and so 70 00:03:07,440 --> 00:03:09,800 Speaker 1: how can we take advantage of this. Let me break 71 00:03:09,800 --> 00:03:12,040 Speaker 1: down a little bit of math so you can understand 72 00:03:12,160 --> 00:03:14,400 Speaker 1: how big of a problem this is going to be. 73 00:03:16,080 --> 00:03:19,680 Speaker 1: There's twelve million baby boomers and they own businesses, and 74 00:03:19,720 --> 00:03:22,639 Speaker 1: these businesses they need to do something with them over 75 00:03:22,680 --> 00:03:25,280 Speaker 1: this next dozen years or so. Now let me give 76 00:03:25,280 --> 00:03:27,160 Speaker 1: you an example of this so you can understand. My 77 00:03:27,280 --> 00:03:31,040 Speaker 1: father is a baby boomer. My father had a business 78 00:03:31,040 --> 00:03:34,840 Speaker 1: for like thirty years, doing a construction business. Over thirty 79 00:03:34,880 --> 00:03:37,640 Speaker 1: years of business, he built up a giant client base, 80 00:03:37,880 --> 00:03:41,280 Speaker 1: massive amounts of good will, and he has a steady 81 00:03:41,320 --> 00:03:44,320 Speaker 1: stream of business that just comes organically because you know, 82 00:03:44,400 --> 00:03:46,920 Speaker 1: a word of mouth and goodwill and customers referrals things 83 00:03:46,960 --> 00:03:50,240 Speaker 1: like that. His phone number rings. People want him to 84 00:03:50,280 --> 00:03:52,880 Speaker 1: come do work. But yet he didn't want to do 85 00:03:52,920 --> 00:03:53,600 Speaker 1: it anymore. He was tired. 86 00:03:53,640 --> 00:03:54,240 Speaker 2: He wanted to retire. 87 00:03:54,760 --> 00:03:56,760 Speaker 1: I didn't want it, and none of my siblings, none 88 00:03:56,800 --> 00:03:57,280 Speaker 1: of my other. 89 00:03:57,200 --> 00:03:58,600 Speaker 2: Brothers and sisters wanted it either. 90 00:03:59,040 --> 00:04:01,320 Speaker 1: And so what did my dad do? Instead of selling 91 00:04:01,360 --> 00:04:04,480 Speaker 1: that business, he just shut it down, literally just closed 92 00:04:04,520 --> 00:04:08,240 Speaker 1: it Now, typically a service based business would be worth 93 00:04:08,400 --> 00:04:12,280 Speaker 1: maybe three to four times one year's profit. So let's 94 00:04:12,280 --> 00:04:15,040 Speaker 1: say that he was making, you know, just let's call 95 00:04:15,080 --> 00:04:19,279 Speaker 1: it a million dollars a year of top line revenue. 96 00:04:19,680 --> 00:04:22,480 Speaker 1: Let's say that he's making thirty forty percent, so he's 97 00:04:22,480 --> 00:04:25,520 Speaker 1: made three four hundred grand. Well, now you can multiply 98 00:04:25,600 --> 00:04:27,800 Speaker 1: that at times three or four, So three hundred grand 99 00:04:27,800 --> 00:04:31,600 Speaker 1: times four is one point two million. So instead of 100 00:04:31,600 --> 00:04:34,680 Speaker 1: putting one point two million dollars in his pocket, or 101 00:04:34,680 --> 00:04:36,480 Speaker 1: maybe he would have done a deal for like two 102 00:04:36,560 --> 00:04:38,800 Speaker 1: hundred and fifty down and then finance the rest over 103 00:04:38,880 --> 00:04:40,760 Speaker 1: over time, and now he'd have an annuity stream as 104 00:04:40,760 --> 00:04:43,680 Speaker 1: he goes into retirement. Instead of that he has zero. 105 00:04:44,440 --> 00:04:47,479 Speaker 1: Shut it down. All those customers that want business now 106 00:04:48,000 --> 00:04:51,040 Speaker 1: find a dead end number. Now this wasn't a smart 107 00:04:51,040 --> 00:04:54,000 Speaker 1: thing to do, but that's about the rate of what's 108 00:04:54,080 --> 00:04:57,880 Speaker 1: going on, which creates a massive opportunity for you if 109 00:04:57,880 --> 00:04:59,720 Speaker 1: you'd like to get into businesses. But it's also a 110 00:04:59,760 --> 00:05:02,760 Speaker 1: mass opportunity for business owners. They don't have to do that. 111 00:05:02,800 --> 00:05:04,360 Speaker 1: So let's break down some of this maths. So twelve 112 00:05:04,360 --> 00:05:06,560 Speaker 1: million business owners that need to do something with their 113 00:05:06,600 --> 00:05:10,200 Speaker 1: businesses over the next decade or so. Let's just assume 114 00:05:10,279 --> 00:05:13,840 Speaker 1: that about forty percent of those business owners decide just 115 00:05:13,880 --> 00:05:16,279 Speaker 1: to close down their business or just give it to 116 00:05:16,279 --> 00:05:19,719 Speaker 1: their kids. So forty percent of them don't sell their businesses. 117 00:05:19,760 --> 00:05:21,520 Speaker 1: They just either shut them down like my dad did, 118 00:05:21,920 --> 00:05:25,600 Speaker 1: or they handed over their kids. Now, that leaves seven 119 00:05:25,640 --> 00:05:29,480 Speaker 1: point two million businesses that will try to be sold. 120 00:05:29,560 --> 00:05:32,800 Speaker 1: They will seek buyers of some sort. Now, if we 121 00:05:32,920 --> 00:05:36,520 Speaker 1: divide the seven point two million businesses that will be 122 00:05:36,560 --> 00:05:40,320 Speaker 1: sold over let's just even be conservative, let's say fifteen 123 00:05:40,360 --> 00:05:42,320 Speaker 1: years instead of ten years. Let's give it fifteen years. 124 00:05:42,360 --> 00:05:44,359 Speaker 1: So we divide the seven point two million divided by 125 00:05:44,400 --> 00:05:49,359 Speaker 1: fifteen years, gives us about five hundred thousand businesses per 126 00:05:49,480 --> 00:05:52,760 Speaker 1: year that will go onto the market for sale. This 127 00:05:52,920 --> 00:05:58,400 Speaker 1: is a massive amount, a massive wealth transfer. Now, five 128 00:05:58,480 --> 00:06:00,440 Speaker 1: hundred thousand business per year. Now, let's just put this 129 00:06:00,480 --> 00:06:02,680 Speaker 1: into comparison. Maybe you don't understand how big of a 130 00:06:02,760 --> 00:06:05,400 Speaker 1: number that is. Last year, according to the old logic, 131 00:06:06,040 --> 00:06:09,480 Speaker 1: in the United States, ten thousand, five hundred and ninety 132 00:06:09,480 --> 00:06:12,960 Speaker 1: seven five hundred and nine seven businesses closed M and 133 00:06:13,000 --> 00:06:15,840 Speaker 1: A transactions mergers and acquisitions. At least that's what was 134 00:06:15,839 --> 00:06:18,520 Speaker 1: announced there was probably more, we don't know if they 135 00:06:18,560 --> 00:06:21,120 Speaker 1: weren't announced, But let's just triple that number. So let's 136 00:06:21,120 --> 00:06:24,800 Speaker 1: stay instead of ten thousand, five hundred, let's say roughly 137 00:06:24,880 --> 00:06:26,279 Speaker 1: thirty thousand. 138 00:06:26,040 --> 00:06:27,600 Speaker 2: Businesses changed hands. 139 00:06:28,200 --> 00:06:31,520 Speaker 1: All right, Now, how does thirty thousand businesses compared to 140 00:06:31,600 --> 00:06:36,680 Speaker 1: the five hundred thousand businesses that are scheduled to change hands? Well, 141 00:06:36,720 --> 00:06:42,440 Speaker 1: that's about fifteen times larger instead of thirty thousand. That's 142 00:06:42,440 --> 00:06:44,839 Speaker 1: about what the market can absorb. Right now. There's people 143 00:06:44,880 --> 00:06:47,760 Speaker 1: buying those businesses, but we go from thirty thousand to 144 00:06:47,760 --> 00:06:51,520 Speaker 1: five hundred thousand business there's not enough demand for the 145 00:06:51,520 --> 00:06:54,159 Speaker 1: amount of supply that's about to hit the market. These 146 00:06:54,200 --> 00:06:57,039 Speaker 1: baby boom baby boomer businesses will hit the market, and 147 00:06:57,080 --> 00:07:01,640 Speaker 1: it's going to just completely overwhelm the demand. Now, what 148 00:07:01,839 --> 00:07:05,160 Speaker 1: happens when this supply outstrips the demand when the price 149 00:07:05,200 --> 00:07:08,760 Speaker 1: goes down, which means then these baby boomers that are 150 00:07:08,800 --> 00:07:11,200 Speaker 1: selling these businesses or wanting to be selling these businesses 151 00:07:11,240 --> 00:07:13,800 Speaker 1: are going to be getting a fraction of what they 152 00:07:13,800 --> 00:07:17,680 Speaker 1: should be getting. It's not real good if you are 153 00:07:17,720 --> 00:07:19,600 Speaker 1: trying to sell the business. Now, it's great if you 154 00:07:19,640 --> 00:07:21,480 Speaker 1: want to buy a business, which is why I'm saying 155 00:07:22,000 --> 00:07:24,720 Speaker 1: this wealth is going to transfer. So even if you 156 00:07:24,720 --> 00:07:26,560 Speaker 1: don't own a business, even if you're a millennial or 157 00:07:26,600 --> 00:07:28,320 Speaker 1: Gen x er and you want to get in, there's 158 00:07:28,360 --> 00:07:31,280 Speaker 1: going to be a massive opportunity in front of you. 159 00:07:32,400 --> 00:07:34,720 Speaker 1: Or if you do own a business, you have to 160 00:07:34,800 --> 00:07:38,560 Speaker 1: understand that they're going to face massive selling pressure, and 161 00:07:38,600 --> 00:07:41,720 Speaker 1: so you need to change your business so that you 162 00:07:41,800 --> 00:07:43,360 Speaker 1: stand out that you're one of the best, that you 163 00:07:43,400 --> 00:07:45,840 Speaker 1: can still command a premium when everybody else is getting 164 00:07:45,840 --> 00:07:48,560 Speaker 1: discounted to you command a premium. And maybe you want 165 00:07:48,560 --> 00:07:51,200 Speaker 1: to front run this trend once you find out about it. 166 00:07:51,800 --> 00:07:54,000 Speaker 1: So there's a few ways that you can do this, 167 00:07:54,960 --> 00:07:56,600 Speaker 1: a few ways that you can take advantage of this 168 00:07:56,600 --> 00:07:57,920 Speaker 1: that I want to walk you through, and I really 169 00:07:57,960 --> 00:08:01,320 Speaker 1: want to kind of give you this systematic framework. I 170 00:08:01,360 --> 00:08:06,000 Speaker 1: want to talk about five pivotal stages to transform your business. 171 00:08:08,160 --> 00:08:11,240 Speaker 1: To set that business up so it's highly desirable so 172 00:08:11,280 --> 00:08:13,360 Speaker 1: you get massive amounts of money, or if you're buying 173 00:08:13,400 --> 00:08:15,880 Speaker 1: that business, you know how to do that as well. 174 00:08:16,720 --> 00:08:19,520 Speaker 1: So we'll walk you through that. And I want to 175 00:08:19,560 --> 00:08:23,440 Speaker 1: talk about, you know, getting you out of the business, 176 00:08:23,440 --> 00:08:25,480 Speaker 1: because the goal of the business, I mean, sure you're 177 00:08:25,520 --> 00:08:27,680 Speaker 1: solving problems and sure your meeting needs and all those things, 178 00:08:27,680 --> 00:08:31,000 Speaker 1: but ultimately you want to Most of us have started 179 00:08:31,000 --> 00:08:34,240 Speaker 1: businesses to increase our income, but also to somewhat be free, 180 00:08:34,280 --> 00:08:37,720 Speaker 1: financially free. And most people just have jobs. And so 181 00:08:37,800 --> 00:08:39,880 Speaker 1: no matter where you're at in your career on a 182 00:08:39,920 --> 00:08:42,280 Speaker 1: business or thinking about starting a business, this is information 183 00:08:42,400 --> 00:08:45,120 Speaker 1: that you want to have. You don't want to be 184 00:08:45,280 --> 00:08:47,920 Speaker 1: trapped as in owning a job. You want to own 185 00:08:47,960 --> 00:08:50,440 Speaker 1: a business. The difference would be I mean, I guess 186 00:08:50,520 --> 00:08:53,360 Speaker 1: just ask yourself a question, what would happen if you 187 00:08:53,440 --> 00:08:55,560 Speaker 1: had a business and you took a month off or 188 00:08:55,600 --> 00:08:58,640 Speaker 1: three months off, or six months off or twelve months off. 189 00:08:59,559 --> 00:09:02,920 Speaker 1: Would that business still continue to run? And how could 190 00:09:03,000 --> 00:09:05,679 Speaker 1: you make sure that you continue to run? And how 191 00:09:05,679 --> 00:09:10,000 Speaker 1: could you really turn this business into a company. That's 192 00:09:10,000 --> 00:09:13,080 Speaker 1: what the difference is, a business into a company that 193 00:09:13,120 --> 00:09:16,679 Speaker 1: would systematically transform that and allow you to achieve your 194 00:09:16,720 --> 00:09:19,640 Speaker 1: ideal exit or be exitable. That's what we're going to cover. 195 00:09:19,640 --> 00:09:21,480 Speaker 1: I'm gonna give you five steps here when we come back. 196 00:09:21,520 --> 00:09:23,720 Speaker 1: If you're just tune, you're listening to the Markmas show, 197 00:09:24,000 --> 00:09:25,800 Speaker 1: something a little different for you. I hopefully enjoy it. 198 00:09:25,960 --> 00:09:27,520 Speaker 1: I'll be back with more in a minute. Don't go away, 199 00:09:28,200 --> 00:09:29,679 Speaker 1: all right, welcome back. If you're just tune in, you're 200 00:09:29,679 --> 00:09:31,840 Speaker 1: listening to the Mark Maas Show. We're talking about the 201 00:09:31,960 --> 00:09:35,080 Speaker 1: greatest wealth transfer in history that is coming our way. 202 00:09:35,760 --> 00:09:37,240 Speaker 1: I don't want to show you to take advantage of it, 203 00:09:37,360 --> 00:09:39,840 Speaker 1: whether you are the one transferring away or the one 204 00:09:39,880 --> 00:09:42,440 Speaker 1: that you want them to be transferred to you. And 205 00:09:42,480 --> 00:09:44,160 Speaker 1: we're talking about it through business. So if you if 206 00:09:44,200 --> 00:09:46,360 Speaker 1: you have a business, own a business, want to own 207 00:09:46,400 --> 00:09:48,360 Speaker 1: a business, and you want to take advantage of this transfer, 208 00:09:48,440 --> 00:09:52,720 Speaker 1: you want to make sure you can command a premium 209 00:09:52,720 --> 00:09:54,280 Speaker 1: over everybody else because there's going to be a massive 210 00:09:54,280 --> 00:09:56,720 Speaker 1: amount of supply. And this is what you need to 211 00:09:56,720 --> 00:09:58,400 Speaker 1: do now. If you want to buy one of these businesses, 212 00:09:58,480 --> 00:09:59,840 Speaker 1: you still need to you still need to know this 213 00:09:59,840 --> 00:10:02,920 Speaker 1: in information because what happens is for most people, the 214 00:10:02,960 --> 00:10:05,719 Speaker 1: majority of these baby boomers that have these small businesses, 215 00:10:05,760 --> 00:10:08,560 Speaker 1: they don't own. They don't own a company. A company 216 00:10:08,640 --> 00:10:11,559 Speaker 1: sort of being like a separate entity that can run 217 00:10:11,600 --> 00:10:13,320 Speaker 1: on its own The legal definition of a company would 218 00:10:13,360 --> 00:10:15,560 Speaker 1: be like its own legal entity that has its own 219 00:10:15,600 --> 00:10:19,679 Speaker 1: tax code all that, and so using that frame of reference, 220 00:10:19,840 --> 00:10:22,320 Speaker 1: a company sort of can run its own it's separate 221 00:10:22,320 --> 00:10:24,600 Speaker 1: from you, Its identity is separate from you as the founder, 222 00:10:24,920 --> 00:10:27,000 Speaker 1: but the founder is more like a business where you 223 00:10:27,120 --> 00:10:30,080 Speaker 1: run that. And so let's talk about the first stage. 224 00:10:30,120 --> 00:10:32,240 Speaker 1: And this is where most people are and I want 225 00:10:32,240 --> 00:10:34,800 Speaker 1: to show you the five exits. So the first stage is. 226 00:10:35,000 --> 00:10:35,840 Speaker 2: You're a worker. 227 00:10:36,080 --> 00:10:39,320 Speaker 1: You're a worker in the business, and typically you're a technician. 228 00:10:39,640 --> 00:10:41,679 Speaker 1: So what do I mean by a technician. Well, let's 229 00:10:41,720 --> 00:10:45,360 Speaker 1: say that you have a job as a baker or 230 00:10:45,440 --> 00:10:49,640 Speaker 1: a dog groomer, or you fix cars, and you're like, man, 231 00:10:49,720 --> 00:10:51,760 Speaker 1: I'm sick of working at this auto mechanic place and 232 00:10:52,000 --> 00:10:54,440 Speaker 1: making my boss the owner all this money. I'm going 233 00:10:54,520 --> 00:10:57,000 Speaker 1: to go start my own mechanic shop, or I'm going 234 00:10:57,040 --> 00:10:58,920 Speaker 1: to go start my own bakery. I'm going to go 235 00:10:59,000 --> 00:11:02,360 Speaker 1: start my own dog grooming business. So you leave the 236 00:11:02,360 --> 00:11:04,880 Speaker 1: dog room or to go start your own dog grooming business, 237 00:11:04,880 --> 00:11:09,920 Speaker 1: your own massage business, or whatever it may be, and 238 00:11:09,960 --> 00:11:12,600 Speaker 1: you end up working in the business as a technician. 239 00:11:12,679 --> 00:11:15,440 Speaker 1: I used to groom dogs for this other company, Now 240 00:11:15,600 --> 00:11:17,800 Speaker 1: do I groom dogs for my company. 241 00:11:17,840 --> 00:11:19,839 Speaker 2: I used to repair cars for. 242 00:11:19,920 --> 00:11:22,560 Speaker 1: This mechanic shop. Now I repair cars, but for my 243 00:11:22,720 --> 00:11:26,200 Speaker 1: own mechanic shop. So you're the technician, you're in the job. 244 00:11:26,240 --> 00:11:26,880 Speaker 2: You're doing the role. 245 00:11:26,920 --> 00:11:31,040 Speaker 1: Now typically this would be self employed small business. You know, 246 00:11:31,120 --> 00:11:33,040 Speaker 1: maybe you have somebody in there doing the books for 247 00:11:33,120 --> 00:11:35,880 Speaker 1: you and answering the phone, maybe someone's even trying to 248 00:11:35,880 --> 00:11:37,600 Speaker 1: do some sort of ads for you, things like that, 249 00:11:37,840 --> 00:11:40,240 Speaker 1: but at the end of the day, it's you doing 250 00:11:40,280 --> 00:11:43,600 Speaker 1: the job, doing the work. You're the technician. And so 251 00:11:43,640 --> 00:11:46,200 Speaker 1: at the stage you have a business, I mean there's 252 00:11:46,200 --> 00:11:49,120 Speaker 1: a company that, there's a business there, there's employees there, 253 00:11:49,280 --> 00:11:51,760 Speaker 1: there's business coming through, but you're in that role. You're 254 00:11:51,920 --> 00:11:55,720 Speaker 1: in the business. Now. You could at this point, you know, 255 00:11:55,760 --> 00:11:59,320 Speaker 1: you could start to hire other technicians, but the first 256 00:11:59,400 --> 00:12:03,800 Speaker 1: exit is who leave this role, to exit the worker role, 257 00:12:03,840 --> 00:12:06,280 Speaker 1: exit the line? And so how do we do that? 258 00:12:06,440 --> 00:12:08,240 Speaker 1: What we want to do is we want to be 259 00:12:08,360 --> 00:12:12,440 Speaker 1: able to hire other technicians to take our role. Now. 260 00:12:12,480 --> 00:12:15,320 Speaker 1: One of the benefits is that, or one of the 261 00:12:15,320 --> 00:12:17,560 Speaker 1: things that we should think about sometimes is starting businesses 262 00:12:17,559 --> 00:12:19,800 Speaker 1: that we're not a technician in. So it might be 263 00:12:19,800 --> 00:12:22,280 Speaker 1: better for the auto mechanic to go set up a 264 00:12:22,320 --> 00:12:24,360 Speaker 1: dog grooming business, and a dog groomer to set up 265 00:12:24,400 --> 00:12:27,520 Speaker 1: an auto mechanic business. The reason why is a dog 266 00:12:27,520 --> 00:12:29,800 Speaker 1: groomer doesn't know how to fix the car, So the 267 00:12:29,840 --> 00:12:34,480 Speaker 1: dog groomer would never go into that technician role. Vice versa, 268 00:12:34,600 --> 00:12:38,040 Speaker 1: the auto technician would never start up a dog grooming business. 269 00:12:38,240 --> 00:12:41,040 Speaker 1: They would be forced to go hire someone to work 270 00:12:41,080 --> 00:12:44,000 Speaker 1: in that role. But let's assume that you're in that role. 271 00:12:44,040 --> 00:12:46,600 Speaker 1: So we want to one, we want to hire other technicians. 272 00:12:46,840 --> 00:12:49,640 Speaker 1: We want to move from being a worker to a manager. 273 00:12:49,679 --> 00:12:52,160 Speaker 1: This is exit number one work exit the line going 274 00:12:52,160 --> 00:12:54,440 Speaker 1: from worker to manager. We need to make sure that 275 00:12:54,440 --> 00:12:59,520 Speaker 1: we're delegating and not relegating, meaning we're saying, this is 276 00:12:59,600 --> 00:13:02,440 Speaker 1: how this role is done. This is the perfect recipe 277 00:13:02,440 --> 00:13:05,720 Speaker 1: for the bread. This is exactly how I groom this dog. 278 00:13:06,240 --> 00:13:08,840 Speaker 1: And this is your new plan to follow your standard 279 00:13:08,840 --> 00:13:11,679 Speaker 1: operating procedure. You don't want to relegate it like, hey, 280 00:13:11,760 --> 00:13:13,600 Speaker 1: I'm just going to hire someone and hopefully they do 281 00:13:13,640 --> 00:13:16,040 Speaker 1: as good of a job as me. In order to 282 00:13:16,120 --> 00:13:19,120 Speaker 1: do that, you have to have very well documented systems, 283 00:13:19,160 --> 00:13:22,920 Speaker 1: and so if you're currently in this role, begin documenting 284 00:13:22,960 --> 00:13:25,200 Speaker 1: what it is that you're doing. Here's what I say 285 00:13:25,200 --> 00:13:27,320 Speaker 1: when I answer the phone. Here's how I make a 286 00:13:27,360 --> 00:13:30,319 Speaker 1: perfect cup of copy. Here's how I treat my customer, 287 00:13:30,600 --> 00:13:32,240 Speaker 1: Here's how I do a review, or whatever it is. 288 00:13:32,440 --> 00:13:36,600 Speaker 1: Start to document these processes. That way, when you hire 289 00:13:36,840 --> 00:13:40,400 Speaker 1: somebody else, then you can delegate using that well documented systems. 290 00:13:41,040 --> 00:13:42,240 Speaker 1: The other thing that you're going to need to be 291 00:13:42,280 --> 00:13:46,240 Speaker 1: doing is starting to establish a very compelling culture. As 292 00:13:46,280 --> 00:13:47,520 Speaker 1: you start to grow to the business. You need to 293 00:13:47,520 --> 00:13:50,320 Speaker 1: be able to track the right people to you, and 294 00:13:50,360 --> 00:13:53,520 Speaker 1: you have to be able to coach them. As a manager. Again, 295 00:13:53,640 --> 00:13:56,720 Speaker 1: you're going from the doing in the trenches doing the 296 00:13:56,760 --> 00:14:00,319 Speaker 1: work to delegating. All right, that's exit number one. Exit 297 00:14:00,400 --> 00:14:03,360 Speaker 1: number two then is now I've moved from the technician 298 00:14:03,440 --> 00:14:06,800 Speaker 1: in the line. I'm now a manager and so now 299 00:14:07,000 --> 00:14:10,080 Speaker 1: I'm starting to work on the business instead of in 300 00:14:10,120 --> 00:14:11,040 Speaker 1: the business. 301 00:14:10,720 --> 00:14:11,199 Speaker 2: Doing the work. 302 00:14:11,240 --> 00:14:13,840 Speaker 1: I'm able to work on the business, which now allows 303 00:14:13,880 --> 00:14:17,600 Speaker 1: me to see things at a higher level and start 304 00:14:17,640 --> 00:14:21,080 Speaker 1: to think more about how do we set policies to 305 00:14:21,200 --> 00:14:24,080 Speaker 1: handle customer service, or how do we do the marketing, 306 00:14:24,600 --> 00:14:27,520 Speaker 1: how do we recruit staff and things like that. You've 307 00:14:27,560 --> 00:14:30,640 Speaker 1: moved out of the business and now on the business. 308 00:14:30,800 --> 00:14:33,560 Speaker 1: It allows you to now be proactive instead of reactive. 309 00:14:33,560 --> 00:14:35,560 Speaker 1: You see, when you're in this technician role. It's like, Okay, 310 00:14:35,600 --> 00:14:37,360 Speaker 1: what's under the hood. You pop the hood. Okay, here's 311 00:14:37,480 --> 00:14:39,760 Speaker 1: the problem, let me fix it. You're reacting to what 312 00:14:39,800 --> 00:14:40,360 Speaker 1: you see. 313 00:14:40,760 --> 00:14:41,520 Speaker 2: You're a dog groomer. 314 00:14:41,520 --> 00:14:42,440 Speaker 1: Okay, what does this dog have? 315 00:14:42,480 --> 00:14:42,960 Speaker 2: What does it need? 316 00:14:42,960 --> 00:14:45,320 Speaker 1: Okay, now I'm reacting to that dog. But as a manager, 317 00:14:45,320 --> 00:14:47,600 Speaker 1: I can now be proactive and we can start to 318 00:14:47,600 --> 00:14:49,840 Speaker 1: think about what it is that we want. What's our 319 00:14:49,880 --> 00:14:53,120 Speaker 1: ideal client, what's our ideal process procedure, things like that. 320 00:14:53,560 --> 00:14:55,480 Speaker 1: A lot of this was highlighting a book called The 321 00:14:55,640 --> 00:15:00,480 Speaker 1: E Myth which stands for the Entrepreneurial Myth book. I've 322 00:15:00,480 --> 00:15:02,040 Speaker 1: read it multiple times. There's a new book called The 323 00:15:02,080 --> 00:15:04,080 Speaker 1: E Myth Revisited, sort of like a new version of 324 00:15:04,080 --> 00:15:07,960 Speaker 1: the book. I'd highly highly recommend it. They talk about 325 00:15:07,960 --> 00:15:11,520 Speaker 1: how the entrepreneurial myth is that most people think that 326 00:15:11,560 --> 00:15:13,960 Speaker 1: if they can start their own business and become an entrepreneur, 327 00:15:14,400 --> 00:15:16,680 Speaker 1: then they can be free. But that's a myth because 328 00:15:16,720 --> 00:15:19,040 Speaker 1: what they have done is they've just created a job 329 00:15:19,080 --> 00:15:21,400 Speaker 1: for themselves. Anyway, read the book. He kind of goes 330 00:15:21,440 --> 00:15:23,920 Speaker 1: more into depth and detail into how to do this. 331 00:15:24,320 --> 00:15:27,880 Speaker 1: But at this level, now, if you've exited from the 332 00:15:27,920 --> 00:15:31,680 Speaker 1: line and the manager. You know, you're now proactive. But 333 00:15:31,840 --> 00:15:35,840 Speaker 1: from here, we want to now exit the staff and 334 00:15:35,880 --> 00:15:37,600 Speaker 1: then being a manager, and we want. 335 00:15:37,440 --> 00:15:39,320 Speaker 2: To go to the CEO level. 336 00:15:40,400 --> 00:15:42,560 Speaker 1: Right, we're working on the business, not in it, but 337 00:15:42,600 --> 00:15:44,160 Speaker 1: we want to get to the next level. We want 338 00:15:44,160 --> 00:15:47,680 Speaker 1: to go from delegation, being the manager that's now delegating 339 00:15:47,720 --> 00:15:51,680 Speaker 1: these tasks to these individual workers, instead of delegation, instead 340 00:15:51,680 --> 00:15:53,320 Speaker 1: of first it was doing, then it was delegation, and 341 00:15:53,360 --> 00:15:56,600 Speaker 1: now we want to move up to leadership. We want 342 00:15:56,640 --> 00:16:00,840 Speaker 1: to go from an operator, someone who's operation aiding the business, 343 00:16:01,200 --> 00:16:05,040 Speaker 1: setting the schedules, paying the payroll, you know, running the 344 00:16:05,080 --> 00:16:07,280 Speaker 1: marketing instead of operating the business. We want to go 345 00:16:07,320 --> 00:16:12,040 Speaker 1: to a CEO. We want to go from a manager, well, 346 00:16:12,400 --> 00:16:14,640 Speaker 1: you know, from an operator to a CEO. We don't 347 00:16:14,680 --> 00:16:17,640 Speaker 1: want to be just a manager with a title. You see, 348 00:16:17,680 --> 00:16:20,040 Speaker 1: most of you owning your own businesses have called yourself 349 00:16:20,120 --> 00:16:22,800 Speaker 1: a CEO, but the reality is you're just a manager 350 00:16:22,800 --> 00:16:25,920 Speaker 1: with a title. You're still managing the business. You're still 351 00:16:26,240 --> 00:16:29,760 Speaker 1: managing the marketing team, managing the day to day, overseeing 352 00:16:29,760 --> 00:16:32,520 Speaker 1: the customer service, managing the meetings and things like that. 353 00:16:33,360 --> 00:16:36,360 Speaker 1: And so now we want to exit the manager and 354 00:16:36,400 --> 00:16:41,160 Speaker 1: go to the CEO level. All right. Once we're able 355 00:16:41,240 --> 00:16:44,840 Speaker 1: to do that, now things start to get very interesting. 356 00:16:46,480 --> 00:16:49,400 Speaker 1: Now we're able to really start to think long term 357 00:16:49,440 --> 00:16:51,960 Speaker 1: or really start to think about other types of the business. 358 00:16:51,960 --> 00:16:54,840 Speaker 1: We can start to think about other businesses that we 359 00:16:54,880 --> 00:16:58,120 Speaker 1: could buy or merge with or partner with. For example, 360 00:16:58,880 --> 00:17:02,200 Speaker 1: you're a bakery, maybe you want to uh, maybe you 361 00:17:02,240 --> 00:17:05,359 Speaker 1: only bake bread. Well, maybe you want to acquire another 362 00:17:05,400 --> 00:17:10,199 Speaker 1: bakery that specializes in pastries. For example, maybe you're a 363 00:17:10,320 --> 00:17:13,000 Speaker 1: dog groomer and now you want a partner or you 364 00:17:13,040 --> 00:17:16,200 Speaker 1: want to buy a dog training business, or you want 365 00:17:16,240 --> 00:17:20,919 Speaker 1: to launch a line of dog grooming or dog training products, 366 00:17:21,440 --> 00:17:23,160 Speaker 1: and maybe you're able to buy that. So now from 367 00:17:23,200 --> 00:17:26,119 Speaker 1: the CEO lens, now you're way up above and you 368 00:17:26,119 --> 00:17:29,880 Speaker 1: can start to think strategically about the business because you're 369 00:17:29,880 --> 00:17:33,320 Speaker 1: not bogged down with the technical work of doing the job, 370 00:17:33,400 --> 00:17:36,040 Speaker 1: nor are you even bogged down with the management of that. 371 00:17:36,640 --> 00:17:39,040 Speaker 1: All right, now, there's two more exits that I want 372 00:17:39,040 --> 00:17:41,520 Speaker 1: to talk about. How we exit the CEO Where did 373 00:17:41,560 --> 00:17:43,960 Speaker 1: we go from there? And how do we exit from 374 00:17:43,960 --> 00:17:46,920 Speaker 1: that next stage? And then we're going to dig into 375 00:17:47,280 --> 00:17:49,840 Speaker 1: exactly how to do this all right, So there's a 376 00:17:49,840 --> 00:17:51,439 Speaker 1: little bit of high level theory. I want to give 377 00:17:51,480 --> 00:17:53,919 Speaker 1: you some actual tactical steps that you can do this, 378 00:17:54,640 --> 00:17:56,240 Speaker 1: but I gotta take a quick breakre just tuning in 379 00:17:56,440 --> 00:17:58,480 Speaker 1: saying to the Mark ma Show doing something a little 380 00:17:58,480 --> 00:18:00,919 Speaker 1: bit different today, talking about the great wealth transfer in 381 00:18:01,080 --> 00:18:04,200 Speaker 1: history coming through the baby boomer's transferring all these businesses 382 00:18:04,200 --> 00:18:05,720 Speaker 1: and how you can take a part of it. I'll 383 00:18:05,760 --> 00:18:07,000 Speaker 1: be back with more in a minute. You don't want 384 00:18:07,000 --> 00:18:09,200 Speaker 1: to miss it, so don't cool way, I'll be right back. 385 00:18:10,080 --> 00:18:11,560 Speaker 1: All right, welcome back. If you just tune in, you're 386 00:18:11,560 --> 00:18:14,919 Speaker 1: listening to the Markmash Show. We're always talking about the 387 00:18:15,160 --> 00:18:16,760 Speaker 1: way the world is changing as we look at it 388 00:18:16,760 --> 00:18:19,720 Speaker 1: through the lens of politics, finance, and technology. Today we're 389 00:18:19,720 --> 00:18:24,120 Speaker 1: talking about well transfer. Specifically, we're talking about businesses being 390 00:18:24,160 --> 00:18:27,000 Speaker 1: transferred from the largest segment of the population, the baby boomers, 391 00:18:27,080 --> 00:18:30,080 Speaker 1: down to the next section. If you're in that role, 392 00:18:30,400 --> 00:18:33,199 Speaker 1: you need to learn how to scale these levels of 393 00:18:33,240 --> 00:18:36,719 Speaker 1: exit so your business becomes worth more. If you're running 394 00:18:36,720 --> 00:18:40,000 Speaker 1: your business in the technician role, you're the one grooming 395 00:18:40,040 --> 00:18:41,960 Speaker 1: the dogs and working on the cars or baking the bread, 396 00:18:42,200 --> 00:18:44,960 Speaker 1: your business isn't worth much. You see, someone who's going 397 00:18:45,040 --> 00:18:47,280 Speaker 1: to want to buy your business doesn't want to buy 398 00:18:47,320 --> 00:18:48,600 Speaker 1: your business because they want. 399 00:18:48,440 --> 00:18:50,320 Speaker 2: A big bread or groom dogs every day. 400 00:18:51,119 --> 00:18:53,040 Speaker 1: Someone who's going to buy your business wants to buy 401 00:18:53,080 --> 00:18:56,480 Speaker 1: your business because it produces cash flow and they don't 402 00:18:56,480 --> 00:18:59,359 Speaker 1: have to groom the dogs. And so it's your job 403 00:18:59,480 --> 00:19:02,239 Speaker 1: before you want to sell it, to be able to 404 00:19:02,320 --> 00:19:05,560 Speaker 1: ascend these five levels of exit. It doesn't mean you 405 00:19:05,720 --> 00:19:08,239 Speaker 1: have to do this, but it means you have to 406 00:19:08,280 --> 00:19:10,600 Speaker 1: be able to do it. The business has to be 407 00:19:10,720 --> 00:19:14,880 Speaker 1: exit a bowl. If the business cannot run without you, 408 00:19:15,119 --> 00:19:18,000 Speaker 1: it's just a job, and no one will buy your job. 409 00:19:18,040 --> 00:19:19,800 Speaker 1: They don't want your job. They can go start their 410 00:19:19,800 --> 00:19:22,400 Speaker 1: own job. And so you need to do this if 411 00:19:22,400 --> 00:19:24,760 Speaker 1: you want to get top dollar, if you want to 412 00:19:24,760 --> 00:19:27,440 Speaker 1: compete in the massive amount of rush of businesses that 413 00:19:27,480 --> 00:19:30,280 Speaker 1: will be sold, you have to do this. Likewise, if 414 00:19:30,320 --> 00:19:33,440 Speaker 1: you want to buy one of these businesses, you might 415 00:19:33,560 --> 00:19:36,280 Speaker 1: be buying one for very cheap because they don't have 416 00:19:36,400 --> 00:19:39,280 Speaker 1: these five levels. But you could very quickly go and 417 00:19:39,359 --> 00:19:41,359 Speaker 1: build all these in now. Depending on the business and 418 00:19:41,359 --> 00:19:42,760 Speaker 1: how big it is and one industry it's in, and 419 00:19:42,760 --> 00:19:44,480 Speaker 1: how many moving parts it is, it might take you 420 00:19:44,520 --> 00:19:45,639 Speaker 1: twelve months to get through these. 421 00:19:45,640 --> 00:19:47,359 Speaker 2: It might take you eighteen months. There's a lot of 422 00:19:47,440 --> 00:19:49,760 Speaker 2: variable factors within this, all. 423 00:19:49,720 --> 00:19:52,720 Speaker 1: Right, So we went through. Exit number one was exiting 424 00:19:52,760 --> 00:19:55,439 Speaker 1: the worker bee, exiting the technician role and moving to 425 00:19:55,440 --> 00:19:58,080 Speaker 1: become a manager where now instead of doing the job, 426 00:19:58,160 --> 00:20:02,040 Speaker 1: you're now delegating the job, right, not relegated, not just 427 00:20:02,119 --> 00:20:04,520 Speaker 1: hand it over, but delegate it. Given a well document 428 00:20:04,600 --> 00:20:07,359 Speaker 1: system they can follow. Exit number two is to exit 429 00:20:07,400 --> 00:20:10,840 Speaker 1: from the manager where you're actively managing the staff, to 430 00:20:10,920 --> 00:20:15,240 Speaker 1: move into the CEO role. The CEO role is now visionary. 431 00:20:15,280 --> 00:20:18,040 Speaker 1: They're the ones that are building the vision, the culture, 432 00:20:18,320 --> 00:20:22,720 Speaker 1: they're building the business partnerships, the development the partnerships. Now 433 00:20:22,760 --> 00:20:25,880 Speaker 1: you've moved that. Exit number three then is where we're 434 00:20:25,920 --> 00:20:28,960 Speaker 1: at right now. And now this is where we want 435 00:20:29,000 --> 00:20:31,919 Speaker 1: to go from being the CEO who's responsible for setting 436 00:20:31,920 --> 00:20:34,119 Speaker 1: the culture, and the CEO is responsible for building the 437 00:20:34,200 --> 00:20:36,560 Speaker 1: vision and setting up the partnerships, and we want to 438 00:20:36,600 --> 00:20:38,520 Speaker 1: exit that. And ultimately what we want to do is 439 00:20:38,520 --> 00:20:41,680 Speaker 1: we want to exit the organizational chart altogether. You see 440 00:20:41,680 --> 00:20:44,159 Speaker 1: in an organizational chart, the CEO typically sets it at 441 00:20:44,200 --> 00:20:46,320 Speaker 1: the top. You have the other executives there, you know, 442 00:20:46,400 --> 00:20:50,080 Speaker 1: chief operations offered, chief, chief marketing officer, etc. And then 443 00:20:50,080 --> 00:20:52,000 Speaker 1: below that you have all the other people. And in 444 00:20:52,080 --> 00:20:55,720 Speaker 1: order to get to exit number three, we want to 445 00:20:55,760 --> 00:20:58,199 Speaker 1: exit the ORG chart completely and we want to go 446 00:20:58,240 --> 00:21:01,800 Speaker 1: from being a CEO to a board member. All right, 447 00:21:01,920 --> 00:21:04,919 Speaker 1: So a business should have a board, a board of advisors. 448 00:21:05,160 --> 00:21:07,760 Speaker 1: Even small businesses, you should still have a group of 449 00:21:07,760 --> 00:21:11,199 Speaker 1: advisors that you can bounce stuff off to. And so, 450 00:21:12,000 --> 00:21:15,359 Speaker 1: as you probably know or you might be aware, a 451 00:21:15,400 --> 00:21:18,600 Speaker 1: board member doesn't work at the company. They're not at 452 00:21:18,640 --> 00:21:22,320 Speaker 1: the business every day. They don't actively have any role. 453 00:21:22,240 --> 00:21:23,440 Speaker 2: Or job that they do. 454 00:21:23,960 --> 00:21:28,159 Speaker 1: Instead, they just advise. They get together potentially a monthly 455 00:21:28,240 --> 00:21:31,960 Speaker 1: sometimes quarterly, they hear what's going on and they offer 456 00:21:32,000 --> 00:21:34,679 Speaker 1: their input and that's all. So to exit the ORC 457 00:21:34,800 --> 00:21:36,600 Speaker 1: chart completely, you'd be moving from the CEO who's at 458 00:21:36,640 --> 00:21:38,359 Speaker 1: the top of the orch chard and sort of the 459 00:21:38,440 --> 00:21:40,960 Speaker 1: buck stopping there and move to the board. Now at 460 00:21:40,960 --> 00:21:44,520 Speaker 1: this point, instead of step number one X, number one 461 00:21:44,560 --> 00:21:47,040 Speaker 1: was working in the business. Then you went to a 462 00:21:47,080 --> 00:21:50,160 Speaker 1: manager and you were working on the business. And now 463 00:21:50,200 --> 00:21:53,720 Speaker 1: going from CEO to board, you're now working above the business, 464 00:21:54,359 --> 00:21:58,720 Speaker 1: not in it, not on it, but above it. Now 465 00:21:58,760 --> 00:22:00,600 Speaker 1: the difference of being above it is. It allows you 466 00:22:00,680 --> 00:22:04,399 Speaker 1: to sort of get that high level, zoomed out look. 467 00:22:05,280 --> 00:22:07,520 Speaker 1: You can draw on your years of experience, you can 468 00:22:07,560 --> 00:22:09,200 Speaker 1: look at what other people are doing, and you can 469 00:22:09,240 --> 00:22:13,679 Speaker 1: advise the business. Now, this is not an operator. Okay, 470 00:22:13,880 --> 00:22:15,680 Speaker 1: this is not an operator. You're not operating anything. You're 471 00:22:15,720 --> 00:22:20,840 Speaker 1: not managing anyone. No one's reporting to you. You don't 472 00:22:20,880 --> 00:22:23,480 Speaker 1: have a job to do. You should be able to 473 00:22:23,520 --> 00:22:25,360 Speaker 1: be gone for months. 474 00:22:25,040 --> 00:22:25,560 Speaker 2: At a time. 475 00:22:25,640 --> 00:22:29,960 Speaker 1: Now again, right, they maybe meet monthly, maybe meet quarterly. 476 00:22:30,000 --> 00:22:32,000 Speaker 1: You should be able to go months without being there 477 00:22:32,080 --> 00:22:34,919 Speaker 1: because you don't have a job. You don't have a 478 00:22:35,040 --> 00:22:38,440 Speaker 1: role to play. Your role to play is the chief visionary. 479 00:22:38,640 --> 00:22:42,960 Speaker 1: If you will chief visionary, here's where I think things 480 00:22:43,000 --> 00:22:45,560 Speaker 1: could go. Here's how I think you could do things. 481 00:22:45,760 --> 00:22:49,159 Speaker 1: Why don't you try these couple variables, run these tests, 482 00:22:49,280 --> 00:22:52,480 Speaker 1: things like that. Chief visionary, But you're not actively doing 483 00:22:52,520 --> 00:22:56,720 Speaker 1: anything in the business. Doesn't that sound fun? Now again, 484 00:22:56,840 --> 00:22:58,879 Speaker 1: most of us could achieve this role. Now if your 485 00:22:58,920 --> 00:23:03,720 Speaker 1: business doesn't have the revenue to afford that today, your 486 00:23:03,720 --> 00:23:06,000 Speaker 1: goal is obviously to get it there. You see, when 487 00:23:06,040 --> 00:23:07,840 Speaker 1: you can go from exit number one to X number two, 488 00:23:07,920 --> 00:23:09,879 Speaker 1: to go from the line to the manager. Now you 489 00:23:09,920 --> 00:23:12,640 Speaker 1: can start to manage the marketing team. You can start 490 00:23:12,680 --> 00:23:16,480 Speaker 1: to manage the sales team. If I'm busy under a 491 00:23:16,480 --> 00:23:18,480 Speaker 1: hood fixing cars all day, at grooming dogs all day, 492 00:23:18,520 --> 00:23:20,960 Speaker 1: I don't have time to deal with sales and marketing. 493 00:23:21,200 --> 00:23:23,800 Speaker 1: Sales and marketing is what grows a business. But as 494 00:23:23,880 --> 00:23:26,720 Speaker 1: I move to the manager, I can now manage the 495 00:23:26,760 --> 00:23:29,000 Speaker 1: sales and marketing team and we could grow the business. 496 00:23:29,400 --> 00:23:31,639 Speaker 1: By growing the business, you should grow the revenues and 497 00:23:31,640 --> 00:23:33,200 Speaker 1: the profits, which then allows me to move to the 498 00:23:33,200 --> 00:23:35,600 Speaker 1: next stage, which is the CEO, which now means I 499 00:23:35,600 --> 00:23:39,200 Speaker 1: can do partnerships and acquisitions. I could grow the business 500 00:23:39,320 --> 00:23:42,320 Speaker 1: even more. You see, if you're in the technician role, 501 00:23:42,800 --> 00:23:44,280 Speaker 1: people don't want to buy your business because they don't 502 00:23:44,280 --> 00:23:46,120 Speaker 1: want to buy your job, and it doesn't have enough 503 00:23:46,160 --> 00:23:51,000 Speaker 1: profit either. If the business can't if I cann't buy 504 00:23:51,040 --> 00:23:55,040 Speaker 1: your business and afford to hire somebody to come in 505 00:23:55,080 --> 00:23:57,879 Speaker 1: and run it, it doesn't do me any good and 506 00:23:57,920 --> 00:23:59,960 Speaker 1: it doesn't do you any good. You know, there's a saying. 507 00:24:00,040 --> 00:24:03,080 Speaker 1: It says that you either sell your business or you 508 00:24:03,160 --> 00:24:03,520 Speaker 1: buy it. 509 00:24:05,000 --> 00:24:05,520 Speaker 2: Think about that. 510 00:24:05,600 --> 00:24:07,159 Speaker 1: You either sell your business or you buy it. So 511 00:24:07,600 --> 00:24:10,119 Speaker 1: if every day if you're not selling it, you're buying it. 512 00:24:10,160 --> 00:24:13,480 Speaker 1: You're committing to stay there. And how much are you worth? 513 00:24:13,520 --> 00:24:15,280 Speaker 1: How much do you want to get paid? Again, I 514 00:24:15,280 --> 00:24:17,200 Speaker 1: wouldn't buy a business unless I could afford to put 515 00:24:17,200 --> 00:24:20,120 Speaker 1: somebody there. And so your role, your job is to 516 00:24:20,160 --> 00:24:22,119 Speaker 1: get your business to that role, and you're going to 517 00:24:22,200 --> 00:24:24,119 Speaker 1: have to make that hard switch. Exit number one probably 518 00:24:24,119 --> 00:24:27,280 Speaker 1: the hardest exit, to go from the technician to the manager, 519 00:24:27,400 --> 00:24:29,280 Speaker 1: so you could really start to grow. 520 00:24:29,040 --> 00:24:31,359 Speaker 2: The business and drive the revenue. All right. 521 00:24:31,480 --> 00:24:34,040 Speaker 1: So then we've gone from the line to the manager, manager, 522 00:24:34,080 --> 00:24:37,359 Speaker 1: to the CEO, CEO to the board and now exit 523 00:24:37,440 --> 00:24:41,080 Speaker 1: number four. Exit number four is now exiting the board 524 00:24:41,800 --> 00:24:45,600 Speaker 1: and becoming an investor. Now you could potentially be the 525 00:24:45,640 --> 00:24:47,960 Speaker 1: board and the CEO at the same time. These lines 526 00:24:48,000 --> 00:24:51,159 Speaker 1: get a little bit blurred here. Or you can just 527 00:24:51,280 --> 00:24:53,679 Speaker 1: exit the board and you can just be an investor. 528 00:24:54,000 --> 00:24:59,040 Speaker 1: And what am I talking about there? I own investments 529 00:24:59,080 --> 00:25:02,040 Speaker 1: into lots of business. I mean technically, if we own 530 00:25:02,080 --> 00:25:04,280 Speaker 1: stock and equities, we own a part of a business. 531 00:25:04,280 --> 00:25:06,560 Speaker 1: We're an investor in the business. Obviously, if we own 532 00:25:06,680 --> 00:25:08,040 Speaker 1: just a couple of shares of Apple, we have no 533 00:25:08,080 --> 00:25:10,639 Speaker 1: say in the business. But we can be an investor 534 00:25:10,640 --> 00:25:12,080 Speaker 1: in the business and we have no job, we have 535 00:25:12,119 --> 00:25:14,560 Speaker 1: no role. We don't even have to advise them like 536 00:25:14,600 --> 00:25:17,280 Speaker 1: we would if we were on the board. Instead, we're 537 00:25:17,320 --> 00:25:21,120 Speaker 1: just an investor. Now, if you have sold a business, 538 00:25:21,119 --> 00:25:22,680 Speaker 1: a lot of times you get put you know, you've 539 00:25:22,680 --> 00:25:24,720 Speaker 1: gone through these exits. You've gone from the manager of 540 00:25:24,760 --> 00:25:28,200 Speaker 1: the CEO, and now you've exited. You've sold the business. 541 00:25:28,240 --> 00:25:30,600 Speaker 1: But typically what happens if your business gets bought up 542 00:25:30,600 --> 00:25:33,119 Speaker 1: by like a private equity, is that they're not going 543 00:25:33,200 --> 00:25:36,000 Speaker 1: to cast you out one hundred percent. When I when 544 00:25:36,040 --> 00:25:38,840 Speaker 1: I had my first exit, they wanted me to stay 545 00:25:38,880 --> 00:25:41,640 Speaker 1: on for two years to help them with the transition. 546 00:25:41,760 --> 00:25:43,399 Speaker 1: And for me, that was like a deal killer. I 547 00:25:43,400 --> 00:25:45,480 Speaker 1: was like, no, I'm not going to do that. I'm 548 00:25:45,520 --> 00:25:48,639 Speaker 1: an entrepreneur. I don't work for people. Why am I 549 00:25:48,680 --> 00:25:50,119 Speaker 1: going to go work for someone. I want to go 550 00:25:50,119 --> 00:25:53,040 Speaker 1: start another business. And so at first I was like, 551 00:25:53,040 --> 00:25:55,359 Speaker 1: that's a deal killer. I'm out, Like that ain't happening, 552 00:25:55,400 --> 00:25:59,240 Speaker 1: I ain't working for nobody. As we got further through 553 00:25:59,280 --> 00:26:02,840 Speaker 1: the process, I realized why it was important, why it 554 00:26:02,960 --> 00:26:05,680 Speaker 1: was basically a deal killer, and then I decided, you know, 555 00:26:05,760 --> 00:26:08,000 Speaker 1: I'll take this as learn opportunity and I'll just learn 556 00:26:08,080 --> 00:26:08,360 Speaker 1: what I. 557 00:26:08,280 --> 00:26:08,760 Speaker 2: Can from this. 558 00:26:09,720 --> 00:26:13,240 Speaker 1: But I had to work, and so during this time, 559 00:26:13,359 --> 00:26:16,320 Speaker 1: typically like what I had to do, I didn't get 560 00:26:16,359 --> 00:26:20,600 Speaker 1: all my money upfront. I got a chunk of money upfront, 561 00:26:20,600 --> 00:26:22,520 Speaker 1: and the rest was riding in the business. And so 562 00:26:22,560 --> 00:26:24,760 Speaker 1: I was invested into the business. If the business did 563 00:26:24,760 --> 00:26:28,320 Speaker 1: really good, I could make even more money, right because 564 00:26:28,320 --> 00:26:30,000 Speaker 1: they only bought part of it, if I stay on 565 00:26:30,040 --> 00:26:33,520 Speaker 1: as an investor, and so that would be the next 566 00:26:34,080 --> 00:26:39,760 Speaker 1: stage to be. And then finally there's exit ownership, exit 567 00:26:39,880 --> 00:26:41,720 Speaker 1: investment at all. And this is where so let's say 568 00:26:41,720 --> 00:26:44,160 Speaker 1: that they give me, you know, thirty percent down, they 569 00:26:44,240 --> 00:26:46,600 Speaker 1: financed the rest. Over twenty four months, I helped them 570 00:26:46,640 --> 00:26:49,159 Speaker 1: continue to grow the business, and then they cash me 571 00:26:49,240 --> 00:26:53,159 Speaker 1: out and I can walk away. I now have exited ownership. 572 00:26:53,160 --> 00:26:55,800 Speaker 1: That's the fifth level of exit. I no longer am 573 00:26:55,840 --> 00:26:58,720 Speaker 1: involved in any facet of the business. I have absolutely 574 00:26:58,760 --> 00:27:01,600 Speaker 1: no say not say, I have no board, I don't 575 00:27:01,640 --> 00:27:04,760 Speaker 1: have any money involved. I'm not an investor. I have nothing, 576 00:27:05,960 --> 00:27:08,120 Speaker 1: and I have no cares. I don't care anymore. I'm 577 00:27:08,119 --> 00:27:10,080 Speaker 1: completely gone, and now I can move on to the 578 00:27:10,119 --> 00:27:12,160 Speaker 1: next stage in my life. So those are the five 579 00:27:12,359 --> 00:27:13,240 Speaker 1: levels of exit. 580 00:27:13,480 --> 00:27:15,040 Speaker 2: Now how do we do that? 581 00:27:15,040 --> 00:27:17,239 Speaker 1: That's exactly what I talk next. If you're just tuned in, 582 00:27:17,240 --> 00:27:18,920 Speaker 1: you're listening to the Mark Maus Show. We're always talking 583 00:27:18,920 --> 00:27:21,880 Speaker 1: about the intersection of politics, finance and technology. Today we're 584 00:27:21,920 --> 00:27:23,920 Speaker 1: going down a little bit of a different path, talking 585 00:27:23,920 --> 00:27:27,720 Speaker 1: about the largest wealth transfer in history. So I'll be 586 00:27:27,760 --> 00:27:30,280 Speaker 1: back with more. Tell you exactly how to advance through 587 00:27:30,280 --> 00:27:32,040 Speaker 1: these five stages in the shortest amount of time. You 588 00:27:32,080 --> 00:27:33,240 Speaker 1: don't want to miss it. Don't go away. 589 00:27:33,320 --> 00:27:33,960 Speaker 2: I'll be her back. 590 00:27:34,600 --> 00:27:36,120 Speaker 1: All right, Welcome back. If you're just tune in, you're 591 00:27:36,119 --> 00:27:38,600 Speaker 1: listening to the Mark mass Show. Going down a little 592 00:27:38,640 --> 00:27:40,520 Speaker 1: bit of a different path today, we're talking about the 593 00:27:40,560 --> 00:27:43,960 Speaker 1: greatest wealth transfer in history. That's coming. Tens of trillions 594 00:27:44,000 --> 00:27:45,960 Speaker 1: of dollars is going to be changing hands, and I 595 00:27:46,040 --> 00:27:47,679 Speaker 1: want to help you get your hands on some of that. 596 00:27:48,200 --> 00:27:50,960 Speaker 1: If you own a business and you want to participate, 597 00:27:51,040 --> 00:27:53,720 Speaker 1: then this is for you. Or if you're thinking about buying. 598 00:27:53,400 --> 00:27:55,760 Speaker 2: One of these businesses, then this is for you as well. 599 00:27:55,840 --> 00:27:59,440 Speaker 1: Now we ran through the five exits, and I want 600 00:27:59,440 --> 00:28:02,520 Speaker 1: to tell you now how to actually do it now 601 00:28:02,600 --> 00:28:04,840 Speaker 1: real quick, just to recap these If you just tune in. 602 00:28:05,000 --> 00:28:08,160 Speaker 1: The first stage is most people in small businesses they're 603 00:28:08,200 --> 00:28:10,800 Speaker 1: small business owners. They're self employed, meaning they don't own 604 00:28:10,800 --> 00:28:11,160 Speaker 1: a business. 605 00:28:11,160 --> 00:28:11,840 Speaker 2: They own a job. 606 00:28:12,200 --> 00:28:14,359 Speaker 1: They're groom and dogs or fixing cars or bacon bread, 607 00:28:14,920 --> 00:28:17,480 Speaker 1: but they're in the business doing that work. So the 608 00:28:17,560 --> 00:28:19,439 Speaker 1: first exit is to exit the line and go from 609 00:28:19,480 --> 00:28:22,760 Speaker 1: a worker to a manager. Exit number two is to 610 00:28:22,800 --> 00:28:25,000 Speaker 1: exit the staff completely, and now instead of being a 611 00:28:25,040 --> 00:28:27,199 Speaker 1: manager that has to manage people, I move from the 612 00:28:27,240 --> 00:28:30,320 Speaker 1: manager to become a CEO. The third level is to 613 00:28:30,440 --> 00:28:33,119 Speaker 1: exit the org chart organizational chart completely and to go 614 00:28:33,200 --> 00:28:35,199 Speaker 1: from the CEO to a board member. 615 00:28:35,400 --> 00:28:37,240 Speaker 2: So now you have no job, no role to do. 616 00:28:37,920 --> 00:28:40,200 Speaker 1: The fourth exit is to go from a board member 617 00:28:40,240 --> 00:28:42,400 Speaker 1: where you still have a little bit of advisory role 618 00:28:42,560 --> 00:28:44,600 Speaker 1: to just be an investor. I just have some money 619 00:28:44,600 --> 00:28:47,040 Speaker 1: in it, but I don't really care. And then finally 620 00:28:47,040 --> 00:28:49,400 Speaker 1: the fifth exit completely is I have all my money out, 621 00:28:49,400 --> 00:28:52,280 Speaker 1: no longer involvement, no investment, no say, and I have 622 00:28:52,360 --> 00:28:55,920 Speaker 1: no care what happens next. All right, now, like I said, 623 00:28:55,960 --> 00:28:56,800 Speaker 1: easier said than done. 624 00:28:56,800 --> 00:28:57,760 Speaker 2: So how do we do it? 625 00:28:57,920 --> 00:29:02,000 Speaker 1: How do we do it? Well? It all starts with planning, 626 00:29:02,200 --> 00:29:04,680 Speaker 1: like all things in life. So we have an idea, 627 00:29:05,120 --> 00:29:08,040 Speaker 1: we think about it, we commit to that idea, and 628 00:29:08,080 --> 00:29:10,240 Speaker 1: then we have to plan to execute on that idea. 629 00:29:10,280 --> 00:29:13,240 Speaker 1: So how do we plan this out? Well, the best 630 00:29:13,240 --> 00:29:15,080 Speaker 1: way to do any type of planning is to start 631 00:29:15,120 --> 00:29:18,840 Speaker 1: with the end in mind? What is it that we want? 632 00:29:19,080 --> 00:29:19,320 Speaker 2: Now? 633 00:29:19,480 --> 00:29:21,200 Speaker 1: You have this dog room business, you have this car, 634 00:29:21,880 --> 00:29:24,640 Speaker 1: car repair business, etc. What is it that you ultimately 635 00:29:24,680 --> 00:29:27,600 Speaker 1: want with this business? I mean, do you want to 636 00:29:27,720 --> 00:29:29,800 Speaker 1: just work on cars to the day that you die 637 00:29:30,080 --> 00:29:32,200 Speaker 1: most likely not? Do you want to grow it? Do 638 00:29:32,200 --> 00:29:33,400 Speaker 1: you want it to be small? Do you want to 639 00:29:33,400 --> 00:29:35,360 Speaker 1: pass it to your kids your grandkids? Do you want 640 00:29:35,400 --> 00:29:36,760 Speaker 1: to sell it? So you have to start with the 641 00:29:36,800 --> 00:29:38,760 Speaker 1: end in mind. So that's where we always start. What 642 00:29:38,880 --> 00:29:40,960 Speaker 1: is the goal that you want to achieve? Most people 643 00:29:41,000 --> 00:29:42,720 Speaker 1: have never got to that level. Henry Ford said that 644 00:29:42,960 --> 00:29:45,400 Speaker 1: thinking is such hard work. That's why so few people 645 00:29:45,480 --> 00:29:48,080 Speaker 1: do it, and so most of us just don't take 646 00:29:48,080 --> 00:29:49,760 Speaker 1: the time to sit and think about this. We don't 647 00:29:49,800 --> 00:29:52,200 Speaker 1: think about the end in mind. So what is it 648 00:29:52,240 --> 00:29:56,560 Speaker 1: that you want? What level of exit do you want 649 00:29:56,560 --> 00:29:57,240 Speaker 1: to plan for? 650 00:29:57,720 --> 00:29:57,960 Speaker 2: Now? 651 00:29:58,880 --> 00:30:02,760 Speaker 1: You might have massive of enjoyment from grooming dogs, you 652 00:30:02,840 --> 00:30:05,760 Speaker 1: might have great enjoyment from fixing cars. And so you 653 00:30:05,840 --> 00:30:08,680 Speaker 1: might say, hey, I think this is cool, but like, 654 00:30:09,000 --> 00:30:11,360 Speaker 1: I don't really want to be on the board. I'd 655 00:30:11,400 --> 00:30:14,720 Speaker 1: like to just keep fixing cars. Well, there's nothing wrong 656 00:30:14,760 --> 00:30:18,160 Speaker 1: with that. You can still keep that role in your 657 00:30:18,240 --> 00:30:21,480 Speaker 1: organizational chart. But your business is still going to need 658 00:30:21,520 --> 00:30:24,840 Speaker 1: to grow that way if you ever plan to get 659 00:30:24,840 --> 00:30:27,120 Speaker 1: any money for it. All right, So you need to 660 00:30:27,120 --> 00:30:29,200 Speaker 1: think about the end in mind. Okay, I want my 661 00:30:29,280 --> 00:30:30,920 Speaker 1: company to be able to run without me. I want 662 00:30:30,920 --> 00:30:32,120 Speaker 1: to be able to sell it one day so I 663 00:30:32,120 --> 00:30:35,800 Speaker 1: can retire, but I like to sit in this role. Great, Okay, 664 00:30:35,840 --> 00:30:37,520 Speaker 1: we'll just think about that. What is the end that 665 00:30:37,560 --> 00:30:39,840 Speaker 1: you want to achieve and what level of exit do 666 00:30:39,880 --> 00:30:42,240 Speaker 1: you want? Okay, so that's where it starts. The next 667 00:30:42,240 --> 00:30:45,120 Speaker 1: thing is we have to get our financial house in order, 668 00:30:45,240 --> 00:30:47,360 Speaker 1: and this is where most small business owners have completely 669 00:30:47,440 --> 00:30:52,760 Speaker 1: neglected this. They don't understand the financial data. And of course, 670 00:30:52,800 --> 00:30:55,320 Speaker 1: to grow from a technician where I'm just grooming dogs 671 00:30:55,320 --> 00:30:57,720 Speaker 1: and fixing cars to go to a business that can 672 00:30:57,800 --> 00:31:00,719 Speaker 1: have a CEO and a board and people to do 673 00:31:00,760 --> 00:31:03,960 Speaker 1: all the work, it's a completely different business and it 674 00:31:04,040 --> 00:31:06,440 Speaker 1: takes more money. I need more money, and I need 675 00:31:06,440 --> 00:31:09,240 Speaker 1: to manage that money better in order to get those people. 676 00:31:10,120 --> 00:31:12,480 Speaker 1: And so it starts with getting your financial house in order. 677 00:31:12,480 --> 00:31:15,920 Speaker 1: And really there's three big reports that everybody needs to 678 00:31:15,920 --> 00:31:18,479 Speaker 1: focus on, and most people aren't doing this. So what 679 00:31:18,480 --> 00:31:20,640 Speaker 1: are the three reports? The first one is one that 680 00:31:20,720 --> 00:31:22,680 Speaker 1: you maybe be looking at. It's called a p and 681 00:31:22,760 --> 00:31:25,040 Speaker 1: L a profit and loss statement p and L, and 682 00:31:25,080 --> 00:31:27,800 Speaker 1: it shows the profit and loss on the monthly, quarterly, 683 00:31:27,840 --> 00:31:29,600 Speaker 1: annual basis, and then you should be able to compare 684 00:31:29,640 --> 00:31:33,440 Speaker 1: them against previous quarters, previous years. Now, this is sort 685 00:31:33,480 --> 00:31:36,280 Speaker 1: of the base report that, like I said, some people know, 686 00:31:36,560 --> 00:31:38,719 Speaker 1: and in my opinion, you should be looking at this 687 00:31:38,760 --> 00:31:42,880 Speaker 1: report every single month. And I look at it every 688 00:31:42,920 --> 00:31:46,280 Speaker 1: single week because I want to understand how this is 689 00:31:46,280 --> 00:31:49,520 Speaker 1: working on a weekly basis. That's the profit and loss. 690 00:31:49,520 --> 00:31:52,240 Speaker 1: That's the first report. The second report then is going 691 00:31:52,320 --> 00:31:55,680 Speaker 1: to be the balance sheet. This shows everything that This 692 00:31:55,720 --> 00:31:57,720 Speaker 1: shows the value of the business. It shows everything the 693 00:31:57,760 --> 00:32:01,239 Speaker 1: business owns and everything the business. So I add up 694 00:32:01,280 --> 00:32:04,160 Speaker 1: all my assets. So I have a building, I have equipment, 695 00:32:04,640 --> 00:32:07,480 Speaker 1: I have inventory, I have cash in the bank, I 696 00:32:07,480 --> 00:32:09,880 Speaker 1: have investments in other businesses, et cetera. I add up 697 00:32:09,920 --> 00:32:12,920 Speaker 1: all the asset values to those and then I deduct 698 00:32:13,000 --> 00:32:15,600 Speaker 1: all the liabilities. Well, I have a loan against the office, 699 00:32:15,680 --> 00:32:17,680 Speaker 1: I have a loan against the equipment, I have a lease, 700 00:32:17,760 --> 00:32:20,840 Speaker 1: kind of things like that. At the end, assets minus 701 00:32:20,920 --> 00:32:23,520 Speaker 1: liabilities gives you your total balance or your net worth. 702 00:32:23,560 --> 00:32:26,520 Speaker 1: You want to understand that because that's what's going to 703 00:32:26,560 --> 00:32:28,840 Speaker 1: determine what your valuation is, or one of the key 704 00:32:28,880 --> 00:32:31,480 Speaker 1: determinations of what your valuation will be if you want 705 00:32:31,480 --> 00:32:34,360 Speaker 1: to sell the business. So, if you're selling a business, 706 00:32:34,560 --> 00:32:36,520 Speaker 1: your goal is to or hopefully should be a goal, 707 00:32:36,560 --> 00:32:38,080 Speaker 1: to sell it for the most amount that you can. 708 00:32:38,520 --> 00:32:40,600 Speaker 1: And that's the number that you need to manage too. Look, 709 00:32:40,600 --> 00:32:42,120 Speaker 1: it's measure gets managed. You need to. 710 00:32:42,040 --> 00:32:44,640 Speaker 2: Measure that number. Manage to that number. Okay. 711 00:32:44,680 --> 00:32:48,200 Speaker 1: The third report that most people are not looking at 712 00:32:48,200 --> 00:32:51,400 Speaker 1: all but might actually be the most important one is 713 00:32:51,520 --> 00:32:54,920 Speaker 1: the statement of cash flows. So one tells you how 714 00:32:55,000 --> 00:32:56,880 Speaker 1: much profit and how much loss you've had. One tells 715 00:32:56,880 --> 00:32:59,040 Speaker 1: you how much your worth, what your balance sheet is. 716 00:32:59,240 --> 00:33:01,680 Speaker 1: But the statement of cash flows tells you where your 717 00:33:01,760 --> 00:33:04,600 Speaker 1: money's going. How many times have you got to the 718 00:33:04,680 --> 00:33:05,960 Speaker 1: end of the month and wondered, where the heck did 719 00:33:06,000 --> 00:33:08,040 Speaker 1: all my money go? Well, the statement of cash flows 720 00:33:08,040 --> 00:33:09,080 Speaker 1: holds that secret. 721 00:33:09,640 --> 00:33:09,880 Speaker 2: Now. 722 00:33:09,960 --> 00:33:11,959 Speaker 1: Of course, some of it is done through proper planning. 723 00:33:12,040 --> 00:33:13,720 Speaker 1: You can either get to the end of the month 724 00:33:13,760 --> 00:33:15,880 Speaker 1: and wonder where your time went or where your money went. 725 00:33:16,000 --> 00:33:17,959 Speaker 1: Time management is like money management, or you can make 726 00:33:17,960 --> 00:33:20,280 Speaker 1: a plan for in advance. But of course there's always 727 00:33:20,320 --> 00:33:22,120 Speaker 1: surprises that come up throughout the month, which is why 728 00:33:22,120 --> 00:33:24,640 Speaker 1: we need to run the reports. We need to sit down, 729 00:33:24,640 --> 00:33:26,880 Speaker 1: we need to reflect and optimize that. But the statement 730 00:33:26,920 --> 00:33:30,360 Speaker 1: of cash flows unlocks that for you. Okay, then once 731 00:33:30,400 --> 00:33:33,760 Speaker 1: you have that, we need to now set pro formas 732 00:33:34,240 --> 00:33:36,960 Speaker 1: Typically for small businesses, I like what's called a thirteen 733 00:33:37,080 --> 00:33:40,760 Speaker 1: week cash flow study, and so thirteen weeks is just 734 00:33:40,800 --> 00:33:43,520 Speaker 1: pasted a quarter. Twelve weeks will be a quarter about 735 00:33:43,520 --> 00:33:47,640 Speaker 1: a quarter, and it projects out where will be where 736 00:33:47,640 --> 00:33:49,600 Speaker 1: our cash flow will be over the next thirteen weeks. 737 00:33:49,600 --> 00:33:51,760 Speaker 1: So if you want to scale your marketing to grow 738 00:33:51,760 --> 00:33:53,120 Speaker 1: your business, can I afford that? 739 00:33:53,800 --> 00:33:55,000 Speaker 2: The thirteen week cash flow will. 740 00:33:54,880 --> 00:33:57,560 Speaker 1: Tell you I need to hire a new manager so 741 00:33:57,640 --> 00:34:00,240 Speaker 1: I can exit and move to the CEO role. Forward 742 00:34:00,280 --> 00:34:04,120 Speaker 1: that when can I can I afford it? When can 743 00:34:04,160 --> 00:34:06,280 Speaker 1: I afford it? Can't? I can't afford it now, but 744 00:34:06,320 --> 00:34:08,120 Speaker 1: in six weeks I can In nine weeks and twelve 745 00:34:08,160 --> 00:34:11,480 Speaker 1: weeks I can. So I need the three for the 746 00:34:11,520 --> 00:34:14,239 Speaker 1: three reports, and then I need to make the thirteen 747 00:34:14,320 --> 00:34:15,920 Speaker 1: week cashlow. Now, if you just go on to Google 748 00:34:16,640 --> 00:34:19,160 Speaker 1: and type thirteen week cash flow, you can find templates 749 00:34:19,400 --> 00:34:20,440 Speaker 1: spreadsheets to help. 750 00:34:20,320 --> 00:34:21,200 Speaker 2: You do this all. Right. 751 00:34:21,960 --> 00:34:24,920 Speaker 1: Then once I have that, then I can make the 752 00:34:25,000 --> 00:34:26,400 Speaker 1: financial scaling plan. 753 00:34:26,800 --> 00:34:27,040 Speaker 2: Right. 754 00:34:27,160 --> 00:34:30,000 Speaker 1: The financial scaling plan is what will allow me to 755 00:34:30,239 --> 00:34:33,319 Speaker 1: build this plan out where. Like I said, here's where 756 00:34:33,320 --> 00:34:36,040 Speaker 1: I'm going to hire these key people, Here's where I'm 757 00:34:36,040 --> 00:34:39,280 Speaker 1: going to launch this promotion. Here is where I'll buy 758 00:34:39,320 --> 00:34:41,560 Speaker 1: this new piece of equipment that's going to make me 759 00:34:41,600 --> 00:34:43,520 Speaker 1: a bunch of money. And so now I have this 760 00:34:43,600 --> 00:34:45,160 Speaker 1: sort of plan of when to grow. 761 00:34:45,200 --> 00:34:45,359 Speaker 2: Now. 762 00:34:45,400 --> 00:34:47,760 Speaker 1: I don't know if you're like me, but I get impatient. 763 00:34:47,840 --> 00:34:49,239 Speaker 1: You know, when I decide I want something, I want 764 00:34:49,239 --> 00:34:51,200 Speaker 1: to grow, something, I want to add, add a new line, whatever, 765 00:34:51,200 --> 00:34:53,000 Speaker 1: I want to launch something, I get impatient. I want 766 00:34:53,040 --> 00:34:55,759 Speaker 1: it right now. What helps me to not be so 767 00:34:55,880 --> 00:34:58,920 Speaker 1: impatient is when I put it down and I know 768 00:34:59,120 --> 00:34:59,960 Speaker 1: when it is that I'm going. 769 00:34:59,920 --> 00:35:00,560 Speaker 2: To to start it. 770 00:35:00,800 --> 00:35:02,239 Speaker 1: If I know that I'm not going to start it now, 771 00:35:02,239 --> 00:35:04,240 Speaker 1: I'm going to start it in one hundred and twenty 772 00:35:04,320 --> 00:35:06,760 Speaker 1: days from now. I can sort of feel at ease 773 00:35:06,800 --> 00:35:09,240 Speaker 1: with that. Okay, I can wait one hundred and twenty days. 774 00:35:09,840 --> 00:35:11,440 Speaker 1: But it's sort of like when you don't know what 775 00:35:11,480 --> 00:35:13,480 Speaker 1: it is that it bothers you at least bothers me. 776 00:35:13,520 --> 00:35:15,480 Speaker 1: And so that that financial plan, that scaling plan helps you. 777 00:35:15,520 --> 00:35:18,239 Speaker 1: And then finally, with the end in mind, are we 778 00:35:18,239 --> 00:35:19,160 Speaker 1: building this to sell? 779 00:35:19,200 --> 00:35:19,359 Speaker 2: Now? 780 00:35:19,360 --> 00:35:21,040 Speaker 1: Again, you either sell your business or you buy it, 781 00:35:21,120 --> 00:35:22,959 Speaker 1: so you should always be building your business to sell. 782 00:35:23,000 --> 00:35:25,680 Speaker 1: But are you building it to sell? And specifically with 783 00:35:25,800 --> 00:35:28,920 Speaker 1: your finances, how are you running your books? Are you 784 00:35:29,000 --> 00:35:31,320 Speaker 1: running them on a cruel basis or a cash basis? 785 00:35:31,520 --> 00:35:34,480 Speaker 1: Are you segregating costs properly? Are you running it like 786 00:35:34,480 --> 00:35:36,480 Speaker 1: a bank account where you're pulling all your profit out 787 00:35:36,520 --> 00:35:40,200 Speaker 1: for yourself personally? Are you categorizing that properly? Because if 788 00:35:40,239 --> 00:35:42,120 Speaker 1: you want to go sell your business, they want to 789 00:35:42,120 --> 00:35:44,640 Speaker 1: see the most amount of profit. Obviously, you're getting a 790 00:35:44,719 --> 00:35:46,799 Speaker 1: multiple on your profit, and so you want your profit 791 00:35:46,840 --> 00:35:48,520 Speaker 1: to be as high as possible, So you need to 792 00:35:48,520 --> 00:35:52,200 Speaker 1: make sure that you're optimizing your finances preparing for that sell. 793 00:35:52,719 --> 00:35:54,279 Speaker 1: I've got a couple more things I'm probably not kind 794 00:35:54,280 --> 00:35:55,719 Speaker 1: of run out of time. But one of the key 795 00:35:55,760 --> 00:35:59,320 Speaker 1: pieces of moving through these five exits is a mental shift. 796 00:35:59,400 --> 00:36:01,319 Speaker 1: And it's a shift. There's a book written about it 797 00:36:01,320 --> 00:36:02,359 Speaker 1: called who Not How? 798 00:36:03,080 --> 00:36:03,439 Speaker 2: All Right? 799 00:36:03,680 --> 00:36:08,040 Speaker 1: Entrepreneurs focus on how how do I get this done? 800 00:36:08,239 --> 00:36:10,440 Speaker 1: How do I grow my marketing, how do I get 801 00:36:10,480 --> 00:36:12,799 Speaker 1: more customers? How do I exit to the next level? 802 00:36:12,920 --> 00:36:15,319 Speaker 1: Entrepreneurs focus on how. But what founders do is they 803 00:36:15,360 --> 00:36:19,160 Speaker 1: focus on who Who can I get to do the marketing? 804 00:36:19,800 --> 00:36:22,600 Speaker 1: Who can I get to manage this business? Not how 805 00:36:22,640 --> 00:36:25,200 Speaker 1: do I do it? But who do I need? And 806 00:36:25,280 --> 00:36:28,640 Speaker 1: so attracting good people is the key that unlocks all this. 807 00:36:28,760 --> 00:36:29,480 Speaker 2: How do you do that? 808 00:36:29,719 --> 00:36:32,840 Speaker 1: Well? It starts by setting a compelling vision, a clear 809 00:36:33,560 --> 00:36:35,120 Speaker 1: picture of who it is and what it is that 810 00:36:35,160 --> 00:36:37,440 Speaker 1: you're looking to have them do, and people will be 811 00:36:37,560 --> 00:36:40,680 Speaker 1: drawn to that. In addition, we need to have systems 812 00:36:40,719 --> 00:36:43,200 Speaker 1: in place that optimize all this because at the end 813 00:36:43,200 --> 00:36:45,440 Speaker 1: of the day, somebody wants to buy your business that 814 00:36:45,480 --> 00:36:48,480 Speaker 1: can run without you, and you need systems to do this. Now, 815 00:36:48,520 --> 00:36:49,920 Speaker 1: if you're just tuning in, you're listening to the Mark 816 00:36:49,960 --> 00:36:52,040 Speaker 1: maw Show talking about the greatest wealth transfer in history 817 00:36:52,040 --> 00:36:53,800 Speaker 1: and how we can be a part of it talking 818 00:36:53,800 --> 00:36:56,120 Speaker 1: about business, something I don't typically talk about it. What 819 00:36:56,120 --> 00:36:58,160 Speaker 1: did you think about today? I'd love to hear from you. 820 00:36:58,160 --> 00:36:59,919 Speaker 1: To hit me up on social media at one Mark Moss, 821 00:37:00,120 --> 00:37:01,840 Speaker 1: leave me a comment on the podcast. I'd love to 822 00:37:01,880 --> 00:37:04,400 Speaker 1: hear from you as well. If you'd like more business 823 00:37:04,600 --> 00:37:07,680 Speaker 1: finance topics like this, let me know we'll do more 824 00:37:07,680 --> 00:37:09,120 Speaker 1: of them. But this is a big deal. 825 00:37:09,000 --> 00:37:10,480 Speaker 2: That you needed to be aware of, you need to 826 00:37:10,520 --> 00:37:11,200 Speaker 2: take advantage of. 827 00:37:11,680 --> 00:37:13,919 Speaker 1: So that's what I got today. Thanks so much for listening. 828 00:37:14,000 --> 00:37:14,640 Speaker 1: Until next time,