Making your business more profitable and exiting rich is easier said than done. Today’s guest is Michelle Seiler Tucker, the Founder and CEO of Seiler Tucker Inc., and she is joining Merrill Chandler to share her 6 ‘P’ Methods that will help you sell your business for a huge profit: people, product, process, proprietary, patrons, and profits. When you build your business on these 6 P’s, you’re well on your way to exiting rich. Michelle also cautions you from committing the same mistakes she has seen many people do in the past…so that you can save yourself from losses and lawsuits! Don’t miss this wisdom-filled conversation with Michelle and Merrill.
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6 Things Every Entrepreneur Needs To Make Their Business More Profitable With Michelle Seiler Tucker
How To Exit Rich
I have been knocking your socks off with some powerhouses of entrepreneur excellence! We’re going to blow your minds. In this episode, I’ve got Michelle Seiler-Tucker. If you have not heard her name yet, you will. We will be talking about turning your hobby into a business and creating an amazing exit value!
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I’ve got an episode for you. I would like to introduce you to my benefactor. How many times have I told you about the Board of Advisors that I spent a week per-quarter getting downloads from brilliant individuals who are far better at running a business than I’ve ever been? They’re teaching me how to prepare my business for an amazing exit. And our guest Michelle is a genius at not just creating value in a business, but showing you how to exit. And that’s not all. She’s been featured in Inc, Forbes, USA Magazine, Fox Business News, and CNBC.
She has shared the stage with Eric Trump, Kathy Ireland, Rudy Giuliani, Donna Karan, Steve Wozniak, and Zuckerberg. She is able to do these types of things because she brings a powerful and unique view of how to create value in people’s lives and monetize it so that you can either have an amazing business. We’re also going to discuss her book Exit Rich.
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Michelle, how are you?
I’m good, Merrill! How are you?
Fantastic!
Congratulations on getting the first advance copy of Exit Rich.
Today we’ll be talking about how to get your own copy, but this is on deck for me. This is the next book I’m reading because I won a contest. She only had three advance copies…and I got one of them, so thank you! We’re going to give you information about how she can create more value for you if you’re interested in becoming a professional business person and not just a professional entrepreneur, fix and flipper, note buyer, etc. Michelle, give us a little bit about how you got into this position where hundreds of thousands of people are waiting for your next book.
The funny thing…is that I already have the next book written! Writing is the easy part. Publishing and marketing is the more difficult part for me. But when I think about how I got to where I am today…I’ve always been interested in both entrepreneurship and writing. Even as a little girl, I would walk around with notebooks and ask questions to complete strangers about who they are, what they do, how they do it, etc.
My mom always thought that I was going to be the next Barbara Walters. I’ve always been a people-person, and writing is definitely my passion. I write poems, lyrics, and books. And when it comes to entrepreneurship, I’m like a kid in a candy store. I can’t wait to find out how somebody built a multi-million dollar company from their kitchen table, garage, etc.
I’ve always been interested in entrepreneurship. I did work in Corporate America. Xerox recruited me, and after only six months of working there, I was nicknamed “The Closer” because every time somebody wasn’t able to close a deal, they would call me to do it. Soon after, my supervisor told me that I should interview for the regional vice president position! She wanted me to go for it, even though I had only been there for six months, while the other interviewees had been there for years.
I doubted myself, but she still urged me to complete the three-month process of it because of the experience. So I met with all of the high-level executives and completed presentations, demonstrations, Q&As, etc. And after all…I ended up getting it, even though they tell me I never would!
You were the young buck on the block, but all of a sudden, you leapfrogged over all of the other applicants!
I sure did! It was against Xerox’s policy to promote somebody who’s been there for under two years…so of course, all of my friends at Xerox ended up hating me because of the fact that I got it nonetheless. I moved up into corporate management, which I actually hated. No corporation should take their number one salesperson—who they nicknamed “The Closer”—and promote them into upper management. Even though I liked the management and leadership, I didn’t like it in Corporate America, because you can’t get anything done. I wasn’t meeting with my clients, solving problems, and finding solutions. I was just stuck in meetings all day long. I end up leaving Xerox and going into franchise sales, development, and consulting.
I ended up doing hundreds of franchises for multiple franchisors, and the client’s kept asking me, “Do you have an existing business?” They didn’t want to buy a franchise, since franchising is not for everyone. This is when I realized that I wanted to start selling a company! So I started my mergers and acquisitions firm. At first, I started selling smaller businesses…but then quickly, I started selling businesses of $10 million and up!
I learned that what Steve Forbes says is true. Forbes endorsed my book, Exit Rich. He says 8 out of 10 businesses don’t sell, and it’s true. That’s when I started transitioning into fixing businesses. I’ve owned many different businesses along the way, and several other businesses that I’m building to sell!
So there’s a formula! You’re saying that 8 out of 10 businesses don’t sell, so that leaves a huge market for you, as a company fixer, to come in and make them sellable, available, and attractive for purchase!
That’s what I started specializing in! I put them on a Build-To-Sell plan. We specialize in buying, selling, fixing, and growing. I buy businesses and flip them. I’ve partnered with business owners…investing my money, time, energy, effort, resources, and expertise. Sometimes, I’ll bring other partners in too. In conclusion…that’s my journey!
Stop being transactional and start becoming transformational. Click To TweetFixing and flipping anything probably has some standard features you have to do no matter what…whether it is houses, cars, businesses, and so on. Just like making an older home fancy and shiny again, fixing and flipping a business has to have some of the same tasks to accomplish to make it sellable.
It’s all the same infrastructure! First, you have to look at the reasons why 80% of businesses aren’t selling. When researching for my first book (Sell Your Business for More Than It’s Worth) in 2013, I learned that 95% of startups go out of business within the first 1-5 years.
When I wrote Exit Rich in 2019 and 2020, I did the exact same research. But the business landscape has flipped-flopped. It’s only 30% of startups that are at risk, and, out of the 27.6 million companies, those who have been in business for ten years or more, 70% will go out of business. You hear about the public companies like Toys “R” Us, who after 75 years of success, randomly go out of business. Other examples include: JCPenney, K-Mart, Stein Mart, Pier 1, Godiva Chocolate, etc. It doesn’t matter what the industry is. The infrastructure, and the way that we look at and fix businesses, is the same.
Give us an example just like that. For the people who are trying to stay in business, some of them have made a business out of the real estate or their vocation. Some of them are still hobbyists, and they don’t know how to make it a real business. What do they need to know in order to have the best chance at staying in business and knowing when to pivot, etc.?
First and foremost, they need to build a solid infrastructure. I call this infrastructure “The 6 P’s.” More specifically, the 6 P’s to sell your business for huge profits! They are the same no matter what industry you’re dealing with. The cylinders are all the same.
People
The very first thing you should know…is that you aren’t necessarily building a business. You’re building people, and those people build the business. There are usually two issues why businesses are not sellable. The first is because business owners never think about planning their exit. They never think about selling their business, until a catastrophic event has occurred. It could be health issues, partner disputes, divorce, death, and now, Covid.
I have a perfect example for you. When you’re trying to sell your business during a catastrophic event, your numbers are typically going down and your business is not going to be worth very much. Many of those business owners are unfortunately selling for pennies on the dollar, or even worse…bankruptcy. The best time to sell your business is when your business is in its prime! Of course, nobody wants to sell their business while it is booming…but that’s the best time.
This is why you should follow the GPS EXIT Model. Once you build the EXIT Model for your exit strategy, then you want to proceed to build the infrastructure and synergies that buyers are looking for. The second reason that businesses don’t sell is because the owner is the business. The owner has created a glorified job where they work for themself instead of working for someone else.
That’s the transition that I’ve been in since I joined BA, and got schooled by all of these badasses who have $10, $20, or $50 million companies. I prided myself on being a subject matter expert, but not being an awesome CEO. I didn’t know how to be in the business of being in a business! When you say it’s all about the leader, the cult of personality, I’m stuck with this mess until I create an infrastructure. I can’t do anything until somebody can preach it as well as I can.
Unfortunately, people don’t want to buy you. They want to buy your company, and they will run it without you. Entrepreneurs have to focus on their strengths and hire their weaknesses. You need to put the right people in the right spot. Merrill, you have to ask the ‘who’ question. Who opens the door? Who deals with clients? Who does the marketing? Who does the accounting? Who does the legal? Who deals with environmental? Who deals with manufacturing, transportation, logistics? Whatever it is, the point is that you should never be next to the who. Every entrepreneur should go home, write down every single task that has to be done in their company, and assign that to a person in their business. If your name is next to every task…you have got a lot of work to do!
Michelle, that is brilliant! Because in my coaching, one of my teammates at the Board of Advisors said, “You need to build out the exit version of your accountability chart of the end game and then you put in the title. It doesn’t matter if you have 30 vacancies or only 3…you have to make sure that you’re not that thing.” I relate to what you’re saying. You can be the CEO, but you have to be able to replace you as the CEO. Every other one of those slots has to have a different title and a different name. You guys…do the homework that Michelle is assigning! Go home and make the organization chart of everything that you do in your business. Here’s the clue: if your name is next to the who…you’ve got some work to do.
You want to make sure you have that layer of management. You’re not going to be able to sell a $5, $10 million, $20 million company unless you have that CFO and COO and all that layers of management. You want to make sure that you have your key people on noncompetes and employee handbooks, etc. It’s important.
Product
The second P, and another reason why a lot of businesses are not sellable…is product. Product is your industry and your service. You have to ask yourself if your product is on the way up or on the way out. Is it thriving or dying? Do you have an Amazon empire or a Blockbuster about to crumble?
A lot of industries that were once thriving before COVID are dying and vice versa. Just because you have a Blockbuster and your industry is a bust, that doesn’t mean that you call it quits. That means that you need to align yourself with an expert! Somebody who can see a different perspective that you’re not noticing because when you’re in the middle of your fog, it’s foggy. You need somebody to consider blind spots and ask these three transformational questions. This is extremely important. Even Amazon did this back in the 1990s. Ask yourself what business you are in. Merrill, if I asked you what business McDonald’s is in, what would you say?
I know the trick answer. They’re in the hamburger business!
Actually, they’re not! McDonald’s is in the real estate business. McDonald’s is the largest real estate holder in the world. Did you ever watch the movie The Founder, which is based on the McDonald Brothers and the Ray Kroc story?
No, I have not.
Watch that movie!
Exit Rich: The 6 P Method To Sell Your Business For Huge Profit
Okay guys, that’s your other homework… watch The Founder on Netflix.
I want to give you all so much homework!
I was told offline that The Founder is a brilliant movie. One of my team members said that it’s awesome.
It’s an incredible movie because the McDonald Brothers started a McDonald’s restaurant back in the 1940s when they had Sonic-type drive-ups. And they also never perfected a concept back then, so the orders were always wrong, the food was always cold, and it always took so long. But the brothers said, “We’re going to start a fast-food restaurant, but we’re going to create it around the customer’s experience.” This is important. “We want the customers to receive great-tasting food that’s hot in two minutes or less.”
Then, Ray Kroc came in, took over McDonald’s, and started franchising it because the McDonald Brothers had only a few locations that didn’t work out, so they didn’t think it was a good idea. This is why Ray Kroc started franchising. He was in the bank one day trying to borrow more money because he was upside down as he took out a loan on his house. He was trying to get more money because the franchisees weren’t paying him. The banker informed him that he had already extended, and he wasn’t going to lend him any more money. But when Kroc walked out of the bank…another gentleman followed him.
The man said, “I’m sorry. I overheard your conversation. Can I ask you a few questions?” After Kroc said yes, the man asked him what business he is in. Kroc informed the man that he was in the hamburger and restaurant business. The man proceeded to say, “No, that’s not the business you’re in. What business are you in?” When Kroc said he was confused, the man explained, “You need to be in the real estate business. You need to buy a land, build the buildings, set up your separate corporation (McDonald’s Realty), and then you lease it to the franchisees. When franchisees are not compliant and they’re not paying their bills, then you void their contract and you get another franchisee in there.” You should ask yourself the same two questions the man at the bank asked ray Kroc. What business are you in? What business should you be in? Ray Kroc had so much leverage, because he owned all of the real estate that he was able to take away from the McDonald Brothers. McDonald’s is still the largest real estate holding company in the world. They’re in a real estate business, not a restaurant business.
Exactly! You have ultimate leverage when you own the land upon which the restaurant is built, manufactured, and constructed.
Amazon did this in the 1990s. They asked themselves, “What business are we in?” And then would say, “We’re in a bookselling business.” Then ask, “What do we do well better than anyone else? We do fulfillment better than anyone else.” They then said, “What business should we be in?” They figured out that they should be in the fulfillment business, selling everybody’s products instead of just books. Those three questions transformed Amazon into the multibillion-dollar worldwide conglomerate that they are today. Everyone needs to ask themselves those questions. You have to stop being transactional and start becoming transformational.
See why she’s here? This is golden knowledge!
You have to pivot in a product. There’s another P for you! You’ve got to do something different. The reason that 70% of businesses are crumbling is because they stopped AIM. AIM is “Always Innovate and Market.” Business owners get complacent. They’re married to their concepts and their ideas. They keep doing things the way they’ve always done them…but that isn’t how you stay in business. That is what happened to Blockbuster. They saw the writing on the wall with Netflix, and had the opportunity to buy it. But instead, sat back happily and did nothing. You have to be innovative now more than ever before, because the companies that make it easiest for their consumers to purchase products is a company that’s going to win. Amazon is winning because they make it so easy for you to do business with them!
Processes
The third P is for processes, which are like an exit strategy. Most business owners don’t think about an exit strategy or processes until something bad happens in their company. We’re working with a manufacturing company where one of the workers had a catastrophic event on the manufacturing floor, and the owner says, “We need a process for that.” But you need the process even before that happens! Every business owner should design processes from the beginning. Back to the story of McDonald’s, and designing your processes with your customer experience in mind. McDonald’s knew that they wanted the food to taste great and come out hot in two minutes or less.
McDonald’s never said that the food would have good quality, or that it would be organic and healthy. They designed the process around the customer experience in mind. When you watch the movie, you’ll see that they took all their employees to an empty tennis court and drew out the processes. They did this all day long until they figured out who’s going to take the customer’s orders, toast the buns, cook the burgers, put the pickles on the buns, and give it to the client. Have you ever dealt with a company where the processes are not designed with the customer experience in mind, but instead designed to irritate and infuriate you?
The point you’re making is not that they intentionally do it, but that they do it to take care of the people offering the service and not the client who’s buying the service. I totally get it.
They are designing processes to serve their agenda, not their clients. Some perfect examples of that, without naming any names, are a lot of social media companies and retailers. Number one: your processes should always be designed with the customer experience in mind. Number two: it needs to be productive and efficient. Otherwise, it’s going to cost you money. It needs to be well-documented in the SLP checklist, standard operating procedure checklist, operating manuals, and your employees need to be well trained on all of it.
Are you guys getting this? I don’t promote anything unless I’m eyeball deep and drinking the Kool-Aid. She is on my podcast because the relationship we developed while we were a BA is extremely target-rich information. That’s why I’m telling you to take notes, or come back while you can, because it is so important to set these up and make sure that you have your people, products, and processes in play. It’s only the first three. Thank you, Michelle! We’re only halfway there, but you’re outlining the things that we need to do and make sure that we’ve got this dialed in!
Proprietary
Thank you again for having me, Merrill! Now, the fourth P is proprietary, the highest value driver. Most businesses are evaluated on either a small percentage of revenues, or on a multiple of EBITDA. EBITDA is Earnings Before Interest, Taxes, Depreciation, and Amortization. Companies under $1 million in EBITDA are typically under a five multiple. Companies over $1 million in EBITDA are over a five multiple. When you start building this fourth P, which is proprietary assets, that’s when I can take your company to 6, 7, 8, 9, or even 10 multiple.
Proprietary is a number one value driver, and there are six pillars to it…so I’ll go through them quickly. The most important is branding. The more well-branded you and your business are, the more I can sell your company for…as long as your brand is relevant in the minds of the consumers. Does anybody want to pay any money for Blockbuster? No. Your brand has to be relevant. Trademarks are another thing that the buyers will pay money for. Trademark your company name, slogans, and logos. I’ve trademarked Exit Rich. Your podcast name should be trademarked as well.
Here’s a mistake that business owners make. They go in and start up a business in Texas, California, New York, or wherever, and get a state trademark. But they never checked the federal database to make sure that name is available. I’ve seen it happen time and time again with business owners operating for several years. I would receive a cease and desist letter because somebody else has that company. It has a federal trademark on that name.
Get an expert, a mentor, or somebody who's been down that same road. Click To TweetYou want to make sure you spend $1,500 or $2,000 and protect those trademarks. We’re selling a company in the $50 million to $60 million range and have a lot of products, and our products are at retail grocery stores. They have trademark products and somebody’s grocery stores have exclusivity on that trademark product. A trademark is extremely valuable. If you have anything you’ve invented, make sure you have a patent on it. Do you ever watch Shark Tank?
Yes.
All investors ask the same question: “Do you have a patent on that? Do you have a utility patent?” Get patents. We went to a soda company that wasn’t making that much money, but they had eighteen patents, and we sold it for $18 million…$1 million a patent.
This is so helpful. All of you aren’t real estate investors. We have entrepreneurs, but some of you have a hobby on the side of flipping houses. Whatever it is, make sure you are documenting everything and getting the patents, copyrights, and trademarks necessary to claim ownership…because they are insanely valuable!
Contracts are in fact extremely valuable. Manufacturing contracts, distribution contracts, vendor contracts, franchisor contracts that have franchisees, and anything that has exclusivity. The most valuable contracts of all are client contracts, because buyers want to buy businesses that are making money and have constant cashflow coming in. So contracts are huge. We talked to an HVAC company that we’re selling, and they have around 350 commercial contracts and 800 residential contracts.
They’re buying revenue stream.
Yes, if you can figure out a way to have reoccurring revenue in your business. This HVAC company does because they have maintenance agreements and/or subscription models…and that’s extremely valuable! There are five different types of buyers. Both strategics and competitors will pay a lot of money for these proprietary assets. Here’s a caveat with contracts that you must know. I’ve never met a business owner that has this in their contract…and I’ve been doing this for many, many years! You have to have the transferability clause in your contract so that it is transferable to the new entity.
In 99.9% of all sales, or asset sells, if your contracts won’t transfer and we can’t get the clients to agree to a sense of transfer, then the deal could fall apart! Why not be proactive and put this language in your contract from the beginning? Databases are huge, but are usually overlooked because most advisors don’t know how to value them. You have to look at your database and ask things like, “How many clients do you have in there? Can it be retargeted? Can it be repurposed?” Facebook pays $19 billion for WhatsApp. Guess how much money WhatsApp was making? They’re hemorrhaging money, but they had a synergy.
They had the install base!
They had a billion users, and Facebook knew that they could monetize that online. But it’s also about the synergies, because if you can build these synergies (even if you don’t have high EBITDA), we can get you millions for your company by identifying these synergies and bringing the right buyers that are willing to outbid everybody else and pay for them!
This is genius! I’ve already been sitting at the feet of the master for a while. We met in Q4. You didn’t say that in Q4, so I just have four more months of clients without transferability clauses in their agreements. If you’re a construction company, gym owner, or whoever, make sure that your contracts can be transferred because that way, it is a highly leverage-able and movable asset.
Do you know how many franchisors do not have the transferability clause in their franchise agreements? I once witnessed a transaction…I was not the broker or the advisor on it, but there was a franchisor that had a couple of thousand franchisees. They sold to a private equity group for millions. The private equity group hired a legal team to do the due diligence. Nobody checked the contracts or transferability, so they had a big hoopla party to introduce themselves to all the franchisees. The franchisees didn’t like them, so they didn’t transfer. Only two people—out of thousands—transferred over and it ended up falling bankruptcy and suing a legal team. It was a mess, and this all proves that transferability is huge!
The last aspect of proprietary that I want to discuss is what I call IP real estate. IP real estate is this intangible stuff that you can get to build the value of your company. Number one is celebrity endorsements. If you have a skincare line and Oprah Winfrey has endorsed you, strategics and competitors will pay a tremendous amount of money for celebrity endorsements because they want to get their products in front of Oprah. If you are one of the big radio shows and you have a diet company, they’re only going to promote one diet company.
Prime real estate is hard to get on TV, some commercial space, and especially on the radio. For all my eCommerce clients, positioning as everything. When you can get within the top three spots of Wayfair, Etsy, or Amazon for your particular niche product, that is gold! Competitors and strategics are paying for these synergies. Build your synergies and you will build your value.
I don’t care if anybody else reads this episode…I’m all in! Holy hell, we have 70,000 downloads but I don’t care if it’s full. Michelle, this is awesome! I love what you’re saying.
Patrons
Thank you so much! The fifth P is for Patrons, which is your client base. I’m going to tell you right now that most businesses follow the 80/20 rule…meaning that 80% of the revenue comes from 20% of their clients. Most business owners have what is called customer concentration, or what I like to call…the kiss of death. We were once selling a media advertising business, that was in a $10 million range, and they had talented media people! They also service casinos, so they only have five players…because of the fact that they have five of the largest casinos. But here’s the problem. They lost 2 of the 5 casinos when we were trying to sell them, which cut overhead in half.
This shows that customer concentration is a big problem…but it doesn’t mean we can’t sell the business with customer concentration. What it does means that we have to search for that needle in the haystack and find the right buyer! We sold a manufacturing business that had a couple of patents and we appraised in the $9.8 million range and had light at $2 million in EBITDA. We have 550 buyers in this business and we had 12 LOIs. The owner had an issue because they had customer concentration as 65% of their revenues which were tied up in the BP contracts. That usually scares most of my buyers.
But I found that one needle in the haystack, and that buyer was a strategic that has some more products and services. He loves the fact that this owner had customer concentration, because he’d been trying to get in front of BP for years with their own products and services. They wanted to outbid everybody else. For a business that was appraised for $9.8 million, they paid $15 million for 70% of the company, which is 126% more than what the value was!
How To Exit Rich: You don’t build a business; you build people, and people build the business.
You found, as you say, the needle in the haystack…the perfect marriage of the buyer who wanted access to BP.
That’s what valuations are all about. People ask me all the time, “Michelle, how do you evaluate a business?” Valuations aren’t more than a science, but the key to valuations is identifying the synergies that businesses have and identifying the buyers who are willing to pay top dollar for those synergies, because it puts their business to the next level. Looking at that buyer and their business and seeing how they can take advantage of economy, scales, and maybe even cut cost, because they might not need that distribution center since they have distribution all over the country. They can double the EBITDA from day one and close it on the business. Value is what a buyer is willing to pay for what it means to that buyer.
We’re not calling them customers. Instead, they’re patrons. Raving fans to use somebody else’s language. Somebody who buys almost everything you offer. They’re like, “I know this is good. I want it.”
Profits
The final P is the most important for all entrepreneurs…profits. It’s the reason why we are all in this game. The reason I put it last is because the lack of profits is never the problem…they’re always just a symptom of not operating on one of the other five P’s. Clients come to me all the time and say, “Michelle, I have a profit problem.” And I respond with, “No, you have a people problem. You have a process problem.”
This is intuitive! I totally get it.
Those are your 6 P’s. They are the infrastructure. You build your business on a simple structure, and then proceed to build a sustainable, scalable business that—when you’re ready—will be sellable. Most businesses never run on all 6 P’s, even businesses that were selling in the $50-$60 million range. I have one business that doesn’t even have all of the policies, procedure manuals, and financials together. Financials are a disaster!
This is brilliant because I totally get what you’re saying about profits being a function of success in all the other five. Nobody is not-profitable. They’re only a socket of one or more of the other five P’s.
Most business owners only run on 2 or 3 of the 6 P’s because they don’t have the right people in the right places. As mentioned before, profits are never the problem…they’re a symptom of another problem. If you’re not profitable, you have to go back to 1 of these other 5 P’s.
I remember when the Colbert Report said, “This is the book. That’s the woman. Make sure you get yourself.” No joke. This has been a revelation and I’ve heard your presentations. As I thumb through this book, I notice that this is all laid out. It’s on deck. I’m finishing one book, and I am all over this because I want to do it right…because whether or not I exit, I want my company to be very valuable!
Yes, you want it to be profitable!
I like asking this to all of my guests. If there was one thing that you could tell someone who was making the leap from W-2—and I don’t care if they’re 19 or they’re 90—into becoming an entrepreneur, what is the core thing they always need to remember to be successful?
Other than reading Exit Rich?
Yes, after reading Exit Rich.
There are many things…but I would say the number one thing is getting an expert, a mentor, somebody who’s been down the same road you’re trying to travel. This is essential, because they will shorten your learning curve dramatically. Why not learn from somebody else’s mistake? Somebody else has already been there.
We’re going to start a book club and begin reading on Zoom together so that we can discuss these things. How do our listeners get a copy of Exit Rich besides googling Exit Rich?
I’m going to tell you exactly how to get a copy of Exit Rich! But first, I do want to tell you a couple of things about the book if that’s okay. Sharon Lechter is my co-author, so it’s important to mention her. Sharon Lechter was the co-author with Robert Kiyosaki in Rich Dad Poor Dad. She is a five times New York Times bestselling author! She also has written several books like Think and Grow Rich by Napoleon Hill Foundation. Plus, she’s a CPA. She’s a financial literacy expert and she’s been an advisor to many different presidents. Sharon Lechter writes and mentors corner after every one of my chapters, and her husband is an intellectual property attorney.
This book has been endorsed by Steve Forbes. Kevin Harrington (the original shark on Shark Tank) wrote the foreword, plus it has been endorsed by Jack Canfield, Brian Tracy, Tom Hopkins, Les Brown, etc. I just wanted to mention that. We are in the middle of pre-sells, so you can buy the book on Amazon! However, I encourage you to buy the book at ExitRichBook.com because the book is less expensive there for $24.79. We will also email you the digital download immediately so you can start reading it. When the book launches in June of 2021, you have 1 of 3 event copies!
No joke! I got one of the few when she was at BA. I don’t even remember how I got it. I just raised my hand and said, “Michelle, I need this book.” She had compassion on me seeing that I’m going to be a $500 million company in the next five years. She was like, “You! I’ll give it to you.”
Learn from somebody else's mistakes. Click To TweetGo to ExitRichBook.com for $24.79 and we’ll also email you a digital download. We’ll send a hardcopy to your doorstep when it comes out, but this is another valuable aspect: you will get a lifetime membership at Exit Rich book club, where there’s tons of video content featuring me discussing all of these different strategies and techniques. Even more important than that, all of the documents you need to run your business and sell your business are in the Exit Rich book club!
Am I part of that or do I need to buy another book?
You bought a book, so you’re in! All of these documents, employee handbooks, organizational charts, sample letters of intent, sample purchase agreements, sample due diligence requests, and purchase agreements are there…not only for you to review, but to download as well. If you went to an attorney to recreate all these documents, it will cost you over $25,000.
You guys, get this done! Again, that’s ExitRichBook.com.
Guess what else you get? A 30-day membership in Club CEOs, which is a mastermind that I started with like-minded entrepreneurs where we do the hot seats and Q&A’s to help entrepreneurs survive and thrive so they too can exit rich!
Thank you, Michelle, for being here. This is genius, especially for me. This was a massive win for my tribe and for me, personally. If someone is looking to sell a business, do you do business valuations?
We’ve done thousands of valuations!
That’s the level I’m looking at. Is there an email where we can send something and say, “I want to talk to you about business valuations?”
My main website is SeilerTucker.com. Also, you can text Michelle at (888) 526-5750. My websites, social media, and everything else will pop up there. My number is (504) 525-1717 in my office. So give us a call! This is the only show I’ve ever given my phone number on.
Thank you for that. Do you do valuations with a checklist?
Yes.
Is there a before and after? For example, if you say, “This is what you are now. Do these things and this is what you are likely to be then.”
Yes, and I call it the annual valuation checkup. One of the things I talk about is the GPS EXIT Model. I take my clients through what I call a GPS EXIT Model because most business owners fail the plan. They don’t plan the failure and they never think about their exit, so they have to do a catastrophic event. Everyone who starts a business or buys a business needs to have a plan. When you want to drive somewhere, you take out your phone, go to Google Maps, and what’s the first thing you plug in?
An address, or whatever your destination is.
Exactly! Business owners need a destination to drive their business to. Otherwise, they’re driving around aimlessly, up and down the financial hills…just to wind up nowhere. You need to figure out your destination, endgame, and desire sells price. Just pick a number. Let’s say you want to sell for $20 million. Maybe you hit it or maybe you don’t, but let’s still have a target. What does the GPS EXIT Model need to know? It needs to know where you’re starting from. It needs to know your current evaluation.
Here’s the deal, Merrill. This is what shocks me. We humans will go and get a physical checkup to make sure our health is in good condition. We drive our cars into the shop to get an annual checkup or tune-up to make sure our cars get serviced. But business owners never ever get an evaluation nor a checkup. I once met with a business owner who had been in business for 50 years and has never had his company evaluated. That is shocking to me.
How To Exit Rich: Entrepreneurs have to focus on their strengths and hire for their weaknesses.
Your business is your most valuable asset! We have to change the mindset of business owners. Stop treating your business like your baby, and start treating it like the asset that it is. Get that evaluation checkup every single year because there are events that happen that can increase and/or decrease your valuation. We do annual valuation checkups for our clients. Let’s say you want to sell for $20 million, and you’re currently worth $5 million. Now we at least have a start of a plan.
The next thing you need to know is the timeframe. When do you want to sell your business for $20 million? Let’s say fifteen years…now, you have a plan! “$20 million is my desired sales price and I’m worth $5 million now. I want to sell in fifteen years.” Now you need to know who your buyers are going to be. Buyers, not buyer. If you have only one buyer, you will never get massive value. You will never get the biggest value for your business. I want auctions and bidding wars. I want to create scarcity. I want some competition!
When figuring out who your buyers will be, you have to remember that there are five different types. Let me tell you who your buyers are not going to be. It’s not going to be a first-time buyer, because they don’t buy $20 million companies and 90% of buyers are first-time buyers. It’s not going to be a turnaround specialist because they buy distressed assets. It’s probably going to be a private equity group, a strategic/competitor, or a serial entrepreneur. Then you need to know, “What’s the financial requirements to sell my business for $20 million? What do the gross revenues have to be? Profit margins? Where does the EBITDA have to be to sell for $20 million?”
Your EBITDA is going to have to be between $3 million to $5 million, depending on your synergies. And then you need to find out, “The buyers that buy $20 million companies…what synergies are they looking for?” That’s how you build a business on the 6 P’s to suit their criteria. The last step in the GPS EXIT Model is the reason why. Why do you want to sell your business for $20 million? If you don’t have a strong enough why, you’ll never have stickability. You’re not motivated. If it was easy to sell a business for $20 million, everyone would be doing it! You’ve got to have a powerful reason that keeps you motivated, hungry, in the game, and weathering the financial storms. Your ‘why’ should be everything to you, and if you’re not hungry enough, you’re not going to do it…so get hungry!
Michelle, this is amazing! Thank you for pixie dusting on my tribe to give us a perspective that there is a game plan and a way. By purchasing the book, I love that we can get access to the planning, tools, paperwork, and assessment. Thank you.
Everything is at your fingertips!
This has been brilliant and amazing! I absolutely love the quality. I go back to BA because I’ve never been a joiner, but I was actually introduced.
If this were multi-level, Michelle would be in my up-line for bringing us into BA. She brought in Tracy Hazzard, who produces all of our shows. I’m her grand-baby when it comes to owning the value of your business, which is contributed by increasing the value of your own personal value. I’ve learned so much from my association there, and I have insanely soul-rich coaches. This is who I get to hang out with one week per-quarter and this is why I’m doing better at serving you and the rest of our tribe! Protecting you from the predatory lending that goes on out there and the ignorance that is replete everywhere through our financial markets. It is my pleasure to have you here with us, Michelle! Thank you for absolutely everything that you have shared with my tribe. We are all exiting richer as a result of it, and we’re so thankful!
You are more than welcome, Merrill…thank you for having me! It has been an absolute pleasure, and I’m looking forward to seeing you at BA!
Tribe, this is Merrill Chandler, your host of the Get Fundable Podcast. Thank you for joining me. I know you guys binge like mad people, so keep coming back for more because we will continue to knock it out of the park! You have a blessed morning, afternoon, or evening!
Important Links:
- Michelle Seiler-Tucker
- Exit Rich
- Sell Your Business for More Than It’s Worth
- 6 P’s
- GPS EXIT Model
- Board of Advisors
- Rich Dad Poor Dad
- Think and Grow Rich
- Club CEOs
- Tracy Hazzard
About Michelle Seiler-Tucker
Michelle Seiler Tucker is the Founder and CEO of Seiler Tucker Incorporated. As a 20-year veteran in mergers & acquisitions, Michelle and her firm has sold over a thousand companies in almost every vertical. She owns and operates several successful companies and holds the following professional designations and certifications: Merger & Acquisition Master Intermediary (M&AMI), Certified Senior Business Analyst (CSBA), Certified Mergers & Acquisitions Professional (CM&AP) Certified Business Broker (CBB), Panelist for M&A Source, Keynote Speaker. Michelle is also the Best-Selling Author of the book ”Sell Your Business for more than it’s Worth”, and her latest book “Exit Rich”is available now for purchase.Michelle Seiler Tucker’s remarkable track record proves her dedication to her clients and has solidified her as a formidable force in her industry. She closes nearly 98% of all written offers and, on average, obtains 20-40% above asking price for her clients. Through this process, she empowers her clients to afford the lifestyles they have always dreamed of and, most importantly, deserve!
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