Welcome to The BossLady Speaks, with host Coach Jo. This podcast lets you hear from thought leaders and change makers all across the world. Join us in the discovery of what makes a true leader– something that may help you to develop your own voice, your own leadership, and legacy.

My guest today, business analyst Michelle Seiler Tucker, is an expert at M&A’s and how to position companies for a sale. In this episode, we’re talking about her upcoming book, Exit Rich, her business secrets, and the 6 P’s in the book. Listen in and find out what they are!

Her super-power? Quickly distinguishing the strengths and weaknesses of a business and creating the appropriate plan for it.

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Business Analyst Michelle Seiler Tucker Talking About Her Upcoming Book ‘Exit Rich’

I have Michelle Seiler Tucker. She is a senior business analyst specializing in M&As and many other things that make businesses fly. Michelle, you’re coming up with your third book called Exit Rich. We’re going to talk about that in this episode because, in light of everything that’s been going on like the pandemic and people losing their businesses, it is a ballsy time to come out with this book. It comes out in January 2021 because you think, on one hand, people have lost hope, but in some ways, it’s this book to inspire new hope and beginnings. Tell us a little bit about the motivations for this book and why you’re releasing it now in January 2021.

I wrote Exit Rich in 2019. It was supposed to be released in April 2020, but because of COVID, I’m having to pivot like everybody else. That’s why we’re coming out in January 2021. The book is ready and available to read in digital format. It will be shipped to everybody’s doorstep in January 2021.

It was your own marketing timing. You decided not to wait. You’re going to go for it anyway.

I wrote it in 2019. We were supposed to publish in April 2020. We decided to stop publishing in April 2020 and come out in 2021 because of the pandemic. The reason I even wrote Exit Rich is that the business landscape has changed dramatically in the United States, even before COVID. Everybody thinks, “COVID is destroying businesses.” Small businesses were being destroyed way before COVID.

When I wrote my first book in 2013, Sell Your Business For More Than It’s Worth and I did the research back then, 85% to 95% of all startups in the first 1 to 5 years would fail, but when I wrote Exit Rich in 2019, I knew the business landscape had changed dramatically. Now it’s only 30% of startups would fail, but out of 27.6 million companies and businesses that have been in business for ten years or longer, 70% of those companies will go out of business.

Why is that?

The big reason is that companies stop innovating. In the US and all around the world, you hear about public companies going out of business like Toys “R” Us. That’s been in business for decades but went out of business. Kmart went out of business. Montgomery Ward, JCPenney, and a bunch of others ones are closing down but you never hear about the small private companies on every street corner. The reason they’re going out of business is that they stop what I call AIM.

AIM is Always Innovate and Market. Toys “R” Us has been in business for many years. They did nothing different. It’s the same thing with Blockbuster. They were huge and Netflix came in. Netflix even offered for Blockbuster to buy them and Blockbuster did nothing. They stayed fat and happy and now, they’re out of business.

Companies stop innovating. You always have to innovate because consumers’ buying habits have changed dramatically. The way that we do business now and purchase products and services is not the way we used to purchase products and services. You can think of Amazon for that. They made it very easy for consumers to practically buy anything and have it delivered in two days. You have to innovate to be able to compete. Walmart and Target are now innovative. If you don’t innovate, you are going to be out of business.

If you’re a small to medium size business and you’re not like the big five, what can we learn from your book?

You can learn a lot of things from my book. First of all, Steve Forbes says, “8 out of 10 companies don’t sell.” Steve Forbes endorsed my book, Exit Rich. You can learn how to plan your exit from day one of starting or buying a business because the biggest mistake business owners make is they don’t think about selling their business until they have to due to a catastrophic event.

I walk them through the Seiler Tucker GPS Exit Model and how to plan from the beginning. The other thing you can learn from my book is not just about selling your business. It’s about building a sustainable, scalable, and when you’re ready, sellable business. Most businesses are not sellable when the owner decides to sell. We talk about the 6 P strategy in my book. For every business I buy partner with or sell, I go through the 6 P process.

Can you divulge what the 6 Ps are?

Number 1) People. You can’t have a business without people. Some of these businesses are very difficult to sell like a dental practice. A dental practice has one dentist. Those patients have been going to that dentist for years. Nobody wants to go to a different dentist. If you take that dentist out of the practice, you have no business. It’s like a hairdresser. When we get used to our hairdresser, we don’t want to switch hairdressers.

You got to look at the business and make sure you have the right people in place. You have to make sure you have the right people in the right seats. You have to ask the who question, “Who in your business opens? Who in your business deals with client service issues? Who does manufacturing? Who deals with distribution? Who deals with logistics? Who does with environmental issues? Who deals with proprietary issues?” The list goes on and on. The clue or the key here has never put you next to the who because you want your business to be sustainable and run without you. The number one reason that most businesses are not sellable is that if you take the owner out of the business, there is no business.

You should make yourself replaceable.

You should work on the business, not in the business. Many business owners get stuck working in the business and not on it. You should work on it and grow the company, but the company has to be able to run without you. You never want to put your name next to who. You want to figure out who in your business does all of these things on a daily basis.

The second P is Product. You want to ask yourself, “Is your product or industry thriving or dying? Do you have an Amazon or Blockbuster?” If you have a Blockbuster, you need to start aligning yourself with an expert who can help you and ask yourself some transformational questions, “What business am I in? What do I do well? What business should we be in?” I’ll give you one quick example to illustrate that.

What business did Amazon start? Books. They asked themselves, “What business are we in? Books. What do we do well?” Amazon said, “We do fulfillment well better than anybody. What business should we be in? Fulfillment.” Those three questions are what made Amazon the multibillion-dollar conglomerate that it is. It is very important. You got to be on the way up. If you’re not, then you’re going to have to pivot, congruent revenue streams, maybe merge with another company or acquire another business. There are all kinds of different things you can do.

Exit Rich: You got to be on the way up. If you’re not, then you’re going to have to pivot.

The third P Is Processes. Processes are very important. Most owners don’t think about processes until they have to because something bad happened in their company. Processes should be designed with the customer experience in mind from the beginning. They should be efficient, productive, and well-documented. You need to make sure all the employees are trained on the processes. You’d be surprised we’re selling a $60 million company and they don’t have their policy and procedure manuals. Buyers will not buy a business without having all that documentation in place.

When you assess a business, do you always think of the business as being sellable? Even if someone says, “This is my baby. I want to have this my whole life,” do you still think of it in those terms?

Every owner should think of it in those terms even if they say, “This is my baby, I’ll never sell it,” because you never know what’s going to happen. A catastrophic event could occur. You could get diagnosed with COVID. That’s external. You got internal catastrophic events and external, plus you might get burned out or the business isn’t doing well and you’re losing money. You should always build a business to sell, even if you never plan on selling it because if you build it to sell, you’re going to have a much better business. You’re going to have a business that is functional, sustainable, scalable, and making money. It is profitable.

Do you think it’s possible to sell your black book? That’s an argument I hear from many people. In the example of the dentist’s office, “I will no longer be the dentist here, but you get access to my entire client list.” Do you think that works?

I don’t think it works in dental practice because the dentist is such personal. It’s somebody in your mouth. The only time that that works is let’s say you have a financial advisor practice, and they’re selling their list because that’s a little bit more transferable than a dentist practice. Sometimes there’s a competitor and the business is not doing very well so they might sell their list of clients to that competitor and that could work, but you’re not going to get maximum value for it. The way to get maximum value is to build a business based on all 6 Ps.

It depends on the industry.

Let’s say you’re selling a graphics company. They’ve been in business for decades and they have commercial accounts. That business is not doing very well and they want to sell off their client list. There might be a competitor that’s willing to buy that client list, but then at what value? You’re never going to get maximum value for that. It does depend on what industry, but these personalized industries like chiropractic, dentistry, MD practices, and interior decorators, those businesses are going to have a very tough time ever selling a list.

What you are saying sounds to me like It’s easier to sell a product-based business than a service-based business.

It’s not. You can sell a service-based business all day long as long as it’s not 1,000% dependent upon that owner. In any business, whether it’s a products business or a service business, if it’s 1,000% dependent upon that owner and you take that owner out of the business, you don’t have a business anymore.

Let’s get back to the book then. Let’s finish the Ps.

We get People, Product, Processes, and now we’re on Proprietary. Proprietary is the number one value driver. There are six pillars for proprietary. Number one on proprietary is branding. How well branded is your company because the bigger the brand, as long as it’s still relevant in the mind of the consumer, it’s going to be worth a lot of money. Apple is the biggest brand in the world with $389 billion. That’s without assets, inventory, cashflow, or anything else. Build your brand. Build your value.

Also, trademarks are worth a lot of money. One of the biggest mistakes that business owners make, I don’t know about Europe, but in the United States, is they’ll start their business. They’ll go get a trademark in their state, but they never check the government website to make sure that name is available on a federal basis.

There’s a difference there.

What happens is you’re in business, running your business, building your brand and value, and all of a sudden, years later, you get a cease and desist letter. Business owners will typically throw thousands of dollars at that trying to fight it, but they will always lose because they’re the ones who didn’t get the federal trademark. Whoever gets the federal trademark wins. It’s very important to spend $1,500 or $1,700 and get that federal trademark to protect your company name. Otherwise, you’re going to have to start all over again. You’re going to have to change the company name, and now that costs money to rebuild your brand.

The other thing that’s important is patents. We sold a company for $18 million. We had eighteen patents. We sold $1 million for a patent. Patents can bring a lot of money into your company. Also, contracts are very valuable. Manufacturing, distribution and any type of exclusive contracts, even franchise contracts, any contracts are valuable, especially client contracts. Client contracts bring in the most money because buyers know, “This business is sustainable because they have all these contracts of customer contracts.”

The problem in America is that most business owners never put the transferability clause in the contracts. The contracts are not transferable in the sale of the business and 99.9% of all sales are asset sales, not stock sales. Take the time to put that two-sentence transferability clause in all of your contracts so it transfers with the sale of the business.

Databases are big but typically overlooked and undervalued because most people don’t understand databases. If your database is like, “We have 28,000 buyers. We probably have the largest database in the industry.” As long as your database can be retargeted and repurposed, people will pay a lot of money for that. Facebook paid $19 billion for WhatsApp. WhatsApp was hemorrhaging money. They were losing money. They were blasted, but they had 1 billion users.

What are the other Ps?

You got two more. You got Patreons, which are your customer base. You got to make sure your customer base is diversified and you don’t have customer concentration. Also, if you’ve been in business for 20, 30, 40, or 50 years, you got to make sure your clients are not aging out. If they’re aging out, you need to replace them.

The last P is Profit. The reason I put profits last is that profit is never the problem. It’s always a symptom of not operating on 1 of the other 5 Ps. If you don’t have the right people in place, you’re going to lose money. If your product’s dying, you’re going to lose money. If you don’t have the processes in place and they’re not productive and not efficient, you’ll lose money. If you haven’t protected your IP, you’ll lose money. If you got customer concentration, you’ll lose money.

It’s great because it’s true. People want fame and riches, then they realize that that is a natural fallout of something. It’s not the goal. It’s a natural result of something you’ve done before then. Let me ask you a critical question here. How is your book Exit Rich different from Grant Cardone’s Sell Or Be Sold, How to Sell Your Way Through Life by Napoleon Hill, or even Good to Great by Jim Collins? What is the distinguishing factor?

Exit Rich: The 6 P Method to Sell Your Business for Huge Profit

The big difference is that Grant Cardone or any of those other authors have not spent twenty years in the trenches with thousands upon thousands of business owners buying, selling, fixing, and growing companies. My book is based on real experience with thousands of business owners. Plus, my co-author is Sharon Lechter who wrote Rich Dad Poor Dad with Robert Kiyosaki.

She’s been a seven-time New York Times bestselling author, plus she wrote several books like Think And Grow Rich by Napoleon Hill Foundation, plus she’s a CPA and a financial literacy expert. She’s been the advisor to President Obama and several other presidents. Her husband is an intellectual property attorney. You got three great minds from my county standpoint, an intellectual property attorney standpoint, and an M&A expert who’s been doing this for over twenty years. That’s a big difference.

If we could wave a magic wand here and everything went right, what would you like to see the effect of this book?

If I could wave a magic wand, Exit Rich would be on the New York Times best-sellers list, Wall Street Journal, and USA Today, making all of the best-sellers lists. It would get in the hands of the business owners who need it and who are maybe struggling now or before the pandemic and they need it they can help get their business back on track and they not only survive but thrive when this is all over.

We look forward to the release of the book. I can’t wait to read it.

The book is going to be available at Hudson, Books-A-Million, and all these bookstores. If you go to ExitRichBook.com, you can get the book less expensive than all the other retailers for $24.79. You will get the digital download immediately so you can start reading it. You will get a lifetime book membership where we have video training and you would go into deep dives about how to build a sustainable, scalable business. Even more importantly than that, we have digital downloads.

If you’ve never seen an employee handbook, contract, sample purchase agreement, sample letter of intent for your business, sample due diligence, or closing docs, they’re all there. Everything you need to build a scalable business to sell it is there. You can download it. We also get 30 days of free membership in Club CEOs, a group of entrepreneurs helping other entrepreneurs. We do Q&As and masterminds, and we ask those transformational questions to help you pivot and catapult your business to the next level. The book comes out in January 2021. We ship it to your doorstep.

Thank you much for the extremely informative time we had together. I wish you great luck with it. I’ve learned already a lot about what to do and not to do in our short interview. Readers, you’ve been learning from Michelle Seiler Tucker. She is the author of the book Exit Rich. It’s already downloadable. It’ll hit the stores on January 26, 2021. Michelle, it’s a pleasure having you. Thank you for being on the show.

Thank you for having me.

Important Links

• Exit Rich
• Seiler Tucker GPS Exit Model
• Sell Or Be Sold
• How to Sell Your Way Through Life
• Good to Great
• Rich Dad Poor Dad
• Think And Grow Rich
• Hudson – Exit Rich
• Books-A-Million – Exit Rich
• Club CEOs
• Megaphone.fm/AdChoices

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