InnovaBuzz #420 – I chat with Michelle Seiler Tucker, the Founder and CEO of Seiler Tucker Incorporated, and author of Exit Rich.
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Michelle Seiler Tucker, How To Prepare Your Business To Sell For Huge Profit
I’m excited to have on the show as my guest Michelle Seiler-Tucker, the Founder and CEO of Seiler Tucker Incorporated. Michelle holds the Mergers and Acquisitions Master Intermediary title, as well as the Certified Mergers and Acquisitions Professional and Certified Senior Business Analyst titles. Michelle also owns many other businesses in several different industries. As a veteran in the mergers and acquisitions industry, she’s regarded as the leading authority on buying, selling, fixing and growing businesses.
She and her firm have sold over 1,000 businesses in almost every vertical and have a remarkable track record of success. In our conversation, Michelle talked to me about why it is important to plan your exit strategy from the business from day one using her GPS model. We talked about her 6 Ps, People, Product, Process, Proprietary Assets, Patrons, and Profit. She explained her three magic questions based on what business we are in. Without further ado, let’s fly into the hive and get the buzz from Michelle Seiler Tucker.
I’m excited to have on the show all the way from New Orleans in the USA, Michelle Seiler Tucker, who is regarded as a leading authority on buying, selling, fixing and growing businesses. Michelle’s the bestselling author and she’s the host of the Exit Rich Podcast. Welcome to the show, Michelle. It’s a real privilege to have you here as my guest.
Thank you for having me. It’s a pleasure to be with you.
Your latest book Exit Rich, the same name as the podcast, provides lots of insights into building sustainable, scalable, and sellable businesses. It works through all the techniques that you’ve built over your many years in that field. Before we start talking about all things businesses, growing, building, and selling businesses, what is it that drives you? How does that shape what you do?
What drives me is entrepreneurship. I love business. I’m like a kid in a candy store. I love to find out how someone started a $50 million company out of their pickup truck, from their garage, or their kitchen table. I’m working with a client now whose business we’re going to sell for about $70 million he’s got an 8th-grade education but he started his business out of his pickup truck. They do about $75 million in revenues and about $12 million in EBITDA. Stuff like that gets me all fired up. I love ownership, business ownership, and business entrepreneurship. I just love everything business.
It’s the whole idea of building something from essentially nothing and growing it into something that has huge value.
That excites me. It does because it goes to show that, not just in America but in Australia too, the dream is alive and well. You can pretty much create your own destiny and write your own script and be whatever you want to be. I’ve got a few business owners that have grown in a huge wealth from starting from an idea, from a concept.
That’s fascinating. This is your second book, Exit Rich. Why did you write that book?
I wrote Exit Rich because lots of reasons. One of the biggest reasons is that when I wrote Sell Your Business For More Than It’s Worth in 2013 and did the research, I realized that the business landscape has changed dramatically. It used to be back in 2013, 2014, 2015 and 2016 that 95% of all startups will go out of business, and 1 to 5 years is the greatest risk.
However, when I wrote Exit Rich in 2019-2020, I realized that the business landscape has changed dramatically. This is before the pandemic. Now only 30% of startups will go out of business. However, out of 27.6 million companies, 70% of those businesses that have been around for ten years or longer are at risk of going out of business.
These business owners are exit poor. They’re selling for pennies on a dollar, closing their business, or even worse, filing bankruptcy. In America, when you file bankruptcy, you don’t just lose your business assets. You lose your personal assets too because most business owners pierce the corporate veil. You hear about big public companies all the time. I’m sure you hear about this in Australia. Toys “R” Us after 75 years goes out of business.
JCPenney is in trouble like Montgomery Ward and Sears. Stein Mart goes out of business. Pier 1 goes out of business. Gymboree goes out of business. Godiva, our favorite chocolate closes 1,500 locations. GNC’s closing down 900 locations but what you’re not hearing about all the private companies on every street corner, every town, and every state across the USA are these business owners dropping like flies and exiting poor.
The reason why I wrote Exit Rich is to help business owners because Steve Forbes also says, “80% of businesses will never sell.” I wrote Exit Rich to help business owners number 1) Plan their exit strategy from day one of starting or buying a business. Number 2) Build a solid infrastructure, running on all six cylinders, all the ST 6 Ps so that you can build a sustainable business that you can scale. When you’re ready, you’ll have a sellable asset.
That’s why I wrote Exit Rich. Most business owners never think about selling until an internal catastrophic event has occurred. Internal means health issues, partner disputes, divorce, or death. External means COVID. That’s the worst time to sell your business because your business is typically turning downward and you’ll never be able to maximize value.
The best time to sell your company is when your company is doing well and it’s in its prime. I wrote Exit Rich to educate business owners that they have to change their mindset. You have to think about your business differently. It’s not your baby. Your baby is your kid at home. Go home, hug, and love your babies. You need to think of it as a valuable asset as it is and build it so you can sell it one day because this is your nest egg. This is your retirement fund. Nothing lasts forever.
A lot of times, business owners are like, “I’m never going to sell my business.” We don’t last forever. What goes up, comes down. You’re either growing or dying. Even if you decide not to sell your business, at least if you built your business as if you were going to sell it, you are going to have a much more profitable business that can run without you.
If you do need to sell, you’ll have a sellable asset. Most business owners go to sell their business and they don’t have a sellable asset because they never built a business that a buyer wants to buy. Most business owners go out and create a glorified job in which to go to work every day rather than a business that works for them. Exit Rich is all about building a business that works for you and building it on the infrastructure of the 6 Ps.
I like that it’s a different mindset to think about selling the business straight upfront when you’re starting it. There are a couple of key points in what you’ve said there that apply to any business regardless of whether you’re thinking of selling right then and there or not. That’s building a business that serves you rather than a glorified job. Also, the idea of an asset and having the systems and processes in place that makes it a profitable asset.
Think about it. We plan for everything else in our life. If we have kids, we plan where they are going to go to preschool. Where are they going to go to kindergarten, elementary, middle school, high school or college? Who they’re going to marry? How many kids are going to give us? We do a state planning and we reverse engineering to say, “We want to be able to live on maybe $20,000 a month, $240,000 a year.”
A financial advisor will say, “This is what you need to do to get to a point where you’re going to live on $20,000 a month.” It’s the same thing with your business. You need to plan for it for your end game, figure out what your desired sales price is, and reverse engineer it like you would your wealth plan. Does that make sense? Nobody thinks about their business and plans or business for an exit. They think about everything else in their life but their business.
It’s a little bit short-term sometimes with the business. You touched on the 6 P method to get your business ready for sale from day one. I know from looking at the book and going through all the documentation you’ve put online that there’s a lot there that is important to get a good business running. Even when you’re not thinking about selling but changing the mindset to building it so that somebody else can step in and take over is almost automatically positioning it for sale. Tell us a little bit more about that 6 P Method and what’s critical for a business owner to have in place.
I’m happy to tell you about the 6 Ps but before I do, let’s start with the GPS Exit Model because this is where all business owners have to start. First and foremost, I want business owners to think about this. When you want to drive somewhere, what’s the first thing you do? You pull out your phone, you go to Google Maps and you plug in your destination.
You know where you’re going. If you don’t know where you’re going, you’re going to drive around in circles and drive your wife crazy. It’s the same thing with a business owner. Business owners don’t plan to fail. They fail to plan. Business owners end up driving around in circles, up and down the financial heel to end up nowhere, broke, or in bankruptcy court. Business owners have to start with a destination.Business owners don't plan to fail, they fail to plan. Click To Tweet
From day one, in starting or buying your business, you can always tweak this but I want business owners to think about, “What is my destination? What’s my desire? Sales price.” Pick a number. A lot of times, business owners get hung up on a number but pick a number. Say you want to sell for $10 million. There’s a number. What does the GPS need after it knows your destination? It needs to know where you’re starting from. What is your current location?
In other words, what’s your current evaluation? What is your business worth now? I don’t know if you know this but most business owners have never had an evaluation done on their business. They have no idea what the most valuable asset is worth. We go to the doctor once a year to make sure our hearts are still ticking and we’re still kicking.
We drive our car to the shop to make sure we get an annual tune-up on our automobile but we never get an evaluation and annual evaluation checkup on our most valuable asset, which is our business. There are events to increase valuation and events to decrease valuation. COVID is a perfect example of that. All business owners need to know what their business is worth every single year. It’s financial suicide not to know these numbers.
Let’s say you want to sell for $10 million. That’s your destination. Your current location or current evaluation is $1 million. What do you need to know next? You need another timeframe. When do you want to sell for $10 million? Let’s say you want to do it in ten years. The next thing you need to know is buyers. Who are my buyers going to be?
You notice, I say buyers and not buyer. A lot of clients come to me and say, “Michelle, I need you to represent me. I already have the buyer.” I’m like, “No, because in all likelihood that buyer’s not going to close on the sale of your business,” and then we have no backup buyers. You never want to put all your eggs in one buyer’s basket. Plus, how are you going to maximize value if you can’t create competition? How do you create competition with one buyer? You don’t.
You want to make sure you have buyers. There are five different types of buyers. If you’re trying to sell a $10 million company, you’re not going to sell to a first-time buyer. 90% of buyers are first-time buyers. They don’t buy $10 million companies. You’re not going to sell to a turnaround specialist because they buy distrust assets.
The third type of buyer is private equity groups then number four is strategic/competitors. They typically pay the highest multiple because they buy synergies. The last type of buyer is the sophisticated entrepreneur that’s industry agnostic. They chase cashflow. You need to reverse engineer and say, “Where do my numbers need to be? If I’m going to appeal to those three types of buyers, private equity group, strategic competitors, and sophisticated entrepreneurs, where does my gross revenue needs to be?”
Most importantly, where’s the EBITDA have to follow? EBITDA is Earning Before Interest, Taxes, Depreciation and Amortization. If you want to sell for $10 million, you’re going to have to have an EBITDA of at least $2 million and then you need to know what synergies these buyers are looking for. What are they willing to pay top dollar for and not bid everybody else on?
That’s how you build on the 6 Ps and that’s how you can close your proprietary assets. The last equation in that GPS exit model is my why. Why do I want to sell for $10 million? If it was easy, wouldn’t everybody be doing it? Your why needs to be powerful and strong enough to keep you in a game and keep you motivated to weather all the financial storms. You need to start with the GPS Exit, then go into the 6 Ps.
It’s pretty much a marketing exercise. It’s knowing what you want to achieve, finding out who the ideal buyer is, and understanding what drives the ideal buyer and what you need to give them.
It’s like when you set up your business, to begin with, and you’re selling a widget. You need to identify who your ideal buyer is to buy this widget. How old are they? What are the demographics? Male or female? Who is your ideal client to buy this widget? It’s not going to be everybody. The first thing you do when you go into business is to find out who your ideal target market is and who your ideal client is. It’s the same thing with selling your business. You need to identify who your buyers are going to be, who the financials need to be, and most importantly, what synergies are they looking to purchase.
Tell us about that concept of synergies.
Let’s get into 6 Ps because the 6 Ps explain synergies. The first P is the most important P. The number one reason that businesses are not sellable is that business owners haven’t built an actual business that buyers want to buy. They built themselves a job. The big reason that businesses don’t sell is that the business is 1,000% dependent upon the owner. I pulled that owner out of the business, there is no business.
I had a sweet little old lady call me, “My husband dropped dead of a heart attack. He had been in business for 45 years. He never planned an exit strategy.” She said, “He left me with a mountain of debt. Can you help me sell the business?” I started asking questions. He had no people and no processes. Everything was in his head. When he died, the business died.
If you’re not going to set up your exit strategy for yourself, set it up for your loved ones. The first P is people. You don’t build a business. You build people and people build a business. Entrepreneurs have to stop trying to do it all. You will never grow unless you let go of control. You have to focus on your strengths, hire your weaknesses, and put the right people in the right spot.
Put the right people in the right seat and ask to who questions. Who opens the door? Who handles customer service, accounting, legal, and marketing? Who handles quality control, manufacturing, transportation and environment? The clue is that you should never be next to the who because you want to build a business to run without you.
I had a dentist come to me. He’s been in business for 50 years. One dentist, three dental hygienists, and guess what? All three dental hygienists are his family members. I said, “You’re going to have to stay around for a couple of years.” He goes, “I’m not staying.” I said, “If you’re not staying, you’re not selling because when you go, the patients go.” People is one of the most important Ps. You got to have the right people.
The second P is Product. This is your industry. This is your service. This is your product. You have to ask yourself, “Is your industry, product, or service on the way up or on the way out? Are you thriving or is it dying? Do you have an Amazon and you’re in your prime or do you have a Blockbuster and you’re about to go bust?”
Unfortunately, a lot of industries are going bust now because of this worldwide pandemic. If you are in an industry that’s dying, that doesn’t mean that you pack up, go home, and file bankruptcy. That means you got to ask yourself three transformational questions. Amazon did this in the 1990s. They asked themselves, number 1) “What business are we in?” They said, “We’re in a bookselling business. We sell books. We fulfill book orders.” All of your readers should be doing this. Question number 2) “What do we do well? What do we do better than everybody else? What are our core competencies?” Amazon said, “We’re good at fulfillment. We’re better than everybody else at fulfillment.”
Question number 3) the most important question is, “What business should we be in?” Amazon said, “We should be in a fulfillment business. We should be a fulfillment of products worldwide for everybody, not just for authors and publishing houses.” Those three transformational questions transform Amazon from a small bookseller to the multibillion-dollar worldwide conglomerate that they are now.
I love those three questions because my background in my early corporate career was in photography when digital photography first launched onto the consumer market. I lived through one of the big film manufacturer’s responses to that change. For me, as a young man, the writing was on the wall and yet they didn’t ask those questions. I thought, “This is the most logical thing here. We’re in the film business but we’re not asking ourselves what we do for customers because it’s not providing film. It’s providing them a means to capture memories.”
You’re in a memory business. Memories last a lifetime. You’re not in the photography business. Those questions are important. It’s important for business owners to get out of being transactional and start becoming transformational. Business owners need to work on their business and not in it. The third P is Processes. Processes are like an exit strategy. You don’t think about them until something bad happens and you’re like, “We need a process for that.”Business owners need to work on their business not in it. Click To Tweet
I have a client who has a lot of unhappy clients and customers. Customers went on the internet and started bashing them. It hurt their business. The owner says, “We need a policy and procedure for customer service.” I’m like, “You needed that before because now you got to do damage control.” Processes should be thought of from the beginning of buying or starting your company.
Most people get this wrong. Most business owners get this wrong. They think about processes based on the owner’s agenda and what the owner’s trying to accomplish. That’s inaccurate. You need to think about your processes based on your customer experience like the McDonald Brothers. Did you ever watch the movie, The Founder?
Do you remember that movie? You got the two McDonald Brothers then you got Ray Crock who came in and blew McDonald’s up and took McDonald’s. McDonald Brothers back in the 1950s said, “We want to create a fast food restaurant and we want to create the processes,” because nobody had a fast food restaurant back then. They said, “We want to create the processes around the customer experience. We want customers to experience great taste in food that’s hot, fast, 30 seconds or less.”
Do you remember they went to the empty tennis courts? They took all their employees and took the chalk and draw out the processes on the tennis court. One of the brothers got up on a ladder and he was orchestrating where everybody should move and what they should be doing. He created this symphony of systems and processes that even though they’ve been tweaked along the way, you can eat at McDonald’s in Australia, the USA, Russia, or wherever and still get the same experience.
They can replace somebody like that because they have the SOP checklist. They have a policy and procedure manuals, so they can put somebody in to run the cashier register and have them trained in 30 minutes. Your processes have to be designed with the customer experience in mind. Many business owners do the opposite.
Have you ever dealt with a company and you’re trying to get your issue resolved? You have to push this button and talk to this person, this button, and this one. You get five different people on the phone and you have to tell your story five times. You’re like, “I’m done. I never want to do business with this company again because of the processes.”
I always say, “Haven’t these people gone through their own processes as a customer?”
Your processes are designed to create raving fans, happy clients, and happy customers. They’re designed to create wow experiences but so many processes do the opposite. They infuriate customers. They create raving haters that want to destroy your company. You need to go back to the bases and ask yourself, “What do you want your customers to experience?” Develop your processes around the customer’s experience.
Your processes should be productive and efficient so they don’t cost you money because a lack of processes can break a company. You got to make sure you have that quality control as well. You want to make sure you have policy and procedure manuals, SOP checklists, and operating procedures. You want to make sure that you have employee handbooks, non-competes, employee agreements and pay for the company. When you go to sell it, the first thing that the buyer asks in due diligence is to see all your policy procedure manuals.
It comes back to what you said earlier that the business owner’s name shouldn’t be against any job descriptions or positions within the company with the people. The way you do that is you have processes that you use to train other people to do those jobs.
Business owners have to figure out what their strengths are and what they can do that nobody else can do. I write my books because nobody else can write my books. I tried hiring a ghostwriter and it was terrible. Let me talk a little bit about valuations. Companies that have under $1 million in EBITDA in the United States will typically trade for anywhere from 1 to 4 times EBITDA. Companies that have over $1 million in EBITDA will typically trade for $4 million or $5 million and up.
This fourth P is called Proprietary. These are your proprietary assets. Proprietary assets can take you to 7X, 8X, 10X and 12X. You want to pay attention to this P. There are six pillars to proprietary. I’ll explain them quickly. First and foremost is branding. Let me explain the branding ladder quickly. There are five steps in the branding ladder.
In the United States, probably about 90% of businesses live in brand absence. That means the consumers don’t know who they are and what they do. They might purchase it from them because they stumbled across them but they’re living brand absence. Nobody knows who they are. You go from brand absence to the second step on the ladder to brand awareness. This is where more consumers know who you are and what you do.
You want to go from brand awareness to brand preference. This is where I would say, “I prefer Diet Coke over Pepsi. I prefer Apple over Android.” You go from brand preference to brand insistence. I’ve been to a lot of hotels because I’m a speaker. I’ve spoken all over the country and I always ask them when we go to lunch, “I want a Diet Coke.” They’re like, “Is Pepsi okay?” “No, Pepsi is not okay. If Pepsi were okay, I would’ve ordered a Pepsi.”
Brand assistance is where you say, “I only drink Coke or I only use Apple products. I only buy Xerox copiers.” You follow me? That’s brand assistance. You go from brand assistance to brand advocacy. This is the highest level of branding you can get to. Brand advocacy is when you tell someone, “Go google this. Go xerox this. Chill out and have a Coke.” Brand advocacy is the highest form of branding that you can possibly get because it’s always better when somebody else sells you than when you sell yourself.Brand advocacy is the highest form of branding that you can possibly get because it's always better when somebody else sells you than when you sell yourself. Click To Tweet
I tell all of my people, “Go get an Apple. Go get an iPhone. Don’t get anything but an iPhone.” Branding is huge because you can sell your business for a lot of money as long as your brand is relevant in the mind of the consumers. Is anybody going to pay any money for Blockbuster? No, they’re not. The most valuable brand in the world is, do you know?
You’re right. Most people get this wrong. Most people say Coke, Amazon, or Nike but Apple is number one. Apple is worth over $359 billion. That’s just the brand. That’s not the cashflow, inventory, assets, real estate, or anything else.
Their loyalty is such that they announce a new product and say, “This will be launched tomorrow at midday.” People are queued up for multiple city blocks in front of the Apple store hours before that at the dawn of that day.
You’ll never find me in those lines. They’re building that because of urgency. It’s customer loyalty and that’s what you want to build. Branding is huge. Trademarks are big. Trademark your company name, your logo, and your slogan. The problem in the United States is that business owners will go to the State of California and set up their businesses. They get a trademark in the State of California but they never check the federal database to make sure that the company name is available.
I’ve seen clients be in business for 10, 15, and 20 years, and all of a sudden, we see the cease-and-desist letter and they have to stop doing business as that company name. They’ll hire an attorney and throw a bunch of money at it but in most cases, they’ll lose. They got to start all over from scratch. Go get a federal trademark. It’s not that expensive. You should federal trademark your podcast. I federal trademark my book Exit Rich. Federal Trademark your slogan, your logo, and your USP.
We are selling the company now in the $70 million range and they’ve got fifteen different exclusive products. Each product is exclusive to our certain grocery store chain. Each product has a federal trademark. This drives value. Synergistic buyers will pay more money for that. Patents are another big one that raises the multiple. If you’ve ever watched Shark Tank, ask every single investor, “Do you have a patent? Do you have a patent penny? Do you have a utility patent?”
It offers contingent upon you proven that you have the patent. We sold a business for $18 million. It wasn’t making that much money but they had eighteen patents. Contracts are very important. Manufacturing agreements, distribution agreements, fender contracts, any type of exclusivity contracts, franchise or contracts, they have franchisees.
The most valuable contracts of all are client contracts because buyers want to know that they’re buying a business with revenue coming in, especially if the contracts have a subscription model with free acquiring revenue. Here’s a caveat to contracts in the United States. I don’t know about Australia. You need that two-sentence transferability clause that says, “This contract is transferable in the new entity,” because 98%-99% of deals in America are asset sales, not stock sales.
If the buyer doesn’t agree to do a stock sale and your clients don’t agree to a consensus transfer, then your deal could fall apart. I once knew an M&A firm that sold a private equity group. They have 1,500 franchisees. The private equity firm had a due diligence team. Nobody looked at the contracts. None of the contracts with the franchisees were transferable. The private equity group set up this huge celebratory meeting and the franchisees didn’t like the private equity group.
They thought, “You don’t have any experience. You’re arrogant. You don’t know our industry. We’re not going to consent to a transfer.” One franchisee out of 1,500 agreed to transfer. This private equity group filed bankruptcy within 90 days and they sue their entire legal team. Make sure you have that transferability clause. Celebrity endorsements are big.
If you watched Rooms To Go commercial in the US, they got Cindy Crawford. We have a client that has products in front of Oprah. Strategics and competitors will pay a lot of money for those businesses because they want to get their products in front of Oprah. She’s the queen of everything, so they’ll pay more money. Radio personalities are also big. You don’t see radio personalities like Cindy Crawford. Cindy Crawford doesn’t put her name on more than one furniture company.
They support one vertical at a time. That’s what we call prime real estate. Let’s back up a minute and talk about databases. If you have a database and your clients have been nurtured and they can be retargeted and repurposed, that’s worth a lot of money. Facebook paid $19 billion for WhatsApp. WhatsApp was hemorrhaging but they had a synergy.
All of these things we’re talking about are synergies. They had 1 billion users and Facebook knew they could monetize an ROI on some of that business. They wanted those billion users. They paid $19 billion for 1 billion users. eCommerce businesses, when you have any at the top three to five positions on Wayfair, Amazon, Etsy, eBay or Modern, that’s worth a lot of money to strategics. These are the proprietary assets that can drive value and get you a much higher multiple.
It’s fascinating. There’s so much to think about there and plan for but you’ve touched on a couple of things there that a lot of businesses ignore or when something happens that they think, “Maybe we should patent that or maybe we should trademark our brand.” It’s often too late.
The fifth P is Patrons. This is your customer base. In America, most businesses follow the 80/20 rule. 80% of their business comes from 20% of their clients and they have customer concentration. Customer concentration is very scary to buyers. We had an oil manufacturing business we were selling. The company had 65%-70% of its revenue tied up in the BP contract.
It appraised at about $9.8 million. We had over 550 buyers look at this business. We narrowed it down to twelve buyers that gave us letters of intent. Out of this twelve, they all had some type of condition about the BP contract. My owner didn’t want to take a condition. I found a buyer strategic that has similar products and services. They have been trying to get their products and services into BP for decades and can never get inside BP.
They said, “If we buy this business, we’re going to get our company in there and it’ll pull our company to the next level.” They offered and paid $15 million for 70% of the business for a business that appraised at $9.8 million. They paid 126% more than their base price because they wanted that BP contract. When we’re doing evaluations and working with our clients, we do evaluations on six different methods. One of the biggest methods is these 6 Ps because we know we can identify the buyers that are willing to outbid everybody else and pay for synergies.
We know the buyers that can take advantage of economies of scale and the buyers that can cut costs by cutting some infrastructure because they already have the infrastructure. They can increase EBITDA from day one. The last P, the most important P to all entrepreneurs is Profits. Everybody’s in business to make money. The reason why I put profits last is that lack of profits is never a problem. If you are not making money, it’s not the problem. It is a symptom of not operating one or the other five Ps.
I have clients that come to me all the time and say, “Michelle, I have a profit problem.” I’m like, “No, you have a people problem. You have a process problem. You do not have a profit problem. Profit is a symptom.” I have one guy come to me and said, “Michelle, I’m losing money again.” I go, “Who’s in charge of your accounting? Who’s in charge of your checkbook?” He showed me and I said, “She’s stealing from you. That’s why you’re losing money. You got to trust but verify. You got to inspect what you expect.” Lack of profits is never the problem. It’s always a symptom. Those are your 6 Ps.
You’ve highlighted why they’re so important and there’s so much to think about there in terms of building those processes to sell and having all those different pillars in place. This is fascinating, Michelle. We could dig so much more into this but I’m looking at the time and watching that and aware of your commitment.
It’s a good point now to move on to the buzz, which is our innovation round with our scripted questions, five questions that are designed to help our audience who are primarily innovators and leaders in their field with some tips from your experience. They probably will circle back to the whole idea of building businesses to scale and sell. I’ve got five questions. Hopefully, you’ll inspire the readers to do something awesome and take action as a result now.
Hopefully, I will, and then we’re going to tell all your readers how they can get Exit Rich.
We’ll do that. What’s the number one thing you think anyone needs to do to be more innovative?
Learn from others outside of your industry. Everybody wants to learn from their competitors. Go outside of your own circle. Learn what the best companies in the world are doing. What does Disney do differently? What does Apple do differently? What does Coca-Cola do differently? Learn from outside your industry to become innovative. Make sure you ask those transformational questions, as I told you.Learn from outside your industry to become innovative. Click To Tweet
I was going to link back to that because they’re so valuable in terms of chunking it up to a higher level. What does Apple do well? I’m not in the business of making computers but what can I learn from Apple? By chunking it up to those questions, it gives you ideas from those other businesses.
Apple was great because when Steve Jobs came back to Apple, Apple was dying. Steve Jobs came in and started asking questions about, “What business are we in? What do we do well? What business should we be in?” They asked themselves the same level of questions but they also said, “We don’t want to create what people know they need. We want to be preempted and create stuff that people can’t live without.” They don’t know they need a smartphone because nobody has smartphones back then. They don’t know they need an iPad. I remember the first time I heard about an iPad. I’m like, “That’s the most stupid idea I’ve ever heard of.” Now I have twelve of them.
You can’t live without it.
You got to figure out what they need before they even need it and create it. That’s what Steve Jobs do so well.
What’s the best thing you’ve done to develop new ideas?
Learn from others outside my industry and allow myself with a mentor.
Do you have a favorite resource you use most often?
I listen to a lot of CDs and tapes. I’m big into like law of attraction. I listen a lot to Bob Proctor and people like Bob Proctor. I would say that’s a big resource for me. In my industry, I read all the trade publications to know what’s happening in my industry as well. My big thing and I learned this from Jeff Hoffman who was the Founder of Priceline. Jeff says, “You got to always look at things through a different set of eyes and identify the problem that nobody knows is a problem.”You have to always look at things through a different set of eyes and identify the problem that nobody knows is a problem. Click To Tweet
He was the Founder of the airport kiosk because he stood in line for an hour and a half. By the time he finally got up to the airline desk, they gave him his silly little ticket to get on a plane. He’s like, “I just missed my plane. You’re telling me I’ve been sitting here for an hour and a half to get a piece of paper?” That experience caused him to go out and create the airport kiosk. You got to look at things and say, “This could be done so much better.” All of us have the ideas in us. We just got to act upon them.
I love Jeff’s story and he was on the show a while back, so go check out his episode as well.
He’s a good friend of mine and he also endorses Exit Rich.
What’s the best way to keep a client on track as you’re working with them to build these systems and the 6 Ps into their business?
We have a whole funnel that we put our clients in. It’s all these different touchpoints. We’ll identify what their biggest top 5 or 6 bottlenecks are or take them through the 6 P process. It’s all these different touch points as far as making sure that they’re hearing, listening, and following our advice, and looking at their numbers too. We’re big into numbers because I always say, “Don’t get mad, get the stats. Numbers don’t lie.” We’re big at checking everything that they’re supposed to be doing and inspecting what we expect from them. As I said, many different touchpoints along the way.
Communication but communication based on the data.
The role would be a much better place if everybody communicated better.
That goes without saying almost but common sense isn’t so common.
That’s right. That’s my favorite line.
What’s the number one thing anyone can do to differentiate themselves?
It goes back to what I said earlier when you ask those three questions like Amazon did. What is my core competency? What do we do better than everybody else? In order to know what you do better than everybody else, you need to identify your strength but know what your competitors are doing. Again, look into other industries to figure out how you can innovate from other industries to be unique in your industry.
I love those questions. What business are we in? I like to add though, what business are we in, to dig deeper on that but then look at what are our core strengths or what are we good at and what business should we be in based on that. Thanks, Michelle. This has been fabulous. Let’s talk about the book. Where can people find out more about the book, get a hold of the book, buy it, and maybe even reach out to you and say, “Thanks for what you’ve shared with us?”
You can go to ExitRichBook.com for $24.79. We will email you the digital download immediately, so you can start reading Exit Rich now. We’ll mail a hard hardcover to your doorstep for anybody that lives in the United States for no additional charge. Outside of the United States, there’s additional shipping. We all know that, so don’t get mad at me if I’m not shipping a book for $24.79 to Australia.
We will give you a lifetime membership no matter where you live into the Exit Rich Book Club where we have video training of me doing deep dives in these different strategies and techniques that I’ve been teaching for the last many years, plus documents to run your business and to sell your business. We have sample org charts, employee handbooks, non-competes, policy and procedure manuals, and SOP checklists.
We have sample LOIs, Letter of Intent forms, sample purchase agreements, sample due diligence checklists, and sample closing docs. All of these documents are available for your review and your download. These documents will cost you over $30,000 if you want an attorney to recreate them. Plus, we will give you a 30-day free membership into Club CEOs, which is an entrepreneur mastermind where we ask those transformational questions. We have those hot seats and Q&As. We help business owners build a sustainable, scalable and we’re already a sellable asset. All of that is for $24.79 at ExitRichBook.com.
There’s certainly a lot of value in that purchase that’s not just the book itself.
All your readers can text Michelle to (888) 526-5750. All on my social media pop up if you want to follow me on social media. Connect with me on LinkedIn and our websites pop up as well. Our main website is SeilerTucker.com.
Do you have some parting advice for our readers, Michelle?
I always tell business owners that you don’t have to do this alone. You should always align yourself with a mentor. It’s not what you know that gets you in trouble. It’s what you don’t know. Align yourself with a mentor who’s traveled down the road you want to travel. Learn from their mistakes. Their path will help your path become much shorter and you’ll get success much quicker. Align yourself with a good mentor but not somebody who says they’ve done it. You want somebody who’s actually done it and as I said, learn from their mistakes.You don't have to do this alone. You should always align yourself with a mentor because it's not what you know that gets you in trouble. It's what you don't know. Click To Tweet
It’s always good to not repeat mistakes that others have already made. Make your own mistakes. Who else should I get on this show and why?
You already had Jeff Hoffman. You should get Alec Stern, who is the Founder of Constant Contact because he’s a brilliant entrepreneur and Kevin Harrington who was the original shark on Shark Tank. He also worked the foreword for Exit Rich. Sharon Lechter is my co-author for Exit Rich.
We’ll get introductions to those folks from you to Alec, Sharon, and Kevin and reach out to them. Thanks, Michelle. This has been fabulous. I enjoyed this. I enjoyed digging deeper into the Exit Rich concept and the idea of all the systems and processes behind that and why it’s so important to consider the sale of your business from day one.
Also, your exit strategy, so you’re not going to become a statistic. Thank you so much for having me on. It was my absolute pleasure.
All the best for the future and let’s stay in touch.
I hope you enjoyed that insightful and valuable conversation with Michelle and took something away from her episode. Whether you’re planning to sell your business now, in 1 year or 10 years, setting up these systems and processes adds to the inherent value of your business and benefits you immediately. I love the sequence of questions, what business are we in, what are we good at, and what business should we be in?
I’m curious to know what you took away from Michelle’s episode. If you like this episode and think it’s going to help some other people, then don’t keep it to yourself. Share it with the people you think it might help and tag me in on that share because I want to personally thank you for spreading this wonderfully valuable information. Michelle suggested that we have a conversation with her co-author of Exit Rich, Sharon Lechter. Also, with the author of Mentor to Millions, Kevin Harrington, and with Alec Stern of Constant Contact on future episodes.
Sharon, Kevin, and Alec, keep an eye on your inboxes for an invitation from us, courtesy of Michelle Seiler Tucker. Tune in again to the next episodes of the show where we’ve got yet more fantastic guests lined up including the author of Intuitive Marketing, Steph Genco and the author of Done by Noon, Dave Ruel.
- Exit Rich Podcast
- Exit Rich
- Sell Your Business For More Than It’s Worth
- GPS Exit Model
- Jeff Hoffman – past episode on the InnovaBuzz podcast
- LinkedIn – Michelle Seiler-Tucker
- Alec Stern – past episode
- Kevin Harrington – past episode
- Sharon Lechter
- Mentor to Millions
- Intuitive Marketing
- Done by Noon
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