FYE-GI | Trusting an Expert


Author, founder and CEO of Seiler Tucker

Show notes: https://www.markgraban.com/mistake20

Joining me for Episode #20 is Michelle Seiler Tucker, founder and CEO of the firm Seiler Tucker. Michelle has sold hundreds of businesses to date and currently owns and operates several successful businesses. Michelle is one of three American women to hold the Merger & Acquisition Master Intermediary (M&AMI) certification.

Michelle is the author of the book Sell Your Business For More Than It’s Worth and her newest book, due out in January 2021, is Exit Rich: The 6 P Method to Sell Your Business for Huge Profit.

In our episode, Michelle shares one of her “favorite mistakes” involved in selling a business and we chat about some of the mistakes made (and lessons learned) by business owners who want to sell their business.


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Trusting An Expert And Not Verifying With Michelle Seiler Tucker

Our guest is Michelle Seiler Tucker. She is the Founder and CEO of her firm, Seiler Tucker. She has many certifications. She’s 1 of only 3 women in the United States to hold the Merger & Acquisition Master Intermediary Certification, which tells you a little bit about her line of work. We’ll explore that. She has a book. It’s available for pre-order now. It’s called Exit Rich: The 6P Method to Sell Your Business for Huge Profit. She has a previous book called Sell Your Business For More Than It’s Worth. Michelle, thanks for joining us. How are you?

I’m great. Thank you for having me. It’s a pleasure to be here.

Thanks for being here. I’m interested to learn more about your line of work and the books. As we normally do, we’ll start off and ask you to tell a story. What do you consider to be your favorite mistake?

I made many mistakes. I used to be in franchise sales, franchise consulting, and franchise development. I transitioned into selling companies. I transitioned to selling small businesses first, and now I sell businesses $20 million and up. My favorite mistake was our first closing was a flower shop, and we contacted the attorney that they wanted to do the closing. The landlord was out of the country. I asked the attorney, “Can we close without a lease?” He goes, “Yes, we’ll have this document transitioned to lease or something like that beforehand, and we can close without a lease.” I said, “Okay.”

We go to the closing table. The buyer, seller, attorneys, and spouses are there. We got through all the closing documents. I said, “Where’s the lease?” I looked at the attorney and said, “You said we didn’t have to have the lease that you could do this transition agreement.” He goes, “No, I never said that. You have to have a lease. You can’t close without a lease.” He lied.

I went to the closing without getting a lease. I didn’t know any better. That was a huge mistake. The buyer and the seller were upset with me. They all loved the attorney and hated me. I relied upon the attorney and what he said instead of doing my own due diligence to make sure I could do the closing without the lease. I ended up closing two weeks later. That was a big mistake that I learned from. I’ve never done that again.

Thank you for sharing this story. The theme of the show here is learning from mistakes. We all, as business people, have specialists that we rely on for specialized information. How do you strike a balance if you’re looking at a situation of when do you rely on that expert versus doing your own due diligence?

The big lesson that came out of that is I trust, but I verify. I inspect what I expect. Now, if I ask an attorney something, I double-check and call other attorneys. Nowadays, you can pretty much pull up anything on Google. I’ll search Google or call backup attorneys or backup CPAs, and ask multiple people now. I trust but verify. That’s the number one thing.

Trust, but verify. Inspect what you expect. Click To Tweet

There’s the expression that dates back to the Reagan administration. From my background, when you said inspect what you expect, that resonates with me. My roots originally were in manufacturing, and people talking about you get what you expect, but you have to double-check and not assume.

A problem that a lot of business owners make is that they finally learn how to delegate. Most entrepreneurs are control freaks, and they don’t want to delegate, but then it’s the opposite. They’re all in doing everything themselves, or they decide, “I’m going to delegate everything,” but then, they let go of so much control, they never come back to inspect it, or they never put that liaison in place that can go from department to department to make sure things are getting done correctly. I’ve seen it happen time and time again where the owner thinks everything is going smoothly and come to find out it’s not. Nobody was inspecting the quality.

Before we talk more about exiting a business and your experiences and recommendations around that, let’s talk about common mistakes when people are building or running a business. I saw in one of the clips you spoke about the question of, “Is somebody building a business, or have they created a job?” I read the book, The E-Myth, many years ago.

I’m friends with Michael Gerber. I know Michael Gerber personally.

That idea first stuck with me of, “If you’re going to build a business, you’ve got to have something that’s scalable and something you can take a vacation away from.” Can you talk a little bit more about building a business as opposed to just a job? How does that impact an eventual exit?

A lot of business owners have created a job that they go to work out rather than a business that works for them. When buyers are looking to buy a business, there are five different types of buyers. We talk about that in my book, Exit Rich. Buyers want to buy a business that’s not dependent upon the owner. If the owner is dependent on that business, then that owner’s going to have to stay on for many years and/or sell a percentage of their company and hold a percentage. They’re not going to be able to sell outright. Buyers are looking for a business that’s sustainable that is not dependent upon the owner. We talked about the six Ps in Exit Rich.

FYE-GI | Trusting an Expert

Trusting an Expert: Buyers are really looking for a business that’s sustainable and that’s not dependent upon the owner


That first P is People. Buyers want to make sure they’re buying a company that has tenured employees. They want to make sure that they have the right people in the right seat. They want to make sure that they have a management team in place and that there’s also some non-compete for key employees as well. They want to make sure that there are W-2s, not necessarily 1099s. We have a manufacturing plant that has about 150 1099s in their plant. If they have a catastrophic event occur and there’s no worker’s comp, that’s going to be a huge issue.

That could close that business down. Now we have to do the math to figure out what it would cost to convert these employees. It’s non-employees to employees. People is number one. Business owners make big mistakes when it comes to people. They don’t document things correctly. They don’t always have the employee handbook signed. They don’t always have the non-competes for key employees. A lot of times, they have 1099s in place where they should have W-2s.

One of the other Ps is Process.

That’s number three. It’s probably the most overlooked by business owners. Business owners are focused on everything else. They think about the process after the fact. Processes should be designed when your company has been designed. Plus you should revisit your processes on an annual basis. You should make sure that your processes are designed with the customer experience in mind. Here’s a perfect example. Have you watched the movie, The Founder?

Is this Ray Kroc?

Yes. It’s based on the McDonald Brothers and the Ray Kroc story. Did you watch it?

I have not seen it yet.

You’ve got to see that movie. The McDonald Brothers went out to the empty tennis court and took all their employees. They all got in a position. It took them all day to figure out their processes, “Who’s going to take the order? Who’s going to toast the bun? Who’s going to cook the burger? Who’s going to put the two pickles on a bun? Who’s going to package it up and hand it to the client?” They did it with the customer experience in mind because back then, in the ’50s, they only had drive-ups. The objective that McDonald Brothers were trying to achieve was good-tasting quality food in a short period of time. That was their objective. They wanted the customer experience to be happy, love the food, and get it quick.

They designed their processes with the customer experience in mind. Most companies don’t do that. I can’t even begin to tell you how many times I’m doing business with a company, and I’m like, “You should rethink your processes because you’re inconveniencing the customer. You’re not making it easy for us to do business with you.” Many businesses are going out of business because if you don’t take care of your customer, somebody else will. If the processes are not efficient, productive, and designed with the customer experience in mind, you’ll be going out of business.

I asked about process. Process is a word that’s near and dear to my heart. As an engineer, I help organizations with process. I’m curious about what your experiences are. I’ve seen in a lot of organizations, and this includes healthcare organizations, the process evolved. Nobody ever took the time to step back and design it so that you’ve got the way it sorted itself out. People are too busy to take that pause and go back and define processes. It sounds like the McDonald Brothers and other businesses are smart to take the time upfront and build that foundation.

You’re accurate in what you said. Most businesses sort themselves out or evolve. Most business owners don’t think about it. Most entrepreneurs are not engineers. They don’t always have that mindset, and they don’t always think about the foundation. They think about getting clients and making widgets and getting them out there. They don’t think about the processes. It happens more the way you said that it happens. McDonald Brothers were different. I did design it, but if you look at Dollar Shave Club, they completely changed their processes. They took them to a billion-dollar company.

Processes are huge. Business owners should be going back and looking at those processes to make sure it takes the customer experience in mind because it’s all about keeping clients happy. You got to make sure those processes are documented and SOPs, policy, and procedure manuals, and make sure that the employees are trained on it. That’s why McDonald’s does so well because you can go to McDonald’s in China, Russia, or the US and get the same experience.

Processes are huge and business owners really should be going back and looking at those processes to make sure it takes the customer experience in mind because it's all about keeping clients happy. Click To Tweet

They sell consistency.

They sell consistency, which is processes. You can’t have consistency without processes.

Speaking of process, and maybe you can touch on your book again for the readers, it’s called Exit Rich, and the work that you’ve done, it seems like from your work that there is a process for getting a company ready to solve. It’s not just flipping a switch. There’s a lot of work.

There are a lot of steps. This is my second book on selling businesses. According to Steve Forbes, who endorses Exit Rich, 8 out 10 businesses don’t sell. The reason 8 out of 10 businesses don’t sell is because they’re not ready to sell. They haven’t planned their exit. Exit Rich is all about planning. I call it the ST, which is Seiler Tucker, the ST GPS Exit Model. That means going into your business from day one of buying or starting, determining your end game and determining what you want to sell your business for. If you want to sell it for $5 million, that’s fine. Set that mark that you want to set for $5,000. Reverse engineer it. What time do you want to sell it? What timeframe, five years? Okay. What is it worth today? What’s your current location? What’s your current evaluation? Who is your buyer going to be? There are five different types of buyers.

That’s the GPS Exit. The biggest mistake that business owners make is not planning their exit. They don’t think about selling until they have to due to an internal or external catastrophic event occurring that, by that time, is typically not in good shape. It’s trending downward. They’re not going to be able to sell it for value. They might be able to sell it for pennies on the dollar, but they’re not going to be able to maximize value. The best time to sell is when a business is doing well. Exit Rich is all about helping business owners plan that GPS Exit Model and determine their end game, reverse engineering, and then build the business on the six Ps. If you have a business that operates in all six Ps, you’re going to have a sustainable, scalable, and when you’re ready, sellable business.

FYE-GI | Trusting an Expert

Trusting an Expert: The biggest mistake that business owners make is not planning their exit. They don’t think about selling until they have to and by that time they are typically not in good shape.


That takes time. What’s the general lead time between somebody deciding they want to retire or they want to exit and start something else? How long does that take, especially considering if they have to work on these six Ps?

That’s the billion-dollar question because it depends upon what stage you’re at. If a business owner is not doing well and only functions on a few of the six Ps and wants $10 million for their company, it could take a while to build that $10 million company. If they come to me and say, “I need out. I need to pay off my debt,” then it could be much quicker. It depends upon where they are in a cycle. A lot of business owners will come to me and say, “I want $20 million from my company.” I’m like, “How did you come up with that value?” They’re like, “That’s what I need to retire on. That’s what I need to pay for my kids’ college. That’s what I need to divorce my spouse,” whatever the reason may be.

Buyers don’t care about your reasons. They care about value. I’ve taken companies. I had one company that we sold for $18 million. They had eighteen patents. In three months, we sold the company. We appraised it for $9.8 million and sold it for $18 million. I had one company take me six years to sell. It depends on how long they can hold on, how old they are, what the events are, are there any internal events, are there any health issues, or partner disputes. It goes on and on about what the issues are. Are there environmental issues? We got to relocate. The list never ends. It’s hard to answer that question because you got to figure out what stage they’re in.

It also depends on how much work needs to be done and how solid and ready they are to sell at a good valuation.

I can get my clients a number, but it might not be their number. That’s why I go through the seller sanity check with my clients to say, “I can sell your business for $1 million, but you’re wanting $5 million, and we’re nowhere close to $5 million. This is your choice. You either sell it for $1 million or build it to sell. Here are the steps.”

Do you do that work with companies over time? Do you bring in other advisors to help them build the business?

I do a little bit of everything. I’m not a consultant. I don’t trade time for dollars. I have partnered with business owners, putting up my expertise and resources and investing my money. I do that for equity and a management fee. I do that for businesses I think I can deliver massive value and has a niche. I’m not going to be in a restaurant. I’m not going to be in businesses that don’t have a niche. I do that. I’ve also bought in consultants before. I have a program that we’re coming out with called Build to Sell. It’s a step-by-step blueprint online educational platform that business owners can go through and follow the step.

That partnership and investing reminds me a little bit of the show, The Profit with Marcus Lemonis, without being televised.

I do what Marcus does. I should have my own show. The difference is I build to sell. He doesn’t have an exit strategy in mind when he does it. He takes things I would never take.

In terms of the industry and the types of products.

You’re not going to see me in the restaurant business because I know that’s not me.

You mentioned earlier you had been involved in selling franchises. How did you transition into, “I’m fascinated in this business of helping people sell their businesses?”

It was quite an easy transition because I had been working for one company in particular while I was a partner with them. I was doing everything. I was selling the franchises. I was pulling the demographics, doing the site locations, doing the build-out, and organizing the build-out and the staffing. I was doing everything. I was a partner. It got to a situation where I sold so many franchises that they couldn’t keep up. They were overpromising and underdelivering. I said, “You got to buy me out because I’m not going to sell any more franchises until you get it together.” It’s a typical company that has a great idea, and I went out and sold a bunch of franchises, but they never built that foundation. After they bought me out, I decided to transition to selling businesses because selling franchises and businesses are similar.

Do you do work all across the US?

I do. We’ve done things in Canada, Columbia, and Trinidad.

What industries do you focus most on? You mentioned manufacturing earlier.

I’m industry agnostic. We’re more EBITDA specific. We have over 25,000 buyers on our database. We have buyers for good businesses. There are more buyers for good businesses than there are good businesses to buy. When the EBITDA is over $1 million, we have hundreds of buyers for each business.

That helps drive up. If you’ve got potential buyers, that’s how you help get a better price for the sell.

We can create a bidding war because we know what buyers want. We know what buyers are looking for. We know how to create those synergies because buyers will outbid other buyers for synergies. For instance, we sold a company in Louisiana, oil manufacturing again. They had customer concentration, and 60% of the revenues were tied up in the BP contract. We had twelve LOIs on this business. We found it strategic. They had a similar product, but different. They had been trying to get into BP for years and could never get in. That’s their end. They bought that company because they knew it was synergistic. They knew that once they had that relationship, they would get their other products and services in there, which I did.

We know what buyers want, we know what buyers are looking for. We know how to create those synergies because buyers will bid other buyers for synergies. Click To Tweet

I know people will get much more detail from the book. We’ve got people and process. Can you throw the other four Ps at us?

Number two is Product. You got to ask yourself, is your business on Amazon, or is it a Blockbuster? Is it thriving, or is it dying? Industries that were exploding before COVID are now dying, and industries that were dying before COVID are now exploding. Just because you’re in a dying industry doesn’t mean you quit. If you’re in a dying industry, then you got to pivot. You’ve got to ask yourself, “What business am I in? What business should I be in?” That’s what Steve Jobs did when he came back to Apple. Apple was dying. He asked, “What business are we in?” “Computer business.” He said, “No, what business should we be in? We should be in a communications business.”

That one question alone, which sparked that answer, developed the iPhone, the iPad, and the iPod. That brand, Apple, right now is the largest brand in the world. The value is $380 billion. That’s without assets, cashflow, furniture, fixtures, equipment, or anything. You’ve got to ask yourself, is your industry thriving or dying? You’ve got people, product, and processes.

The fourth P is the biggest value driver, and that’s Proprietary. People pay for brands. The Coca-Cola brand is worth $89 billion without any cashflow. Apple is worth $390 billion without any cashflow. Build your brand, build your value. Same thing with your company name. You’d be surprised how many business owners get a local trademark but never a federal trademark on their company name.

They get the domain and the company name, but somebody else starts using it, and before you know it, they’re in a lawsuit. If they didn’t protect their company name, they’re out. You’ve got to get trademarks. You’ve got to protect your company name, logo, and slogan. Like the six P method, that’s trademarked. The ST GPS Exit Model, even Exit Rich, I got trademarked. Get this stuff trademarked and get patents. These are value drivers. The other big value driver is contracts. For all of your readers, get client agreements. Client agreements are huge. It drives value. Get manufacturing agreements, vendor agreements, and distributor agreements. Here’s the caveat to that, 99% of all business owners never have a transferability clause in their contract. 99.9% of all sales are asset sales because the buyers don’t want the liability.

FYE-GI | Trusting an Expert

Trusting an Expert: You have to get trademarks, you have to protect your company name, you have to protect your logo.


That deal will stop dead in its tracks if the contracts are not transferable. It’s two sentences. That’s number one. You got to have transferable contracts. Also, we’re dealing with a manufacturing business that has a manufacturing plant in Canada. They have no agreement with them. They have no backup plan. That manufacturing business goes out. They’re out of business. You should never put all your eggs in one basket. Always have backup plans.

The other thing that’s big and proprietary is databases. It’s probably the most overlooked and the most undervalued, but it has the biggest value. Facebook paid $19 billion for WhatsApp. WhatsApp was hemorrhaging money, but WhatsApp had a billion users. Facebook knew they could ROI and monetize that. One other thing on proprietary that’s huge is eCommerce businesses. If you’re selling home goods and you are number one on Wayfair, guess what that is? That’s real estate that is hard to get.

If you have a niche product and you’ve cornered the market for that particular industry on Amazon, that’s a huge value. If you’ve got Rush Limbaugh, Glenn Beck, or anybody from a famous show endorsing your products, that’s a huge value. That drives up the price. The fifth P is Patrons. Patrons is customer-based. One of the biggest issues for businesses is that they stop asking their clients, “What do you need? What do you want? How can I make your life easier by doing business with us?”

Do they start assuming or think they know?

They started assuming. They become complacent. When I wrote Sell Your Business For More Than It’s Worth in 2013 and did the research, 85% to 95% of all startups would fail. We all know that. That’s common knowledge. I’m not teaching anything you don’t know. However, I bet you all don’t know this. When I wrote Exit Rich in 2019 and did the same research, there are 30.2 million businesses in the US employing over half the US workforce. Out of 27.6 million businesses, 70% of those businesses that had been in business for ten years or longer are at great risk of going out of business. Only 30% of startups will go out of business now. You hear about big-box stores like Toys “R” Us, Kmart, JCPenney, but you’re not hearing about the private, small companies on every street corner, city, and state across our great nation that are dropping like flies before COVID.

The reason for that is because of a lack of aim. Aim is always innovate, always market. It’s like Blockbuster. Netflix came in, and Blockbuster did nothing. They sat there fat and happy, did nothing, and lost everything. Business owners got to stop being complacent. Whoever makes it easiest for the consumer to do business with them is the one who’s going to win. Amazon wins because Amazon asks themselves, “What business are we in?” They were in the book business, but then they said, “What business should we be in? What are we good at? We’re in a fulfillment business. Let’s take on everybody’s products. By the way, we could sell a horse too.”

That’s what business owners stop doing. They stop asking, “What business are we in? What business should we be at? What do our clients want? What do our clients need? How can we make it easier to do business with them?” The last one is Profits, the most important. Profits is always a symptom, never the problem, and not operating on one of the five Ps. If you don’t have the right people, you’re going to lose profits. If you are not in the right industry and your product is suffering, you’re going to lose profits. If your processes are not efficient and productive, and you lose clients because they’re angry about your service, you’re going to lose profits.

Profits are always a symptom. Never the problem. Click To Tweet

If you haven’t protected your IP, you’re going to lose profits. If you have customer concentration like patrons, it’s customer concentration. Here’s another thing. In a business that has been in business for 20, 30, or 40 years, the customers age out. They stop marketing to people who are spending money. The way Millennials do business is not the same way that Baby Boomers do business.

There’s this gold mine of different business mistakes you’ve mentioned here that would interfere with someone’s ability to exit rich. It seems like that’s what your life, your work, and your book are focused on, helping people maximize what they get out of something they’ve put their life into.

You don’t know what you don’t know. It’s not what you know that gets you in trouble. It’s what you don’t know that gets you in trouble. We try to help clients not make some of these mistakes so that when they’re ready, they can exit rich.

We learn by making mistakes, but there’s a time to learn from someone else’s mistakes. It seems like that’s a reason for hiring you to benefit from that experience.

A genius learns from other people’s mistakes. I love the name of your show.

Thank you. I love the name of your book. Michelle, can you tell people about some of the opportunities and some of the special offers that are available now?

Exit Rich was endorsed by Kevin Harrington, which was the original Shark Tank, and Steve Forbes. If you go to ExitRichBook.com and buy the book now, for $24.79, it includes shipping. You will immediately receive the digital download. You will get free access lifetime membership into the book club, which has a training of me talking about all this stuff and great debt. Plus, it has document downloads. If you’ve never seen a due diligence checklist before, I have one. If you’ve never seen an LOI, there’s one in there. If you’ve never seen what closing docs look like, I have one in there.

Everything you need to build a sustainable, scalable, and sellable business is in there. Plus, they get 30 days of free membership and two club CEOs where we do hot seats, masterminds, and have conversations like this so we can focus on, “What business are you in? What business should you be in?” and all of those type questions, so we get the right answers to help people not only survive this pandemic but thrive afterward. When the book comes out, we ship it to your door.

There’s a lot that’s offered there. I hope people will check that out. You mentioned Kevin Harrington. I was thrilled when I had the chance to interview him. The co-author from his book, Mark Timm, they were guests on Episode 1 of this series. If somebody is reading this for the first time because you know Michelle and her work, I’d invite you to check out Kevin’s episode and everything else that we have here in the series. We’ve been joined by Michelle Seiler Tucker of the firm, Seiler Tucker. Again, her new book is Exit Rich: The 6 P Method to Sell Your Business for Huge Profit. Michelle, thank you so much for sharing a lot of interesting experiences and insights with us. I appreciate it.

Thank you for having me. It was a pleasure being here.


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