Robust ThemeDec 09, 2019 2020-04-08 7:40
Exit Rich, Michelle Seiler Tucker and Simon Severino | STRATEGY SPRINTS 185
In this episode, Simon welcome Michelle Seiler Tucker, the founder and president of Seiler Tucker. Seiler Tucker specializes in selling business by representing over 10,000 buyers looking to buy a business and have a proven process in place that helps companies grow to the point where they can be acquired for the maximum amount. On average Seiler Tucker obtain a 20-40% higher selling price that what the business first appraises for. Services offered by Michelle’s office include: Business consulting, business brokerage, business valuations, business and franchise consulting, sales, and development. Let’s listen to Michelle’s sharing with the topic of “exit rich”.
3 Valuable Insights:
- Always innovate and diversify targeted market
- Business owners never plan or exit and never think about selling until an internal or external catastrophic event has happened. The best time to sell is always when your business is doing well.
- Be in the fulfillment business
(00:02) -Simon: Three, two, one, roll the footage. Welcome back to the strategy sprint podcast. I'm your host Simon Severino. And my guest today is the founder and CEO of Seiler Tucker Inc. As one of only three women in the U.S. who holds a mergers and acquisitions master intermediary degree, and has a wealth of experience regarding, buying, selling, fixing and growing businesses. Welcome everybody. Michelle Seiler, Tucker,
(00:39) -Michelle: Hi Simon. Thank you so much for having me. It’s my pleasure to be here.
(00:43) -Simon: So cool to have you here and also super relevant and topic that we will be discussing how to create a business that is highly sellable.
(00:52) -Michelle: Yeah. So you can exit rich, like the theme of my book
(00:58) -Simon: And especially in this time, not the easiest thing in the world, so super relevant. And tell us, what are you currently creating?
(01:10) -Michelle: Well, I've, I'm currently creating a bestsellers campaign for my book, exit rich, you know, cause our dream is to make all the lists wall street, journal USA today, New York times we've already made the Amazon list. Number one for business accuracy for, um, for acquiring a business you've that business evaluations, et cetera. So we've already made the Amazon's best sellers list. Now we're working on all the other ones. That's what we're creating right now. And we'll hoping, you know, we're helping business owners create wealth by planning their exit early on and creating a business that buyers will want to pay top dollar for.
(01:46) -Simon: Absolutely. And then, so if you can pick only one person when everybody's zigging, this person is zagging, but they are doing the right thing. Who would you pick?
(01:59) -Michelle: I would probably say, you know, that's a tough question because I think there's a lot of, a lot of entrepreneurs that are zagging when other people are zigging and that's what entrepreneurship is all about. Right. Um, I think I'm even zagging because I'm coming out with a book in the middle of COVID, but I would say Elon Musk, you know, he's always zagging when everybody else is zigging. He marches to the beat of his own drum. He listens to his intuition, you know, he just moved his entire company during COVID to Texas and left California. So I would say he would probably be, uh, you know, top of my list. It might be him. And then Warren buffet.
(02:36) -Simon: How is it to do a book tour in a pandemic? So what, what's your angle?
(02:43) -Michelle: Well, good question. It is very different because we finished, uh, I finished writing my book exit rich with Sharon Lechter coauthor. Sharon Lechter is my coauthor. She wrote rich dad, poor dad, Robert Kiyosaki. So she's been in New York times selling author of five times. Um, so we, you know, initially I had a bunch of stages lined up and then COVID happened. So RN go is, we're doing a lot of podcasts. We're doing a lot of radio shows, TV articles. Um, we're trying to do things to think outside the box, like reach out to book influencers that have, you know, a million followers on Instagram, um, doing some unique email campaigns, some unique book signings, you know, so we're just really throwing a box away and doing things differently because that's what you have to do. You have to pivot, you know, when life throws you a curve ball like a pandemic, you gotta, you gotta think differently. You gotta pivot.
(03:37) -Simon: Absolutely. And so tell us a little bit about your business and who the ideal client is.
(03:45) -Michelle: So I'm an emergency physicians, mastering intermediary, um, better business for 20 years, my company, and I've sold over a thousand companies and then thousands of valuations, we specialize in buying and selling, fixing growing companies. I don't just sell businesses. I buy businesses. I flip them also partner with business owners to help them build a successful business for all of the six cylinders, all six piece. So they two connects it rich and an ideal client for me on the sell side, um, is as a business owner has been in business. You know, it doesn't really matter how long they've been in business. Um, but, but a business owner that's been in business that's ready to sell, knows they want to sell. And um, you know, is, is a Timo dollar and up client. Now I typically focus only on businesses, $10 million and up. However, I do have a team of agents and analysts that sell smaller business as well. So an ideal client is somebody who wants to sell their business or somebody who really needs a partner needs some capital, um, needs some resources and experience that we can partner with and help grow them into a build to sell plan.
(04:51) -Simon: Beautiful. What are the three books that shaped you most?
(04:57) -Michelle: Um, other than my own books, I would say, I would say rich dad, poor dad from Robert Kiyosaki and I, my co-author Sharon Lechter, um, love him or hate him the art of the deal by Donald Trump, you know, cause I think that was a great book. Um, I really liked thinking grow rich by Napoleon Hill foundation. And I'm also gonna throw in one more book called the one thing by Gary Keller who owns Keller real estate.
(05:27) -Simon: Beautiful. What have you recently changed your mind about
(05:32) -Michelle: What have I recently changed my mind about? Hmm. I changed my mind and I'm not that, you know, I was dead set on publishing and coming out with a book in 2020. So I changed my mind about that and how we're coming out with it in 2021. So that's the most recent thing I've changed my mind about, you know, you gotta be flexible. Like I said, you gotta pivot.
(05:55) -Simon: Would you now with the, with the knowledge of hindsight, would you change the publishing date of this book or would you, would you, would you do it differently in any way?
(06:11) -Michelle: No, I think, you know, we have changed the publishing date a few times because we had to, and I'm not the only author has had to change the publish date. Most authors are having to pivot and change the date and, you know, look, we all go into business and go into writing books with a certain plan, but plans have to be flexible. You have to adapt, you know, and, and you have to look at, okay, what's the best outcome here is it's a stick to this day and be so regimented that you're not going to be flexible. Well, no regimen being regimen. It could be the kiss of death. So you gotta be flexible. You gotta listen to the experts. You gotta listen to other people's core competencies and do what they're suggesting that you do.
(06:49) -Simon: Cause I, I just signed my first book deal. And we plan to, to get it out February 2022. So I was like, okay, I will just no plates. I'm just planning the whole thing with no planes in mind. Every, every everything, digital affiliate marketing and everything that you can do via email basically.
(07:17) -Michelle: Right? Yeah. And as you know, and that's good and hopefully February 22 will be way out of this pandemic and hopefully that won't be anymore. And that would be a good day for you. And you're doing everything digitally. We can't do everything digitally because we are trying to make certain lists and they require you to sell so many hardcovers.
(07:36) -Simon: I am the hardcover doesn't travel so well I, across countries, I heard
(07:43) -Michelle: It doesn't travel so well across what?
(07:46) -Simon: Across countries.
(07:47) -Michelle: That’s true. That’s why in America, everybody gets a hardcover ship to their doorstep and other countries that buy exit rich, they received the digital download right away. And then, um, after pub date, we send them the Kindle version.
(08:01) -Simon: Yeah. Yeah. Beautiful. Where can people find out more about you? Where should they go?
(08:11) -Michelle: Well, they, if they want to buy the book, they should go to exit rich book.com. We are in the middle of pre-sales right now. And if they go to extroverts book.com, they can, they can buy the book today. They don't have to wait to the launch date. They can buy the book today for $24 and 79 cents, which is less expensive than Amazon. And that price includes receiving an immediate digital download from us plus in a hardcover, since your doorstep, if you're in America, if you're not in America, we'll send you the Kindle version. Plus it includes a lifetime membership into exit rich book club and extroverts book club has video training, lots of content. Most importantly, it has documents. Every business has to have documents. I have to non-competes employee handbooks, organizational charts, um, policy and procedure manuals. I need to have to sell a business.
(09:02) -Michelle: You need to have a letter of intent agreement. You need to have a purchase agreement. You need to have due diligence checklist, closing docs. All of these documentation is worth thousands. Upon thousands of dollars at exit rich book club, you get them for free. You can download them as well. And we also give him 30 days free membership and two clubs CEOs, which is a like-minded entrepreneurial group where we do masterminds and Q and A's and hot seats in which to really build a network, to help people, not just survive, but thrive on the other side of this pandemic. So they to connects it rich. And then it can also go to Seiler Tucker.com to get more information about me.
(09:40) -Simon: Tell us more about the masterminds. What, who should join, how do they take place?
(09:46) -Michelle: Who should Jordan and how do they, what,
(09:48) -Simon: How do, how do they run?
(09:51) -Michelle: Yeah, so it's, it's a it's um, it's twice a month and it's typically ran by me. Sometimes my partner shone lector, uh, can participate, but, um, we do Q and A's we, we asked, you know, I like to, I like to get to know people. So I want to know who's in the group. What type of business are you? Do you have? What's your biggest challenge? What are you trying to accomplish? What's your biggest objective and really try to help solve problems. I mean, that's what we do. We solve problems. If you read my book extra rich, it's all about, you know, building a business that's sustainable, scalable. And when you're ready to sell a bone, it's about how to solve problems.
(10:31) -Simon: What's what's up next? What do you need to solve in the next quarter?
(10:35) -Michelle: What's up next? Well, we need to finish the launch of exit rich and then I will probably have another, I have several other books. Um, then I'm going to write one. I've already written, it's all on the buy side of how to acquire businesses, um, with no money down, how to grow through acquisitions, how to quit your corporate job and buy a business. You know, so it's all about the acquiring side. Plus I got probably five or six more books after that. Um, and we're just going to keep, you know, working with business owners, helping them save their businesses, helping them retire rich.
(11:14) -Simon: Well, what, what fascinates you about writing books that you are doing so many?
(11:19) -Michelle: I've always been a ride as a child. I never played with toys. I wasn't your typical little girl. I didn't play with dolls. In fact, I thought it was a colossal waste of time. So I would run around with a notebook and a pen and I would walk up to complete strangers and ask them a bunch of questions. So I've always been interested in people I've always been interested in writing, you know, um, I've always liked solving problems coming up with solutions and entrepreneurship is obviously in my blood. I own many different companies. I don't just sell businesses, also buy them and run them. Um, and I just like, I think, you know, it's the best way to communicate your message and get your point out there. Plus, you know, creating books is a good way to educate a massive audience at one time and, um, a good way to let business owners know there's a better way to run your business and there's a better way to sell your business. So you don't become a statistic.
(12:12) -Simon: I want to know more about your book and maybe you tell us some, some parts out of it so that we can get a little bit of a taste of the book, but first one word from our sponsors.
(12:37) -Michelle: That was quick. Sure. So one of the, one of the philosophies that I cover and exit rich as we kind of address the biggest mistake that business owners make, because according to Steve Forbes and Steve Forbes endorsed exit rich, it gave us a glowing testimonial, but according to Steve Forbes, eight out of 10 businesses will not sell. So why do eight out of 10 businesses don't sell in America? I mean, that's a huge statistic. Well, the number one reason they don't sell is because business owners never plan or exit and never think about selling until an internal or external catastrophic event has happened. They come to me when there's a death in the family or there's divorce or health issues or partner disputes, or COVID when there's a catastrophic event, internal or external, that's typically the worst time to sell your business, not the best time to sell.
(13:29) -Michelle: So the best time to sell is always when your business is doing well. Okay. So one of the big things that we talk about strategies and exit rich, as what I call the GPS exit model, you need to plan your exit from day one of starting or buying a business assignment. It's kind of like when you drive somewhere, what's the first thing that you do anywhere in the world. We pull out our phone, right? And we've got a Google maps or a Wade. So whatever program you use and you plug in your destination, right? You need to, you need an in game. You need to know where you're going. So business owners, they never have a destination. They just drive around in circles. They drive up and down those financial Hills ended up nowhere. So business owners need to say, okay, listen, here's my end game.
(14:16) -Michelle: Here's my desired destination. I want to sell my business for $20 million. Great. Now we got a number. That's the beginning of a plan. Now what does a GPS exit model need and needs to know where you're starting from? What is your car location? What is your business worth right now? Most businesses in America have no idea what their business is worth because they never get a business evaluation checkup. And you should have your business evaluated every single year because our events that increased valuation and decreased valuation. So know what your business is worth. So get evaluation. So if you say, okay, I want to sell for $20 million. I'm calling with $5 million. Great. We know what our end game is. We know what we're starting from. Now. You need to know timeframe. Let's say you want to do it in 10 years on a sell for $20 dollars.
(15:04) -Michelle: And I’m worth $5 million. I want to do it in 10 years. Now you need to know who's your buyers, buyers, not buyer. Who are your buyers going to be? So there's five types of buyers. Here's who you don't want to be your buyer. You're not going to sell to a first time buyer because they can't afford a $20 million company. And you can't sell just a turnaround specialist because they buy distressed assets. So the most important thing is to determine who your buyers are going to be is probably going to be a private equity group, a strategic or a competitor with strategic and competitors by synergies. And they pay more money for those certain synergies. Or it could be a serial entrepreneur, sophisticated buyer. They didn't need to know. Well, gosh, if I want to sell $20 million company, what do the financials need to look like? What am I gross revenues have to be?
(15:49) -Michelle: Where does my EBITDA earnings before interest taxes, amortization have to be. And so to sell a $20 million company, you need to be around in a three, four or $5 million, three to $5 million in EBITDA. Now you need to know, well, what are those buyers characteristics? What do they look for in buying a business? And then most importantly, you need to know what is my, why, why I want to sell a business for $20 million Simon. If the why is not powerful enough, you'll never stay in the game. You know, selling a business for $20 million. If it was easy, everybody would be doing it. It's not easy. There are a lot of financial hurdles. There's a lot of obstacles. There's a lot of hoops. You gotta jump through and you really gotta be tough to stay in the game and you gotta be motivated. And the only way to stay motivated is by having a powerful, why to keep you in that game. So that is what we call the GPS exit model. Then when he figured that out, then you build your business to suit the buyer's criteria. Based upon what we call in the book, the S T six piece, any questions
(16:57) -Simon: And other questions, what to, what to really consider in terms of raising devaluation. I guess there are some KPIs like everyday, like revenue that everybody is checking, but maybe there are some KPIs where you say, Hey, people, you are not taking that seriously enough. This is really important. You have to measure that.
(17:21) -Michelle: Yeah. So that's when we get into the foundation of the business and that's what I call the six PS, would you like me to start going over the six piece? Cause that's piece of the book. So number one, we, when we do evaluations and we look at the KPIs, we look at evaluations, we base it on several different things. We base it on industry comps, market comps, just kind of cashflow asset approach. And what I call the six PS, the six PS or the synergies, the strategic competitors and private equity will pay a lot of money for. And this is how we evaluate businesses. Number one, P is people you don't build a business. You build people and people build the business. There are so many businesses in America that are 1000% dependent upon that owner. And you pull that owner out of the business. There is no business. Okay? So buyers want to buy a business. Not a job.
(18:13) -Michelle: I have dental practice has coming to me. One dentist, dental hygienist. You pull that dentist out of the business. Is there a business anymore? No same thing with a chiropractor practice, same thing with a law firm. All these professional practices have to build a business because all they're doing right now is operating a job. So number one is the people you have to have the right people in the right seats. Business owners need that higher focus on their strengths, higher their weaknesses. And ask the who question who opens the doors, who deals with clients who deals with customer service issues, legal issues, accounting who deals with environmental logistics, transportation, manufacturing. The clue Simon is you should never be next to the hoop. You need to build a business that runs without you. The number one reason that businesses are not sellable is because the business is 1000% dependent upon the owner.
(19:10) -Michelle: You have to build a business most, a lot of businesses in America or jobs. They're not businesses. Number two is product. You have to ask yourself, is your industry on the way up on it, way out. Do you have an Amazon or do you have a blockbuster? And have you have a blockbuster? What do you have to do? You have to pivot. You have to align yourself with an expert. They can maybe see things that you're not clearly seeing because when you're in a fog, it's foggy. So you have to align yourself with an expert and ask three transformational questions. Amazon did this. Amazon asked themselves years ago, what business are we in? And I said, well, we're in a book selling business. What do we do really, really well better than anyone else. We do fulfillment really, really well. What business should we be in?
(19:56) -Michelle: We should be in the fulfillment business. Those three transformational questions, check Amazon from a seller, a small time bookseller to a multi-billion dollar worldwide conglomerate that they are today. So product is huge. If you're in a dying industry, if you don't pivot, if you don't make some changes, you'll end up going out of business rather quickly. And buyers are not going to buy you. If you're in a dying industry, they're not going to buy your business by now. Nobody wants to buy restaurants because of COVID. Okay. And then a therapy is processes. Processes are very important. A lot of business owners don't think of processes until they have to because a catastrophic event, a car, let's say somebody got it. Her, um, on the, on the floor, the manufacturing floor. Well, they, I do a process for health and safety or a client complaints and put it all over the internet.
(20:49) -Michelle: Now they want to have a customer service policy. You want to have those processes and procedures and policies, but they want a starting a buying a business. Of course you tweak them along the way, but you want to make sure that they're designed with the customer experience in mind and they should be efficient, productive, and documented. There are so many companies that don't have policy and procedure manuals. You need PPE manuals. You need SOP standard operating procedures, and you need to make sure your clients or your employees are trained on all. Any questions so far?
(21:22) -Simon: Three pieces so far.
(21:24) -Michelle: Three Ps. Number four P is the highest value driver. This could take you from a five, a five months, water, 10 X, multiple. And this is what we call proprietary. There's six pillars to proprietary. But number one in proprietary is Brandy. How well Branded are you, the more well-branded your company is, the more I can sell your business for as long as your brand is relevant in the mind of the consumer.
(21:52) -Michelle: So blockbusters, anybody want to pay for blockbuster? No, because I went belly up. They bust, blockbuster was a bust. The biggest brand in the world is, Do you know?
(22:07) -Simon: Biggest brands in the world?
(22:08) -Michelle: In the world.
(22:11) -Simon: Alphabet?
(22:13) -Michelle: What's that? You don't know, Apple. Apple is the largest brand in the world with $189 billion. That's just for the brand. That's what the brand was so forth. That's not including cashflow. That's not including assets, inventory, real estate, accounts, receivables, anything else? That's just the brand. So build your brand and you'll build your access so you can exit rich. The other thing that's really big is trademarks. Any type of trademarks you have, like on your company, name, your slogan, your podcast. A lot of business owners in the United States will go out and get a state trademark. They never checked the government database to make sure that's available on a federal level.
(23:00) -Michelle: So you can be in business for 10, 15, 20 years in America. And all of a sudden, receive a system decision letter in the mail and you have to stop using that name. You have to start all over again. So it was very important to get a federal trademark. If you own a podcast, same thing, it could be building your brand and your podcast, and now you have to stop using it. So make sure you get a trademark. The other thing is pens are very valuable. Do you ever watch shark tank? What are the, what's the questions I always ask on shark tank? Every single shark asked the same question. Every time to every, uh, every inventor. What did I ask?
(23:40) -Simon: Are you patented?
(23:42) -Michelle: That's right. Are you patent? Do you have a patent on that? Do you have a patent pending? Do you have a utility patent pans are worth a lot of money, protect your product and get a patent. I think contracts are very important to manufacturing vendor contracts, distribution franchise order. It has a lot of franchisees, the most valuable contract of all Simon, a client contracts, because buyers will pay more money for a business that's in revenue and has reoccurring clients has reoccurring revenue, reoccurring revenue streams, and work in progress, money coming in the door. So here's the caveat in America is that most business owners don't have the two sentence transferability clause. So when a business sells 99.9% of all sales are assets sells, not stock sells. You have to have that transferability clause. If you don't have that, then your deal can fall dead in its tracks and you have to start over.
(24:39) -Michelle: So make sure you do that. And then databases are really big, especially after clients can be re-targeted and repurposed. Um, Facebook pay $19 billion for WhatsApp and WhatsApp was hemorrhaging, not just losing money. They were a hemorrhaging, but guess what? They have, Simon. They had a billion users and WhatsApp and Facebook knew they could monetize. They could all lie from those users. So that a base is a really important also IP real estate. Let's say that there's a company that manufactures bedding and our number one on Wayfair are number one. And Amazon strategics and competitors will pay a lot of money for that number one spot on Etsy, Wayfair, Amazon, let's say, do you have a skincare line? And you're number one with Oprah Winfrey. And she's endorsed your product. Celebrity endorsements are huge. That's what we call these IP real estate as strategic and competitors will pay a lot of money for this.
(25:37) -Michelle: Um, and then the last, the fifth P are you ready for the fifth one you're being so patient, the fifth P is patrons, which is your customer base. In America, a lot of businesses function on the 80 20 rule where 80% of the revenue comes from 20% of their clients. If you lose a few clients, you could practically be out of business. So you want to make sure you go from customer concentration, a customer diversification. And then if your, if your business has been in business, 20, 30, 40, 50 years, your clients are probably aging out. And one thing that business owners don't always do very well is they don't diversify and go after those millennial buyers because millennials buy very differently in a way baby boomers buy, right? So you always got to innovate. I call it aim, always innovate and market. And then the last P the most importantly to all of us entrepreneurs is profits. Well, I'm in business to make money, but Simon profits is never the problem. It's always a symptom of not operating one of the other five PS. A lot of my clients will come to me. Sellers will come to me and say, Michelle, I have a profit problem. And like, no, you have a people problem. Or you have a process. Problem is never the problem. It's a symptom of not having your ducks in a row. Make sense?
(27:00) -Simon: Many times, it's the SOP is missing in the processes because we’re reinventing the wheel every time. And then that eats up the profit margins, right?
(27:08) -Michelle: Absolutely. And you know, and in restaurants, if your processes are not really efficient, then it could cost you a lot of money and waste, right. And overhead. So processes are huge to making sure your company stays, stays and maintains profitability.
(27:25) -Simon: Wow, Michelle, you gave us a really a predicable, beautiful checklist and people, if even if you're starting out right now, that's a checklist that you can use as a thinking tool right now, because you need to have all these elements in place. Of course, in the, in the first years you think it through and, um, ask yourself these questions is very good exercise that you should really do once, once a year and go through all these questions. So get the book exit rich, and, um, thank you, Michelle, for.
(28:02) -Michelle: You’re welcome. Make sure they go to exit rich book.com.
(28:07) -Simon: And what should be my next guest?
(28:11) -Michelle: Who should be our next guest? Well, it depends. I mean, what subject matter do you want to discuss
(28:17) -Simon: Somebody who has a good CEO tip?
(28:22) -Michelle: Okay. Uh, gosh, I have so many. David Corban, really good friend of mine. He always has great CEO tips. He's written several books. He wrote a book called brand slaughter. He wrote another book called, um, Illuminae great. Great, great guy. And funny on, not that funny, he's really funny. And we'll have you in stitches a whole interview.
(28:44) -Simon: Thank you so much, Michelle, for sharing all these knowledge with us, stay safe and come back soon.
(28:51) -Michelle: Thank you so much for having me Simon. It was a pleasure to being with you. Thank you.