The Ripcord Moment: Recent Episodes
Joe Seetoo
Business owners are today’s American heroes. They innovate, they create jobs, they believe that they can CREATE a better future for their families and our country. So much attention is given the start of a business (the idea, the technology, and the fund raising). Yet much less to the exit – as if it will magically take care of itself. When they do exit the business, it’s a once in a lifetime event – there is no do over! Yet so many are ill-prepared to make the jump.The Ripcord Moment is a podcast focused on learning from those entrepreneurs and their team of advisors who have made the jump and sharing their best ideas with you. So when you are ready for your Ripcord Moment – you can execute and hit your perfect landing.
On this episode of The Ripcord Moment, host Joe Seetoo welcomes Julia Schieffer, founder of DerivSource. DerivSource is an independent information source on derivatives, post-trade, fintech, risk management and technology that she sold to Markets Media in 2021.
Julia encourages owners and leaders to listen to their gut. If you feel passionate about an idea, be persistent with your vision even if other people shoot it down. If it does not work out, know that trial and error are integral to finding success and creating uniqueness. Julia reframes failures as “experiments” and knows that they are for her ultimate good.
She also urges owners to detach themselves from their business when it’s time to let go. Although the business might feel like it is a part of your identity, many owners ultimately suffocate their company because they do not allow themselves to trust another entity or owner to give it new life.
Finally, Julia urges owners to know their worth and what they truly want. Write down a couple of your own goals (not what you think people want from you), and never waver from these core aspirations. She also encourages owners to build a strong transition team and surround themselves with a reliable team of lawyers, advisors, and other professionals.
On this episode of The Ripcord Moment, host Joe Seetoo welcomes Julia Schieffer, founder of DerivSource. DerivSource is an independent information source on derivatives, post-trade, fintech, risk management and technology that she sold to Markets Media in 2021.
Julia encourages owners and leaders to listen to their gut. If you feel passionate about an idea, be persistent with your vision even if other people shoot it down. If it does not work out, know that trial and error are integral to finding success and creating uniqueness. Julia reframes failures as “experiments” and knows that they are for her ultimate good.
She also urges owners to detach themselves from their business when it’s time to let go. Although the business might feel like it is a part of your identity, many owners ultimately suffocate their company because they do not allow themselves to trust another entity or owner to give it new life.
Finally, Julia urges owners to know their worth and what they truly want. Write down a couple of your own goals (not what you think people want from you), and never waver from these core aspirations. She also encourages owners to build a strong transition team and surround themselves with a reliable team of lawyers, advisors, and other professionals.
On this episode of The Ripcord Moment, Joe Seetoo welcomes Joel Sherwin, an experienced attorney and fintech leader. He is now Head of Legal at Galileo Financial Technologies and recently published The Path: A 30-Day Guide to Building a Meditation Habit That Will Change Your Life, a book on how he has become more present and peaceful in his daily life.
Joel emphasizes the importance of mental fortitude for entrepreneurs and business owners. He discusses the need to have self-trust and confidence as you develop your career and pitch ideas to peers; it’s natural to feel afraid sometimes, but Joel encourages listeners to trust that they can ultimately persevere even if they don’t have all the answers right now.
Furthermore, Joel shares his experience with meditation and journaling. These practices helped him manage his anxiety during the pandemic, leading to an incredible transformation in his mental health and perspective. He also highlights the importance of having a solid support system and keeping people in your life who can provide valuable feedback and support (both professionally and personally).
Finally, Joel advises business owners to define their core values as these shape not only their company’s direction but who the company grows with. He also reminds owners to evaluate what their market wants; sometimes, even a great idea that is executed perfectly does not get picked up because the audience or market does not want it. Make sure you do a proper analysis of the products your audience wants and the problems they most desperately need solved.
On today’s episode of The Ripcord Moment, host Joe Seetoo welcomes Tim Gaspar, CEO and Founder of Gaspar Insurance Services.
Tim spent 15 years building his company and began feeling uncertain how to continue growing within the insurance industry. In 2021, he decided to sell his business as various assets such as Bitcoin and real estate were experiencing high valuations. He considered the possibility that if he didn't sell his business at that time, he might regret it in the future when valuations could potentially decrease.
Tim acknowledges that selling his business had a considerable impact on his personal life, as he saw the business as a part of his identity. He emphasizes the importance of being mindful of how the transition can change your sense of self ahead of time and finding support from family and friends during the transition. Tim also finds fulfillment in getting involved with his local community and giving back. He says community work can improve one’s sense of ownership, accountability, and responsibility- and therefore their leadership skills.
Tim encourages listeners to take a leap of faith when they feel called, even if they do not feel “smart” or “ready” enough to. Many people try to put goals or tasks off due to the amount of time or energy it would take, but Tim says that time passes anyway and it’s better to start now and stop making excuses. He also suggests business owners to find wise people to learn from with a humble spirit.
On this week’s episode of The Ripcord Moment, Joe Seetoo invites best friends and co-founders of Meli’s Cookies, Melissa Blue, and Melissa Mehall, to discuss how they started their gluten-free cookie company that now sells products in over 9,000 stores across the country.
Melissa and Melissa have been friends for 30 years. They say prioritizing their friendship over the company, finding mentors to seek advice from when experiencing tension, and realizing what areas are appropriate to compromise on have been critical for being able to maintain the closeness of their relationship while being business partners.
Melissa and Melissa explain that the pandemic had both positive and negative effects on their company. When the pandemic ensued, people began baking more at home, so sales went up. However, in-person meetings with buyers transitioned into Zoom sessions, and many buyer meetings have stayed remote, making it harder to sell their product since buyers cannot taste it.
A strategy that has helped Meli’s Cookies create more connections and find buyers is attending food shows and conventions. They also recommend business owners who may be minority-owned or women-owned to become certified, as this can potentially help them compete for federal contracts and gain recognition from stores who are looking to support minority and women-owned brands.
Melissa and Melissa also suggest listeners to consider raising funds earlier and working with people who have experience in their niche or industry. When starting a business from the ground up, you may not have time to train people to learn about the field. They say they have benefited the most from working with experts, mentors, and employees who are familiar with the food industry.
Check out Meli's Cookies here: https://melismonstercookies.com/
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On this episode of The Ripcord Moment, host Joe Seetoo welcomes Aaron Bergh, founder of Calwise Spirits Co. Calwise is headquartered in Paso Robles and is home to labels like Big Sur Gin and Axe Hole Whiskey.
Aaron’s passion for spirits began in college when he learned how to make his own alcohol. Eventually, what was once a fun hobby turned into a calling. He attended Cal Poly, San Luis Obispo, which offered an entrepreneurship concentration that helped him develop a business plan and connect with investors. After graduating, Aaron worked in a distillery, got his product started there, and lived out of his car for two years. Now, Calwise has been established for seven years and is available in Albertsons, Vons, Total Wine, and many restaurants/bars.
Aaron recommends other business owners to be open-minded enough to make changes to their product or brand based on what is or is not resonating with people, learn from mistakes, and stay resilient in difficult times.
Check out Calwise here: https://www.calwisespirits.com/
African Family Firms, and host of The Connected Generation podcast.
Nikè Anani has first-hand experience with being a second-generation family business owner and knows how confusing and isolating a transition can feel. According to a study done by The Williams Group, only 30% of business transitions are successfully passed onto the third generation. 65% of the reasons why most transitions do not work out are due to lack of effective communication and trust and 25% was due to a lack of engagement in the next generation. Therefore, Lifetime to Legacy focuses on more qualitative and relational advice for how families can better connect, collaborate, and co-create the businesses of the future.
She also recommends NextGen business owners to have more empathy for their elders and to understand what their deepest anxieties and aspirations are. It is normal for younger owners to have their own ideas and potentially become frustrated with traditions and how things were done by older owners. However, Nikè says bringing your new ideas to the table with empathy and a reverence for the experience older people have can help the transition go more smoothly.
Nikè suggests family business owners to plan a family meeting and have collective conversations on the purpose and vision of the company and to join a community or networking group of other business owners who can act as a sounding board or a support system. She says transitions can potentially be a very stressful and lonely time for owners and it is important to have community.
Visit Nike’s website here to connect with her: https://nikeanani.com/
On today’s episode of The Ripcord Moment, Joe welcomes sister-duo Lizzie Means Duplantis and Sarah Means, founders of Miron Crosby, a custom cowboy boot brand headquartered in Dallas, TX.
Sarah and Lizzie were raised on a ranch in Texas and were gifted cowboy boots on every important occasion: birthdays, graduations, and weddings. Their cousins also owned a cowboy boot factory and helped them make custom boots for their personal use. When they began wearing these boots around New York City later in life, strangers would stop and ask where they could get a pair. That’s when Sarah and Lizzie knew they had something special to introduce to the luxury fashion market.
Miron Crosby made over one million dollars in revenue during their first year. Sarah and Lizzie say they accomplished this by elevating the shopping experience through their brick-and-mortar store in Highland Park, TX, highlighting the uniqueness of their products and working with a PR firm to help get their boots featured in publications like Vogue and Elle. They have tied sentimental value with luxury by also offering the option to embroider handwritten words onto their boots. There is no one else in the fashion world who is offering such niche products.
As they grow even more this year, the sisters are putting more energy toward hiring new executives who will push their brand forward. They agree there are certain values and skills you cannot teach someone, like work ethic and kindness. Lizzie and Sarah are intentional about the tribe they keep at Miron Crosby to ensure their brand is propelled by the right people.
Lastly, they shared their two action items for business owners:
1. Work with people who are experienced and whose values align with yours.
2. Get comfortable with being uncomfortable. Be the first one to ask questions, don’t be afraid to seem “dumb,” and be open to feedback.
On this episode of The Ripcord Moment, host Joe Seetoo invites President of Stainless Process Systems and Alliance Finishing & Manufacturing, Mark Hyman, along with his son, Chief Operating Officer of Stainless Process Systems, Brandon Hyman. They discuss generation gaps, the dynamic between parents and children when working together, and what Brandon had to consider when switching from a job at Google to a family business.
Mark and Brandon say they have different communication and work styles due to their generational gap; for example, while it would be natural for Mark to call a customer or vendor, Brandon would rather email them. Furthermore, due to the fact that Brandon used to work at the multi-billion-dollar entity that is Google, financial resources have never been a constraint for his prior working experience. Therefore, he would rather pay more money to save time, while Mark would rather spend more time on a process to save money. When it comes to bridging their gaps, Mark says compromise and trust are key.
If you are considering joining or starting a family business, Brandon and Mark agree it is crucial to consider how other people like extended family members may be affected (spouses, children, grandchildren, etc.). Before Brandon transferred to SPS, he created a document for his wife outlining how the transition from Google to SPS would work and how to mitigate the risk of joining a smaller family business.
Ultimately, Brandon and Mark have been able to maintain their close father-son relationship and have learned to trust and respect each other’s skills and contributions. They say keeping lines of communication open, holding each other accountable, prioritizing the right goals together and discussing one another’s visions for their lives within and beyond the company is pivotal to successfully running a business with family.
Disclosure: Information presented herein is for discussion and illustrative purposes only. The views and opinions expressed by the speakers are as of the date of the recording and are subject to change or do not necessarily represent the views and opinions of Morton Wealth. These views are not intended as a recommendation to buy or sell any securities, and should not be relied on as financial, tax or legal advice. You should consult with your financial, legal, and tax professionals before implementing any transactions and/or strategies concerning your finances.
On this episode of The Ripcord Moment, host Joe Seetoo invites Regional Executive Vice President at American Business Bank, Jeff Munson, to discuss the recent bank crises and what business owners can do to protect themselves.
Jeff says Silicon Valley Bank collapsed due to their investments in longer bonds, so when depositors started to leave the bank, SVB did not have much liquidity because they could not sell those long-term bonds. This is a learning lesson for anyone who has money in a bank- it is imperative to ensure your bank prioritizes risk management. Jeff says while your banker should understand your balance sheet, you should also be asking questions about theirs. You should have conversations with your banker about their loan portfolio, bond strategy, and senior management.
Jeff also notes that American Business Bank evaluates their clients’ character, management, strategy during the pandemic, etc. Therefore, the clients they take on are generally quality companies who make money and preserve their assets. Your bank should be asking questions about how your business is run and how your organization has weathered storms in the past, as this may mean they are a bank that understands risk.
Jeff recommends business owners to analyze the cash flow and debt structure they need to transform their lifestyle business into an organization that is not entirely dependent on them. Your bank should be helping you understand how to get there. Furthermore, business owners should understand how FDIC Insurance works in order to understand what risk they are taking. Jeff is confident that while some banks have failed recently, reinforcing the importance of being with a bank that mitigates risk, the banking system is here to stay through good and bad times.
Disclosure: Information presented herein is for discussion and illustrative purposes only. The views and opinions expressed by the speakers are as of the date of the recording and are subject to change or do not necessarily represent the views and opinions of Morton Wealth. These views are not intended as a recommendation to buy or sell any securities, and should not be relied on as financial, tax or legal advice. You should consult with your financial, legal, and tax professionals before implementing any transactions and/or strategies concerning your finances.
Welcome to Season 3 of The Ripcord Moment! On the first episode of this season, host Joe Seetoo invites CEO of Watermark Life Insurance Services Nicole Rex to discuss being a woman in the insurance industry, the challenges of owning her own business, and insuring one’s business.
Nicole says although obtaining initial opportunities in the insurance industry has been easy for her, as a woman, proving herself to clients and peers has been difficult since the field is extremely male-dominated and people may doubt her intelligence because of stereotypical beliefs around women.
Therefore, she works hard to educate herself on insurance so she can provide valuable knowledge and show how reliable she and her team can be. Nicole asserts that there are good days and bad days as a business owner, but if you carry a persevering attitude, you have much better chances of succeeding.
Nicole also talks about how many insurance companies do not clearly explain the reasoning behind their policies to clients. She wants to make insurance easy to understand for the average person so their clients know exactly why they have their policies. She also encourages business owners to go over their insurance regularly to ensure it fits their individual situation as circumstances change.
Finally, Nicole admits it’s easy to get caught up in everyday tasks as a business owner but reminds listeners to create goals that will take their company to the next level and actually block the time to complete them. It may even be beneficial to leave the office for one day to meditate on what would be best for the company’s long-term strategy and return to work with a refreshed mind and appropriate goals that will optimize the business.
Check out Watermark Life Insurance here: www.watermarklife.com
Disclosure: Information presented herein is for discussion and illustrative purposes only. The views and opinions expressed by the speakers are as of the date of the recording and are subject to change or do not necessarily represent the views and opinions of Morton Wealth. These views are not intended as a recommendation to buy or sell any securities, and should not be relied on as financial, tax or legal advice. You should consult with your financial, legal, and tax professionals before implementing any transactions and/or strategies concerning your finances.
“When we talk about emotional intelligence, what we’re really talking about is recognizing that we’re emotional beings and that we react to life’s events emotionally. First […] when leaders are not developed in emotional intelligence, they’re not able to listen to people.” – Robert Grossman, CEO of Black Diamond Leadership
On today’s episode of The Ripcord Moment, Joe welcomes Robert Grossman, founder and CEO of Black Diamond Leadership, to discuss psychological safety, team building, and the importance of emotional intelligence in workplace relationships.
Robert helps clients respond to triggers or stressful events maturely instead of reacting with emotion. When leaders and team members can observe their own emotions and then take a step back to consider how they should respond, they feel better, earn more respect from those around them, and build a psychologically safe environment at work.
Robert says the main reason why people leave a company is not because of money but because of leadership and managers who fail to make employees feel like their contributions matter or who even instill fear in the workplace. Therefore, it’s extremely important for leaders to receive training in emotional intelligence and learn to listen to their team with humility.
Lastly, Robert leaves us with two action items for owners:
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When someone is looking to buy a company, they want a strong team. Teach leaders to build high-performing teams with members who trust each other and feel psychologically safe with one another.
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Successions can be a time of great stress. Create an environment of radical candor, where team members feel comfortable approaching the leaders of a company with any concerns they may have so these issues can be addressed before it’s too late.
Disclosure: Information presented herein is for discussion and illustrative purposes only. The views and opinions expressed by the speakers are as of the date of the recording and are subject to change. These views are not intended as a recommendation to buy or sell any securities, and should not be relied on as financial, tax, or legal advice. You should consult with your attorney, finance professional, or accountant before implementing any transactions and/or strategies concerning your finances.
“What’s being expected from the younger generation is you’re sitting down with your manager and learning about the culture and values. What does the company stand for?” – Daan Renssen, Owner of PrideStaff.
In today’s episode of The Ripcord Moment, Daan and Joe discuss hiring trends, what job satisfaction means to the younger generation, and what the pandemic has taught companies about flexibility.
Gone are the days when work is just a way to make money – now, companies are expected to improve the world around them, take stances on global issues, and foster their employees’ growth. This process starts right at onboarding; when they join a company, people expect to engage in deeper conversations with leaders because they want to feel aligned with their workplace’s goals and values.
Daan also reminds owners to polish their business’s online presence since job candidates will often research companies on Glassdoor, LinkedIn, etc. Additionally, he encourages them to ensure that their hiring process is simple and speedy as it is common for talent to be interviewing with multiple companies.
Lastly, Daan shares two action items for owners:
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Before selling a business, owners should hire an HR agency to conduct a complete audit to ensure that their business is in good standing. The agency can also examine the workplace culture and may help improve it.
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Before an owner leaves their company, they must ensure that any unsettled feelings and dynamics amongst their team are resolved. To minimize disruption, leaders must leave their team knowing the members work well together and are confident in the firm’s future.
Disclosure: Information presented herein is for discussion and illustrative purposes only. The views and opinions expressed by the speakers are as of the date of the recording and are subject to change. These views are not intended as a recommendation to buy or sell any securities, and should not be relied on as financial, tax, or legal advice. You should consult with your attorney, finance professional, or accountant before implementing any transactions and/or strategies concerning your finances.
“Before you go to market, the seller should do a due diligence review. Hire an ERISA lawyer, get the paperwork together, and see what’s going on.” – Meredith Sesser, Owner of Sesser Law
In today’s episode of The Ripcord Moment, Meredith offers her expertise on the nuances of retirement plans, ERISA (Employee Retirement Income Security Act), and ensuring your business is in good legal and fiduciary standing before selling.
While owners may feel overwhelmed by the concept of conducting an audit or due diligence review, it is easier than you may think. Meredith usually asks clients to send her documents related to retirement, like pension plans, 401(k) plans, and profit-sharing plans, through Dropbox. Buyers will see the same documents, so it is wise to ensure there are no liabilities or mistakes that need to be fixed before the buyer assesses them.
Because there are so many employee-related elements in a sales agreement to consider beyond a 401(k), like non-qualified retirement plans, deferred compensation, health benefits, etc., an M&A lawyer should request an ERISA lawyer to review these parts thoroughly. Proactively communicating with your third-party administrator about important decisions, like adding a new partner to the firm, is crucial so steps can be taken to update certain documents and avoid problems that can potentially become legal burdens.
Lastly, she shares two action items for owners:
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Prevention can save owners significant amounts of stress and money. Engage an ERISA lawyer to conduct a due diligence review to ensure there are no liabilities or fiduciary breaches.
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If there is a problem, fix it before you go to market. A few thousand dollars to fix a mistake is always better than having the IRS get involved later. It also lessens buyers’ hesitation/risk when considering your business.
“Progress is in relationship with struggle.” — Chris M. King, CEO of Status Flow. In this episode, Chris explains what “flow” is and how to create momentum on your team and in your personal life with flow triggers. He also shares how embracing change and discomfort is pivotal to growth.
Chris discusses the law of accelerating returns, which signifies the exponential progress of technology and culture. In order to keep up with our ever-changing world, business owners must be open to pivoting their plans and products and constantly innovating.
Being immersed in a state of “flow” is necessary for creativity and momentum. Think about a time when you were effortlessly absorbed by the task at hand because your mind was in a state of inspiration. Certain triggers, like risk and novelty, contribute to the flow state.
When organizations learn to remove flow blockages and create an environment, routines, and culture that include flow triggers, innovation and motivation will come to employees naturally.
Lastly, he shares two action items for owners:
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Figure out what to do when you reach your goal. Continue innovating and thinking about ways to spin your products and business, or what the next project should be. The dark side of flow is that when you obtain success, there now exists a large gap that must be filled with the next journey.
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The brain and body require rest in order to bounce back to their most creative, inventive state. When you rest, let yourself completely relax and step away from work.
Disclosure: Information presented herein is for discussion and illustrative purposes only. The views and opinions expressed by the speakers are as of the date of the recording and are subject to change. These views are not intended as a recommendation to buy or sell any securities, and should not be relied on as financial, tax or legal advice. You should consult with your attorney, finance professional or accountant before implementing any transactions and/or strategies concerning your finances.
“Progress is in relationship with struggle.” — Chris M. King, CEO of Status Flow. In this episode, Chris explains what “flow” is and how to create momentum on your team and in your personal life with flow triggers. He also shares how embracing change and discomfort is pivotal to growth.
Chris discusses the law of accelerating returns, which signifies the exponential progress of technology and culture. In order to keep up with our ever-changing world, business owners must be open to pivoting their plans and products and constantly innovating.
Being immersed in a state of “flow” is necessary for creativity and momentum. Think about a time when you were effortlessly absorbed by the task at hand because your mind was in a state of inspiration. Certain triggers, like risk and novelty, contribute to the flow state.
When organizations learn to remove flow blockages and create an environment, routines, and culture that include flow triggers, innovation and motivation will come to employees naturally.
Lastly, he shares two action items for owners:
-
Figure out what to do when you reach your goal. Continue innovating and thinking about ways to spin your products and business, or what the next project should be. The dark side of flow is that when you obtain success, there now exists a large gap that must be filled with the next journey.
-
The brain and body require rest in order to bounce back to their most creative, inventive state. When you rest, let yourself completely relax and step away from work.
Disclosure: Information presented herein is for discussion and illustrative purposes only. The views and opinions expressed by the speakers are as of the date of the recording and are subject to change. These views are not intended as a recommendation to buy or sell any securities, and should not be relied on as financial, tax or legal advice. You should consult with your attorney, finance professional or accountant before implementing any transactions and/or strategies concerning your finances.
“Progress is in relationship with struggle.” — Chris M. King, CEO of Status Flow. In this episode, Chris explains what “flow” is and how to create momentum on your team and in your personal life with flow triggers. He also shares how embracing change and discomfort is pivotal to growth.
Chris discusses the law of accelerating returns, which signifies the exponential progress of technology and culture. In order to keep up with our ever-changing world, business owners must be open to pivoting their plans and products and constantly innovating.
Being immersed in a state of “flow” is necessary for creativity and momentum. Think about a time when you were effortlessly absorbed by the task at hand because your mind was in a state of inspiration. Certain triggers, like risk and novelty, contribute to the flow state.
When organizations learn to remove flow blockages and create an environment, routines, and culture that include flow triggers, innovation and motivation will come to employees naturally.
Lastly, he shares two action items for owners:
-
Figure out what to do when you reach your goal. Continue innovating and thinking about ways to spin your products and business, or what the next project should be. The dark side of flow is that when you obtain success, there now exists a large gap that must be filled with the next journey.
-
The brain and body require rest in order to bounce back to their most creative, inventive state. When you rest, let yourself completely relax and step away from work.
Disclosure: Information presented herein is for discussion and illustrative purposes only. The views and opinions expressed by the speakers are as of the date of the recording and are subject to change. These views are not intended as a recommendation to buy or sell any securities, and should not be relied on as financial, tax or legal advice. You should consult with your attorney, finance professional or accountant before implementing any transactions and/or strategies concerning your finances.
“They have to build some value.” — Scott Snider, President and Co-owner of the Exit Planning Institute (EPI) and the Operating Partner of Snider Premier Growth. In this episode, Scott offers his expertise on how to best prepare for your ripcord moment from the perspective of a lifelong entrepreneur who has worked with his father to create a formal training program called the CEPA (Certified Exit Planning Advisor) within the Exit Planning Institute.
At a recent national summit for the Exit Planning Institute, Scott spoke about the impact of finding his personal purpose and the impact that this has had on his business and succession planning. He believes that finding your personal purpose as a business owner is crucial to aligning your business, personal, and financial goals.
The Exit Planning Institute recently released their purpose as a company, which mentions working with business owners to create companies of significance rather than just success. When considering the purpose of the company, Scott thought about what the company meant internally to employees and externally to its members and the surrounding communities. He says he considered how many business owners have seemingly successful businesses, but when selling their business, they don’t end up getting what they want for their company or the sale takes much longer than expected. He believes this issue boils down to a focus on success and growth instead of a focus on building value and significance.
Scott discusses who he turned to for coaching and mentorship when constructing his personal purpose and the purpose of his company. He says he went through transformational leadership training with InitiativeOne Leadership Institute, a program designed to bring teams together to create a better communication system and make better decisions across a company.
He talks about the importance of knowing your personal purpose before selling your business, because an exit can leave business owners wondering, “Who am I?” This is critical for not allowing your business to define your entire being and being able to separate yourself from the business.
Scott tells us that 78% of owners don't have a board of advisors and 63% of owners have not sought out any advice about exit or transition planning for their business. He stresses the need for business owners to surround themselves with a strong external advisory team to create accountability and allow the owner to be more of the strategic visionary.
Lastly, he shares two action items for owners:
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Find your purpose, write it down, and begin to live by it immediately. It'll change all aspects of your life—business, personal, and financial.
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Understand and know the value of your business by conducting an annual discovery event, which is like a diagnostic of your entire company. It will change the way you operate and will create a more successful company today and a more significant one when the time comes to exit.
“These business owners, they just have a lot of grit.” – Joe Gerber, CEO at Intelligent Optical Systems, Inc., who has over two decades of C-suite experience and over a decade of buy- and sell-side M&A investment banking and private equity group experience. In this episode, Joe offers his expertise in bringing high-level strategy and operational experience to building, restructuring, and scaling businesses, providing them with strategies and initiatives that drive company growth with proven results.
Joe discusses the path that led him to his current role as a sort of “CEO for hire.” He details some of the lessons he’s learned from working with business owners, including the grit and willpower that it often takes to move the needle and get things done. He says that he quickly discovered issues constantly arise in a business and he needed to step back and create a process that could continually assess and improve the business.
Joe dives into an overview of his process, mainly focusing on the first one hundred days. He likes to start by organizing issues into bucket lists, and then force ranking each bucket for what needs to happen, who needs to work on it, and what the timing is on a solution. He then follows this up with weekly meetings where he can assess each department and keep them on track.
Joe goes deeper into the importance of creating an action plan for those first one hundred days. He likes to interview the board, senior management, etc., upon his arrival to truly find out what is and is not working and follow that up with a solid plan. He says that if a reset of the management team is necessary, it will happen within the first one hundred days.
Joe discusses how he builds trust with a business owner from the start when coming in to a new company. He knows that handing over the reins of a company can be a huge step for an owner, so he likes to include them in his first one hundred days process as much as possible[BY1] . Joe likes to remind owners that change is a constant. He is coming into a business because something wasn’t working or the owner wanted certain things to change from the start.
Joe shares what he looks for when hiring a CEO. Beyond experience, Joe likes to look at personality, cultural fit, adaptability, how goal-oriented the person is, and the balance between the industry knowledge and the financial knowledge. He stresses the importance of considering what you as the owner want to accomplish by hiring a CEO and deciding which of the above characteristics will help you achieve those goals.
Lastly, he shares two action items for owners:
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Using a process like this allows an owner to be objective about what's working and what's not with the company and to figure that out well in advance of the five-year last growth period before selling a business.
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Augment the management team and get the floor laid out properly, really getting the company buffed and polished well in advance of a sale or exit.
“The three rules of ESOPs are cash flow, cash flow, cash flow.” – Sheryl Bayani-Alzona, attorney with the Employee Benefits Law Group, a Southern California-based practice that focuses on employee stock ownership plans. In this episode, Sheryl offers her expertise on the world of ESOPs and if this is the right exit strategy for you.
Sheryl starts off by explaining to us what an ESOP is. At a high level, an ESOP is an employee stock ownership plan. It is a retirement plan similar to your 401(k) profit sharing plan. However, it is the only retirement plan that is allowed to enter into a loan to purchase employer's stock from selling shareholders.
She dives into the main benefits of an ESOP to a selling shareholder, including the ability to defer payment of capital gains. She also discusses what types of companies usually use ESOPs as an exit strategy, with manufacturing, construction, and professional industries leading this list.
Sheryl also addresses common pitfalls that owners should be aware of when it comes to ESOPs, the biggest one being whether they can afford it. Companies need cash flow to function, and since the ESOP is funded by the company, it is important that the company's cash flow is healthy.
She also discusses the concept of a partial ESOP coupled with a later exit. She says this is an option because the ESOP is a ready buyer, and perhaps the only buyer who is willing to take a minority interest in a company.
Lastly, she shares two action items for owners:
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Go through the ESOP suitability review process to make sure you know what you are getting yourself into before you establish an ESOP.
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Call Sheryl. She works for the Employee Benefits Law Group, the largest ESOP consulting and legal practice in Southern California. Her direct line is 310-571-8896.
Disclosure: Information presented herein is for discussion and illustrative purposes only. The views and opinions expressed by the speakers are as of the date of the recording and are subject to change. These views are not intended as a recommendation to buy or sell any securities, and should not be relied on as financial, tax or legal advice. You should consult with your attorney, finance professional or accountant before implementing any transactions and/or strategies concerning your finances.
“The three rules of ESOPs are cash flow, cash flow, cash flow” – Sheryl Bayani-Alzona, attorney with the Employee Benefits Law Group, a Southern California based practice that focuses on employee stock ownership plans. In this episode, Sheryl offers her expertise on the world of ESOPs and if this is the right exit strategy for you.
Sheryl starts off by explaining to us what an ESOP is. At a high level, an ESOP is an employee stock ownership plan. It is a retirement plan similar to your 401k profit sharing plan. However, it is the only retirement plan that is allowed to enter into a loan to purchase employer's stock from selling shareholders.
She dives into the main benefits of an ESOP to a selling shareholder, including the ability to defer payment of capital gains. She also discusses what types of companies usually use ESOPs as an exit strategy, with manufacturing, construction, and professional industries leading this list.
Sheryl also addresses common pitfalls that owners should be aware of when it comes to ESOPs, the biggest one being, can they afford it? Company's need cash flow to function, as the ESOP is funded by the company it is important that the company's cash flow is healthy.
She also discusses the concept of a partial ESOP coupled with a later exit. She says this is an option because the ESOP is a ready buyer, and perhaps the only buyer who is willing to take a minority interest in a company.
Lastly, she shares two action items for owners:
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Go through the ESOP suitability review process to make sure you know what you are getting yourself into before you establish an ESOP.
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Call Sheryl. She works for the Employee Benefits Law Group, the largest ESOP consulting and legal practice in Southern California. Her direct line is 310-571-8896.
“The three rules of ESOPs are cash flow, cash flow, cash flow” – Sheryl Bayani-Alzona, attorney with the Employee Benefits Law Group, a Southern California based practice that focuses on employee stock ownership plans. In this episode, Sheryl offers her expertise on the world of ESOPs and if this is the right exit strategy for you.
Sheryl starts off by explaining to us what an ESOP is. At a high level, an ESOP is an employee stock ownership plan. It is a retirement plan similar to your 401k profit sharing plan. However, it is the only retirement plan that is allowed to enter into a loan to purchase employer's stock from selling shareholders.
She dives into the main benefits of an ESOP to a selling shareholder, including the ability to defer payment of capital gains. She also discusses what types of companies usually use ESOPs as an exit strategy, with manufacturing, construction, and professional industries leading this list.
Sheryl also addresses common pitfalls that owners should be aware of when it comes to ESOPs, the biggest one being, can they afford it? Company's need cash flow to function, as the ESOP is funded by the company it is important that the company's cash flow is healthy.
She also discusses the concept of a partial ESOP coupled with a later exit. She says this is an option because the ESOP is a ready buyer, and perhaps the only buyer who is willing to take a minority interest in a company.
Lastly, she shares two action items for owners:
-
Go through the ESOP suitability review process to make sure you know what you are getting yourself into before you establish an ESOP.
-
Call Sheryl. She works for the Employee Benefits Law Group, the largest ESOP consulting and legal practice in Southern California. Her direct line is 310-571-8896.
“Be a lifelong learner.” — Ken Keller, CEO of Strategic Advisory Boards, a Southern California-based leadership advisory firm. In this episode, Ken offers his expertise on how to best prepare for your ripcord moment from the perspective of a consultant and coach who works regularly with business owners and CEOs on the challenges of growth, leadership, employee engagement, and increasing profitability.
Ken discusses how he coaches his business owner clients who are looking to sell their business in the near future. This includes always working on and refining the business model, ensuring you have the right management team in place, and staying focused on growth, as a buyer will want to see a continuous track record of growth.
He talks about the importance of creating alignment throughout your organization so that employees can truly buy into your vision for the company. He also stresses the importance of keeping employees in the loop by sharing goals and strategies so that everyone can contribute. He feels that this is especially important today given that only 34% of the workforce is currently actively engaged in their organization.
Ken dives into the significance of owners creating incentives for departments and roles outside of sales. Though few companies currently do this, he feels that implementing this revenue-sharing structure into your business will create an atmosphere where all employees will be more motivated to actively contribute to the results of the company.
He walks us through a typical strategic advisory board meeting, describing it as a monthly four-hour retreat where you get to take yourself away from your desk, work ON your business not IN it, share ideas, learn new ideas, and open up to a group of peers.
Ken discusses a challenge that many business owners face as they are transitioning their business, and it is the concept of letting go. He believes that there is a way for a business owner to retain some involvement and level of control over contracts, purchases, etc., without having to be involved in the day-to-day operations of the business.
Lastly, he shares two action items for owners:
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Be committed to being a lifelong learner to better prepare yourself for your future and to set an example for your employees that work is about more than just coming in and punching a clock.
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Making an exit and selling your business requires a lot of teamwork and a good amount of time for preparation. Start with evaluating your current team, addressing underperformers and unengaged employees, and getting everyone on the same page before even thinking about an exit.
“Make sure you have a presence EVERYWHERE.” – Jonathan Boring, founder and president of Social Spice Media in Camarillo, California. In this episode, Jonathan offers his expertise on how to prepare your business for a transition or sale from a digital marketing standpoint.
Jonathan discusses how to best prepare your website for an upcoming exit, including staying up on regular maintenance and updates for the most seamless user experience. Simple things could be out-of-date, such as phone numbers, or entire submission forms could be broken on the back end. Either way, you don’t want to wait to hear about these issues from a client or a potential buyer.
He talks about the website auditing process that his company takes new clients through. First, they evaluate the good, the bad, and the ugly. Essentially, what is your company doing well, what could be done better, and what needs to be changed NOW. Then, an extensive report is run to paint a full picture of what is happening on the client’s website, including everything from Google ranking to key word gap analysis.
Jonathan dives deep into what it means to be ADA compliant for websites and why an owner should care. He shares simple changes you can make to your website to ensure you don’t face legal repercussions, including making sure you have a screen reader and all of your videos have an option for closed captioning.
He gives tips on how to optimize your email marketing campaigns, including the power of A/B testing and making sure you send out emails at the best possible times (Tuesday and Thursday mornings).
Lastly, he shares two action items for owners:
1. Audit your website regularly and ensure you are ADA compliant to avoid any unnecessary legal action or fines.
2. Make sure you have a presence across multiple channels. Omni-channel marketing is huge right now, so be sure your website is up-to-date, you have regular blog postings, and you are active across multiple social media platforms.
“Minimize taxes, maximize profits.” – Scott Gilmore, a Tax Principal at KROST. In this episode, Scott offers his expertise on important tax matters to consider when it comes to succession and exit planning for businesses.
Scott discusses M&A transactions, including what types of businesses meet the qualifications (HINT: You have to be a C-corp), and the tax implications that come with these transactions.
He talks about purchase price allocation on a sale and how the buyer and seller must come together to agree on a purchase price. He dives into what the goals of the seller should be during this process, including allocating more consideration to capital gain items.
Scott goes over some tax-deferral techniques that can be used during the exit planning process, including the use of the installment sale treatment and rollover equity.
He talks about ways to handle the transfer of real estate and leases during a succession plan. If you already own the property, leasing to the new buyer might provide you with a steady income for the foreseeable future. On the other hand, if you are currently leasing the property, make sure that these leases and contracts will carry over to your buyer before going through with the sale.
Lastly, he shares two action items for business owners:
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Prepare ahead of time to save yourself money. Get professionals on your team early. A year or more would be great, but at least 3 to 6 months will give your team enough time to optimize your outcome.
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A change of ownership might be difficult for some of your employees, so before you go through with a sale, talk to your employees to help you pick the right buyer. Find out what the most important things are to them about the business and their work within it. For your business to continue to be successful after a sale, those key employees will need to stick around and be happy under new ownership.
“Get your ducks in a row—NOW.” – Janice Miller, Managing Partner at Miller Haga Law Group, LLP, and author of Coopertition®.
In this episode, Janice offers her legal expertise on the world of exit planning and the common issues she sees owners deal with when going through an exit, specifically in today’s post-COVID environment.
Janice discusses how to best prepare for an upcoming exit, including the importance of knowing what you want to accomplish from the sale and assembling a team of professionals to help you achieve those goals early on.
She shares the significance of having a buy-sell agreement in place, comparing it to a pre-nuptial agreement in a marriage. She shares with us why she believes everyone should have one, detailing how they can strengthen a business relationship and set clear expectations and parameters for leaving a partnership.
Janice talks about the why behind her book, Coopertition®, including how it is the concept that “competitors can work cooperatively together to benefit all: benefit their clients, benefit themselves, benefit their competitors.” She says she lives and breathes this concept, which inspired her to trademark the phrase and write the book.
Lastly, she shares two action items for owners:
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Give yourself the gift of time, and don’t expect to do a transaction now if you have not spent time getting everything in a row first.
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Be true to yourself and have clear goals that you want to accomplish from the transaction. Don’t stray from these goals unless necessary.
“I have this belief that skateboarders are actually great entrepreneurs” – Mikey Taylor, former professional skateboarder and founder of Saint Archer Brewing Company. In this episode of The Ripcord Moment, Mikey shares his life story of being a professional skateboarder turned entrepreneur.
One of the areas Mikey opens up about is the mixed emotions he had with the sale of Saint Archer to a major corporation. Growing up in the anti-establishment culture of skateboarding, the idea of selling a business to a large corporation was perceived as “whacked.” However, with a bit of reframing and support, he was able to push through this discomfort. He also expected mildly positive feelings around providing a positive return to his investors. In actuality, though, the joy and elation he felt were substantially more fulfilling.
Lastly, he thought he would be more excited from the personal financial windfall. However, Mikey candidly explains that the reverse happened—he was fearful, which he wasn’t expecting. He says he went from a growth mindset to maintenance mode, asking himself “how do I not lose it.” Luckily, he had the right support team around him both personally and professionally to give him honest feedback. He says it’s important to not have “yes” people or “hype guys” around you to placate your wishes but rather people who will “keep it real with you.”
Mikey shares some interesting insights on brand management in an exit and how to best navigate the differences between a smaller niche company and a large corporation that will likely move slower. When contemplating an exit with a company that has a strong brand, Mikey says it’s a balancing act to create a brand that is culturally cool but doesn’t push the boundaries so far that it limits your optionality with a major strategic acquirer, which might have some hesitation around narrowly focused messaging that doesn’t appeal to a wide enough audience.
Lastly, he shares his two action items for owners:
1. Don’t celebrate the deal until it’s done: It’s important for sellers to manage their expectations. Many deals fall apart during the due diligence phase and up until the closing. He suggests sellers maintain a healthy awareness of this possibility until the deal is fully complete.
2. Recreating your identity: Mikey says that it’s a process that will need to run its course. It takes time to figure out who you want to be next. This requires owners to be patient with themselves. He suggests you take time to reflect and decompress. Then, you will be able to get back into the creative zone of tackling your next adventure.
“It’s freaky—having people work for you that you never met” — Michael McCrary, founder and CEO of PureSpectrum, a complete end-to-end market research and insights survey platform with the mission of making researchers’ jobs easier. In just five years, the company has sourced over 32 million online interviews. Recently, the company was ranked #21 on Deloitte’s Technology Fast 500 list.
Michael shares his insights in procuring $17 million of Series B financing (growth stage capital). With this explosive growth, Michael used this opportunity to take some chips off the table. He surveyed a number of other entrepreneurs and it was unanimous that he should sell some shares in the process.
Some of the key benefits for Michael were “de-risking” his personal financial plan. From a psychological standpoint, he says it was nice to see some reward for the last five years of work and effort.
Additionally, it helps protect the value of the overall enterprise in case something unforeseen were to happen. He wouldn’t be forced to take a lowball offer due to a scarcity mindset. With personal security checked off the list, he can focus on taking the company to the next level. Michael says that the key is to strike the right balance in the deal structure so that an owner can’t ride off into the sunset. The owner should be incentivized to work.
Unlike many technology companies that partner with private equity firms based in major hubs like San Francisco or New York, Michael partnered with a Minneapolis-based firm. As he explains, there was a better cultural fit and he felt a better alignment of interests. He says it’s not just a quarterly board meeting. You are inviting these investors to be a “fiduciary” to your company. He thought of it like hiring another executive.
Lastly, he shares his two action items for owners:
- Tax planning – With tax rates likely to move higher in coming years, Michael strongly encourages owners to do their tax planning well ahead of the transaction. Specifically for lower middle market companies, he encourages them to research Section 1202 of the Internal Revenue Code, which outlines the benefits of a qualified small business stock sale and how to potentially eliminate federal capital gains taxes.
- Assemble your team – Michael stresses the importance of assembling your professional management team, specifically your wealth management advisor, estate planning attorney and CPA. These transactions are complicated and you need professional advice. He also says it is critical that they know each other and are able to communicate with one another openly.
“If it’s going to be worth something to someone else, it has to create value for them” – Chris Yount, former CEO and 3rd generation business owner of Fortifiber.
Hear Chris’s story as he shares how he rescued the family business from bankruptcy during the Great Financial Crisis, revamped the company’s strategic initiatives and led the company to its highest level of profitability in its 80 year history. As Chris looked to the future, securing his family’s legacy and financial security was a top priority. He chose to sell the company to Henry Co., a strategic buyer backed by a Private Equity firm.
In this episode, Chris discusses some of the finer points between a family succession plan and a transaction with an external party. For example, with a family succession, Chris points out the importance of clearly defined leadership roles for the new management team so it’s clear to employees how they need to prioritize their work and responsibilities. One potential solution Chris suggests is to consider moving the former CEO to a more remote office away from the main office.
One of the beauties to family successions, if over multiple generations, is the cumulative lessons learned along the way which can be retained and passed from one generation to the next.
When it comes to an institutional buyer, Chris says cultural differences will shine through. For example, a Private Equity firm has a more formal structure and will look at the acquisition through the lens of risk management. This will cause the due diligence process to be more onerous than with a private non institutional buyer, who is likely looking to be more opportunistic. The process is much more formalized than with a family transfer.
Chris strongly encourages entrepreneurs to consider having a board of Strategic Advisors. These are non-fiduciary members who can push the owner to think about the company in a different manner than they are accustomed to. Additionally, these advisors can help professionalize the company which will enhance the enterprise value of the business and make it more attractive to a potential suitor.
Lastly, he shares his 2 action items for owners:
- Push to professionalize your business: Specifically, Chris encourages owners to ensure their financial record keeping is accurate and robust. Sloppy accounting and financial records will not stand up to the rigors of due diligence when dealing with a strategic institutional buyer or a Private Equity firm.
- Value Creation: Set the business up in a way that can create value for anyone not just you.
Chris now spends his time consulting with other businesses and writing for Forbes magazine. If you’d like to connect with Chris Yount, he can be reached via his website at https://www.christopheryount.com/contact.
“Believe in yourself as much as others believe in you” Caroline Connolly, CEO of Optotest – a worldwide leader in fiber optics testing solutions based in Camarillo, California.
What is interesting about Caroline’s journey is how she transitioned from a minority owner in the business to the majority owner and CEO. When her business partner died in 2013, there was no formal buy-sell agreement in place. It took several years of discussions and negotiations between herself and her former partner’s family to agree upon the transition plan. She shares how she had to embrace a variety of risks in order to make the jump to majority owner and CEO. She credits her support system, specifically her Vistage group, with helping her make the transition. One of the critical lessons Caroline learned is that a formal buy-sell agreement is mandatory. Many entrepreneurs understand the need for one but think they will get to it later because early in the lifecycle of the business you need to focus on sales and revenue. The problem is that owners typically don’t go back and formalize the agreement which puts everyone at risk.
She shares her perspective on why culture should be a CEO’s number one priority. At Optotest, the company philosophy is that the customer is #1 but this definition is not limited to just external customers, it applies internally as well - meaning your colleagues. Her management philosophy of changing the company’s organizational chart to an inverted pyramid is a practical application of the company’s values. She recommends that CEOs document their company’s core values. Additionally, set up a platform like regular meetings where staff are encouraged to talk about them on a regular basis. This will ensure your team feels engaged.
Lastly, she shares her 2 action items for owners:
- Be in a Peer Group - Use the group as a cabinet or informal board of advisors (assuming you don’t have one). They will help you grow both professionally and personally while also helping you strategize about your exit plan.
- Read “How to Stop Worrying and Start Living” by Dale Carnegie - Caroline shares how the book provides a framework for tackling challenges she is dealing with in her business and how the process helps make her feel better until she arrives at a solution.
"Get comfortable with being uncomfortable” –Alec Eickert, Owner and Managing Partner of BDV Inspections and BDV Capital Group. In this episode, Alec shares his story as a Generation 2 owner of a family business and how he navigated the challenges of losing his father unexpectedly who was the head of the family business.
Alec shares why contingency planning is so critical for all businesses, especially family-owned enterprises. Specifically, he suggests focusing on building transferable and repeatable systems and processes as part of the core operations. This will ensure the viability of the business. He also strongly believes its critical for any business that wants to thrive to attract and properly incentivize the best talent possible. Business systems can’t run on their own and by attracting the right team you can ensure the business continues to evolve over time to adapt to changing market conditions. This helps to mitigate the “tribal knowledge risk” which is so common in lower middle market family-owned businesses.
He also suggests owners take the time to play out various scenarios (i.e. if they are not around) and think through the ramifications to the business.
Alec shares his passion for ultra marathon events and how he plans to reach the highest peak in all 50 states. He applies this mindset of embracing discomfort to running his business.
Lastly, he shares his 2 action items for owners:
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Develop the systems and processes early in the business and ensure the team is using the systems effectively. This action will help increase the enterprise value of the company.
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Surround yourself with a personal board of advisors and mentors. This will help keep you accountable towards the success you desire.
“The single hardest thing for me was being between my sister and my husband.” – Kim Millman, former CFO and 2nd generation owner of Girlfriends LA - a teen apparel mail order catalog company, which she grew to over 200 employees, producing 30 million catalogs annually marketing to over 8.5 million teens and ultimately sold to a NY based conglomerate. Kim discusses the complexities of a family run business. She later says when her husband and sister didn’t get along - she felt like a human tug of war.
Kim shares how she started working in the family business at age 10. Both she and her sister were groomed to be the succession plan for her parent’s roles. With her father’s premature passing, Kim found herself as CFO at 23. She made the strategic decision to pivot the company towards mail order catalogs. In what she describes as a mind altering experience, Girlfriends LA received over 6,000 calls on the 1st day after advertising in a national magazine.
Kim shares why intrafamily business succession rates are so low and why it’s so challenging. Specifically, the impact of time, money and resources has on the future generations makes it very challenging to keep them interested in the family business. For most families, the future generations simply develop other interests.
Kim has since transitioned to practicing law specializing in estate planning. She feels she is uniquely positioned to help business owners since she understands the mindset of an entrepreneur. She likens it to childrearing and the push/pull of wanting the business to fly on its own versus keeping it all to yourself.
Lastly, she shares her 2 action items for owners:
- Think about life after the exit: One aspect that often gets overlooked by owners is what it will be like having to answer to a new owner. Kim explains she had never worked for someone else– it’s a shock to the system.
- Nothing to do: Having too much time on her hands, Kim struggled with how to fill her time to give her meaning and purpose – until she pivoted to law school. As she says, entrepreneurs don’t do well with too much time on their hands. She suggests owners think about what they will do in the next chapter of their lives.
“It’s not just a business transaction – it’s an emotional transaction” - Chris Passmore, Managing Partner of Martini Partners - a Los Angeles Based accounting firm. In this episode, you will hear how Chris led the 2nd generation of owners and how his team navigated the challenges of their succession plan.
He talks about why identifying the next generation of leaders early on is critical for a successful G1 to G2 transition. It also requires a real investment on the part of the 1st generation to intentionally provide the 2nd generation with opportunities to lead and put their own stamp on how things are done.
Chris discusses how he and his team have shifted away from the idea of “Mandatory Retirement” to creating a culture centered around “Mandatory Succession”. From Chris’s perspective, this is not optional and it has to be part of your strategic plan in order to sustain the long term viability of the company. Chris credits the change in mindset across the firm and wide adoption of succession planning by all senior leadership as one of the main reasons for their success.
Chris dives into some of the challenges he faced in his new role including how he and his team had to overcome fear from his own staff of what this change would mean for them and the struggles some of the G1 owners faced as their identity shifted away from owner to something new.
Lastly, he shares his 2 action items for owners:
- Establish the buy-sell agreement well ahead of the exit. According to Chris, it’s best to have the economic discussions and other items sorted out well before emotions get involved during the actual exit.
- Start developing the next generation of leaders yesterday. The amount of time it takes to identify and develop these leaders is often longer than most owners anticipate.
“Slow Down to Speed up ” – Margalit Grunberger, founder of Gotcha Covered, an international wholesale linens company which she founded with a close friend and ran successfully for 20 years. Ultimately, she chose to sell to a strategic buyer in 2016 and move on to the next phase of her life.
Margalit has since transitioned to a business coach for entrepreneurs where she focuses on the mental fitness and the inner game of business and life. Her motto is “Coaching leaders on what matters most”. Often her coaching conversations focus on mindset, communication and emotional intelligence which were critical elements of her own exit.
Hear how she leverages neuroscience and the understanding of how our brains work to help overcome fear and anxiety which are common during high stress situations like a business exit.
She shares her story about how stressful the due diligence phase was and the importance of having emotional and mental tools readily available to help in the process. Specifically, she suggests 1) deep breathing which can alter our physical, mental and emotional state, 2) cultivating self-awareness to question your thoughts, 3) have a coach or mentor to talk to regularly, 4) create a moral support team to lean on and 5) take the time to learn how the brain works and how it will help owners better execute their exit plan.
Lastly, she shares her 2 action items for owners:
- Prepare early: One of the benefits to preparing early is that it gives owners more time to plan methodically. She recommends using an exercise called Stop and Start where owners identify 1 thing they can stop doing and 1 thing they can start doing to move their business in the direction of what they want to create.
- Take care of your emotional and mental state: By creating the space for self care, owners will have a greater likelihood for a successful and enjoyable business transition.
“Do we have the cast of characters in the right seats on the bus in order to bring us the next 2-3 years of growth” - Dan Doran, Founder of Value Scout and Quantive.
Hear how Dan’s unique skills as an entrepreneur, valuation expert and M&A advisor help bridge the gap between buyers and sellers.
Dan talks about how owners can overcome their blind spots which might cause them to perceive specific business risk differently than what a potential buyer might see. He shares the importance of having an outsider provide their insight/perspective on the business. For some owners, one way to do this is to consider setting up a non-voting advisory board to bring additional experience, resources and expertise to the table.
Additionally, many owners know they need to grow business value to fund their lifestyle or retirement but aren’t sure how to formulate an actionable plan. It was this disconnect that led Dan to create Value Scout, a platform that helps entrepreneurs and their advisors more deliberately create business value leading up to an eventual exit. Specifically, Value Scout helps owners create a measurable plan to correlates each tactical initiative back to the overall enterprise value.
Lastly, he shares his 2 action items for owners:
- “Do you have the best team in place?” He suggests owners surround themselves with the best team possible. The importance of human capital can’t be overstated. It’s what really drives the value of the business and owners should look both at their in house and outside teams.
- Understand the rules of the game – you can’t fight the market. Owners need to take the time to educate themselves on the M&A process well in advance of a sale. You don’t want to be the least knowledgeable person room at the time of a transaction.
“When you have your back against the wall, it’s amazing what strength you can come up with” - Brian Shafton, Founder and CEO of RBC records. Hear how Brian created RBC from scratch with just a computer and cell phone in his living room, grew the business and how he approached BMG which led to a strategic acquisition.
As the acquisition unfolded, Brian discusses some of the synergies between RBC Records and BMG. Specifically, he discusses how BMG’s International presence allowed him to expand his business from only U.S. based clientele to working with artists around the world.
Pay close attention to why an independent company was a non-negotiable must for Brian when negotiating his deal.
He shares his insights on the realities of the due diligence process - how arduous, stressful and time consuming it was. And, how by going through this process, it gave him a better appreciation for his business and how he learned from himself by retracing his steps. Ultimately, in retrospect, he now looks back at it with enjoyment.
Lastly, he shares his 2 action items for owners:
- Ask specific scenarios during the courting phase with your potential suitors. Get an understanding how the new buyer will treat your clients and your employees. Additionally, take the time to come away with a clear vision of how the buyer will integrate your systems into their systems.
- How to ensure your legacy is preserved when your company is acquired by a strategic buyer.