Armando (0:00 – 1:52)
Hi, I’m Armand Roman, host of the Founder’s Guidepost. You’ve built your business over decades and now it’s time to think about that once-in-a-lifetime exit. You’ve come to the right place.
Here you will hear business exit professionals talk about what you should know before exit. Besides hosting the Founder’s Guidepost, I’m CEO and founder of Axiom Founders Family Office, working with founders to help preserve their American success story. And it all begins with a founder stress test.
We also host the Scottsdale Founders Forum for the founders considering exiting in the next 36 months. Here’s to your hard work and to your American success story. Enjoy.
Sometimes they wonder if they need to grow it, maybe get their processes and procedures in place and really make it nice and pretty and transferable to the next owner. And they might not know how to do that. And the reason I’m anxious to have this conversation with you is obviously that’s where you come in.
So just an introduction for our audience here. Marcus Sipolt had a company, T.B. Consulting, for many years that he grew and then sold, was with Accenture for many years as well. And in that business consulting role, what Marcus does is help companies understand where they are, help them get systems and processes in place, help get those people to work better as a team, which is sometimes needed, maybe train leadership and the leaders of the company.
And Marcus, I’ll ask you to fill in the blanks on what I didn’t talk about that’s pertinent to the conversation we’re about to have.
Marcus (1:53 – 2:59)
Wow. Hey, that’s great. Matter of fact, I think you just did a commercial for me.
I should have you in front of some of my clients, Armando. You know, that is true. Filling in the blanks.
I’m an accountant by education, CPA by exam, which kind of is unique because I really didn’t use that much of it my first 20 years working with Accenture. And more used it when I started a couple of businesses, which I ended up selling. And I use a lot of that knowledge now and, you know, working with a number of other clients and helping grow their business.
I use that as a basis of how to get the business owners to the next level they want to get to. And like you said, I think a lot of them come in, some might want to sell, some might just get stuck. You know, they’re all coming from a different place.
So it’s kind of figuring out, you know, what is it they’re looking to acquire or get done or achieve. And sometimes it’s just the next chapter in their life and figuring out what I can do to help them. Good.
Armando (3:00 – 3:17)
And one thing you mentioned to me earlier is you want to help people who want to be helped, people who are willing to listen and accept ideas and think about things and really have you walk them through your process so that they can be in a better place when the time with you is done.
Marcus (3:19 – 5:06)
True. You know, that’s very true. I think there’s some business owners that are just, oh, just doing great and not looking for help.
There’s other business owners, I think, need help and just point, they’re not quite ready for it to accept. I’m sure you see that yourself. And then the other business owners, I think that it’s ones I work with.
Those are ones that, hey, we want to get to the next level. You know, and usually I’m introduced by a friend or a colleague, another business owner that I’ve been working with. I’d say as for 90 percent of my business comes from the referrals of existing clients say, hey, great.
You know, Mark has done a great job with me. I think he can help, you know, take you to the next level. But, you know, part of that is also, I think, having, you know, a wide exposure to different companies, I’d say mid-market companies or mid-sized companies that I’ve been able to help get to the next level.
And I’d also tell you that there’s not one solution that’s all those cases. So it’s helpful that I’ve been trained in something called EOS. I don’t know if Armando, you and I talked about that, the Entrepreneur Operating System, which, oh, my God, a lot of folks in Vistage or EO are exposed to it.
And it’s just a toolbox of like 20 tools that, you know, help, you know, help owners get to the next level. And, you know, you bring out the right tool at the right time. You don’t bring out, you know, a saw when you need to paint a, you know, paint a room and vice versa.
You don’t bring out that paintbrush when you’re trying to kind of log into, so.
Armando (5:06 – 5:31)
Right. And there’s a book, the book called Traction that speaks to us. Anybody who might not know about EOS or the book Traction might want to get that book Traction, T-R-A-C-T-I-O-N, because it does talk about just that you described the bigger picture of what to look at.
And probably a pretty good background for somebody maybe who had not studied business before.
Marcus (5:32 – 6:20)
Sure. I totally agree. Traction is great.
Sometimes that reads like a textbook for some people. And there’s another book out there by the same author, Gino Wickman. It’s called What the Heck is EOS?
And that’s, you know, that’s kind of I call it the reader’s digest version of that tool set. It’s a great, great book. You know, I’d give you some other great ones out there to read, too, because the whole EOS entrepreneur operating system is a compiling of work by Vern Harnish, scaling up a lot of stuff from Patrick Galencioni and a lot of stuff from good to great.
You know, so you take those three systems, put them together. That’s what you actually have with EOS.
Armando (6:21 – 7:00)
Yeah. So let me ask you some questions, Marcus, about what you do. As you said, it’s not one size fits all.
It’s a variety. You’ve got the right tool when you need it, which is such a broad, you know, such a broad thing to look at. When a company is, as you said, maybe stuck or maybe wondering what they should do, should they should they ramp up the business more before they exit the business or should they just keep it going and be done with it?
But I guess the question I have for you really is, how do you how do you help business owners? How do you help them understand where they are and decide what they might want to do? How do you how do you help them?
Marcus (7:02 – 9:13)
Great question. I think a lot of business owners come with issue A, B and C. And shortly after working with A or B, they come up to, oh, my gosh, we need to address D, E and F.
So there’s not one one size fit all. That doesn’t work. It’s meeting the business owners where they are and trying to figure out, hey, what are you trying to get to?
So some, you know, it’s interesting to some business owners I’ve met. Hey, they just want to meet. And then after digging a little bit deeper, you go, well, shoot, where do you want to go?
And I always start with that question. Where do you want to go? Do you have a clear idea where you want to be?
I don’t know. Three to five years. OK, you don’t have three to five years.
I’m wondering, hey, do you have one year? Do you know where you want to be by the end of the year? And I’ve made business owners that, oh, geez, I just want to survive or I don’t know.
I’ve only thought about the next two months. So I’m thinking about where do you want to be in a year? Where do you want to be in 18 months?
I’d say the next thing is, hey, do I got the right team? So let me back up. I say, do I have that picture very clear?
Because I think if you can paint a picture where you want to be in 18 months, your chances of achieving it are a lot higher than if you just think about it. So draw the picture, talk about it, put it down on paper. That’s number one.
Two is then figure out, hey, if I want to be there in 18 months, what do I need to do in the next three months? So I’m all about setting great quarterly goals. And then after I have great quarterly goals, I say the next thing, usually work with business leaders on this and, hey, weekly metrics.
And then quickly after that, it’s getting like, well, if I have those things in place, do I have the right leadership team to get me there? Sorry about that. And I got to make sure I do have the right leadership team, because if you don’t have the right leadership team, shoot, you’re not going to get anywhere.
So especially medium-sized companies, the people that got you to the first level aren’t always the ones that get you to the next level. That’s another whole conversation too.
Armando (9:15 – 9:35)
So maybe I could ask you to just describe the size of the business or type of business that you typically work with or that is really in a position where they can come to you and you can really help them, ones that are too big or too small or not the right ones, but which ones are just right for you?
Marcus (9:36 – 10:56)
For me, I’d say the business owner, the 5 to 25 million or 5 to 40 million. I’ve got three clients that grossly exceed that. And I’ve got a handful of clients that are smaller than that, but those are probably the ideal ones from, you can make some, you know, you can really make some things happen, but that’d be size.
The other one is, you mentioned it earlier about those clients, do they want to be coached or they want to get to the next level? They got to have that first, that mindset. Yep.
Hey, I want some help and I’m open to doing things a little bit differently. But, and that’s from a revenue standpoint, I would take it also from a people standpoint that 5 to 100 people is probably the ideal spot for using the EOS tools. So, you know, yeah, I think you got to, I don’t say you got to have both, but if you’re out of whack on either one of those things, probably I’m not the ideal coach.
Oh, Hey, last one, service business. I don’t work with manufacturing companies. I don’t work with healthcare companies.
I do some behavioral health stuff work, but typically it’s service, the service industry is what I’m really good in.
Armando (10:57 – 11:59)
Okay, good. And so Mark, let me just recap that really quickly. So, you know, audience listener, as you’re listening to this, again, he said 5 to 40 million revenue is about where he is.
He’s got some bigger, some smaller, but 5 to 40 million revenue, maybe 5 to 100 employees in that general range of number of employees and service businesses. So if that describes your company, you want to listen to this conversation, Marcus, because you are the, you are the, the, the business that he typically works with and can really add a lot of value to. And so, Marcus, a question for you, discovery, when you’re getting to know the companies and they’re getting to know you, you always have to have to ask a lot of questions to really understand where they are so that you can understand where is that, you know, where are those next steps that need to take place?
How, how that business owner who’s not gone through a process like that before, and you’re now talking with them, working with them, what would they expect? What does that look like when it rolls out? The discovery process?
Marcus (12:00 – 13:08)
I think, yeah, the discovery, I think is taking a look at three areas and how strong you are in those three areas, you know, your sales and marketing area, your operations area, and your, I call it the back office, accounting, finance, IT. And so I’d say the discovery questions are usually around those three areas. The other ones would be, hey, great, definitely a vision, where are you on a vision?
You know, do you have it or don’t you have it? Another question I love asking is, hey, how are your leadership team meetings? Are they good?
Not so good? Or do you even have them? Some organizations don’t have them.
And some will tell you, you know, but I don’t need them because I meet with my people every single day. And so then it’s that whole conversation about working in the business versus on the business. But I’d say focus on those three areas, sales and marketing, where you are, operations, you know, where do you want to go?
And then finance. So, and the back office, how good are things going? I like that stool.
You’re only as good as your weakest leg of that stool.
Armando (13:09 – 13:26)
Okay. When you begin working with a company, I imagine sometimes they know what the pain points are, and maybe sometimes they don’t. What do you typically see when you, when they start working with you, what do you help them see, I suppose?
Marcus (13:27 – 15:29)
Yeah. You know, I’ve had to pick some of the most common issues. I’d say the biggest common issue is probably people.
Organization, midsize organizations, you know, they don’t, the owner of the company is at one level, the next level of management is not that level. And they’ve been with them for a good amount of time, but they’re not really leaders, and it’s time to maybe upgrade those leaders. And business owners are hesitant to cut people at times.
I do remind them your biggest assets, your people, right? And I always like to ask, hey, what’s your biggest liability? And let them think for a while.
And then the real answer is, you know, the wrong person and the wrong person in any seat. Somebody doesn’t have the core values. So, I’d say, hey, one of those things is people issues are really one of the biggest things that come up.
And then organizational structure, I say is the other one is like, wow, yeah, outgrow your organizational structure. What worked when you were 10 people doesn’t work when you’re 20 people. And the same thing, you know, some of the people you had on board when you only had five or 10 people don’t work when you get to 25 people.
And it’s hard to let them go and say, I got to find somebody to be over the top of them or get a chief operating officer. So, people issues are really big. And I’ll take the other one, Armando, the common one I would say is vision.
When you’re a medium-sized company getting the next level, you got to be able to dream, think, document, what does that next vision look like? And if you can’t do that, or you need some help, you know, get some help to go figure that out. What do you want it to look like?
Or, hey, you want an exit? What do you want that exit to look like? So, those are probably the most common things I encounter when I first meet up with new clients.
Armando (15:29 – 15:35)
Okay. So, people, organizational structure, and vision for where they want to go.
Marcus (15:36 – 15:38)
Yeah. I’d say definitely. Yeah.
Those are probably the three most common.
Armando (15:39 – 16:00)
Okay. Okay. All right.
Is there a typical time frame when somebody brings you on board? You know, you don’t know what you’re walking into. They probably don’t know either what you’re going to show them or tell them.
So, I guess for an expectation of a time frame, six months, a year, three years?
Marcus (16:00 – 18:18)
Oh, my gosh. Hey, the first, the simple answer to that is no. So, I’ve had some clients that have been very successful in a short four months, you know, and it’s like, oh, my God, I feel great.
I’ve had some clients I’ve worked with now for years, you know, and we just keep on getting to the next level. So, they end up using me more as that board partner or their business partner, unpaid business partner, kind of, that gives them advice when they are thinking about, oh, this acquisition or that acquisition, or help us figure out what next person we need to hire. And so, I’m on just a plain consulting basis as an advisor to them.
I’d say the average for taking somebody through a journey of putting in these 20 tools is probably two years. Like I said, some people can do it faster. Some, you know, some just want to continue to be, I’ll work with them just on a quarterly basis versus a monthly basis after that.
So, yeah, I wish, that’d be really nice if there was some fixed time. Oh, hey, it’s going to be four months. Well, we’ll be in and out, get everything done in four months.
You know, the problem is, you just don’t know what everything is when you first meet a client. They don’t know, I don’t know. So, it’s, I do have agreement with the clients about Armando that we know right away within, I’ll tell you, four weeks.
When you pick up a client and work with somebody and they want help or don’t they want help, and hey, can you get homework done, and I will put in as many hours as needed to, you know, start working with a client and even going forward. And then we finally figure out what that cadence is. So, the cadence is, some of my clients is, they want to meet every 10 days, three times a month.
With other clients, hey, I just, once a month, you know, we’re running a business, we want to keep on running the business, but we want your help in getting into this new operating system. But we can only meet once a month, but got to meet at least a minimum of once a month unless you’re already got all these tools in place and then it’s on a quarterly basis.
Armando (18:19 – 19:25)
Okay. Okay. And you said there were, I guess, starting point three areas, sales marketing, operations, and then back office accounting, HR, that kind of thing.
And I guess when I’m thinking about that business or that business owner is thinking about their company and those three areas, there are people, there’s organizational structure, there are processes and procedures, all kinds of things that come into play in those areas. So, when that business owner is talking with you and working with you and you’re addressing one of those, say, sales and marketing area, you’re trying to pinpoint, I imagine, you know, what is the problem and solutions to fix it. And if that means, as you said, bringing in a new software system or maybe taking some of the people who were great on day one, but now they’re just not the right people anymore, helping them to identify what does that right person look like, what experience do they bring to the table, so you can put them in place.
So, all of that is part of what you’re helping to oversee and coordinate and help get done?
Marcus (19:26 – 21:38)
Correct. Correct. And I can give you examples of each one where if you walk in the company and let me go in reverse order, you know, the financials seem really good.
I’ll take a first look at them. And great, we don’t need to work on financials, we need to work on operations and finding, hey, two, we need to split operations in two places or in half and get people to run each one. And we just finished doing that with a company.
And now, it’s amazing you just said that or asked that question. Now, the company has come back, said, hey, Marcus, hey, I know you cleaned up ops or we got a lot further in operations, help us with the accounting. So, what happens, you know, part of it is personnel issue changes, whatever, that aren’t working really well for the company.
And we’re going to do a massive shifting of roles and responsibilities in the accounting area. So, I’d say, you know, that was when I had no thoughts it would happen. All of a sudden, hey, it just happened because personnel changes.
And then we had another one, Armando, I think I might have, I talked to you about this company, there’s a lot of online retail sales. Hey, we’ve been fixing all the op stuff. We got the op stuff pretty well working like a well-oiled machine.
And now, I’m meeting with a business owner because they, wow, we’ve grown organically by 8% to 12%. And like, and there’s no paid advertising. Well, pay for click is the only thing they’re doing.
But we don’t have a marketing program. No one reaches out to any potential clients. We don’t do anything to further upsell our existing clients and say, oh my gosh, if we, and we already have a great bottom line.
If we could just do that, we could probably grow stuff growing by 12%, let’s say 18%. And the bottom line is already great. So, when it came in, it was nothing to do with sales or marketing.
And here it is, nine months later, and the big focus is now all about the sales marketing.
Armando (21:38 – 21:46)
Yeah. But you saw an opportunity that they were not taking advantage of or making use of that could add another 50% profit.
Marcus (21:46 – 23:15)
Oh, my gosh. Yeah. And yeah, the business is already a well-oiled machine.
And there’s a great example too, when you’re talking about five people and $8 million in revenue, great bottom line. It’s like, hey, what do you do? And it only has five people.
So, it’s a little bit under that, oh, that ideal number of people or it’s underneath, or it’s just above a $5 million minimum mark. But I look at this company, it’s like, what a blast to work with, because you’ve got a business owner and a leadership team. And it’s actually a family business that does really well and can do even better.
So, and I’d say the other one, that one, and again, Armando, you know, some of my clients, a couple of them would get to that point and I’ll say, wow, I could sell this business now. Yeah, it’s no longer a hobby. Let’s go set it up to go sell it.
And it’s like, yeah, let’s go do that. And so, that’s another whole journey. And Armando, I will say this, people that are listening on your podcast here, you sent me some other podcasts to listen to.
There are some great people that I’ve heard on your podcast that are really good and skilled and talented at selling businesses. And they should listen to some of those. You got to send those podcasts out to other people if they’re thinking about selling.
Even I picked up some stuff from listening to those business brokers, VC folks, investment bankers too.
Armando (23:15 – 24:21)
Well, thank you for saying that. We have a lot of good talent here in Metro Phoenix and we try to get them to share that information freely. And they do with people who’ve gone through that once in a lifetime exit.
It’s just too important to not get it right. So, that’s why we want to highlight them and highlight you so that many of them don’t want to just sell or transition out. They want to instead get the company in a better position.
So, it runs like a well-oiled machine. And if they want to then hand it to that adult son or daughter to run, then it’s a better thing for them or to the new owner to continue with that business. But they often care about those employees and those customers.
And they want to make sure that when that ownership changes, that it continues delivering on what they set up years and years ago. So, that’s why talking with you in this conversation, I’m glad that we can help people meet you and understand what you do for them, what you can do for them, because often they just haven’t looked at that before, what can be.
Marcus (24:22 – 26:03)
Well, let me just piggyback on that because I’m working with three situations now where it’s the parents transitioning the company to the kids. And they’re, yeah, I think all of them wanted to do it. And I can tell you, one’s done it very successful and the son is running the businesses.
I hope someday they’ll listen to this. He’s doing better than the parents ever did with the business. And he’s kicking butt and he’s a blast to work with.
I would never expected that day one. The second one is one that, hey, thought we’re going to transition to the kids. And, you know, one has decided, hey, I want to run part of the business.
The other one says, really, I don’t want to be in the business. It’s like, oh my God, I think that surprised the folks. And the third one is transition.
And it’s gone to the daughter who’s now running the business and both dad and daughter want to go sell the business. Every one of those have been very effective in figuring out not only what did the owner want, but what are the kids, what are the next generation want? And I’d say in all three situations, everybody’s a lot happier and going to be a lot wealthier by just figuring that out.
And it didn’t take years to figure that out, you know, and it wasn’t forced upon anybody. It’s like, hey, let’s self-select out or self-select in what we want to do. And then make sure no matter what we’re getting, the business is performing really well.
So we do have options, turn it over to a kid or kids, or let’s go market and get it sold.
Armando (26:04 – 26:34)
Are you wondering if you’ve missed anything in your planning? We hear that a lot from very smart, very successful people. And that’s why you may want to know more about our Founder Stress Test.
If so, go to axiomcorp.com. And that gets back to the vision you talked about, helping them understand or helping them see a vision. And if that vision they see is them fishing on the beach rather than running a business, that’s fine.
But once you understand what their vision is, you can help them get that.
Marcus (26:34 – 26:41)
Yeah. So I think one of it’s just spending more time in Mons Park. Another one is actually fishing on a beach.
Armando (26:41 – 26:59)
Anyway. Well, it’s their business. They can decide what they want to do with it, right?
Yeah. Are there common pain points that you hear from a new client? Or is that what we touched on a while ago?
You mentioned those three areas you look at. Common pain points, though?
Marcus (27:02 – 28:44)
You talk about common things. I don’t know if it’s a pain point. I would say, again, the people that got business owners to the next level are not always one to get them the next level up.
And no company grows like that. Evolution, revolution. Is that right?
Evolution. They go through dips and valleys. And like I said, the same…
And you know what’s funny? I don’t care if it’s your accounting system, right? Everybody started off with checking accounts, right?
I started two businesses. The last one sold 20-some million, 80 people. I started in my closet and I did the accounting.
I think it was in Quicken. I don’t even think I did any accounting to start with. Build somebody that collected the money.
And that’s kind of true, half true, half not. I’m an accountant, so I had to use some system. It was Quicken and then QuickBooks.
But that does not get to the next level. That doesn’t scale for a lot of companies. And the same thing.
So if I started with index cards, or you went to Excel, and then you went to Quicken, and then some Microsoft tool or PeopleSoft, whatever, that changes. So do the people. I maybe is not the one you need in the future.
The tax person you had was not the one. You’re an attorney, right? You can outgrow your attorney, your bank, your banking relationship.
So I’d say that’s a common thread that growing pains creates new opportunities. So yeah.
Armando (28:45 – 29:03)
And that makes sense. And that gets to a little bit about what we said a moment ago as well, that they don’t like to let go of people or they don’t want to let go of people sometimes when they really need to. If the vision is clear, they may need to do that.
And it might be you who needs to tell them and help them understand why.
[Speaker 3] (29:03 – 29:04)
Yeah.
Armando (29:04 – 29:04)
Yeah.
Marcus (29:05 – 31:19)
Let me give you one other, I just thought as another common issue. People not getting to leadership teams, not getting to the root cause of an issue. And they just put a bandaid on it.
I don’t care if it’s an accounting firm, you know, hey, now we haven’t adjusted our prices in a long time. Yeah. We need to do that.
Or, eh, Joey’s ice coming in late. Yeah. We need to fix that instead of saying, hey, well, we will adjust or look at our prices from a competition, everything, you know, once a year, every March, every whatever.
And we’re going to go through and say, hey, are we competitive or not? So, and I’m just going back to, hey, what’s the root cause? We’re not making a lot of money or this or that has happened.
How come? And then how do we solve it once and forever versus, oh, you know what? Armando, he’s a client.
We’re just going to raise his billing, you know, on that one account. Well, that doesn’t fix anything. Yeah.
That’s like putting a bandaid on it. Same thing with, you know, if I have people I shouldn’t hire and I keep on having a high turnover, how do you stop that? You know, hey, let’s get to the core values of the company and make sure we have better hiring, hiring, firing, and attracting, retaining people all based on core values of people, you know, versus, oh, I like that person.
We’ll find a spot for them. So anyway, there’s things, processes that should be followed. And then one of those is being able to solve problems once and forever.
So I think anytime a leadership team solves a problem, you know, they got to go back and ask, hey, do we really solve the root cause of it? I mean, determine the root cause and solve it, or we just put a bandaid on it. And that’s kind of, I’d say that’s very common.
The last one I’d say is very common. People work in the business and leadership teams work in the business versus on the business. And it could be a bigger difference.
Most leadership teams that I start with, we don’t have time to meet every week. And about four months after get them trained in how to run a great leadership team meeting and ask, hey, what’s the best thing that’s happening? Oh, those leadership team meetings.
[Speaker 3] (31:19 – 31:21)
I don’t know how we ever ran without them.
Marcus (31:22 – 31:29)
But, you know, six weeks ago, we didn’t have time to do them. Now it’s like, we don’t have time not to do them.
Armando (31:29 – 31:33)
Yeah. It sounds like they didn’t realize the benefit with well-run meetings.
Marcus (31:33 – 31:34)
Yes.
Armando (31:34 – 32:10)
Yes. Totally agree. So as you help them see those pain points, or as you explore those pain points with them, you must see some aha moments that are maybe recurring themes for you.
As you’re talking with your business owners, with your leadership team, you’re the leader of the company that you’re working with the client. So for that business owner listening now, wondering what aha moment they might hear if they talk with you, what might be that aha for them?
Marcus (32:11 – 34:05)
Aha would be, you know what, my leadership team is not all on board with where I want to take the business for multiple reasons. Could be I didn’t share it with them. I don’t know it.
And they all might have their own semi-private agendas. And, geez, if I could get everybody on the same page, rowing in the same direction, I’d be a lot better. That’d be one aha moment.
The other one, I think most business owners will agree, you know, not everybody has a discipline of being accountable. And if I could put in a discipline of being accountable, oh, my gosh, we could get a lot further. Oh, wait, wait, wait.
I got one more, Armando. As a business owner, I spend a lot of time doing stuff I shouldn’t be doing. And God, if I got a coach or mentor or somebody that could help me just bring that up where I wouldn’t have to work 60 hours a week on my business or 50 hours and I could get somebody else to go help me, wow, wouldn’t that be great?
And so I’d say the other big aha moment for a lot of business owners, they’ve come up through the ranks or built their business. They’re really good at their trade, but are not good at leveraging other people. A lot of them are not good at leveraging other people or even figuring out how to use an assistant, you know, at a fraction of the cost in offshore or onshore that could really aid them.
So those would be my ahas.
Armando (34:06 – 35:03)
Great. So let me just make sure that the listener heard those ahas. You talked about a team that’s all working together.
If you get all those people working together as a good, cohesive team, the benefit to everybody is just very, very powerful. That’s one of the common ahas, getting that cohesiveness. And if you could get folks to just be accountable and get accountability, put in, use it as a discipline, meaning it’s just part of what they do.
There’s not a whip cracking over their back. It’s just part of what they do. They are accountable and that is their own discipline.
And that other, the third one was freeing up leadership’s time. That business owner is working 67 to 80 hours a week. And the aha would be when you help them to get that assistant or offload or delegate to where now they’re working less hours and it’s working better for them overall.
Marcus (35:04 – 35:23)
I’d say those are, yeah, very common. And I would say every one of my clients would agree. Oh yeah, those are things we didn’t know or issues that we had that, you know, we’ve been affected that getting done.
So, okay. Yeah.
Armando (35:23 – 35:33)
And so are you typically working say with the, with the CEO owner or with that owner and the executive team, the leadership team, or does it, does it vary?
Marcus (35:33 – 36:00)
Yeah. So I’d say I’m always, always most commonly brought in by the owner, president or CEO. That probably, yeah, I can’t think of a case where that didn’t happen at that level.
Two, after working with the owner or CEO, the vast majority of the time, I ended up working with the whole leadership team.
Armando (36:00 – 36:00)
Okay.
Marcus (36:00 – 37:26)
Sometimes it exists, sometimes it doesn’t. And so then, yeah, you help them build it or figure out who’s there, who should be part of it or not. It’s also amazing that Armando, that sometimes the owner has other great people working with them.
They just haven’t been elevated or lifted up and been say, Hey, yeah, you’re part of the leadership team. I need you and you need me. Hey, let’s work on this thing together.
That’s, that’s pretty common. Or less common, you’ll find an owner who has got one where two out of three partners are really good and one partner just really opts not to participate. And yet they try to run the company with three people.
And it’s like, wait, I got two really effective people, one not. And just because people put money in a company, investors or partners does not mean that they should be running the company. And so, so many times find that we have outside investors in the company and they put in, I don’t know, 3%.
And all of a sudden they think they have a seat at the table. And I think it’s, it’s very easy to correct that problem. Especially if you use an outside resource.
It’s not always easy for the owner to correct that problem, but it’s like, hang on, are you an investor or you’re part of the leadership? Big difference between the two. Yeah.
Armando (37:26 – 37:43)
And that’s where having that, that outside party, you come in with a different perspective and you’ve seen situations before where you understand how to address things and, and navigate through that. You can certainly help that owner leadership team get to a better place.
Marcus (37:44 – 37:55)
For sure. For sure. And that same one, having an outside perspective when you have a family-owned business.
Yeah.
Armando (37:56 – 37:58)
Yeah. That’s a whole different dynamic.
Marcus (37:59 – 38:56)
We’re not going to, we don’t have enough time. We don’t have enough time to go through that. But they are, family-owned business are, are pretty unique.
Love working with them. Yeah. It’s sometimes it’s a challenge, but they just need somebody from the outside saying, Hey, wait.
And then, you know, we really all need to sit down and go through this open and honestly. And sometimes just don’t want to do that. I don’t want to say you’re kind of like a marriage counselor at times, but it’s like, okay, if you can do it in a professional manner, that’s great.
By the way, Armando, and for the audience, listen, I am not a life coach. I’ve told people, you know, all right, every once in a while, you got to do that stuff in there to keep the peace and everything. But I do not promote myself as a life coach.
If you’re looking for umbayas and, you know, touchy feely, that’s not me. There’s other people out there. Armando, you probably know a ton of them.
That’s not, that’s not me. I like to get results. That’s results.
Armando (38:57 – 39:12)
Yeah. Your, your focus is the business and our focus is, is the family. So we, we often hear from, from couples having conversations.
One of them will look over and say, you didn’t know you were going to get into marriage counseling when you started working with us. Did you? There you go.
Marcus (39:12 – 39:13)
Yeah.
Armando (39:13 – 40:10)
Actually I kind of did over time. That is just what evolves. You have very deep personal conversations and you mentioned family business.
You know, I grew up in a family business. I’m, I’m son number three out of four sons, two older brothers worked with my dad and his company, and it can get very sensitive, very touchy and, and you know, any little something can spark a firestorm. So you just have to be so careful navigating things with her.
This is a tear. But again, you said, you said you’re focusing on, on the business and focusing on, on that. And you’re trying to really separate, which makes a hundred percent sense on, on why that is important to that business owner, because the business has its own accountability to its employees, its customers, what it does.
It needs to be healthy and function in a way that benefits everybody.
Marcus (40:11 – 40:54)
Yeah. And you know, when you take those family businesses, I don’t care, a husband and wife running a company or whatever. I think if you can go in there and yeah, you do end up being kind of a personal coach.
A lot of times you can, you know, just being independent and listening and say, wait, this is what I’m hearing now. And you know, having enough experience say, here’s three ways we can solve this. You guys just, you know, before we leave today, let’s pick one and go down that path.
Yeah. And it’s like, wow, you know, I don’t want to say not, not forcing the hand, but help them get to the next level a lot quicker than dealing with it for years and years more when they should have been dealt with last year.
Armando (40:54 – 41:45)
Yeah. Yeah. So Marcus, let me ask you, one of the things that we hear quite a bit from, you know, from our audience, they’re, they’re thinking about selling sometime in the next two to five years.
They’ve never gone through this before. They don’t know what to expect. So as you pointed out earlier, we’ve had other podcast guests who can talk, who could speak specifically in their discipline, investment bankers or valuation people, et cetera.
But when you are meeting with that business owner, who’s thinking they want to transition out of the company in two to five years, and you know, that’s what they want to do. How do you help them walk through that and navigate that with the idea that it will be a much more sellable business or a better value business or better functioning business? How do you help them do that specifically?
Marcus (41:46 – 45:05)
Yeah. Great question. And obviously do end up with helping folks like that, having those questions, I think number one is helping them understand the value of the company.
I think so many business owners go and they think it’s worth this when really it’s worth this or it’s worth this, you know, and independently helping them number one, figure out the value of the business. The personal life catch would say, Hey, where do you want to go? What’s your objectives?
Well, let’s leave that off the table for a second. So if you know the value of the company, the next thing I think it’s educating clients on if you want to part, or if you want to transition to employees or take some of the chips off the table, it’s like, how do you make the most value out of the business? And whatever steps you would do to put more value in the business will also help the business owner typically and get them to the end objective.
So it’s like, well, how do we make sure? So what’s the most important thing? It’s like, okay, how involved is a business owner?
If the business owner is in there 50 hours a week, it’s like, well, you don’t have a business as much as you have a job, you’re paying yourself for a job. And it’s kind of like, Hey, how do we get you out of the business? So your business is valued more, and it gets somebody else to run it.
Two is how do we prove that things are running smooth, and you could actually take off for a month. So many business owners, so many of them are so hesitant to take off even a week, because, oh, I don’t know what happened, you know, ding, ding. So it’s like, wow, that’s a problem in my eyes.
You know, let’s, geez, just, you know, not only if they want to take off, they can’t, or they don’t feel like they can. If something bad were to happen to them, a misfortune, I’m not talking about winning the lottery, I’m talking about, you know, getting hit by the school bus or something like, oh, shoot. So let’s go fix that, that increases the value of the company.
And then, you know, standardizing processes a lot of times, so we don’t have to think about stuff, and we can also measure it. If you standardize a process, you typically can measure it, and then we get, hey, great metrics for a business that helps you, besides all the finances. Well, I’d say that’s not the last one.
Also important fact there, having really good finances, right? So if you want to sell, transition a business, or gosh, just to be a great business owner, you got to have a good, you know, solid financials. Because a lot of times for business owners, that is their total wealth, or a major part of it, and going into retirement, whatever, it could be selling their business, or they want to take, again, some chits off the table, or just have those coupons come across every week, and have their kids run it, or somebody else run it, and hey, I got to make sure that the numbers are solid, and I can have that play out to whatever action they want to take. So got to have solid numbers.
So yeah, I think those are key things.
Armando (45:06 – 45:50)
Yeah, good. And let me just reiterate a point that you just made for the audience, because I think it was critically important what you just said. You said that if they can’t take time off, well, that’s a problem.
And I think what often they might not understand is, if they can’t take time off, it’s actually reducing the value of their company. Because a new owner does not want to come in, and you’ve got to be there seven days a week. That’s not what they want.
They need a company that will function without the owner. So when they can put in the systems and processes, and they can take a week off, and go on vacation, then they’re actually helping increase that value of the business. They just might not understand that.
Marcus (45:52 – 46:58)
Great, great point. And I think that is something very easy to explain, but a lot of times not thought of. It’s like having the one supplier.
When I get all my stuff from one supplier, it’s like, oh, shoot. Or I have one large customer that does 80% of my business. Oh, shoot.
I got to go fix those things, right? There’s other risks in the company, too. You got to make sure, right?
Oh, hey, all my counting is done on that PC right over there, sitting next to my desk. And any unhappy employee could come over and just kick it, and I’d be out of business. So it’s looking at those other business risks too.
I only brought that up because I just ended up working last week with a client that, oh, close to the same situation. The employee didn’t kick it, but something went haywire on it. And it’s like, oh, geez.
Our new client is like, wow, I think we got more than that. That’s the biggest one of the issues. We probably have other issues, other risks that we got to mitigate.
Armando (46:59 – 47:43)
Right, right. Yeah, that sounds terrifying. Oh, yes.
But as you’re helping that business owner prepare for their own transition out of the business, I’ve heard investment bankers say many times that a new owner wants to buy a business that just prints money. Everything is automatic. It just works without anybody having to do it.
It just runs all by itself. Everything is automated. The lead generation, the sales fulfillment, everything is automatic because that is what that business owner wants to buy.
And that is the highest value typically of that business of what it could be.
Marcus (47:45 – 49:31)
You’re absolutely correct. You have immense money. It runs by itself.
That’s great. Economy bulletproof too, right? Don’t want to, oh, shoot, if this happens, it goes down.
Yeah, I don’t disagree. I mean, that’s, I say, my job, that’s my challenge a lot of times. Hey, let’s get it to do that.
And for the business owners that are listening to it too, it’s like, I think you need to have a dashboard. You need to look at how do you know, hey, my car runs, I don’t have to do anything, but I have some gauges on it, right? I know when I’m running out of gas, right?
I know when it’s getting too hot, you know, the temperature, you know, I don’t really have, well, yeah, actually my car does tell me when I’m, the tires are low. If we have all that in a car, we need the exact same thing for our business, right? We need to have an easy dashboard that tells us how are we doing and where am I at risk?
Or if I’m trying to get it up to, you know, 200 miles an hour, I need that speedometer, right? And says, hey, I’m going to focus on that and I’m going to keep on, you know, working on, you know, getting to the next level. And it doesn’t happen all at once.
I’ve got to shift gears. Oh man, that’s a new analogy. Yeah, I got to shift gears every once in a while.
It slows down a little bit and then, hey, we take off again. So a lot of businesses don’t have that dashboard that they can look at. Not only on a, you know, again, I’m a big KPI metrics person.
Well, you know, you got to look at the important stuff on a weekly basis. But even if you don’t look at a monthly basis, hey, am I getting where I want to go and where I need to get to or not? So get that dashboard in place too.
Armando (49:32 – 49:57)
Yeah, that makes a lot of sense. And I’m glad you said dashboard because that reminds me of a client I spoke with recently who likes to travel and they can be on the beach with their laptop and they can see the dashboard. They can be in Europe on the beach with the business that runs here and with their dashboard know exactly what’s happening with their company.
Marcus (49:57 – 50:58)
Yeah, I love it. And if you don’t have it, it’s just, it does not make a bad company. You’re not a bad company if you don’t have it, right?
And it doesn’t mean you’re not successful. Matter of fact, a lot of the companies, 90% of the companies I work with are already successful. It’s just putting in the rest of those tools to, you know, even make it better and get to the next level.
So the dashboard, the annual goals, quarterly goals, weekly metrics, great leadership team meetings, those are just a lot of tools. An accountability chart, what does that organizational instruction look like? Not only today, what does it need to look like in 18 months?
Having those tools in place just helps a business owner get to the next level or I say business owner, really business owner and a leadership team. I keep on picking on just the business owner, but it’s really the whole leadership team needs that dashboard.
Armando (51:00 – 51:38)
Yeah, that makes sense. So have we not touched on something, Marcus, that you’d say is important for that listener who is thinking they want to exit in two to five years? They’re not really sure what they should be doing or changing, or maybe they have an idea, but they just haven’t done this before and they’ve never, of course, exited a business.
So that’s a whole new territory, but they’d like to think that when they do exit, their company will be in that perfect position. So they realize they might need some help on the outside, you know, from you.
Marcus (51:39 – 54:19)
Well, two things. One’s about me, one’s not about me. I think, you know, it takes time to get there, right?
You can’t change everything, processes, people, and systems in, you know, two months. Oh, I’m ready to sell, right? So you need a track record.
So start early. That’s going to take time. There’s the other thing I’d tell business owners.
I really believe it’s for any business owner listening or leadership team. You know, most of us have kids and we, or when we were a kid, our parents got us a coach, all right? It was a soccer coach, baseball coach, whatever, you know.
We paid to have those coaches. That’s what we did for our kids, right? And then they got them a better team.
They got a better high school maybe, or helped them in high school. And then, oh, wow, we still got them a coach because, oh, that would help them get into college, right? And then you go through all that stuff.
And it wasn’t even their main purpose. Their main purpose was to study and be a great human being and be able to think on their own and so forth and so on. Now you get into business and the vast majority of business owners and leadership teams don’t have a coach.
But you look at all the, you know, Fortune 500 companies, whatever, there’s not one that doesn’t have a coach. So I look at it and say, well, here’s the most important thing for this company is growth, leadership, and such. And you think, you know, the vast majority of all the people on that leadership team have not done it before.
Why wouldn’t you go get a coach to go help you just like we did with our kids? And here’s my other comment on it. Again, it’s not about me.
It’s like, find a coach that can make an impact. Somebody, you know, it’s like having a, I don’t know, somebody selling your house or coaching your kids or coaching you in golf or whatever. Find somebody you trust, you get along with, and you should be able to make a multiple of whatever that cost is.
You know, I always tell a client, I can’t make, you know, 10x of, you know, or believe I can make a 10x impact on what I charge for doing coaching. It’s like, wow, I’m not sure I want to do it. And sometimes coaching leads to a larger number just because you’re increasing the value of the business, but you got to be able to make that, you want to make, invest in yourself, invest in your company by, yeah, keep on growing, learning, and get somebody to help you, push you, mentor you along the process.
Armando (54:20 – 55:25)
Right, right. I agree 100%. I’ll also mention that as we’re having these conversations with that business owner, that couple that owns a company, for example, we are doing that, not life coach, but certainly helping them just see, well, you know, once you’re not running this business, once you’re not day-to-day in this company, what is life going to look like for you?
What do you want it to look like for you? And as we’re having those conversations, they might decide to work five years longer because they really enjoy it, or they want to let their oldest son mature a bit before they hand over the keys. So great, whatever they would like to do, but it’s just so important that that owner or leadership team or husband, wife, whatever it is, that there’s communication and that they’re all going in the same direction, which gets to your point earlier about having that cohesive team, everybody on the team, all oars in the same direction.
The magnification of the benefit is just incredible.
Marcus (55:25 – 55:27)
Hear, hear. Hear, hear.
Armando (55:28 – 56:15)
Yeah. Well, good. Well, Marcus, this has been the conversation that’s very helpful.
And I hope that that business owner who is thinking of the exit, say two to five years, understands that, as you said, it will take time to implement things. And if you talk with investment bankers, they will all tell you when you’re planning to sell, plan at least five years in advance, at least two years, at least one. But if you can plan five years out before you plan to exit that business, then you have more time to do those things really that you can help them do to increase that value of the company so that when they do exit, it is the right time and their company is in the right place for that.
Marcus (56:16 – 56:37)
Armando, I got a question for you. It doesn’t matter, a medium-sized business, if you planned three years ahead or two to three years ahead, do you think you could probably impact, most catches could make a impact on sale by a million dollars, get a million dollars more for the business, medium-sized business?
Armando (56:39 – 56:41)
If not more, yes. Yeah. Yeah.
Marcus (56:42 – 56:56)
I easily believe that. And so I look at that, just simple little math there. God, if I could use a coach, I’d get a million dollars more for my business in three years.
I just got to invest a little bit right now.
Armando (56:57 – 57:00)
Right. Was that coach worth it or not? Yes.
Oh my gosh.
Marcus (57:01 – 57:11)
Because you’re not going to pay a coach. I don’t know. Maybe there are some coaches that get a million dollars or a hundred thousand dollars a year or whatever the case may be.
That’s not me. That’s probably some other podcasts.
Armando (57:11 – 58:02)
And that’s also, I’ll just mention that it’s also a legitimate business expense you can run through the company. So it’s putting my old CPA hat back on that I wore for me. But it’s certainly a benefit, but certainly, yes, you can increase the value.
Is it, will it increase it by a million dollars? Certainly. Yes.
And 20%? Yes. Depends on where they are for sure.
Well, Mark, that’s good. This has been excellent. I really appreciate the conversation.
Thank you so much. And if somebody has questions, they disliked what you said, or weren’t quite sure about something and wanted to have a conversation with you, what’s the best way for them to get in touch with you? Is it through your website, through an email?
How would you want people to contact you?
Marcus (58:03 – 58:41)
Sure. Either way, it’s blindsidesbc.com. That’s the best way.
Or reach out to you and you’ve got my contact information. Everybody should have your contact because you know everybody, Armando. So reach out to you and that’s fine.
Pass it along.
Armando (58:42 – 59:45)
Excellent. So I do want to just wrap up a little bit here for the listener. When you engage somebody like Marcus, who can come in with an outside perspective and help you see what you might not be able to see and work on those diligently over time, and there’s enough time for him or her to do that, then what you can end up with is a company that runs more efficiently, makes more money, is more sellable at a higher value for you when it comes time to sell.
And you don’t have to sell that company at all. You can choose to keep it and be an owner, maybe an absentee owner, hire someone to take your role. But all those steps leading up to sale that build that value are just so many ways that you then have choices to exit.
That’s what’s possible when you follow a guide like Marcus who can help you see what you might not be able to see in your company. Agree, Marcus?
Marcus (59:46 – 1:00:01)
Armando, thanks for having me on. I enjoyed it. Love to talk to any business owner that I’d love to get a cup of coffee or get on a Zoom call.
Love to do that and talk about, hey, which issues are, and if I can help, gladly help. First coffee’s always on me.
Armando (1:00:02 – 1:00:27)
Thanks, Armando. Yep, thank you. Hope you enjoyed this episode of the Founder’s Guidepost.
Whether exit is on your immediate horizon or maybe 10 years down the road, there’s something here for you. Wondering if you’ve missed anything in your planning? Schedule your 30-minute Founder’s Strategy Call at axiomcorp.com.
Congratulations on your business success. You are the American success story.
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