Speaker 1 (00:00:05) - Hey there, a thoughtful listener. Are you looking for introductions to partners, investors, influencers, and clients? Well, I've had private conversations with over 2000 leaders asking them where their best business comes from. I've got a free video you can watch with no opt in required, where I'll share the exact steps necessary to be 100% inbound in your industry over the next 6 to 8 months, with no spam, no ads, and no sales. What I teach has worked for me for over 15 years, and has helped me create eight figures in revenue for my own companies. Just head to up my influence. Com and watch my free class on how to create endless high ticket sales appointments. Also, don't forget the thoughtful entrepreneur is always looking for great guests. Go to up my influence. Com and click on podcast. I'd love to have you. With us right now. Len Busquets Len, you are a certified business and executive coach and certified exit planning advisor. You're found on the web at Greater Heights coaching.com.

Speaker 1 (00:01:19) - Len. Thanks so much for joining us.

Speaker 2 (00:01:21) - Josh. It's great to be here. I really appreciate it.

Speaker 1 (00:01:24) - Yeah, absolutely. Well you're in the greater Boston area and tell me who you serve and who you work with. And and kind of the impact you have in the in the business owner and leader community.

Speaker 2 (00:01:35) - Yeah, I work with business owners typically from 1 to $10 million in revenue. So, you know, decent sized businesses. And and the problem I solve is that if you look at the data, only about 20 to 25% of the businesses that go up for sale actually sell. And so it's brutal, right? and so my goal in life is to increase that percentage my own little as much as I can so that, you know, I really get business owners ready to transition out of their business. And that can be through a sale, through succession to their family, to management, whatever. But really just getting that business ready so that the owner can leave on their terms and on their timeline.

Speaker 3 (00:02:17) - Yeah.

Speaker 1 (00:02:18) - What is going on, Len, that's so few business owners and leaders are are able to make a successful exit. That's that's devastating. And and here's what I think about as a business, you know, I'm an entrepreneurial world, you know, since, you know, I've been at this for decades. You know, I think about all of the authority that I built up, the amazing network that I've built up, the brand, the impact that, you know, the social capital out there and just to, you know, not have that thought out or planned out or be able to like certainly I don't necessarily see my kids necessarily taking the reins of this, which is fine. But boy, there there's got to be someone that if they understood the assets and and what is available here. Oh boy, would that be just a lot easier to step into and succeed with rather than having to start from zero. Because again, as we know, the attrition rate of a typical small business to that's That's devastating acquisition.

Speaker 1 (00:03:21) - Stepping into an existing company is such a hookup. Well lens sorry, that was a lot of thoughts in that thought. Okay. You could take that jumble of, you know, my soapbox issues and and maybe translate that for everybody.

Speaker 2 (00:03:34) - Yeah. And so I think you, you hit the nail on the head. The, the other really disturbing statistic not not to be on the bummer side, but I'm going to, you know, give you the the optimism as well. Yeah. Is that, about 80% of the financial assets of a business owner are typically tied up in their business. Right? So that's the other piece to this is if you can't figure out a way to unlock that, you know, you're missing a huge, piece of your financial assets of, of what you've built up over time, right, whether that's been five years or 30 years. So the, the you know, my biggest thing is that you need to think about this and you need to think about a transition plan well, in advance of when you want to transition out of your business.

Speaker 2 (00:04:20) - And, and what I like to say is when you start a business, you need to think about what your exit is going to be. And I'll tell you, the the younger generations are much better at this than the older generations. And I'm going to put myself in that older category. they, they tend to have just a shorter timeline, right? They think, hey, I'll probably run this for five years and then I'll do something different. And so they think about much better about, okay, I'm going to structure this business so that it's ready when I want to get out of it. And that's that's what I help business owners do, is just be ready. And there are some components that I'd love to talk about, just kind of a the four things that I think every business owner should be thinking about from day one.

Speaker 1 (00:05:04) - Yeah. yeah. Please continue on.

Speaker 2 (00:05:07) - Yeah. So, so really quickly, there's more to this, but regardless of your stage of business, first thing you need to think about is what do you want to do after this business.

Speaker 2 (00:05:18) - Right. And the reason that's important is if somebody does want to come in and buy your business, the first thing that you ask is, what are you going to do next? Right? If you don't have a if you don't have a good answer, they're heading for the exits, right.

Speaker 1 (00:05:31) - Why why do why would they care about that?

Speaker 2 (00:05:33) - They care because of all the deals that fall apart at the last minute, 75% of them are because the business owner, the seller gets cold feet because they don't know what to do next. Oh, I've heard that.

Speaker 1 (00:05:48) - Yeah, I've heard that.

Speaker 2 (00:05:49) - So that cold feet problem, you solve that by saying, I know what I'm doing next, I'm going to start something new. I'm going to go create a nonprofit, whatever it is, having that personal plan. So that's number one. The second big thing, potential buyers care about growth, right? Yeah. so really putting together a growth strategy, and even if the business is relatively new, it's really a time to think about focusing what you're really good at and get rid of everything else.

Speaker 2 (00:06:20) - So, you know, you may have that customer, maybe it was your first client, your first customer, but you're losing money on them, you know, got to get rid of them, right? Like you have to think about what a buyer is looking at. And so really getting your business strategy in order is the second big thing. The third, you know, your accounting records. Right? You got to have you got to understand your metrics, gotta have your accounting in order. Right. And then the fourth and this is really important, especially if you've been in running a business for a long time. You've got to get distance from your business. You've got to get independence from it so that somebody else can run it, because otherwise the business is you can't sell it if you if you are the business. So getting some people that can do what you do, documenting what happens, those are so those four things again need to be doing those from day one. super important.

Speaker 1 (00:07:17) - You know, again, this still just kind of blows my mind that someone would be entertaining the thought of an exit.

Speaker 1 (00:07:23) - The numbers are fine, right? They you know, obviously, you know, if they've entertained it. I mean, if if there were a problem with the numbers, I think that that would likely come up early in the conversation. But to think that they get that far along the way and then just simply for emotional reasons, because it could feel like I'm going to lose my purpose, I'm going to lose my identity, which Which sounds like what you're saying is a big component of that. I'm not going to know what to do. That is just, that's surprising that that that it would be that high. between you and Eileen, I know exactly what I'm going to do. I've already. I can just listen. In my personal life, I've got, you know, probably a good now that my kids are kind of excited or, you know, my own kids are, like leaving the nest and stuff. Oh, I'm super busy with, like, I got hobbies, I've got passions.

Speaker 1 (00:08:15) - You know, I picked up all kinds of new stuff. But not just that, but, you know, I think a viable path for many people. That and I'd love your take on this that have innovated like they care passionately about their point of view. There's a certain, sense of values that they bring to their industry that's truly unique. There is so much opportunity to for me, I intend, you know, if I'm not involved in the day to day of my company, which, by the way, to anyone that's listening, I'm not ready to sell today. But when I am ready, trust me, I know exactly what I'm going to do. And to me, like, I'm so excited about just being a full time evangelist for the things that, you know, we're kind of behind how we've implemented that. so if I can persuade someone who might be listening to this, it might be struggling with what would they do? I think that's a huge one. Can you maybe have a I would imagine you have a story or two of, you know, folks that did find their way or did have a plan and, and, and, you know, it's not just sitting on the beach for years on end because you're going to get tired of that.

Speaker 1 (00:09:22) - Like, that's that's not a forever kind of thing. That's good. I've had friends talk about, you know, I've had friends who've had successful exits. They say, you know, it's fun for about a month. And then for most achievers, it's just that you're just going to get bored out of your mind, you know? We got to stay engaged.

Speaker 2 (00:09:42) - Yeah. So, I think you are in the. You know, you're in the minority by by having that plan already and, and I would say I'll give you two examples a bad plan and a good plan. Okay. A bad a bad plan is, is kind of what you said. I'm going to play golf and travel. That's a bad plan. Yeah. Right. Yeah. It's not going to last. What's a good plan? Hey, you know, as you said, maybe I'm going to I'm going to evangelize my industry. Maybe I'm going to start a nonprofit right about something I really care about. Maybe I'm going to move closer to my grandkids or whatever that, you know, whatever the plan, that's the plan.

Speaker 2 (00:10:16) - The I'm just going to play golf and travel is not a plan. But let me tell you a story about a client I'm working with today. So she is a a successful coach, a transformational coach, and she works one on one with clients and in small groups. And what she's realized is that her vision is to leverage what she does so that more people can be exposed to it. And she doesn't have to just be the the only one providing that service. So what we're working on is her plan to be able to create leverage for what she does. But her plan plan is that she wants to sell the business and then write, because writing is really her passion. So that is an awesome plan to me, right? She's putting things in place and oh, by the way, she's going to end up working less and likely making more money as she does this transition because she's now figuring out how it's not just billing for her time, but it's really billing for her expertise, which she can expand now because other people can provide the service that she does today by herself.

Speaker 1 (00:11:21) - Yeah. let's say someone is conceivably, you know, 4 to 5 years out before they would, likely exit. What type of things should they be doing today? Because, you know, and I know exit planning should begin right from right out of the get go, right when you're designing or thinking about what this business is going to look like. And likely, you know, there are many of us that that are not thinking about it at those earlier stages and maybe thinking about, well, start worrying about that or thinking about that when I'm like a year from selling or something like that. No, no, no, no, I'm sure you're going to say start now. And what is that activity we should be doing?

Speaker 2 (00:11:59) - Yeah. So, my recommendation is always at least 2 to 3 years out. Right. And and when I think of exit planning, I don't think of it as a point in time. I think of it as being at a point where you are ready so that any when something happens, you know, you can move on, you can transition.

Speaker 2 (00:12:20) - Right. So, but at least 2 to 3 years. And why do I say 2 to 3 years. Some of these things take time. If you're accounting records aren't in great shape, you can't fix that overnight. If you have some infrastructure you need to build some some management talent you need to build. That takes time so that 2 to 3 years and it really comes back to the to my four big points. And that let me just talk about, you know, 1 or 2 activities in each of those from the personal side, you know, you kind of need to get your house in order. You talked about it before. Your kids may not want to take over the business. You need to communicate with your. If you do have kids to know, are they interested? Are they capable because capable and interested may be two very different thing. What I what the data suggests is that over 50% of the parent generation thinks their kids are going to take over their business, whereas only about 25% of the kids are interested.

Speaker 2 (00:13:18) - So there's a huge gap. Why is there a gap? Lack of communication. It's awkward, but you need to have it. So if I think about your business strategy, what do you need to do now? You need to start focusing your business on the things that are you're really good at, and get rid of the peripheral things that aren't adding a lot of value to your business. And again, most business owners are kind of focused on the day to day. They're not taking that that longer term. So that's on the business strategy. Really get rid of the stuff that you're that's not working. Really focus on the products or services that you're really good at. On the accounting side. Yeah. Understand your metrics, right. when potential buyers are going to want to know how what's what really drives this business and what this may mean the 2 to 3 years out is you not. I don't want to disparage bookkeepers, but you may need a CPA that really understands. You know what? How you know what the metrics are of a business rather than just recording transactions.

Speaker 2 (00:14:19) - So, you know, that's something you may need to do with some with some forethought. And then on the final piece, really, it's, you know, documenting everything in your business and, and building that bench strength. Right. You may not have a huge organization, right. You may not have 100 people, but even if you only have five, you've got to figure out who can take over certain parts of your business. And there's a double benefit to this. One is you've got coverage now. And the second thing is you can take a vacation.

Speaker 1 (00:14:49) - Yes, exactly. You're going to enjoy life better. You're going to love, like for the work you do. You stay only in your zone of genius. You know, a lot of the stuff is just common sense e-myth stuff. But again, easier said than done. I think a lot of people probably agree with you intellectually, but they have excuses, right? Or reasons like, oh, I gotta put out fires, I gotta do this, I gotta do this.

Speaker 1 (00:15:09) - You know, I'm the only one that can do this. And, you know, again, it's, it does. It requires a lot of conscientiousness, and sometimes sacrifice and sometimes some hard decisions, sometimes, you know, some short term sacrifices for that long term game. Then in the few minutes we have left. You know, I suspect that there's someone that's listening to us right now that probably just needs to have a conversation with you. And can you tell me a little bit about the services you provide, what that looks like? You know, what you typically talk about in a first conversation?

Speaker 2 (00:15:43) - Yeah. So I work with, you know, I work with clients who, are just starting to think about this. Right. And and so an initial conversation is really around what are your goals? You know, what are you thinking about down the road? What do you want to happen. So that's a big part of the conversation. Another really early thing I do early on is get a business valuation done, a professional business valuation.

Speaker 2 (00:16:09) - And what that does is really sets sets, you know, where you are today. And those are sometimes uncomfortable conversations. Because if a business owner has worked on their business for a long time, they think it's worth this. And the valuation comes here. Right? So there's there's a big gap. the other reason I talked about 2 to 3 years is we can we can close that gap. Right? We can focus on the things that build value. So that's a lot of what I do is I help the business owners focus on the things that outside buyers care about. Right. And those again, processes document metrics growth, right. Those are the kinds of things that that I work with clients on. And again, I'm a sounding board for them, right? A lot of times they know what they need to do. what I'm providing is the guidance, the guardrails around which and so so that business valuation is, is really important just to set the set the, you know, the where you are today.

Speaker 1 (00:17:09) - You know, I, I suspect, Len, that there's probably a lot of missteps or pitfalls. I think that that all of us could potentially do. Like, for example, you know, even just on the financial side, you know, we could be getting advice from our, tax professional or accounting professional and, and that might be sound advice, but it might not be in alignment with the owner's goals. Right. If exit is a strategy, you know, there could be some things that short term might be good for cash flow long term is going to it's going to hurt valuation for example. so so stuff like this that, you know, if they don't have you know, if they're not giving you their ear, you know, these are just things to be at least aware of. how does it look like to actually work with you? Like, how long do you work together? When do you typically start the process? And, you know, I would imagine, you know, it seems like engaging you would be a pretty clear path to a, a positive ROI if we're talking about an eventual exit and, you know, and what that could mean in multiples or, you know, the total valuation if you can help lead that.

Speaker 1 (00:18:18) - Right. I, I'm assuming.

Speaker 2 (00:18:21) - Yes, that's that's what I do. I mean, that's why I do what I do is to help businesses get the value, you know, to, to harvest the value that they've built up over time. And so what it typically looks like is, you know, an ongoing weekly meeting, you know, our long meeting where we we have a topic for each each session we go through exercises. Right. We work on and but it's always if there's something pressing right we take care of that. Right. We I help as needed. But I do have an agenda that gets us. And you talked about there must be a list. There's absolutely a list, of things that either add to or detract value in a business. And, and that's one of the things that we'll work through. It's it's a pretty extensive list. I'll just give you a couple examples. you know, is your is your revenue, one time or is it recurring? Right. That's that's a huge impact on value.

Speaker 2 (00:19:13) - Do you have any pending lawsuits out there? You know, what's the value of your brand? Do you have some great, you know, real estate assets, those types of things. So we go through each of those and we give each a red, yellow or green. And then those things that are red that have the biggest impact on value, that's what we work on first. Right. So it's it's a gradual process. And again I typically am thinking 2 to 3 years out. but my services are, you know, if I, if the client doesn't think I'm adding value, that's, that's their right to, to say, you know, to end it. But, typically what we do is continue to work through to and through a transition because a lot of times the new owner, wants some guidance as well.

Speaker 1 (00:19:59) - Yeah. Your website, Len, is greater heights coaching to our friend that's been listening. What would you recommend their next steps be?

Speaker 2 (00:20:07) - The biggest thing I would recommend is to take a look at the business valuation calculator.

Speaker 2 (00:20:13) - It's up in the right hand corner. That takes about ten 15 minutes to go through. And what it will do is actually give you a basic valuation of your company today, as well as a number of categories that are either detracting value or can add greater value. It'll give you a little sliding scale as to the types of things that you may want to work on. So, it's it's pretty low effort, pretty easy to get through and gives you some really good data to work from. you know, it's not, it's not asking, you know, really intense questions, but it just gives you a guideline of, here are the big areas that add value to my company. And how am I doing in those areas?

Speaker 3 (00:20:55) - Yeah.

Speaker 1 (00:20:56) - Len. Busquets, again, your website, Greater Heights Coaching. Com again, you're a certified business and executive coach. Certified exit planning advisor. Congratulations, by the way CPA. So Len, it's been a great conversation. Thank you. Let's help some good folks out there.

Speaker 1 (00:21:14) - Don't be part of the 75% my friend. Get that stuff locked down. Now work with someone like Len. Len, it's been great. Thank you for the conversation.

Speaker 4 (00:21:22) - Thank you.

Speaker 1 (00:21:28) - Thanks for listening to the Thoughtful Entrepreneur show. If you are a thoughtful business owner or professional who would like to be on this daily program, please visit up my influence. Com and click on podcast. We believe that every person has a message that can positively impact the world. We love our community who listens and shares our program every day. Together we are empowering one another as thoughtful leaders and And as I mentioned at the beginning of this program, if you're looking for introductions to partners, investors, influencers, and clients, I have had private conversations with over 2000 leaders asking them where their best business comes from. I've got a free video that you can watch right now with no opt in or email required, where I'm going to share the exact steps necessary to be 100% inbound in your industry over the next 6 to 8 months, with no spam, no ads, and no sales.

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