Are you looking for a financial planner?
Justin Goodbread is the founder and CEO of the financial planning firm Heritage Investor.
Justin founded Heritage Investor in 2009 with a goal in mind; to help business owners and individuals meet their financial goals with ease.
Justin is a certified financial planner, certified value growth advisor, and a Forbes finance council member.
Heritage Investor offers individual financial planning, pre-retirement and post-retirement planning, business planning for small businesses, and much more.
Learn more about how Heritage Investor can help you reach your goals by listening to this episode of The Thoughtful Entrepreneur above and don’t forget to subscribe on Apple Podcasts – Stitcher – Spotify –Google Play –Castbox – TuneIn – RSS.
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Welcome to The Thoughtful Entrepreneur Show. I'm Josh Elledge, founder and CEO of UpMyInfluence.com. We turn entrepreneurs into media celebrities, grow their authority, and help them build partnerships with top influencers. We believe that every person has a unique message that can positively impact the world. stick around to the end of the show, where I'll reveal how you can be our next guest on one of the fastest growing daily inspiration podcasts on the planet in 15 to 20 minutes. Let's go right with us right now. We've got Justin Goodbread. Justin, you are the founder and CEO of Heritage Investor, on the web at Heritage Investor dot com. Thanks for joining us.
Thanks for having me, Josh. Appreciate it.
So Justin, what is the I guess the the USP or what is the the message of of the work that you do with heritage investor? The message
is is business owners can double their net worth every three to five years. That's a simple message. Ultimately, you can, you can expand on that message to say, as we're doubling our net worth every three to five years, we can break the the traditional results that the average business owner has. And that is that 80% of our net worth is our business because we got we're we're kind of stubborn, sometimes I'm one of these guys, I'm a serial entrepreneur, we like to grow our companies. And then ultimately, statistically, only 4% of us actually sell our companies or turn it into a from an illiquid asset to a liquid asset. So my whole mission with our team, we have an awesome team nationally, is to teach business owners that your business is your number one asset that you can grow, and that you can grow where someone is interested in buying it from you. That's the mission.
Well, then, I guess that brings about a bunch of questions or issues about if I'm in the early so let's say you know, a couple is kind of in the early growth stages, you know, they're kind of scaling up to seven figures a year. You know, they're they're in some decent experiencing that that double growth. What are the things that they should be putting in place, even at the earliest stages to eventually prepare for that exit?
Okay, that's a good question. So Josh, what I would answer that question with first is you have to know where you're going. Okay? So we all take trips, we all take vacations every year hope and if I'm leaving from East Tennessee Knoxville, where I'm currently reside and traveling to Oregon. I know I have a destination I have a timeframe when to get there. So first thing that I would tell every business owner do in fact, this is how we operate our litany of businesses is to go through comprehensive financial planning. And I'm not talking about what the stock market can do for you. I'm talking about what are you doing today in your personal life? And are you making sure that your your cash coming in from your business is being spent properly that you're not bringing too much money home that you're giving it all to the IRS that you're protected from a home position? First, that you do have some of those assets working for you outside of your business. But more importantly, once you get once you make sure the home front is okay, my wife calls it pillow money so to speak, you can go to bed at night and not worry about us, okay, the good brands so to speak. Once you get past that, then you actually take your business and you you learn how an appraisal works. And you backwards engineer, so this is where it gets kind of fun in my world, what makes your business or my business attractive to a buyer. And if we understand the appraisal process and what drives the appraised value up, then we can backwards engineer and say okay, now let's see these eight key areas and we'll go over those in detail these areas which drive an appraised value of your company up. Now let's focus on that and build a exit strategy which takes 510 1520 years so that now that buyer is ready to buy your business.
All right, Justin. I'm excited to find out about these eight key areas. And by the way, is this something that you've actually produced me you have a book? Do you have some sort of a resource that goes through these?
Sure. Yeah. So we do have a book is called the ultimate sale is kind of walking through some of these key areas. We have another book that's coming out that's going to dive deeply into what I'm talking about today, mostly value growth are financially simple as our blog and podcast that we produce ourselves. We have in over 200 episodes on the podcast that's teaching business owners this may going one on one for 20 minute 30 minute episodes, diving deep into various various topics teaching. So a lot of content out there that we produced answer your question.
Okay, great, great. Good. I just want to make sure. So the title of the book is what so if someone wanted to find it, where could they get it?
Sure. So it's available on Amazon and audible is called the ultimate sale,
the ultimate sale and it's on Amazon. Okay, good.
Yep. So if you're looking at your business, you have to understand that there are eight eight key areas Drive the value of your business. So I'm going to kind of work my way mentally around a clock, so to speak at 12 o'clock, we're gonna start with planning. Planning is where do you want your business to be in three years? Okay, I don't care about 20 years market, everything moves too fast right now to plan a 20 year time frame. What do you want to accomplish in the next three years? It's been said that we entrepreneurs, under estimate what we can accomplish in three to 10 years, but we overestimate what we can accomplish in one year, right. So our job in the planning section is to come out with strategic planning that we have a course coming out that people can check that out and finances simple on strategic planning how you can walk away through that course or through your process with 27 specific action items that can help you outline the plan for your next 36 months. So planning is number one, that's my 12 to one o'clock or so. Okay? After you go through planning, then we deal with leadership. How are you going to educate yourself, your team, your customers, your vendors to help them point you in the right direction. So that's leadership section. We then deal with sales and marketing, believe it or not sales and marketing two different things. We know that in our world, the appraising software also identifies that sales is what allows people to come into our business, what attracts them. Marketing is what gets them to the door for us to so ultimately sell them, right. Yeah, so sales and marketing is are the next two steps on that out of eight. The following two is people and operations. So people is how strong is our bench? How strong is our team? Do we have a national championship team that we are working with in our organization? And the operations are? Can we systemize the company, the processes that we use in a company that that can drive us to that point of success? The way I describe it is we've all seen the Golden Arches McDonald's Corporation and we realize that it's not uncommon across the globe for 16 year olds, 17 year olds to cook french fries and not burn a restaurant down. Yeah. Donald's has a system for even cooking french fries. So we want to systematize our practice. And then ultimately, we deal with finance and legal finance is not just your profit loss statement, or your balance sheet, your financial statements is actually calculating things like her right? calculating things like cost of capital, calculating your pro forma, illegal, you're dealing with all those things that are risk management perspective. So if you take all eight areas, you're ultimately trying to de risk your company. So let me explain that. If we look at Apple, for example, Apple's one of the largest companies in on the globe, right? They, if I look at their their valuations, or if their stock price valuations, I can pretty much bet that the valuations accurate because they're following the Sarbanes Oxley act. They have all these top heads and all eight of those key areas that are best in class they can actually go the sales team can go to national sales conferences, and teach sales. Because they're that good. Whereas in my business, my financial statements even though I'm in the world of finance may not be as good as apples, because maybe I just have a CPA just preparing them and they're not prepared or compiled in accordance with the Sarbanes Oxley act. Right? So as an investor's looking at my financials there can question a poke holes through my numbers a little bit easier. They can't apples. Okay. So what we're trying to do in that growth of our business, is to take eight all eight of those key areas so planning, leadership, sales, marketing, people operations, finance, and legal those eight key areas and make it where all eight of those areas are best in class where you have trained people who are department heads are those eight key areas that can go to their national sales organization and teach others or other vendors, other competitors, etc. Why you have a best in class business and in doing so, You've decentralized yourself, you've moved yourself as the business owner from the center that business because you have systems that operations people processes that can run your company. So those are
they curious? And I would imagine in your experience, you don't see many financial professionals. So let's say I have a, obviously if I have a bookkeeper and attacks, you know, prepare, they're not going to get involved in any of this stuff. It's probably not until you get to, you know, bringing in a CFO or V. CFO, that's going to start thinking about these issues. And until then, it's the founder CEO that needs to be responsible for this.
Yes, well said so. The US a McDonald's he's sticking with as the thing that McDonald's brothers kicked a lot of hamburgers. They probably made a great hamburger compared to the nice McDonald's hamburger right? Ray Kroc didn't cook too many hamburgers. What he did was he said, Look, we're not gonna be in the hamburger business. We're going to be in the restaurant business. We're going to be in the property holding business ultimately, is what they're doing. So he developed systems. Whenever we start a business, no matter where we're at in that business, you're right, we are blood, sweat, tears, 24 seven, we're doing what we can to drive that business off the ground. But what we have to do sooner than later if we truly want to business, again, my definition of businesses you can leave to whatever reason and the thing stays, it stays afloat and grows without your presence. Okay? So if we truly want to business, like passive real estate like passive stocks, etc, that can provide income to us that is sellable at a top value, then ultimately, we have to systematically move ourselves from the center that business over time. So for example, in my world, I'm a strong D personality. I'm a high planner, I'm really good at planning. I'm really good at leadership. I'm awful, very bad at dealing with people on a soft skill level and operations. That's not my strengths. So the very first thing I did was hire somebody very, very good to come in and offset my weaknesses. And so you continue to do that as you build yourself. You can decentralize yourself, which is the goal, Josh.
Yeah. And so again, Justin, if we're going through, excuse me, the eight areas, and I want to just pause just just a little bit longer on each one of those. So this could be a little bit longer episode than then typical. So the very first one again, could you could you go through what was the very first one? Sure.
So the first one is planning.
So planning. So when planning is really just deciding where it is that you want to go, is that right?
That's ultimately it, but we've all heard the SMARTT analysis, you know, Specific, Measurable, Attainable, Repeatable, Trading, Trackable, right, so we all are smart. So if I use my simple financial bind here, and I'll say, Okay, I want my business to double in three years. Okay, well, now I've got a have an idea on how to make it double Right now know what I want to do I want to take the top line route revenue, the sales, I hope and double the revenue, or do I want to double the net the margins? Or do I want to double the order I want to double the the cost of goods, the cogs position the business. So whenever we start in the planning, it's not just saying here's where I want to go. It's actually becoming extremely descriptive and laying out the exact steps that you're going to do to get there. So the easiest way for me to explain it because I know your listeners are all different types of businesses, all different types. These this way describing it is is I want to take a vacation, my family and I want to go to Oregon as I mentioned earlier, we want to leave from Knoxville, okay, we're going to take a boat, you can do it I guess, go around through the Panama Canal. We're going to take a plane train car, how we're gonna get there. That's the first question. When are we going to get there? How long we gonna stay? What are we going to eat? What happens is there's hiccups. So think about planning that vacation that is planning for business. You're going to look at as as almost microscopically as we do when we plan our vacations. You're gonna do it in the business level. And you're going to apply a plan to all eight areas of that business. How What is your marketing plan? How are you going to attract or convert as the attract the right customers? How are you going to attract the top 20% of those customers? So that's planning, you're trying to get specific action steps that is delineated throughout the entire organization that everybody can follow.
Okay. You know, I would imagine then, that if your goal is to get to the northwest and you're in Knoxville, Tennessee, you'll know when you get kind of close to ready for exit when you get to Oregon. Right? And until then, you're like, Well, wait a minute, I'm still somewhere in the middle of Nebraska. You know, even though and it can happen. Someone from the outside can say, Hey, I really like what you guys are doing. You know, you'll know that you're just not read like you're not going to Get the valuation that you can, because you got a plan,
right? That's exactly right. So what will go it goes back to that personal financial plan first. So where do you and your family as a business owner want to be in 510 15 2030 years? Where do you want to be? What does that picture because ultimately, unlike the Wall Street type financial advisors who you're not going to traditionally save your way to the lifestyle that the majority of us business owners and entrepreneurs want to have just not going to happen mathematically. Okay. And I know that's a little contrary into some advice is my opinion. Okay? So what we end up doing is we end up having real estate or business and both are great assets in the business world. It's amazing how staggering it is that people are working in their business and not own their business. And so now whenever they get close to that destination, use that metaphor of Oregon. No one's interested in it. And then we find ourselves as business owners, I deal with this constantly. We have thousands of people we deal with and we have a secret Constantly Josh, when they're 60 years old, 70 years old, they got a nice job that requires them to work 6070 hours a week, and all they want to do is go on vacation, and they can't because they're the center the epicenter of their business, because they didn't start 1015 years ago, slowly removing themselves from the business. So in that journey across from the southeast, where I'm located up to the northwest of the United States, it's an idea of every step in that process as we take that journey across the country. How close how much closer we get to decentralizing ourself in the business
on the subject of exits. Justin, what are what do you see is kind of the most common models for access just complete by out and buy and, you know, we're not going to, you know, enjoy, you know, enjoy life on the beach, or do you see a lot more of like, Well, I mean, I know there's a lot of different models. I'm just curious if you have noticed any trends are like you know, an exit or most people is going to kind of look Light, x and what have you seen?
Yeah, so it's going to depend on the industry. And so if you were to tear the industries apart, then you could pretty much get into a bandwidth of where you're going to where that's going to happen. So for example, the entrepreneur, a doctor, so your dentist, your vets are chiropractors, it's not uncommon for them to have not tell a team that they're actually selling the practice, all of a sudden sell it, bring in associate and or bring the new buyer in and say, Hey, he's just bought the practice, she just bought the practice. And now I'm going to work with them for the next three months, six months, etc. And I'm out of here, that's not uncommon. Okay. Whereas on the other side, I've got clients right now in the manufacturing industry, that it's a three year transition. In fact, they have they have a callback provisions in place on the exit that holds that seller there to pretty much guarantee that the business is going to more for change hands. So think of it in the terms of the relay that like we see at the Olympics, you're actually passing that baton and depending on how fast that Businesses moving the baton handoff takes longer. If the businesses more centralized, slower moving or more isolated, it can be a rather fast handoff.
And Justin Goodbread. This has been a sadly, way too short conversation for what we need to talk about that. But that's kind of the nature of this show is you know, it's just kind of whet your appetite for the thought leadership that exists today. So I want to encourage people to to find your podcast. And they can do that right now by just searching in their podcast app and looking for financially simple. I got it up. I'm your I'm your brand newest subscriber, and I can't wait to dig into this. This is really great stuff. So you're the you're the host there. And then of course, you're also the founder of Heritage Investor dot com and CEO. And then Justin, one more time on your book.
Yeah, so the book is the ultimate sale is on Amazon. Yep. And I would I would encourage Everybody to look at financially simple that's the hub of my life. Yeah, actually simple. It's what we produce the book through is what we produce the course is what produced the podcast. And there's over 1000 articles many have appeared in and some national publications that is instructing business owners I look we can man Josh, you and I we can change the destiny for business owners. We don't have to retire broke.
This has been great stuff, Justin Goodbread. Thank you so much for joining us.
Thanks, buddy. Thanks for having me.
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