43: Michelle Seiler Tucker Shares the Lessons Gained from Selling over 1000 Businesses in her Firm

Speaker A: Hey there. This is the Business Talk with Loop guy and Team show. I'm your host, Jaron Jackson. I just wanted to welcome you all out here today because we have a very special guest. Michelle Seiler Tucker is the founder and CEO of, uh, Seiler Tucker Incorporated. She holds the Mergers and Acquisitions Master Intermediary title as well as certified Mergers and Acquisitions Professional and certified Senior Business Analyst. Michelle also owns many other businesses in several different industries. As, uh, a 20 year veteran in the mergers and acquisitions industry, she is regarded as the leading authority on, um, buying, selling, fixing and growing businesses. Her and her firm have sold over a thousand businesses in almost every vertical and have a remarkable track record of success. Michelle can provide you with insight into building a sustainable, scalable and sellable business by utilizing her proven techniques outlined in her newest book, Exit Rich, a, uh, Wall Street Journal and USA Today best seller. I am so excited. Ladies and gentlemen, let's get down to business. Michelle, thank you for coming on the show.

Speaker B: Thanks Jen, thanks for having me. It's a pleasure to be with you today.

Speaker A: Let's get down to business. Michelle, why don't you tell us a little bit more about how and why you started your company.

Speaker B: Sure. So I've always been an entrepreneur. Even as a little girl I used to tell my mom, mom, I'm not going to get a job. I'm not going to work for anybody because I don't like to be told what to do. I like to, uh, to figure things out and march, march to beat of my own drum basically. And so I always knew from a young girl that I would always own my own business, I would always be an entrepreneur. And I've owned many different businesses in different verticals even, um, at a very young age. So I did end up getting that job though, because corporate America, a little company called Xerox actually recruited me, made me an offer I couldn't refuse and, and then within six months promoted me to regional vice president. So I was making, you know, great six figure income with great benefits. But I really missed entrepreneurship. So I transitioned out of Xerox and started my franchise development, consulting and sales company. And I had an equity partnership in different franchise or businesses. And there were so many buyers that kept coming to me asking me for existing businesses. I'm like, well, we don't do that. We only have startups, you know, startup franchises, franchises. And then I just dawned on me that why am I saying no? I need to listen to the consumer and give the consumers what they want, give them what they need. So that's really how I started my mergers and acquisitions practice nearly over a little over 20 years ago and transition out of that franchise sales development consulting. We still do some franchise sales development consulting, um, for the right partner, uh, but that's not our core business anymore. I also learned a long time ago that what Steve Forbes says is true. 80% of businesses will never sell. 80%. So I'm like, gosh, if I don't fix these businesses, you know, tweak them, grow them, put them on a build to sell platform, then I'm going to starve to death and a lot of business owners are going to go out of business. So we really specialize in buying, selling, fixing, growing companies. I invest my money, uh, core competencies, resources into a business, into a partnership and put them, fix their business, grow their business, put them on a build to sell model. We buy businesses and flip them. And so we really, like I said, specialize in buying, selling, fixing, growing. I have personally sold over 500 companies. My team altogether sold over a thousand and pretty much in every vertical you can imagine. I'm an author of three different books, an international speaker, and very passionate about what I do.

Speaker A: That is some powerful stuff, ladies and gentlemen. I love it. I'm so excited for this interview. So why don't we dive into who are the people that you serve and why does that group of people matter to you?

Speaker B: Well, I serve both buyers and sellers, primarily sellers because we work with sellers to help them fix their business, help them build the proper infrastructure. When we call the six P's and my book Exit Rich, we help them build out their exit plan or exit model using what we call the STGPS exit model. And you know, so many sellers go out, are going out of business. Over 80% of businesses will never sell. And that should be a strong wake up call for business owners because that means you have less than a 20% chance of success, you know, and your business is your most valuable asset. So if you can't sell your business, if you can't cash out at the end of the day, then what are you going to do from a retirement standpoint? Um, so we're very. I've always been passionate about business owners. I'm like a kid in a candy store, you know. I can't wait to find out how a business owner grew their business from their dining room table, from their pickup truck. We're working with a gentleman right now that started his business. He has an eighth grade education. Uh, they do nearly $100 million in revenue and millions and millions in EBITDA. And they started their business out of a pickup truck. So, you know, it's very exciting to me to find out how so many wonderful, fabulous entrepreneurs have started their company. I've always been passionate about entrepreneurs, but also passionate about the buying side because, you know, we help buyers leave their core, leave corporate America, leave their job, create financial freedom, create a better quality of life. And we help other types of buyers really help grow their company, uh, through acquisitions.

Speaker A: That is so true. That is awesome. So, Michelle, what has been the key motivation for you when things get tough in your company? Because we know it's not always a straight line up.

Speaker B: Well, things get tough all the time. You know, this is a very difficult industry. Um, it's 98% male dominated, number one. Number two, it's got about a 98% failure rate. Uh, so it is a tough industry to be part of. Um, and writing a book is tough. We came out with exit rich in 2020. Uh, we're supposed to publish April. We're supposed to launch April of, uh, 2020. And then this little pandemic took over the world and closed everything down. So that was tough. Um, and we have tough times in business. But I think for me it's, you know, I always try. I've always have adopted the philosophy that this too shall pass. This too shall pass. This is temporary. It's not forever. Failure is temporary. Quitting is permanent. And so my mindset has always been this too shall pass. And if it's not going to significantly change my life in five years, did I need to not sweat the small stuff and I need to not let it affect me? And it's a mindset thing, you know, and it's not easy. It's not easy when and everything's going berserk all at once and you just want to yell and scream. It's not easy to sit there and say, this too shall pass. It's not going to affect me in five years. Because as entrepreneurs, you know, we're really firefighters and we're always putting out fires all day long. So it is difficult to keep that perspective. Um, but I work really hard at knowing that this is temporary, this is not permanent. And I just, you know, muscle through.

Speaker A: That is so true. That is a lot of wisdom. I hope you are all taking notes. I know I am almost at half a page already and we are only 10 minutes in. Let's go. So, Michelle, you have written several books. I was curious, what are the six Ps? How would one build a sustainable, scalable and sellable business.

Speaker B: So my book, Exit Rich is my latest book, uh, that just launched, uh, in 2021. Supposed to launch in 2020. Launched in 2021. It is a Wall Street Journal bestseller, USA Today bestseller, of course, Amazon bestseller. Uh, so we talk about in great depth. We talk about the GPS exit and the 6Ps. The 6Ps are your infrastructure. They're your foundation. You know, when you go to build a house or a contractor goes to build a house, what do they do? They dig deep, right? They dig deep. They build the foundation, they put in electrical, they put in the plumbing, they dig really deep to put in a solid foundation. So if a strong wind comes by a hurricane or, you know, tornado or some, something like that, the house will remain strong and won't fall apart. Well, you need a solid foundation in your business. So there's all types of financial storms that come our way. This pandemic is a perfect example of that. You need a, uh, solid, strong financial to keep your business afloat. And so many business owners are focused on marketing themselves and getting people in the door. Getting people in the door, Getting people in the door. And then they wonder why they end up going out of business. It's because they never built a solid foundation to be sustainable, scalable. And that's why so many business owners crash. So the 6Ps are all about your infrastructure. So I'm going to weave in the top mistakes that business owners make with the 6Ps, because I know you're going to ask me after six Ps, what are the top business mistakes that business owners make? So number one is people. So the first P is people. Um, one of the number one reasons why 80% of businesses don't sell is because business owners have built themselves a job, a glorified job, and wants to go out to work at every day, versus an actual business that works for them. So don't get mad at me for that statement. But it's true. Look at yourself and ask yourself, can I go, can I go somewhere for three months? Can I go to the Caribbean for three months and my business succeed without me? And most business owners can't say that it will because most of the time the business will fall apart when the owner's not there. So we got to learn to build a business that can run without us. And entrepreneurs have this mindset that my business is my baby, you know, and if I want things done right, I have to do it myself. Well, you can't have your fingers in every pie. Entrepreneurs are not Good at everything. We need to take stock of what Oral core competencies, Focus on our strengths. How are our weaknesses? You don't build a business, you build people. And people built the business. So the biggest mistake that, um, business owners make is they're working in their business, not on their business. So you want to work in your business, Hire your weaknesses. Put the right people in the right seats and ask the who question. Who opens the door, who handles customer service, marketing, legal, accounting, manufacturing, logistics, environmental quality control, et cetera. The list goes on and on and on. I probably have about 50 to 75 who's in my company. And the clue here, Sharon, is you should never be next to the who because you're trying to run a business, build a business to run without you. So I encourage everyone to stop this podcast right now and write down all the who's in your company and assign a name next to each one. And it shouldn't be your name if it's your name. Now you know what you need to hire for. So that's number one is people. The second P. And let me, let me just illustrate this with a case study so everybody understands. I had a dentist that came to me, been in business 50 years, wants to sell his business. One dentist, three dental hygienists. The dental hygienist just happened to be his daughters. So he said, michelle, can you sell my business? I said, yes, I can, because I'm really good at what I do. However, I'm not going to be able to maximize value because you are the business. You and your daughters are, uh, the business. And I said, I can sell your business, but the purchase price, the deal is going to be contingent upon you and your daughter staying on. So there's going to be clawbacks, it's going to be earning outs, there's going to be different contingencies to mitigate the buyer's risk. And he said, well, honey, we're not staying. I said, well, then, honey, you're not selling. So I can't begin distress enough that you really got to take inventory of your business and find out do you have a business or do you have a job? And if you have a job, then you don't have something to sell because buyers don't buy jobs, they buy actual businesses. So people is number one. The reason I put people number one is because you're not going to get anything done without people. And that doesn't always have to be W2s. That can be 1099. It can be interns. We sit in between four different colleges. So we have a wait list of interns. Always say, darren, if you don't have an assistant, you are the assistant. So you got to hire the right people, put them in the right seats. Number two is product. Let me give you a little bit of background on, um, product before we dive into product. When I wrote my very first book called Sell youl Business for More Than it's worth in 2013, I did the research and learned that 90% of all startups will go out of business. We all know that. That's common sense. That's common knowledge. However, when I did the research for Exit Rich, I was flabbergasted and so was my co author, Sharon Lecter. I was flabbergasted to learn that the business landscape has flip flopped, has changed dramatically. Now it's not startups at great risk anymore. Only 30% of startups will go out of business now. However, out of 27.6 million companies, those businesses have been in business 10 years or longer. 70% of them will go out of business. 7, 0. You hear about the big public companies all the time. Toys R us in business 75 years goes out of business. Kmart, Stein Mart, Pier 1, GNC is closing down 900 locations. Godava Chocolates closing down 1500 locations. Disney Stores are closing. But what the, um, public does, what the media doesn't tell you about, is the private businesses. I want to talk about the public companies, the private businesses. On every street corner, uh, in every town in every state across the great nation, these business owners are dropping like flies. They're acting poor. They're selling for pennies on a dollar. They're closing their businesses and filing bankruptcy. So what's the main reason for that? The number one reason for that is lack of aim. AIM AIM is always innovate and market. Always innovate and market. You cannot stop innovating and you cannot stop marketing. So many of my clients were going through their P. Ls during this pandemic and they kept saying, well, we're going to cut marketing. I'm like, no, you don't count marketing. That's the last thing you cut. You take inventory of all your different marketing channels to see which one's working for you and cut the ones that are not and double down on the ones that are. Marketing is the last thing you ever cut in overhead. Okay, so lack of innovation, lack of marketing. Business owners are married to their original concept. They want to keep doing things the way they've always done them. And here's the Bottom line, you can't continue to do things the way you've always done them, because things change. Consumers, buying habits change. Whoever makes it easiest for the consumer to purchase products and services is the company that's winning. There is no such thing as loyalty anymore, Lucas. You know, there really isn't. Whoever makes it easiest for them to buy products and services is the company that's winning. Amazon is winning because you can practically buy anything. You can practically buy a horse on Amazon and have it delivered to you in two days. So product is number two. This is your product, your service, your industry. Ask yourself, is your product, your service, your industry? On the way up or on the way out, is it thriving or growing? Do you have an Amazon and you're in your prime? If you have an Amazon and you're in your prime, guess what? It is time for you to sell. Because what goes up must come down. Nothing lasts forever. Or do you have a blockbuster and you're about to go out of business? If you have a blockbuster and you're about to go out of business, that doesn't mean you just close up and go home. That means you have to pivot. There's another P for you. But you have to pivot. And you have to ask yourself three transformational questions. Amazon did this back in the 90s. Ask yourself, what business are you in? The business you think you're in is not the business you're in. Amazon asked themselves, what business are we in back in the 90s? And they said, we're in the fulfillment business. We fulfill book orders. The second most important question is, what are our core competencies? What are we better, uh, than everybody else at? What is our usp, our, uh, unique selling proposition? And Amazon said, it's fulfillment. We're better at fulfillment than anyone else. And the third obvious question, Jaron, is what business should, should you be at? And Amazon said, ding, ding, ding. We should be in a fulfillment business fulfilling products for everyone all around the world. Now, these questions sound simple, but they're not. These are very complex transformational questions. Those three questions transformed Amazon from a small book fulfillment center to the multibillion dollar worldwide conglomerate that they are today. So business owners have to get out of transactional. That's another big mistake business owners make as they live in transactional. They're always putting out fires every day. We got to get out of transactional, become transformational, and we got to work on our business. It's only in transformational, in which you really grow your company. It's not in the Transactional. It's not in the day to day. The other thing about product is you can't have one revenue center, can't have one profit center. That's why so many businesses went out of business during this pandemic. If you look at restaurants, it's a perfect example. Restaurants get paid one way. They get paid when consumers come in and eat or take food to go. They don't have e commerce businesses. They're not selling, you know, spices and seasoning and recipes and things that are unique to their restaurant. They're not, uh, selling apparel, they're not selling cooking classes or something. Wine and cheese experiences. Some, something that's really unique to their specific restaurant. You have to have multiple congruent revenue streams. Congruent. Because if you don't and you only get one paid one way and a hurricane shuts down your restaurant, you're in big trouble. But if you have your e commerce business, you can still survive. And pandemic shuts down your restaurant, but you still have your E commerce business. You can survive. So you got to have multiple congruent revenue streams. That's a big mistake the business owners make is they have one way they get paid. The third p. Do you have any questions before I m move on?

Speaker A: I'm just taking notes, everybody.

Speaker B: The third p is processes. Processes are kind of like exit strategy. People don't think about them until something bad happens. People don't think about exit strategy until a catastrophic event occurs. Internal or external? Internal is health issues, partners, disputes, divorce, death. Uh, external as this pandemic. Business owners don't think about processes until something bad happens in their company. We had a client that was getting really, really bad, horrible reviews on the Internet. And they were getting really beaten up and it was uh, really costing them to lose market share. And they're like, we need a process for customer service so we don't keep getting all these bad reviews. And I'm like, it's a little late for that. You need that process before you get eaten alive on the Internet. So we need to really design our processes from the beginning of buying or starting a business. And those processes are obviously ongoing and tweaked as we, uh, along the way. But this is where most business owners make a huge mistake. Most business owners design their processes around their own agenda, around the owner's agenda, not around the customer experience. Perfect example is doctor's offices. What are their hours? Monday through Friday, 9 to 5. When we all work, do any of them say, oh, you can come in on Saturdays? I um, have Saturday appointments or have evening hours. No. That's why we have to end up going to urgent care to the hospital. Because doctors offices schedule, you know, they design their processes around the doctor's agenda. Chiropractors do this too. And they're, they're probably even worse at it because they're like, we're open Monday, Wednesday, Friday from, um, 9 to 12. We're close from 12 to 3. We open again from 3 to 5. Close Tuesday mornings, open Tuesday afternoons, close Thursday, Thursday afternoon. Um, open Thursday morning. Who can keep up with that? So I encourage you to ask yourself, what are the three things I want my customers to experience? And if you ever watch movie. Did you ever watch a movie the founder, based upon the McDonald's story, McDonald's franchise. You did. Okay, everybody should go watch the founder. So back in 1950s, the McDonald brothers said, we want to create a fast food restaurant because there isn't one. We want to design a fast food system and we want to design our processes around the customer experience. They said, we want our customers to experience great tasting food that's hot fast, 30 seconds or less. And they design those processes around the customer's experience, not around the owner's agenda. And even though this was written back in 1950s and the processes have obviously been tweaked along the way and improved along the way, it's the reason you can eat at a McDonald's anywhere in the world and get great tasting food that's hot fast. You get the exact same experience all around the world. Now, they never said you're going to get great customer service at McDonald's because I think they have the worst customer service. They never said you're going to get healthy food that's good for you. They said, you're going to get great tasting food hot and fast. So stop and pause this podcast right now and ask yourself, ask your employees, ask your clients, what are the three things we want them to experience? If you can't figure it out, ask your clients, what do you need? What do you want? How can I make it easier for you to do business with us? Design your processes around the customer experience. If you don't create WOW experiences for your customers, then guess what? Your clients will be happy, your competitors will be happy to do it for you, and you'll lose tremendous market share. So your processes have to be designed around your customer experience. They must be productive, they must be efficient, and they must be well papered, well documented. You need those policy and procedure manuals. You need those SOP Checklists, standard operating procedure checklists per department. You need those employee handbooks. Non competes. When you go to sell your company, that's one of the first things buyers asked to see. Plus you will never, your business will never be able to sustain itself or scale if you don't have these processes and systems in place. So the fourth P, which is the highest value driver of all the P's is proprietary. So I'm going to give you a quick crash course on valuations. Industries. All industries except for SAS software companies, they all trade for a multiple of ebitda, uh, typically ebitda, uh, which is earnings before interest, taxes, depreciation, amortization or SDE, which is seller's discretionary earnings. They all trade for multiple. So companies under a million dollars in ebitda, uh, net income, SDE will typically trade from one to three, three and a half times ebitda, ah, depending upon your proprietary assets. Companies that store over a million in ebitda, uh, this is, this is your goal, this is your objective. You need to get your company over a million in EBITDA for a multitude of reasons. But number one, the multiples are higher. So they typically start at four and a half, five and up. Proprietary assets. Proprietary synergies can take you from a 4 to a uh, 6 to 8 to 10 multiple. These are proprietary assets in your company. So there are six pillars to proprietary. The other two P's are quite short. So I'm going to go through these in depth. First and foremost, the number one P. I'm sorry, the number one pillar underneath proprietary is branding. The more well branded your company is, the more I can sell it for. As long as your brand is relevant in the mind of the consumers. Is anybody paying any money for Blockbuster? No, because Blockbuster went bust. The most valuable brand in the world is. Do you know Jaron? Most valuable brand in the world.

Speaker A: That's uh, right now I want to say Disney. I don't believe that's the answer though.

Speaker B: Now why do you just want to go to Disney? Are you wanting to make a trip to Disney?

Speaker A: Well, I mean we're talking about mergers and acquisitions and I think Disney is such a brilliant example of that. Like they own Marvel, they own Star

Speaker B: wars and Disney's in the top 10. They're in the top 10, but they're not number one. Number one is Apple. Apple is worth $359 billion. Doesn't matter how much money you make, what language you speak. Everybody knows Apple. It's like everybody knows Coke. So Apple's worth $359 billion. That's just for the brand. That's not including your cash flow, your assets, your inventory, your real estate. That's just the brand alone as Apple. So build your brand. Trademarks are huge. Trademark your company name. Trademark your slogan, your logo, anything that's unique to you. Your products, your podcast. But here's the biggest mistake that business owners make. They come up with a, uh, name for their company. They go to GoDaddy, they plug it in, they get the.com like yes, they're so excited they got the com. And they think that's the best thing ever. So then they go to their state and they get a state trademark. But they forget to check this little thing called the government. They forget to check the federal database to make sure that company name is available. So I've seen podcast host have to stop using that name and start all over again. I've seen companies have been in business for 5, 10, 15 years receive assist and desist letter in the mail and they have to stop using that company name and start the branding process all over again. So spend the 1500-2000, get your company trademarked, get your company name federally trademarked products too. We have a company that we're selling between 50 to 60 million dollars. They have 12 products. Everybody nobody thinks about getting federal trademark on their products. Big mistake this company has exclude a product that's exclusive to Target one's, exclusive to Walmart ones and TJ Maxx and so on and so on. Each product has exclusivity to that retail chain store. Plus it has a federal trademark. So you need to protect your ip. Same thing with inventions. If you have any type of inventions, inventions are just not products. Inventions can be, you know, software, they can be different things. If you have any type of inventions you can get a patent on, get a patent. Because if you've ever watched Shark Tank, all the sharks ask the same questions. They sound like a broken record. Do you have a patent on that? Do you have a patent pending? We went sold a company for $18 million. It wasn't making much money, but they had 18 patents. So patents are very valuable. Now here's the deal with your ip. If you got patents and federal trademarks and ip, you need to hold it in a separate entity. You do not commingle your assets. You need a separate LLC for your ip. Because if you're, if you were to get sued in your corporation, you don't want them to have access to be able to gain your intellectual property. So uh, make sure you keep that in a separate llc. Same thing with your real estate if you own real estate. I see so many business owners own the real estate in a corporation name. Big mistake, huge mistake. And they're like, well, my CPA told me to do that, my attorney told me to do that. I'm like, no, own your real estate in a separate corporation. Okay, you want to make sure that you protect the corporate vow and you're not commingling all your assets. The other most valuable thing is contracts, client contracts. But let's talk about manufacturing first. Any contracts with manufacturers, vendors, distributors, franchisors that has franchisees. Client contracts are the most valuable to buyers, especially if they have subscription models with reoccurring revenues. Now, what's so great about digital marketing companies and e commerce companies is they typically have subscription models. You know, we're selling several digital marketing companies right now. They've got, one of them's got 2,000 client contracts. These 2,000 clients pay per month, every single month, like clockwork. Buyers love that and will pay a lot of money for it. But here's a big mistake that all business owners make. I've been in this industry over 20 years. A thousand transactions later, and I've never seen an owner get this right. You need the two centers transferability clause that says this contract is transferable upon the new entity. Because 98 of sales are asset sales, not stock sells. If your buyer doesn't agree to a stock sell and you can't get your clients to agree to sign consent to transfer, when you sell your company, then your dad is going to. Your dealer is going to fall dead in its tracks. Plus, if you have 2000 clients like my other seller, uh, does, do you. Are you really going to go to all 2000 clients and have them sign conceptive transfer? No, because you still want to maintain confidentiality. Because what happens if the deal doesn't close now all your customers know you're selling and they could jump ship and hire another marketing agency to handle all their needs. Okay, so make sure you get the two sentence transferability clause that says this entity is. This contract is transferable upon a new entity. Databases are big, databases are huge. You can be losing money and still sell your company for millions and billions. Facebook paid $19 billion for WhatsApp. And WhatsApp was hemorrhaging. They weren't just losing money, they were hemorrhaging. But they had a synergy that Facebook wanted and they were willing to pay $19 billion for it. And that was a billion users Facebook knew they can monetize an ROI on those billion users. So make sure you build your database. Let me give you a big tip. I have a lot of clients that say, michelle, Michelle, Michelle. I've got a hundred thousand followers on Instagram. I got a half, you know, I got a half a million on Twitter. I've got all these LinkedIn connections. You don't got anything because you don't own them. You don't have them. They're not even in your CRM, you know, they're not in your database. They're Instagram's people, they're LinkedIn's people, they're Twitters. They're not yours. You don't have anything. So set up a funnel to capture these people, these followers, and get them into your database, okay? So don't come to me and tell me you own a million followers on Twitter, because you don't. You gotta get them into your system. Celebrity endorsements are huge. We have a client that has products with Oprah. There's five different types of buyers. Strategists and competitors will pay a lot of money for that. Because everybody wants to get their products in front of the queen of everything. Oprah is the queen. We all know that. Celebrity endorsements, radio personalities, are huge because think about when you're listening to a, uh, radio celebrity and they're endorsing a skincare company, our diet company, or, uh, educational platform, they can only endorse one vertical, otherwise they lose complete credibility. That's prime digital real estate that you cannot get unless somebody falls off. So Strategics will pay a lot of money for those celebrity endorsements and those radio personalities because it's prime real estate. Same thing with all of my e commerce businesses. Anybody that manufactures, you know, let's say you make these little masks that we all have to wear and you have the top three positions on Etsy. That's huge. Or you manufacture, you make pillowcases and you're number one on Wayfair. Or you make vacuum cleaners and you're number one on Amazon. I mean, this is what we call digital real estate. The Strategics will pay a lot of money for a couple content too. Content is still king. Still king. And people will pay a lot of money for companies that are rich in content. But here's a caveat with content. When you got your 1099s, or you go to Elands, you go to Fiverr, you go to Odesk, or you go somewhere like that and get content, you get videos, you get photographs, etcetera you have to get a release signed because you don't own that content. They do. So don't pay anybody, don't hire anybody, especially 1099 and interns, without making sure they sign the agreement that you own that content. I've seen lots of lawsuits because of this issue. So I could go on and on and on about proprietary assets all day long because proprietary is a number one value driver. The fifth P is Patriots. This is your customer database. Most customers follow the 8020 rule where 80% of the revenue comes from 20% of their clients. They have customer concentration, not customer diversification. I was selling a media business, media marketing digital agency, and they only have five clients and we were selling between 10 and $15 million. But there are five clients for casinos because their core competency, their specialty was casinos. But they lost two of the five while we were trying to sell them. So the revenues and EBITDA dropped in half. They were no longer sellable. They had a huge overhead because they had to keep their talent employed to service the other three casinos. But they weren't profitable anymore, so we ended up merging them with another media company. The last P is profits. We're all in business to make money. None of us are in business work for free. But lack of profits because so many companies are not profitable, Lack of profits is never the problem. Lack of profits is a symptom of not operating one of the other five PS I have clients that come to me all the time and say, michelle, Michelle, Michelle, I have a profit problem. I'm like, no, you got a process problem or now you got a people problem. You don't know I have a profit problem. Because profit is the result of. It's a symptom of it's not the actual problem. And there's your infrastructure on the six fees.

Speaker A: That was, ah, amazing. This is ninja level stuff. I hope everyone sincerely listens to this podcast again and buy Michelle's book. Like, there's wisdom here. It's awesome. Um, just, just one thing I have to add. We talked about the founders and McDonald's and that is such a brilliant example from people to products to everything. Um, but one of the questions that they asked was how can we build something to pay the rent for our real estate? And so that's just a testimony to your six P's. Like McDonald's owns most of the significant commercial real estate locations in the world. That's the real business. They, they know what they.

Speaker B: Yeah. Can I add on that? Because I think that's a huge point. Can I add on that. So go back to the transformational questions. McDonald's is not the one who figured out buying the real estate. McDonald brothers did not figure that out, and neither did Ray Kroc. Ray Kroc was over leveraged. Ray Kroc borrowed money against his home. He franchisees were not paying him. His margins were very slim with the franchisor. And he was in the bank trying to borrow more money. And the banker told him, no, you're over leveraged. Ray Kroc walks out of the bank. There's a gentleman that is in the cubicle next to them that overhears the entire conversation. He follows Ray Kroc out of the. Out of the bank. He says, I'm so sorry. I didn't mean to eavesdrop, but I heard the entire conversation. He thinks I can. I think I can help you. And Ray goes, how can you help me? Goes, well, let me ask you a question. What business are you in? He asked Ray, what business are you in? Just like I told you earlier, under product, what business are you in? What's your core competency? What business should you be in? He asked Ray Kroc, what business are you in? And Ray says, I'm in the restaurant business. He said, no, no, no, that's not the business you're in. What business are you in? Everybody's like, I'm in the restaurant business. You're annoying me with these questions. And the gentleman says, you're not in the restaurant business. You're in the real estate business. You need to buy up the land, build the buildings, lease them to the franchisees. When the franchisee is not compliant, you, uh, evict them and you put another franchisee in. This is when he started McDonald's, um, uh, McDonald's Realty Corporation. McDonald's Realty Corp, I think is what he called it. It gave him the leverage. This is what gave Ray Kroc the leverage because he had so many franchisees that he owned the real estate where he could go back to the McDonald brothers and basically steal McDonald's from them because he paid them a million each. He made a royalty agreement that he never made good on, but this is what gave him the leverage to do that. And, and it is the reason why McDonald's is the largest real estate holding company in the world. But Ray Kroc didn't figure that out, and McDonald brothers didn't figure it out. It was an outsider that had great vision and was able to see stuff that they weren't able to see. Because I Always say when you're in your fog, it's foggy. So that's where those transmissions are so powerful.

Speaker A: That is so huge. Thank you for, for sharing that. That really enlightens and broadens your perspective.

Speaker B: And it makes you want to go watch a movie. Yeah. It makes you want to go watch a movie. Yeah.

Speaker A: 100.

Speaker B: Yeah.

Speaker A: Oh, man. This is, this has been, uh, too good. But, Michelle, our time is coming to a close. I just got two final questions for you. One, what is one black belt level tip you would give yourself if you could go back in time and start your company over?

Speaker B: I think, I think the biggest tip for myself and for others, it kind of goes back to the Ray Kroc thing. You don't know what you don't know. And my favorite quote, because it's my quote, is it's hard to read the label from the inside of the bottle. You need an outsider's perspective dev to read the warning signs that keep you out of the danger zone. And I will line myself with a mentor. I would pick up not just any mentor. I would do my due diligence and I would pick the biggest, most successful mentor I could possibly find that's been down the path that I want to travel, because they will shorten, uh, my learning curve dramatically and short my path to success dramatically. Can you imagine what would happen if that gentleman never followed Ray Kroc out of McDonald's? I mean, out of that bank that day? I don't know. I don't think Ray Kroc would have thought of it himself, and I don't. And McDonald brothers didn't think about it. They didn't. So we might not have a McDonald's everywhere around the world like we have today. We might all be healthier, but the bottom line is you need an outsider's perspective. You need that mentorship. You need that guidance. You need that expert. You need somebody who's going to be your inspiration, like Ray Kroc. If Ray Kroc didn't have that guy, he would have never built McDonald's. I'm convinced of that

Speaker A: 100% mic drop, people. This is, uh, awesome. So, Michelle, thank you so much for coming on the show. How can our guests find you and get some more of that wisdom of yours?

Speaker B: So they can go to silertucker.com that's silertucker.com Also, I encourage everyone to go get my book, Exit Rich. We only touched on, really, a few chapters in Exit Rich. You know, just a few chapters. Exit Rich is also endorsed by Steve Forbes who said it's a gold mine for entrepreneurs because they leave way too much money on the table when they go to sell their business. My co author, Sharon Lecter. Have you heard of Sharon Lecter? I don't think I have, no. So you've heard of a book called Rich Dad, Poor Dad? Yes, with Robert Kiyosaki. So Sharon Lecter was a co author of Rich Dad, Poor Dad. She's a five time New York Times bestselling author, a uh, CPA and a financial literacy expert. She writes in Mentor's Corner after each one of my chapters. And then Kevin Harrington, original shark on Shark Tank, writes the forward. Plus we have glowing testimonials from Jack Canfell, Mark Victor Hansen from Chicken Soup from the so, uh, Brad Sugars from Action Coach, and the list goes on and on. Exit Rich. Just to be crystal clear, it's not about selling your business because in all likelihood you don't have a sellable business. Exit Rich is about building that sellable business that you, that's sustainable, that's scalable. So when you're ready, you won't become a part of the 80% of uh, businesses that never sell. Even if you never sell your business, Exit Rich will help you build that business on all six cylinders, all 6Ps. You have the proper infrastructure so you have a much more profitable company. So Exit Rich is a Wall street journal's bestseller, USA Today, Amazon, of course, and it just launched June 22nd. If you live outside the United States, I encourage you to go to Amazon and buy Exit Rich because of the shipping cost. If you live inside the United States, you can buy it on Amazon or you can buy it at your favorite bookstore or go to exitrichbook.com because that's where all the golden nuggets are. That's where all the extra additional value is. So@exit richbook.com for $24.79 plus shipping, we will email you to digital download. We'll ship the hardcover to your doorstep. We'll give you a lifetime membership to the Exit Rich book club that has video content. So if you like what you're hearing here, there's a lot more of me doing deep dives and these different strategies and techniques. Plus documents, documents to operate your business, documents to sell your company. So we have sample employee handbooks, org charts, policy and procedure manuals, sample letter of intents when you get ready to sell, purchase agreements, due diligence checklists, closing docs, all these documents, all of these documents will cost you over $50,000 to recreate. They're there for your review and your download. So that's a huge value right there. Plus, we're giving you a 30 day free membership into Club CEOs. This is where we ask these really transformational questions. So we help business owners build that sustainable, scalable and sellable business. All for $24.79. Plus I have a podcast called Exit Rich. So go listen to my podcast, Exit Rich and follow me on social media.

Speaker A: Love it. And again, all the links will be in the show notes below. Thank you so much for coming on the show, Michelle. This has been a blast.

Speaker B: Thank you for having me. I had fun. Thanks for having me, Jared.

Speaker A: No worries. All right, everybody, this has been the Business Talk with Luke Guy and Team show and I'll talk to you all next time.