How Education Founders Build Succession Plans that Scale Impact Beyond Themselves With Ryan Steuer

- · Speaker 1 New principal comes in. Doesn't understand the system. Doesn't understand why. And really, everything just shuts down the next day.

A principal change could really kind of wipe out the work that we've done. They've never evaluated their business before. They definitely don't know what multiple. Should we be looking at?

- · Speaker 2 Meet Ryan Steuer, CEO of Magnify Learning Transforming Schools Across America through Project based learning, author of PBL Simplified Training over 10,000 educators at 500 schools across the country. Also a project based learning. Keynote speaker and author, a former engineer turned teacher who bet on real world learning and one. What remains is what exists if you walk away and.

- · Speaker 3 Most people are not willing to make that shift. - · Speaker 1 You can let things go. You can delegate things and things continue. - · Speaker 2 What are your biggest.

- · Speaker 3 Barriers right now to growth? Is it the team? Is it the introductions? - · Speaker 1 At the end of the day, it's leads.

- · Speaker 4 As you've been listening to this guest, you're probably starting to ask your questions. How do I apply this to our own situation, our own succession story at the company that I'm working in now at GWC, we have built a custom GPT that you can find linked down in the description below on our website. We have loaded this GPT up with all of our knowledge about public accounting and tax preparation around succession planning. We've also included the insights from the guests from the past two years of interviews at the Art of succession.

You can find all of that at the custom GPT use at any time of day. Start to apply it to your situation. Ask it the questions that are keeping you awake at night. I want to thank you for listening so far, and let's get back to the episode.

- · Speaker 5 Welcome to the Art of succession podcast with Barrett Young. Join us as we explore the strategies, stories and insights that shape the journey of leadership, transitions and business success no matter where you find yourself along the journey. This is the podcast where you'll find the tools to make it happen. - · Speaker 4 My name is Barrett Young and this is the Art of succession podcast.

My guest today is Ryan Steuer, founder and CEO of Magnify Learning. Ryan started his educational Transformation company about 12 years ago, and has grown it through hard work and grassroots to about 25 on the team today between contractors, teachers and admin. Today we're actually going to talk through various options for future growth and exit, and I'm excited to bring you this conversation. Ryan, welcome to the Art of succession.

- · Speaker 1 Hey, happy to be here, Barrett. Thanks for having me on. - · Speaker 4 The first question I always start off with, my guess is like, what brings you to the art of succession? What has got you interested in this conversation?

What do you really hope that our guests get out of just what we're going to talk about today? - · Speaker 1 Sure. So happy to be on. I love the topic.

This Art of succession. We see succession planning in schools go very poorly, something we try to help with. So then on the business side, I'd love for, you know, that succession plan to go well for the business I've founded. And as we're looking to transform schools, we're not going to shore it up here the next week or two.

Right. So it's going to be an ongoing process, you know. So when we find a way to, you know, maybe expand the business or continue that succession, I want to make sure that, you know, that's done well and excited today to see kind of where I'm at. I think I might be a bit of a unique guest for your audience.

So hopefully we can kind of go some places. Maybe they haven't gone before and give them some good insights. - · Speaker 4 So we'll get into your background and you know why you're talking about schools and everything like that. But I want to just before we get there and maybe this can lead into that history.

I don't think of schools in succession too frequently. So could you expand on that just a little bit there? - · Speaker 1 So we're doing work to make school more engaging and make it more real world. So instead of, you know, an academic scenario where it's just a textbook, we want to bring it out of a textbook and connect it to real world learning and to businesses so that kids are better prepared.

And we might get a principal or a superintendent that absolutely gets this type of work, and they're doing rockstar stuff. Kids are working with, you know, local businesses. Sometimes we've got a kid that comes straight out of high school and he's making $80,000 a year because he just went straight in through a community partnership. And then a new principle comes in and doesn't understand the system, doesn't understand why.

And really everything just shuts down the next day. So all these amazing opportunities that kids had are gone because of really poor succession planning. So it could be the same in businesses. That's why I appreciate the podcast so much.

- · Speaker 4 Okay, interesting. I've not considered that. I've got a number of friends who are teachers, and I always think of like the students leave every single year you get a new batch of students or a teacher leaves at the end of a school year. But the admin side of the school definitely.

I understand from their complaints just how much of an impact that can make on the long term health of the school. So that is an interesting aspect. So let's get into it. Yeah.

Just share a little bit about your background. And you know, what brought you up to the point where we'll get into magnify learning. - · Speaker 1 So I went to Purdue University to be an engineer and then did some engineering with UPS fortune 50 company and for 3 or 4 years and really enjoyed the work. Found out I really liked the time that we spent with United Way though, where we were actually kind of volunteering and giving back with kids.

So I jump ship from engineering to teaching eighth grade English at a school in the southwest side of Indianapolis. Found it very rewarding. Was super excited to be there, but I also found out that kids were not, at least in that environment, were not instantly engaged in school. School was not important to them like I did well in school.

I did all the things I was supposed to do, and a lot of my students just didn't see the opportunities that were available. And we did our niches called project based learning. So we brought that into the school system and immediately attendance went up, discipline went down and grades went up. So kids were coming to school and doing what they're supposed to be doing.

And generally it was the same kids, right, that when I was teaching, traditionally they were failing and not too worried about it. Right? So I was there to change the world and project based learning. I saw that change in my classroom.

So we started doing some work with other schools that started to grow. So I saw an opportunity to create a business in this space to continue the work with other schools across the country, and we've been doing that for about 15 years now, and we see a lot of success. We see schools that are turning around. And again, both engagement and test scores for individuals and then test scores for the school itself.

So very rewarding work. Really enjoy doing it. We started on a table in my living room. Right.

And now we've grown to about $1 million in top line revenue this year. And as we bring on some sales force, we see the opportunity for probably about 3 million next year. - · Speaker 4 So this started while you were teaching English at eighth grade. Was this something that the school was starting to experiment with, project based learning, or did you go to a conference or a training seminar or something and learn about this and start just using it in your own classroom?

Talk to me just a little bit about those first signs of success. - · Speaker 1 I was at the middle school level and the high school was using this model, and so we brought it down to the middle school and one of the first schools in our state to do that. And while it was effective, it was different than the traditional school model. So while it was really good for kids, it didn't fully fit the model of school.

So it's a little countercultural, right? So there are some places where it doesn't fit, even though it's really good for kids, if that makes sense. - · Speaker 4 Describe to me just the model at that stage, not necessarily where it is today, but what was it about it that was different or that was really engaging? Kids, do you think?

- · Speaker 1 Sure. So we had some social studies standards where we're going to study some some historical figures in, you know, our country's history. And rather than just going through the book, we found the Benjamin Harrison home was in Indianapolis. So we asked them if they had any projects we could work on, and their middle school curriculum was not doing very well.

People weren't checking it out. So our eighth graders, uh, actually redid that curriculum. So someone from the Benjamin Harrison home came and presented and said, hey, look, this isn't really working. Well, you're our target audience.

Can you guys make this work? And our eighth graders went to town and came up with seven different models. And the Benjamin Harrison home actually adopted kind of a several portions of different models that our kids came up with. But that's what they actually use.

And they literally sell that to schools and are using that in schools. So that real world application kind of gets kids to sit up and, you know, pay attention and learn because they know it's going to be used somewhere. Okay. - · Speaker 4 Is that like the key to the model continuing is getting them engaged in their own education that way.

How does that work? How does that replicate if you don't all have a historic home nearby looking to educate tours? - · Speaker 1 Yeah. So we look for community partners.

So probably some of the folks who are listening to the podcast right now, business owners, if we find ways to connect the academics to businesses that are out in the real world, and we'll do that. Uh, if you think about a school year, it's if each unit takes about 4 to 6 weeks, we need about nine of those projects for that to work really well. And if you think about the other implications, some there's some Stem research out there that says if your learners have interacted with someone that's in the real world doing the work.

They can now see themselves in that role. So when they interact with a founder or a CEO, they can now see themselves maybe finally starting their own business. Prior to that, the learners that were in our school system, they just didn't have a doctor or an engineer or a business owner in their top five relationships. So it's difficult for them to see that in their lives.

- · Speaker 4 Yeah. So this is more than like a career day where we just come in and tell you what we do for actually a month, you're going to be involved in that business or in that, in that project some way and actually see what the day to day decision making process looks like. Is that correct? - · Speaker 1 It is.

Yep. - · Speaker 4 Okay, cool. So you're still a teacher at that point then I guess to to sell it to other school systems or other neighborhood schools, you have to create something different. Or how did that start that shift start for you?

- · Speaker 1 I was working three jobs in order to pay bills and make all those things work. Did leave the school system to do that. So I was doing some consulting, really two different consulting gigs in order to make the to make magnify learning at a place where it could grow. And that probably took a couple of years to then see, like, hey, this is really going to work.

So then we went all in with Magnify Learning and really start to focus in on schools and doing something differently. - · Speaker 4 Okay. How do you how do you pitch that? I mean, what's that look like?

Is this something that parents come to you directly for? Is this something that teachers come to you directly for, or do you go into the administration? What does that look like? - · Speaker 1 Sure.

Usually schools understand that something needs to be done differently, or a leader does so. At a school in Lexington, Kentucky, that was a would have been a De school, you know, as far as state testing scores. And the leader there, she knew that something needed to be different for her students. So she called us in.

We did work for about two years in flipping the instructional model. And then they were they were an a two years later. you've got schools that maybe are struggling and know, hey, something needs to be different, or you've got some schools that are not necessarily struggling, but see that the workforce is changing and that kids need different skill sets in order to be successful. - · Speaker 4 So talk to me about your model and magnify learning how you grow this from just being you, going to the school next door and teaching a fellow teacher how to do this for a two year project.

Like, talk to me about how you built this thing and said, I need to make this bigger than just my hours that I can put into it. - · Speaker 1 So I was traveling the country doing this work, right. Doing a lot of the training. And then a school in, in Arizona called.

So I was in Indiana, Arizona called and said, hey, would you put in a proposal? So he put in a proposal. I said, I don't really want to go to Arizona. I don't have time to go to Arizona.

So we added an extra $3,000, that proposal that we normally would have. And they said yes. Okay. Well, great.

Uh, hey, Andy, who is another another teacher friend. Would you go to Arizona, do this teaching, and then I'll pay you, you know, a stipend. And that kind of started that model. So we do a model with a three day workshop and then ongoing coaching.

So we sent Andy to Arizona for three days. He did the work. He knew the work already. So we didn't have a ton of training involved.

Um, and that kind of birthed the model of, you know, using teachers, as, you know, 1099 trainers along with our agendas to then be able to spread across the country. - · Speaker 4 And when as school contracts with you coming into one classroom or one, uh, subject matter like, what's that look like? - · Speaker 1 Sure. It's it's often a whole school implementation.

Um, if it's a school with districts, sometimes we might start with the social studies department, you know, start in a specific vein that they have. And then we kind of spread from their. - · Speaker 4 Gear, your contractors, your instructors towards the if it's like a science department versus an English department, how does that work? Or is it really just you guys have the system now and you go in and teach all the teachers in that school, and they have to come up with their own systems.

- · Speaker 1 Yeah. So especially early on, it was very attractive to schools to say, hey, we have teachers that are currently doing this work that we can send to you to help teach your teachers, so specifically middle school, high school, we would send a middle school or high school facilitator to go do the work. And if it's elementary, we would send an elementary teacher to go do the work because there's just vastly different languages, culture between, you know, a kindergarten classroom and a, you know, junior English class.

- · Speaker 4 What does that look like? Because you're going to run out of buddies eventually. - · Speaker 1 So yeah. Great question.

So I love the spirit. You've it's like you're you're kind of reading my past right here. So - · Speaker 1 we did we we ran out of buddies. And then you know when you go and call somebody maybe you don't know, say, well, how do we know they're good, right.

How are they going to, you know, uphold the brand? So we created a certification process. Um, so then the schools that we were training, we would find the top 10% of teachers in those schools, we would take them through a certification process. So then we got to know them.

We got there, we got to train them and we can see what their their level of expertise was. And then we could send them out to go train others. - · Speaker 4 Talk to me just about lessons learned, because you're in your school system and you had a couple early experiments where you were hands on. But, I mean, there's got to be - · Speaker 4 times when it didn't work where the system needed to change, where this state's system was entirely different than what you were dealing with in Indiana or Kentucky.

Just talked to me through some of those early lessons. - · Speaker 1 Early lessons. Right. We assumed that what we were doing would be accepted and work everywhere.

Um, we found out that especially early on, we were teachers teaching teachers, and we didn't pay a whole lot of attention to the leadership, you know, principals, superintendents. And so we found out that a principal change could really kind of wipe out the work that we've done. So the teachers might get it, but a new principal comes in and just doesn't understand. You know, it's nothing evil or, you know, bad.

It's they just didn't understand the model. So they came in with a different vision. And then, you know, how is the teacher going to continue down this path if they're being, you know, their job is being evaluated on a different path. So they kind of conformed.

So I guess the solution to that is we've created trainings for leadership, for principals, for coaches, even for superintendents. So it's a different workshop, right? Because they need to be able to create a culture and structures and processes for teachers. Not so much know how to do this on the ground, boots on the ground.

But once they started, once we started paying attention to that, we did kind of solve that problem. But early on, that was definitely an issue. - · Speaker 4 Any other resistance, any other roadblocks that you had to work through? - · Speaker 1 Lots of resistance.

Um, right. - · Speaker 4 So primarily from whom? - · Speaker 1 A good question. Um, traditional teachers.

Um, so in education, there is unfortunately, sometimes there's this revolving door of initiatives. You know, principal comes in, hey, this new idea is going to work. And three years later, it goes away. This idea is going to work.

Um, so sometimes it's rightfully so that there's, you know, some resistance to something new. Some of it is an inertia of 100 years of traditional teaching. You know, the teacher's been up front as the expert telling us what to know and say, and we would regurgitate that information for a very long time. And teachers typically are very good at that scenario.

So that's why they came into teaching. So it's kind of what they know and it's what they do. And it worked for them. So why would they change.

So there is a whole change process here that that we're working with where we pay attention to innovators early and late, majority and laggards. Um, but yeah, sometimes there's just not sometimes it's a healthy resistance. We're happy to work through that. Sometimes it's just to dig your heels in because this is what I've always done.

- · Speaker 4 How do you deal with I mean, they have a subject matter that needs to be taught. They've got a test that's going to be done at the, you know, various times throughout the year. Um, you know, lots of pressure related to those tests. So I've got to teach the curriculum and do this project on the side.

Like, do they teach the curriculum through the project, making sure it covers all the various aspects of it? Just talk me through that because it's is this like extra curricular work on the part of the teachers and the students, or how does it know. - · Speaker 1 You actually nailed it right away with your first explanation, we're going to have to have you go out and talk for us, Barrett, because that's, you know, it's it's yes, you're going to use your curriculum. Yes.

You have state standards. Those don't disappear. So we're going to build a collaborative project with a community partner through your curriculum and through your current standards. So if you had a genetics project, we'd have somebody from the hemophilia society come in and launch the project and say, hey, guys, there are parents every day that will find out their child has a genetic disease today.

And they want to know two things are they going to be okay? And then they want to know everything there is to know about that disease. Would you guys help us put pamphlets, PSA's, videos, slide decks in doctor's offices to help these parents learn about genetic diseases? And inherently, kids say, yes, they do want to help.

And then what happens is the kids don't know how to do that, right? They don't know what the Punnett square is. They don't know these deep genetic standards. So the teachers are now in a position where the kids want to create these, these resources because it's engaging and helps people, but they have to have learning from the teacher in order to do so.

- · Speaker 4 And you're also learning other things like how to put a pamphlet together. What what marketing language works to get somebody to actually pick it up and read it, real world practical stuff that, um, that probably brings other teachers in their day involved around some of that same project too. Then, like you've got your art teacher involved, now you've got your communications or, um, math teacher or something like that involved too. - · Speaker 1 Yeah.

And the motivation becomes, you know, in this case, like, we're going to help these parents. Rather than the traditional motivation is grades or because you're gonna need it in high school, or you're gonna need it in college, or because I said so. Right? Or you're going to take a test, none of which are truly engaging for teenagers.

Right. So you have more of an intrinsic motivation to do the work. - · Speaker 4 The community partnership aspect is interesting to me, too, because that's the challenge. Um, you guys don't know who the community partners are in Arizona, for example.

So I imagine you've got to get administration or the teachers or someone involved in bringing in nine projects throughout the year. How does that work and what's the other than the goodwill in the community? Maybe that's all what it is. What's what's the benefit to a business to partner with you guys?

- · Speaker 1 So what we do is we we train locally. We train the teachers how to reach out. All right. So you mentioned you had a few teacher friends and, you know, they could likely create a, a unit where they need to, you know, create a business, you know.

And you know what I've got? I've got a friend. I've got Barrett. He could come in and talk to us about that, and they're going to tie all their standards into it.

And then you're going to come in. It is because of goodwill, but it's also because it relates to something you're passionate about. Right. And you get to share this passion with others.

And and that's different. It's different than if you just go down to the elementary school and say, hey, I'd like to help. And then they have you make copies. That's probably not what you want to go do, right?

But if it was really in your area of expertise, you probably would take an hour and go down and talk to the kids. - · Speaker 4 Yeah. I mean, I'm thinking back to that original test case you said Benjamin Harrison's Harris or. Yeah, yeah.

His home. They want to know, how do we keep kids engaged when they come here to learn so that they're not just bored and, you know, staring at their phone, running off into the woods kind of thing. So there is a benefit there of, I don't know, as a scientist or as a historian or as a 20 year CPA, what's going through the minds of, um, My ordinary clients or in this case, you know, 13 year old kids. Uh, so the benefit there is to get some audience research for free audience labor in this case, um, as well.

So interesting. - · Speaker 1 Yeah. So you're trying to create a value add for both sides, right? - · Speaker 4 Um, I assume you have to have national partnerships at this at this stage after doing this for over a decade.

So do you get a lot of, um, you know, we've got branches all over the country like a national financial firm or something like that, that would partner with you and say, let us know as soon as you're in this area. We've got people ready to go. - · Speaker 1 So we've just partnered with a group that is kind of a middleman to that idea. Right.

Of okay, they've got some software kind of a it's probably the best edtech we've seen in this, this space where they're connecting professionals in the workforce with schools in specific areas. And the challenge has always been really the user interface, if that makes sense. Like you don't want to sign up for something. And then two years later, somebody says, hey, would you come into this eighth grade classroom?

Um, so they found a way where community partners are willing to sign up and schools are willing to do the same. So they've kind of cut some of the friction to this process. And schools can literally get on and say, hey, I need a marine biologist. And I mean, zoom helps quite a bit too, right now, right where it doesn't have to be geographically as close.

You can zoom in with that marine biologist. Um, and we find that we're creating a space where, again, there's a value added for that partner to give back. And there's specific expertise. But also we're not asking for ten hours a week.

Right. So you can come in, talk about things that you love and you're passionate about, watch kids do things and like it. You can actually see the effect that it has in the school system. And then we actually try to bring them back at the end of a project, too, so they can kind of see the fruits of that labor.

- · Speaker 4 Okay. So what is that commitment look like for a business then? - · Speaker 1 Sure. So it's really typically about an hour in the front end.

You come in and say, you know, when I work with people, this is how we launch businesses, this is how we sell businesses. You guys are going to create a business model for a local nonprofit. I'm going to come back in four weeks to see what your business plan looks like for that nonprofit. And then at that point, you probably spend another hour in the classroom on the back end.

- · Speaker 4 How have you. I mean, you're not maybe you are doing these still throwing yourself in on the occasional one just to keep it interesting. But how have you had to shift now from your initial projects to now running a team? You know, pretty good sized team, even if they are subcontractors, that's still a that's still a good team.

And you've got a culture there that you have to, you know, keep them all in line with and give them a vision. So how have you shifted as a leader? - · Speaker 1 Yeah. Good.

Great question. Again you're just you're I feel like you're reading my journey already. It's like that. - · Speaker 4 That is it's almost like I do this for a living.

- · Speaker 1 Right. 100%. I love it so. Because that's absolutely it, right.

Like I, I was I mean, I was pretty good at it. Right. So that's what we did it. And then somebody else had to do it and I had to watch.

And I kind of wanted to jump in every now and then. Uh, but we figured out that we've got a good, you know, uh, system and agenda so that as long as someone can do 85% as good as me, that that the output was really solid for the school partner. So we felt really comfortable there. Um, and now you're right.

I don't really do a whole lot of facilitation unless it's a large district or something brand new. Sometimes they bring me in for those, um, or, you know, we're doing some new leadership work. So I kind of get involved in some of that. - · Speaker 4 Does stuff with the administration.

You talked about, like the superintendents, principals. - · Speaker 1 Yeah. Assistant superintendent superintendents. That's a different shift.

So I'm involved in those. And it is more of I mean, frankly, some work that I've not inherently enjoyed, you know, like meetings are my world, right? And if you look at kind of my disc assessment, it's probably the opposite of my personality. I'm a doer, so I want to do the things.

Um, so I'm setting up meetings with multiple stakeholders with multiple portions of my team. We're meeting together. We're meeting monthly, quarterly, individually. And that's been a big shift for me.

Um, and just kind of making setting up that process and then making that the thing that I'm doing. Right. So that's my doing itch, I guess, I guess. - · Speaker 4 What's your biggest challenges?

Um, you know, roadblocks, things that you have to solve. And I guess let's start early on systematizing this, making a certification and everything. Did you have to bring in outside help for that? Was it just the the teacher and the inquirer within you that that figured out a way to make that happen?

- · Speaker 1 Yeah, we're pretty geeky. So we did it on our own. Uh, you know, so we created a rubric of this is what a really great facilitator would need to know, say and do. And then we ran people through that.

So that structure felt good. And it was really pretty natural for us because we're really geeky about our work and we want it to to go really well. So that was easy to protect. The portions of maybe the marketing and the sales didn't come as naturally because, you know, we wanted to do the change process portion, you know, but now I'm, you know, working through I mean, so our director of training and operations is an amazing educator, but she doesn't want to touch sales.

She doesn't want to know about dollars and cents. It's like, well, we also need you to think about referrals, right? So so that's kind of our training a little bit. Right.

As to and she's open to that. Right. Because she wants to work spread. But then we can we've kind of figured out some language for her to say, oh here you need to go talk to our salesperson now because, you know, you're really close so we can really help you.

So those have been some of the challenges of moving away from some of this work that we love and the geekiness of it and still protecting it, right, and protecting that culture. - · Speaker 4 What's your biggest barrier right now to to growth, as we, you know, shift? Um, we did talk a little bit about before about acquisitions, about succession, things like that. So what are your biggest barriers right now to growth?

Is it the team? Is it the the introductions. What's what's that. - · Speaker 1 Sure.

It's it's introductions. I mean at the end of the day it's leads, right. If we had more leads, uh, we would do more work. So we've, we've done a lot of inbound at this point because we produce a lot of content.

So we've got sales capacity now, which we didn't have, you know, a year ago. It was always me doing sales. So we moved from founder to true salesperson. And then the next bottleneck is going to be leads.

And on the marketing side. - · Speaker 4 So let's talk about you've you've shared just briefly what models of growth other than just inbound the leads the the grassroots kind of thing. What do you what are you looking at right now? - · Speaker 1 So what we currently do again, we're producing a lot of content.

So blog, YouTube podcasts once a week. Um, some probably like social media I would say a lot of email progressions and kind of free downloads. So we offer a lot of value to, you know, give some information and follow up a little bit of ads and then some cold email as well. - · Speaker 4 But are you looking at acquiring somebody with a similar platform or.

- · Speaker 1 Sure, on a larger scale. Yeah. - · Speaker 4 Long term yeah. Long term strategic growth.

What's that look. - · Speaker 1 Like? Copy that. Yes.

So we've looked at acquiring two different companies. Um, one at least at the time said no, not not interested. This is my thing. I'm not ready to let it go.

And we've got another one kind of on the horizon that we're starting conversations with that would be would allow us to grab a pretty significant portion of a specific market. So like a charter school market, really? Uh, specifically. So, um, that's the piece that we're looking at right now.

- · Speaker 4 Okay. When you look at strategic growth, um, if if you're in a world where nobody else is doing what you're doing, what does that growth look like? How do you evaluate an option for growth, a potential? Um, is it by, you know, buying a soft not a software company?

Well, maybe a software company? I'm thinking more like a textbook company or something like that that has all these inroads with school systems already. Is that talk me through what you're considering there. - · Speaker 1 Sure.

So we're we're looking at, uh, again, it's an organization in the charter school and kind of networks, uh, in a specific area of the country that really helps start charters. So if you said, okay, hey, Ryan, I've got this specific niche that I want to open up. You know, I'm looking to do this with the state. You would go to this organization and say, you know, can you help me get funding to get started?

And that's what they do. So they were, uh, they're going to start this school kind of from brand new. So it's it's attractive to us to, you know, be a part of well frankly the funding model is there. And then we also know that if we start at the beginning of that, that the instructional model can be there.

So our work fits well into that at the birth of an organization. We've done that with several schools where they're starting up and we're there at the very beginning. So, you know, acquiring that that company, uh, puts us at the ground floor of the work that we do. Well.

- · Speaker 4 Okay, awesome. What other types of options have you guys been weighing or looking at? Not necessarily. A deal's already in the works or anything like that.

But as you think ten years out, what does this look like? Um, what's running through your brain on that? - · Speaker 1 Oh, and I'd love feedback on any of this, by the way. Um, so.

- · Speaker 4 Please. Yeah, right. Ask me any questions you might have. Right.

- · Speaker 1 So, you know, there's probably five big players in our very specific space, right, in project based learning. And, you know, we're we're usually in that conversation. Uh, and then there's let's just say 30 or so like kind of one off consultants, whereas it's just them, but they're doing work in schools. So we approached one of those organizations that, you know, just kind of a one off and doing really great work, uh, supporting a lot of schools really has a pretty good audience.

Um, you know, that key figure might be an issue, but we're just looking at some of the dynamics of, let's say, her audiences, you know, has 500 people in it or so. Each one of those likely. And her model probably comes from a different school or district. So an acquisition there seems, um, like a reasonable, reasonable jaunt.

We kind of looked at what would it take for us to market and reach each one of those people individually versus, you know, acquiring the company and then having access? What are you. Yeah. So, like, what do you see in that idea that, you know, we should be watching out.

- · Speaker 4 If I'm going to acquire a solopreneur, a solo CPA firm, how much of the loyalty is going to be to that individual and their method and are they going to undercut or how are they going to sell? No, it's not me. It's not my method anymore. I'm a part of magnify learning, and I'm now going to shift slightly or, you know, gradually, the way that I've always done things over to the way that it's been done over here, that would be the concern there, because you don't want to just I mean, you've already got subcontractors out there.

You've gone through a certification process. You don't want to have 25 methods out there. The cost of acquiring those 500 clients, but watering down result that they're getting watering down the culture around what you're actually believing and teaching is going to be the challenge there, I think. - · Speaker 1 And then if you were to hire that solopreneur for a time, is that a reasonable solution?

Or you still have the same questions of kind of underselling or shifting? - · Speaker 4 Yeah. So that's the burnout idea of an acquisition is how long do I have to stick around? You know, that conversation is a bit easier if you've got somebody who's got a teaching model.

They've been running for 35 years and they're at the end of their career, you're really just doing the introduction and saying, we're going to shift it slightly, but continue working on this kind of work in the school districts that they're involved in, right. Burnouts are interesting if you have the right people, but they can be counterproductive as well, depending on how much resistance there was or how many times they're going to say, well, this isn't the way I would have done it.

But now I'm part of magnify learning. And so I've still got to be a cultural fit there. And they do have to realize, you know, their legacy without magnify learning coming in is going to go away. They're not going to be able to continue doing that forever.

And so do they want to have that legacy blend into something bigger that's still going to benefit those schools, still going to benefit their students, or are they going to hold so tightly onto. No. But if my name's not on it, and if it's not my method, then I don't want it. Nobody's going to be teaching your method in five years from now, ten years from now.

so that's going to be difficult. - · Speaker 1 The other thing that we've kind of come across and I'm not an expert, I can't read the journey like you can, but I've done some study, I've done some research. But I find that those that I'm approaching have not. So they've never evaluated their business before.

You know, they've never some have considered, some have not. But they definitely don't know what multiple. Should we be looking at. You know what's a reasonable price.

Right. Like are you going to pay me for all the dry erase markers I have in my closet? You know that. - · Speaker 4 This is always the challenge.

It's that inflated idea of I put 35 years into this, so it's got to be worth some multiple of that effort. And it's like, well, no, a portion of that 35 years is you working a job. What remains is what exists if you walk away. And if you are the only person doing this model and you retire from teaching tomorrow, nothing remains except for the memories and the legacies of the students who've already moved on.

But somebody else has to step in there with their own. Yeah, so that's the every business owner has this inflated idea of our own value, and especially hard when you're in my mind, when you're dealing with solopreneurs or you're dealing with teachers where they're not paying for business consulting, they're not paying for somebody to come in and value their business. They're like, you know, this business only makes my salary. You know, I'm not going to put that effort in.

And that's a little bit harder. - · Speaker 1 I mentioned this term a couple of times. Not even sure I should be using it. But this key figure idea, right.

The founder of one of these businesses in particular looking to acquire well known in these circles. She's a great networker, obviously. What's that look like? You know, when we go to the business model seems sound.

They have good financials, they have some good employees. But obviously there's a difference between, you know, me suddenly stepping into that spot or them joining us if she's going to go retire. - · Speaker 4 Key figure key man risk. That's always the risk especially in relationship businesses.

We're not manufacturing something. I don't care who the head of the manufacturing plant is that makes my car necessarily, even though there will be changes to the efficiency and the culture. I'm shaking your hand or I was shaking her hand. I was face to face with this person.

The transition there, it needs to. We always recommend to business owners don't wait till the last minute. And this is really hard because the value of your company is going to go up or down based on how you handle that transition. And if you wait till the last minute and spring it on your customers.

The reason they do that is because they're like, well, they're going to leave as soon as they get a whiff of this. And we try to say, well, no, the more you communicate with it and that this is a good thing and that this is the reason you guys chose magnify learning to take on this role within the school. The more that you communicate that, the better off it's going to be. And you know, people don't like that.

They don't want to not be the key person. We all love to be the one that everybody comes to for our problems to get those solved. So it requires some humility there, but it also just requires a realization. Again, if we don't do this successfully, these kids three years from now, nobody's going to know what they learned in my seventh grade classroom.

Nobody's going to be doing this. So that transition needs to be handled as far out as possible, knowing that somebody is going to retire. And then, yeah, it has to come from both of you, because if it's only coming from you saying, this is why we're a good fit and they're not hearing it from the person that you're taking over, they're going to be like, well, this is just a deal that they took because they needed to get something out of this. - · Speaker 1 Yeah, I think between that and the really just the businesses that we've kind of like you mentioned specifically in our space, it's typically someone who's really good at teaching can be a great consultant.

They've built a business sometimes. They've never thought about selling their business. They've definitely never thought about evaluating it. So that kind of comes out of left field.

And then I feel like we want to like throw out a number just to kind of keep them in the conversation. And I'm not sure that's healthy either. - · Speaker 4 It's rough when you any time a business owner, the first number that they hear comes from a buyer. That's hard because it's never the number that they think it's going to be.

I don't know if you're insulting me. I don't know if you're like somebody on Facebook Marketplace that's just trying to like, get this as cheap as possible. I don't know how many of these you've done. And you realize that by throwing out a multiple of two, you really close in deals with somebody who's negotiated and they're they're getting six.

I don't have any of that context. I've never been through this transition before. It's kind of like using a realtor versus, you know, selling your own house. The reason you use realtors is because this is every day for them.

It's not a once in a 30 year situation or once in a ten year situation for them. - · Speaker 1 So when does somebody get somebody like yourself involved? Right. You know, I go and say, hey, Susan, we think it would be great for us to, you know, maybe to acquire you, but we want to make sure you're getting a great deal.

We're getting a great deal. We want to bring it in. Is it a beginning conversation? - · Speaker 4 There's usually going to be.

If it's an inner family transition, there's usually going to be one evaluation done. But you can do sell side valuations. You can do buy side valuations. Now a full valuation is not going to be cost effective for most of these situations where you're talking about.

So like a full valuation, most of those are going to be effective for like $5 million and higher businesses 500,000 to $5 million. You can do a light valuation at those levels. It's a little bit less due diligence, but there's also what's called quality of earnings. It's a very light assessment of what kind of cash flow a company puts off.

And so those could be a little bit more cost effective. Most of the time, though, with my business owners, I'm finding out they're talking to their peers. And that's where the conversation is happening. That's where they're finding out what those multiples are going to be.

So if you're preparing to go out to these next 30 project based learning, you need to find out who are they talking to? Who are they listening to as these deals? Kind of happen? What kind of multiples are they here and kicked around.

And some of them are going to be wild. Some of them could be realistic. Using your own case studies like this is the kind of multiple that we did. This is why this valuation came to this for when we acquired X person over here.

They're going to do a lot of their own searching, their own googling. They might talk to their CPA, they might talk to their attorney and see what's going on. But if we haven't been involved in those kinds of businesses, it's going to be very hard for us to find realistic multiples. A lot of that is going to be like rule of thumb multiples.

Unfortunately, a lot of the material that's out there to give you multiples on acquisitions, they consider $100 million small business, which is hilarious. So when we do a valuation of a business, we have to adjust that multiple even further based off of, you know, a 10th of that $10 million business, even more for $1 million business. So that's why most businesses will do a reasonable number. And this is most people don't realize this.

But smaller acquisitions like you're talking about, they don't need to have a formal valuation done. You just have to come up with a number. Valuations. The purpose of valuations is can it be defended before the IRS and can be defended in court.

And if you feel like it's going to end up with a lawsuit or if it's got to go to a state, uh, you know, it's an estate tax situation or something like that. That's why a formal valuation usually gets done. But if you throw out a number and you say, we're going to get, we're going to offer you $400,000 for this. And they say we want five, you guys find somewhere in the middle and you can move forward with that.

- · Speaker 4 You really want to show like this though. This is our approach to why we have that. That's going to be probably the most. If they can read something and say, oh well, no, they're right.

I haven't put in a system or, you know, it is dependent on me working 70 hours a week to get this done. they're going to be able to reason through that. - · Speaker 1 That makes sense for those. The 30 you know, kind of below to kind of snag up some of those and, you know, consolidate things.

Uh, the the other one would probably be more between like 1 to 1.5 million. Um, and we would ideally look at like a seller financing situation. Um, is that is there a way to set that up or that's attractive to the business owner that's selling, or is it a good idea?

Right. So however you want to poke that. - · Speaker 1 Yeah. - · Speaker 4 So seller financing is risk is risky.

Um, it means I'm not getting all the cash now. There is some. The reason you would do it as a buyer is because there is some incentive on their end for it to be good transition of the business. Because you could stop making payments if I saw you.

My leads, my 500 leads, that I've got intros into these school boards and none of them turn into business and you decide to default on that. I now have a worthless note that's really only secured by, you know, a legal contract. Um, so seller financing is a cert, a sort of earn out in that situation. No different than saying you're going to you're going to work for us for three years in order to get the full amount.

It's just a different type seller financing. I would not go more than ten years. I would probably go five, would be a would be a long term play in most of those businesses minds. But for I would say for a million, million five seller financing is not out of the ordinary for an acquisition either.

So yeah, I think the hardest part you're going to have is they've never wrapped their brain around. They have a business here that's actually to be sold. And they're like, well, why would I sell it to you for 1.5 when I can go over here and I can get, you know, $800,000 cash today or from a educational textbook company or something like that, that just wants to buy my model and turn it into a course.

It's my thought. - · Speaker 1 My thought was to combat kind of the key man risk portion with seller financing to say like help transition that the key man risk over. - · Speaker 4 Yeah for sure. I mean that's why most of them do that.

Like I said, they don't want that puts the burden back on them to not have those be terrible leads that just dry up or, you know, non-compete also would be appropriate in those cases, too. And seller financing kind of ends up playing a little bit of a role as a non-compete because they don't want to not get paid. You don't want to drag it out too much. I will say that on the buyer side, you do not want to be paying somebody for ten years from now, because effectively, when you buy a relationship business, you're really only buying them, coming back a second time, because after they've come back a second time, they're coming back to you.

For you. They're not coming back because you acquired them. So the majority of the clients are going to give you one year. And then the ones that come back after year two, they're they're going to continue coming back because of you've proven yourself reliable.

Um, and so if you're still paying on ten years down the road for clients that left, you know, eight years ago, you don't want that. And that's why multiples tend to be a multiple of annual revenue. And you could have deals written where it's like only the revenue that actually gets retained or new business from those clients that come over as well. - · Speaker 1 That's helpful.

Anything else to to think through when we're thinking about this kind of strategic, you know, growth through acquisition. - · Speaker 4 Your opportunities will probably also be in areas that are tangentially related to what you're doing. So like, um, buying an educational software product or something and building this into that, or, um, figuring out how to do the model that you've done really well here. And then, you know one example.

You've probably already done this, but bridging it into different grade levels or going higher or lower with it, um, or, - · Speaker 4 you know, moving from we partner with businesses to now we partner with, you know, government agencies or something like that. And, you know, kind of expanding from there new opportunities for the leads moving from I mean, you guys are big on content marketing. So growing it through - · Speaker 4 the in person to this is now a I mean, you've got a certification course, but this is now a DIY form of, of what you could do and it's going to be cheaper, but you're going to be able to close more of those deals or the opposite direction, go completely white label on this.

And this is probably why how you're getting pulled in and you guys are looking at the assistant superintendents. The superintendent side is this side of it is way more than we come out. We teach our teachers how to do this. We're actually going to be engaged, embedded in your school for six months, and it's going to be a higher level value being provided for that as well.

We are coming to the end of our time here, and this interview definitely went a different direction. - · Speaker 1 You mean where I started interviewing you? You mean. - · Speaker 4 Yeah.

When you think about your own future for this. So, I mean, I'm sharing with you some of the risks we assess on your side as the buyer. But how are some of these risks, things that you're aware of on your side as the seller positioning. You know, magnify learning to be acquired by a larger group and push this out.

That that is another way of growing, is taking your model and selling it to somebody who's got contacts in all 50 states, across every school board. Some, some way. - · Speaker 1 Have been thinking about this for, I don't know, maybe 4 or 5 years probably. So started creating more systems processes.

- · Speaker 1 Getting my hands out of day to day portions for sure, but also the reflective growth like coming out of some of those areas. I'm still in a lot of the content that's created in podcast YouTube. My face is on all of those things. We just brought in somebody to kind of bring another voice to the podcast, so maybe we've got multiple voices in there.

So the kind of the key man risk that we kind of discussed seems like that's still a a risk for us to someone that would be looking in. Uh, so that's I suppose that's where we start thinking about those things. - · Speaker 4 How have you built out the leadership team? So like one of the ways we did we've done this in our company is we've implemented iOS entrepreneurial operating system, because our firm for 80 years has always been whoever the most senior partner is.

They're now the managing partner. And they effectively get the tie breaking vote and everything. so we needed to get it away from that and make it. Keep it from being so dependent on the personality of that managing partner.

So we're putting an operating system in place. How have you guys done that at Magnify Learning? I know you said you brought in sales director, and you've got a director of learning and various roles like that. Talk through that.

- · Speaker 1 We have directors. I would say we do not have like I understand the EOS system, but we don't have a specific system, which might be, um, something we look into, but appreciate your your thoughts on that. So we would have, uh, standard operating procedures, you know, for each of, you know, kind of these core elements of the business, you know, we still would need a chief marketing officer at this point to come in. That's a whole that we have right now, having that leadership team in place.

So then I take kind of one more step where I'm really managing that, that leadership team more than some of the day to day, um, would be something that we still need to shore up. I would say. - · Speaker 4 Good. Yeah.

I mean, that's that is the right direction. That's iOS. Whatever the system framework you put in place, our goal was we wanted a way to identify issues and then push the solving of those issues down from one of the two partners here. And and we've only been working with the OS for actually in effect, six months, even though we've been adjacent to it for ten years.

Um, and that was for us putting that system in place. If this is how decisions get made, this is the meetings that we have. This is what the leader, the various levels of leadership should be focusing their time and effort on. And it sounds like you've got that, um, you're working towards that.

That is a huge part of Key man risk that, that you're already taking steps to remove. And again, that's why business owners don't do it as much as we love, as much as we hate our 80 hour weeks, our 70 hour weeks, and we use it as a badge of honor. That that's our identity. I'm the problem solver.

I'm. You know, you're the teacher that built a model to teach other teachers. And it's really hard for somebody like me to say I don't do taxes anymore. Who am I if I'm not a tax preparer?

I'm a business owner. I run a team of tax preparers, and most people are not willing to make that shift. And I think you've taken steps - · Speaker 4 in magnify learning to move away from that and be like, I if this is going to grow, it can't be me traveling across the country all this time, you know, all these months of the year to put this in place, right? - · Speaker 1 I think the other piece is when I look at, you know, who would acquire, uh, you know, our business, um, - · Speaker 1 you know, we've got large textbook companies that are in, you know, this space that are selling textbooks but also have some service or training.

Um, we do have, you know, again, probably about five big players in the space. Some are nonprofits, so I don't know exactly what that would look like. Um, so that would be another piece that we are probably unsure of in that equation. - · Speaker 4 You know this, I'm sure, but nonprofits still make acquisitions and still need to be profitable.

A lot of people, you know, think nonprofits means that they can be charities, that they can, you know, run in the red all the time. But nonprofits have to be profitable. They just don't pay taxes on that profit. And the profit doesn't go to the owners.

It goes back into the programs. So so I wouldn't rule that out for you on the sell side. It no different than finding the right company for you guys to acquire. It's going to be about cultural fit.

And so if you know that there are five potential players out there that could be acquisitions, rule three of them out and say, this is what the situation would have to be for this one to buy us versus, you know, player A versus player B. Tobias. Um, actually, as much as possible on the side, on your side with what you can do with public information is find out which one would be a better fit as far as vision and culture. And then in your mind in the back of your head, think, what would that have to be?

What would that what would that look like in order for all the pieces to fit just the same way that we talked about? You're going to business owners who've never considered the value of their business. Look into your own multiples. Look into why would you justify a high versus low?

I have this discussion with business owners on the sell side. This is why I said the the you don't want the first number to come from your buyer because you're going to be suspicious of it. But we do an event with business owners called the Triggering Event. It's part of the value acceleration methodology, which is an exit planning strategy where we bring a business owner in and we say the range of multiples for your industry is 5 to 9 times, uh, EBITDA, not, uh, you know, and then a different range for revenue.

Here's where you fall in that. So the range is 5 to 9. You're out of six. Best in class is nine.

Um, above average would be a would be a 7.5. Here are the steps that you would have to take to get your business to a 7.5.

And so you on this on your side as you look at I would need an offer from these two, not these other three. Also say realistically I think I'm on the lower end or the middle or the higher end, and what would need to be put in place in order for us to get to a higher end? Multiple. Do those do that, work yourself, work through it, and you start to get a more realistic number in your mind of where your business is at, so you're not surprised when the buyer comes in.

- · Speaker 1 Yeah, that's super helpful. - · Speaker 4 Yeah. Our consulting is done. Not our not our interview.

We're coming to the end of the interview, but I do appreciate this opportunity. Ryan, this is fun. I've always thought about doing, like, an open consulting hour kind of thing on YouTube and seeing if anybody would sign up for something like that. Um, but yeah, I really appreciate your time.

We are going to wrap this interview up with our Lightning round. But before we do, uh, do you have anything else that we haven't covered or that you wanted to add? - · Speaker 1 I would say, I don't know, I guess those that are listening. This has been really helpful.

Yeah. We've always had all kinds of questions on both sides of things. Right. That, you know, maybe we're a little fuzzy or a book doesn't fully connect with.

So, um, walking through some of the exercises that you've mentioned, uh, seems really helpful and could bring a lot of clarity, so I appreciate it. - · Speaker 4 Oh, well, thank you very much. I've enjoyed it. Like I said this, I do I love what I do, and there's a reason I welcome any conversation I can get.

- · Speaker 1 So yeah, Barrett. Maybe one more thing is, you know, when you were kind of reading my mail there for a while, especially in the beginning of the interview, I was like, okay, so this isn't just me, right? - · Speaker 4 Like, it's not just you. That's - · Speaker 4 that's always the biggest one.

It's like, oh, other people worry about this stuff. It keeps everybody else up at night. Yes. So good.

Yeah. Awesome. Thank you. All right.

Let's, uh, let's jump into the right lightning round and bring this home for for landing. Um, coffee or tea? And how do you like it prepared, Ron? - · Speaker 1 Uh, tea generally just straight.

It's black. - · Speaker 4 Okay. Very good. Pie or cake?

And do you have a favorite kind pie? - · Speaker 1 I typically say anyone that's round, but a strawberry cake is probably the favorite. Really? Yeah.

Strawberry pie. - · Speaker 4 Strawberry pie. Okay. I was like, you switched there for me, but.

All right. Very good. Do you have a favorite holiday and why? - · Speaker 1 For me, it's Christmas.

Our family has a lot of traditions around that. Our kids do a really good job of giving gifts, so it's. It's a fun time. - · Speaker 4 Awesome.

How old are your kids? - · Speaker 1 There's nine to to 17. - · Speaker 4 Okay. Teenage years ish.

So I'm in the same phase with my kids Christmas is different than it was when they were little. I really like to see them give gifts. That's an awesome, rewarding aspect of it now. So they're so excited to see the other siblings face when they open their gifts.

- · Speaker 1 So that's a fun time. - · Speaker 4 Do you consider yourself a morning person or a night person, and do you have a favorite routine you look forward to? - · Speaker 1 Good morning for sure! I'd love to get up, read.

Pray. Work. Walk. - · Speaker 4 What's a common belief among entrepreneurs that you would want to challenge?

- · Speaker 1 Oh, I think we discussed a little bit today that you have to do everything you can let things go, you can delegate things and things continue. And I might be just sharing that with myself, but I think others could use it. - · Speaker 4 It's so hard, right? It's like I believe it.

I read about it all the time and I'm like, yes, that's what I want. Yeah. It comes down to it. I'm like, nobody can do as good as I can.

Yeah. That's right. Yeah. Awesome.

What is one thing that you would want your successor to remember you for? - · Speaker 1 I think the passion for the work. Always keeping that at the center. Like, I know there's a whole business side to this, but at the end of the day, what we do is we're transforming schools to help kids have more opportunities.

We think that's really important. - · Speaker 4 Awesome. I mean, I said earlier, I've got a number of friends that are teachers, and it's so frustrating to see what they deal with. And I just I want to say thank you for pushing in and finding a new method and, you know, building this out for teachers around the country.

I know they appreciate it and the kids do too. So thank you for the work that you do. - · Speaker 1 Yeah for sure. I love it.

- · Speaker 4 Where are you finding creativity right now? - · Speaker 1 Oh, for me it's that morning walk or a hike run. That's sunrise time. That's where the creative ideas kind of flow.

And you'd have something to take notes, typically. But that's where a lot of creativity comes. - · Speaker 4 Yeah, I try to do so many of those without electronics, but then I'm like, I have nothing I can, like, record my thoughts on. I've got all this great stuff.

- · Speaker 1 Yeah, that's right guys. - · Speaker 4 What do you have coming up in the next year or so? This got you really excited. - · Speaker 1 We've got some you know the work that we're doing with schools.

We're excited. We've got some scorecards, kind of some quizzes that we're coming out with so teachers principals can figure out like where am I at and my way on the traditional end? Or am I on this more progressive end where we're doing some things differently? And I think if we can help educators find out where they're at, they're probably not as far away as they might think.

So we're pretty excited about that idea. - · Speaker 4 Awesome. Very good. So, Ryan, where can people go to find out more information about you?

- · Speaker 1 Magnify PBL com. That's got a little bit of information about me and the work that we do, and we'd love for anybody to connect if we can help connect them to a school, or if they're trying to figure out how can they best serve their school, we'd love to have that conversation. - · Speaker 4 Okay, awesome. So that's teachers.

That's parents, that's students. That's anybody along the journey can go there and find more information. Awesome. And we can get to the YouTube channel from there as well then.

- · Speaker 1 Yep. That's right. - · Speaker 4 Very cool. We'll put that down in the link.

Ryan, again, I just want to thank you for the time. Thank you for yeah, just the chance to talk through this and with you. This has been fantastic. Thank you so much.

- · Speaker 1 Yeah. Thank you for the time. It was awesome. - · Speaker 4 My pleasure.