31 - Exit Like a King | 5 Secrets to Maximizing Business Value

Welcome to the Impact Podcast. I'm Eddie Wilson, here to help you visualize what others cannot see, create opportunities where others have failed, and push you to build empires where once there was empty space. Let's embark on this journey together and make a difference in this world. The exit is not the end. It's a reward for building right. Most entrepreneurs do not exit because they build a job, not a business. On today's podcast, I'm going to talk to you about exiting like a king. As you know, I've been called the king of exits because I've sold over 120 companies, but I'm going to give you five moves that maximize your business on the exit. You may be sitting here today going, yeah, I have a business, but I'm a solopreneur, or I've got five employees, or I've got a business, got 100 employees, but I don't think it's actually sellable. That's not the point of this podcast. The point of the podcast is, is I want to teach you how to create the right value so that there is a succession plan. No matter what you believe about your business, like there is a succession that will happen. So why not intentionally go down that path? Why not actually architect succession? You say, well, I'm not going to sell my business. Okay, well then let's actually provide enough value to pass it on to someone else. Most people right now are getting to a place of viability, but never thinking about the future. Let me tell you about the five to seven million baby boomers that are in this same exact spot you're in right now. They're going to walk away from their place of business in the next seven years, and they're going to turn the sign to closed. They're going to lose every bit of value because they had no succession plan. They were just building it to be a cash flow machine. They built it to create a job for themselves. It's a dentist who sat in the chair for 30 years. It's an electrician who's pulled wires for 20. It's a plumber who's been on his hands and knees for 25 years, but now does not know what to do with his business while he's sitting there with massive, massive value. The value today is the eyeballs that watch you. It's the customers that pay you. It's the brand that you have built, the equity in your business that you've put into it. And I want to help you maximize it. So this is not my traditional tactical. It's more of a philosophical of what do you need to do in your business. Then I'll give you a couple of tips along the way. Very quickly, just I want to reiterate what I said, and that is, is a business exit is the reward for building a business correctly. So there's some five, there are five things I'm going to give you that are going to help you build this business correctly. And I want to give you some moves that you can take strategically, tactically, philosophically. Okay. So number one, the first teaching point I want to give you is that you cannot sell something that requires your presence. You cannot sell something that requires your present. If you're still the engine, your business really isn't sellable. And I know that there are some exits that defy that, but you're going to put yourself in a spot where you are going to have what we call golden handcuffs, where they pay you to stay with the business because you're irreplaceable. In my business, when I'm going from phase to phase to phase, right, there's five phase of business, you got startup, perseverance, viability, scale, and then succession. When I'm going from phase to phase of my business, in order to get to true viability, I have to remove one thing. And that is, I have to remove single points of failure. And oftentimes in an entrepreneur's business, they are the single point of failure. If you remove them, the business fails. They're the mind, they're the hands, they're, they're actually doing and physically doing. So what are you doing in your business to replace yourself? If we're going into succession planning, creating a business that's sellable, exiting like a king, right, then you must number one, learn to replace yourself. Now, I think that the big problem here for entrepreneurs is not that they can't replace themselves. It's that they're afraid to replace themselves. What happens if someone does my job? What happens if someone does take my responsibility? What value do I have? I think there's a core problem here that really isn't how do I delegate and elevate myself to a different position. It is, what is my identity outside of the role I possess? You have somehow attached your identity to the business you have. And now the functions that you follow through, you are the number one dentist in the chair, right? Like you are the number one physician in the office. You are whatever it is. You are in your CPA firm. You are the person who has all knowledge. And I think that we do that as entrepreneurs because we don't know what other value we possess. Can I tell you that your value increases? And I'm not value intrinsically like as a human, but your value from a sale or an excitable position increases if you're not the sum of all wisdom, if you're not the person doing everything, right? Like you would be better off in a position of exiting your succession, diminishing your role and actually employing people to do greater things, right? So you have to use accountability charts. You have to use win meetings. You have to use these things that hold people accountable, but then it does come down to delegation, right? And so I will say this, that a person that is going to move in succession is only going to move into succession because there is a successor. Succession requires a successor. And if you do not determine who that successor will be, someone else will be or your business or the opportunity will die, okay? Number two, but I want to give you a quote that I've used so much in my life and that is an investor doesn't buy talent and investor buys systems and investor buys systems. The second thing I want you to understand is you have to identify what I call your brick. And let me just build kind of a concept for a second. The brick is the core KPI in the business. If you've ever heard me teach the empire operating system, I constantly talk about this concept of the brick. And I know that there's other systems out there that teach you to measure your rocks and there's boulders and there's all these different things. The brick is not that. The brick is not just a system of targets or goals or KPIs. The brick is the fundamental thing that if you put emphasis on it changes everything in the business. I give the illustration of Footlocker. Footlocker in their early days of growth, they had a kind of a hiccup and they decided that it was it about selling more or Jordans or Reebok pumps or whatever it was. It was that the one thing that drove more sales or activity was measuring feet. You've all seen it. You've got the metal trays that sit in Footlocker. You've put your feet in them and they would ask you, let me measure your foot. What they realized is that every time they measured a foot, 78% of the time it created a sale. So what they said was, let's focus on measuring feet. The manager's success was measured by how many feet they measured every day versus their top line revenue. Because what they knew is if they could get people to measure their feet, then they could deliver a product that they wanted. They would sell shoes 78% of the time. Their brick in Footlocker that drove all activity was measuring feet. Now, there are so many things that you could take down that path, but I'll just give you one example of a business that I currently have. And that's Coffee. We have a coffee company called Because Coffee. That's the Roastery and we have retail shops called Myth and Legend all over the Southeast. The one brick that we measure every day is what sets us apart. We serve what would be known as like an A grade coffee or a specialty roast coffee, which is the top 2% of the world's coffee. However, what I know is that if someone comes to our shop and they just buy another latte or they buy a baked good or they buy something that isn't uniquely us, then they're never going to actually be tied into the greater purpose and whole of the actual coffee brand. So what we do is we give out hot cups of coffee and explain what the difference is. This is what you're tasting. This is what the difference is. This is what elevates this coffee over every other coffee you've ever tried. This is why this is the top 2% of the world's coffee. And when they understand that and they now associate the value of my brand, the value of the experience to the quality that is now in that cup, which is not going to be experienced in many other coffee shops, all of a sudden they attach to that brand. So our brick that we measure is hot cups of coffee. The brick is something that you measure on a daily basis that drives everything. It usually is before the sale. So you have to understand in maximizing your business, what is the one dial, the one dial that changes everything. And I'll tell you that in all of my businesses, there's one dial that I know if I could focus in on that, it changed everything. Many of you know me from the Aspire tour. That's the world's largest business tour. We go from city to city every month. We're still month to month going around the nation. And the one dial, the one focal point on everything we focus on on Aspire is not ticket sales. It's not celebrities. It's not what's actually sold at the event. What the actual driving number is, is show rate. How many people actually show up? They bought a ticket for $40, $50, and they actually came and sat in the seat. We can't make impact on those people unless they show up. The one focal point, the brick of our company at the Aspire tour is show rate. So what we hyper focus on is how many people bought, yes, but more than that, how many people actually showed up. We put as much emphasis on that period of time between purchase to show up as we do on actually getting the ticket purchased. Does that make sense? So that's our brick because I know that the more people that come in, think about it, our programs are all built off of people that come in. The more people that actually show up, the higher show rate, the more success I can experience. So our brick there is the show rate. So what is your core KPI? Key performance indicator. And there's one, I guarantee it, after helping and coaching over 3,000 businesses, there's always been one that if you turn that dial, it changes everything into business. So that's number two. Number three is buyers pay for consistency, not chaos. Buyers pay for consistency, not chaos. So you have to run your business. Listen to me, run your business as if the buyer is watching. When you get into viability, you typically do not think about it in third party. It's this idea and so many philosophers teach about this concept of if you want to change something about yourself, remove yourself out of the equation, look at yourself from a third party perspective, and then actually diagnose the changes you would make in your life to create the right response. So it removes the emotion out of it. The same thing goes in your business. You're in your business today and you're like, man, did I sell, did I deliver, are the customers happy? And you feel these emotions of business, you have to remove yourself out and say, what would the buyer that wants to buy my business, private equity firm, strategic, whoever it is that wants to potentially buy your business, what would they think? Another dentist that wants to buy your dental practice, another physician that wants to buy your physician practice, another lawyer, right? Like whatever it is, what would they think about how I'm operating the business today? Would it give them security? Would give them fear? Would it give them insight into how I do it? Do I have a superior way of thinking? Do I have IP or something that separates me? So it's vital that you start thinking about running your businesses if the buyer is watching. I get into this mindset where I actually, as I'm thinking about, for instance, I have two businesses for sale right now, I probably will transact one in the next 30 to 60 days. And it's outside of my core group of businesses, but it's an ancillary business that I have. And when I enter the buying process, every week I have a meeting specific to that company. And in my meeting notes at the very top of it, I have a phrase that says, run this like the buyer is watching. Because in this last year of preparing this company for exiting, I don't want to just think about what profit it's giving me, what margins it has. Are we losing customers gaining customers? I want to think about, am I running this as if the buyer was watching? Okay. All right. That's point number three. I hope you're still tracking with me point number four, strategic exits are always more advantageous when you don't have to exit. The greatest leverage that you can, that you can have in your business is not necessarily needing to sell. I put my businesses up for sale when I don't have to sell them, not when they're losing money, when they're making money, not when they're waning, but when they're gaining. Does that make sense? And so you don't need to sell, you need leverage, right? If you don't need to sell, you have leverage, right? And so, when you're thinking about going down the succession path, you want to exit like a king, right? Number four, make sure you don't have to exit, make sure that you don't need to exit. Now, this goes back to my first point and that is, is if you can replace you in the business, then you don't necessarily need to exit, right? Like if the business is running without you, then you don't have to exit, it just could live on a perpetuity, it could just feed cash flow to your family, whatever it is. And so, making sure that your exit is strategic versus forced. And so, my very first exit, I talk about a lot, I needed capital. And because I needed capital, not because I wanted capital, it wasn't that I wanted capital for growth, I needed capital because I took on a contract that I couldn't fulfill unless I had the capital. Because I needed the capital, I went into it quickly and I had to do it and then somebody took advantage of me. Do not need to exit, want to exit, does that make sense? And then last piece here is this. The king doesn't just walk out on his kingdom, right? He chooses when and how he's going to walk out. In your business, yes, make yourself replaceable. That doesn't mean that you're not significant. You can still be significant. You still can turn the dial by being there, but replace yourself, right? But more than that, choose the time and place when you're going to exit and create the right story. When I've exited a majority of my companies, the ones that went best was the one that I had to plan. Now, it doesn't always go according to plan. Succession planning oftentimes is having a plan that never actually gets executed, right? It never actually goes the way it's supposed to. This company that I'm potentially selling in the next month or two, I had been planning an exit, but the person that came into my life was so far outside of where I thought I was going to exit. I thought I was going to sell it to a private equity firm that was going to take this company for its data and the value of its data. There was a strategic that came into my life that was clear alignment, but because I had already built the succession plan, my mind was already there. I already knew its capability. I already knew its value. I knew how I was going to exit. I knew the storyline of where I was going to go. I've built this company. I was the face of this company. As I exit out of it, as I move out of it, now I have to have a storyline. Well, the storyline in my mind was already built. I already knew what I was going to do. I already knew the ethos in which I was going to do it. When this person entered into my life, it was like, oh, wait a minute. You're a piece of the puzzle. Do you have interest in the puzzle or the greater opportunity? This person very much agreed. It's a really, really important piece, right? I gave you five points on exiting or five points on maximizing your business value in the exit. The last teaching point would be a PS. That is, is that exits without a next. Let me just put next in quotations. What happens next? Lead to depression or distraction. In succession planning, I gave you the five steps into moving towards succession or potential exit. Then you needed to think about you. What is going to be your next? Your next might be retirement. Your next might be traveling the world and doing everything that you ever dreamed of doing. I will tell you that being in a position where I exited a company without the next in mind led to some serious depression, some serious wandering, some serious questioning to the point where it threw me off kilter because my identity was so wrapped up in my business and because I was putting in 60, 70, 80 hours a week and I was fully immersed in it. Then all of a sudden I go to 10 hours a week worth of work that was actually needed. Then you start creating work that's not necessary, which then entrepreneurs who create work that is unnecessary, that usually leads to messes. I started creating messes in my other business. I was trying to find significance. I was trying to find relevance. I was trying to find purpose. It wasn't until about a year or two later that I really walked deeply into my purpose, which is impact others. Then I found the equilibrium of like, oh, there's fulfillment over here and helping other people. I can find just as much fulfillment in helping someone else get to their destination as me searching and striving and pushing to get to my own destination. I will just say kind of as the last PS, make sure you have your next. In succession planning, let's say you're 40 years old and you're like, well, I'm 25, 30 years away from exiting. You still should have the plan. The plan will actually create the right pathway for the right strategic business growth. Having a succession plan gives you a North Star. It gives you an end date. It gives you an end piece that now allows you to make the right choices along the way. It might be 20 years from your exit. However, if you create the plan, it builds the business the right way. Then as you start to near that process, it allows you to open up your mind to what is my next? What else would I do if I wasn't sitting in this seat? If I wasn't doing what I'm currently doing, what would that look like? Now be very careful. If you still have 20 years to your exit, don't take your eye off the ball right now. Don't start thinking about what would I do if I didn't actually have to do this. First of all, give yourself a runway so that you don't have to do that. Then allow your brain to start thinking deeper and deeper about what purpose is. That's how you exit like a king. That's how you maximize your business. I hope that helped today. Eddie, this topic is awesome. I have a couple of questions. If you stripped everything back, I think at the end of the day, I want to be heard or understood. Is the answer the same for everyone? Is it different for everyone? You mentioned things like retirement, travel. Is travel the answer? Or is it they want to experience something? So they're still searching. For you, it was philanthropy. Is that right for everyone? The word you mentioned was fulfillment. So I don't know. What are your thoughts on? I think that fulfillment is the true North Star that we're all searching for. I just think that based on our human design, fulfillment comes in different types. Your fulfillment might come through creating and being heard and seen. Fulfillment for me wasn't that. I had no desire. It's ironic because I stand on a stage every month with thousands of people, but there's never been a desire inside of me to stand on a stage. I get no fulfillment out of it. The only fulfillment I get out of it is if someone takes action in their life and then I feel like I've made some impact that's greater than myself. And so the same thing goes inside of my nonprofit. So one phrase that I wrote when I was really, and it was after the exit because I was going through a period of depression. I really, I lost my identity. I didn't know what to do. I was struggling. By the way, it was 2019 where I had all the big exits. And so 2020, I'm sitting there in COVID and I'm limited on what I can do. So I'm traveling around the world and I'd hop on a plane and be me and two doctors. And they would ask me, like, are you in the medical field? I'd say, no. And they're like, what are you doing? It's like, I'm just helping and serving. It's like, because I was stuck. You know, and I was on a plane. I was flying back from Columbia. And I wrote this phrase and it's a phrase I've went back to a lot of time. And I said, I built my company to exit. I did the succession part right, but I missed the next piece, which and then I wrote, I build the exit, I build exit. And I was like, I know I did that, right? Because I had the empire operating system. I kind of had all the succession planning, like we exited well, we made lots of money. And then I thought, but I missed the piece. And then I was like, what actually gives me fulfillment? Like what is where? And I was doing a lot of philanthropic stuff and we built some orphanages. And I was like, man, what I really love is that. And I said, I know for me, when I serve is when I feel fulfillment. I when I'm serving someone in some capacity, because that's the impact I want on them. I don't want to lead or rule, I want to serve. And sometimes you have to lead, you have to rule, but in the end, it's like service for me feels like the right impact I want. So I wrote build to exit and exit to serve. And that has become everything to me. And I don't think I've actually ever said that to anyone out loud before, because that's been so it's almost like holy to me. It's like this thing that just is so much a part of who I am. Because building to exit isn't really the checkbox. It's not the fulfillment I feel. It's building to exit that allows me a greater capacity to go serve more. And so then it's like an exit to serve. So like, so the more I build to exit, and the more I exit to serve, then the more serve becomes exponential. And so that's why I went from selling, you know, 70 companies now sold over 120 companies, because it's a motto for me. It's like build to exit, exit to serve, build to exit, exit to serve. And it's like, and it gives me the full, the piece of fulfillment that I have. So I actually go all the way back to the beginning, start building companies again, and feel fulfillment when it's not my true desire. I don't care if I build a company or not. But because it's tied to exit to serve, all of a sudden it makes this, you know, piece back here. So I think it's to your point, the one, you know, really big suggestion I would have for people is to find what gives them fulfillment. You know, and I don't think I can articulate that to anyone, you know, in a way that gives them the answer. The answer is within the answer is not without. And I think to you, it's like, it's you, you distill you distill you distill you distill, and then it's like, but what does give me fulfillment? What is that that that quenches the inner fire of my soul? You know, and it's like, when, when you feel it, you know it, you know, it's like, because all of us have this, I think there's two, there's two things. And I've heard this said so many times, there's two things on the human experience. Number one, we have a fire, and that fire is a burning desire to do something. Everyone has it. Sometimes it's a little flicker and you got to fan it. And if you fan it, it'll grow. And oftentimes, like to our younger employees, that's all I'm trying to do is just fan it a little bit. Just like, what is it? Where do you want to go? What gets you excited? You know, you fan that flame. But then I think on the other side of the human experience, there's a hole. And it's like, there's a fire and there's a hole. And the fire is like this inner desire and push and drive. And then the other side, there's a hole. And it's like, and I'm missing something, something has to fill it. And so there's a deep yearning and needing, right? Like, I, because I'm, I'm very faith based in my theology, like, I would say that hole is actually God, because God is love. And I think love is actually true fulfillment. And I think that how we experience love is actually where we get the different types of fulfillment. Like, I think I actually feel love through service. And, and so I think that, that hole that's actually filled is God, you know, the, the, the kind of the essence of who God is, it's love. And I think my experience of love is typically tied to that. And so it's like, I always tell people that there's two things you have to figure out in life. And really only two, because if you figure out these two things, it's like, then everything begins to illuminate. It's like, number one, what is the fire? And number two, what fills the hole? It's like, if you could figure those two things out in, in life, it's like your life becomes so much more holistic. And the experience is so much more important, but also impactful. Oftentimes, we confuse the hole in the fire. Sometimes it's the hole that we're trying to fill that we mistake is the fire, the passion. Oftentimes, when I direct my passion towards a certain people group, it illuminates the hole that's actually there. For instance, you know, like I've told the story of my brother Dakota, and it's like, why am I so passionate about helping orphans? And it's like, because I had a brother who went through a catastrophic situation, he was looked down upon. He didn't have representation, you know? And so put this fire inside of me, but it also is a hole. It's like this, this missing piece, you know, I have. And so like, so it's like, sometimes they're kind of together too, you know, it's like, I think our, our life and human experience, that whole that, you know, it's like, you might want to be a better father because of something that you've experienced in your life, you know, it's like, that might, but, but it also then drives and fans the flame. You know, exiting is not about an accomplishment, achievement or a checkbox. Exiting is about a journey. And if you start thinking about your business or your, you know, your profession or whatever you do, right? As a, an end goal and end result, this gets me too. But it's actually just, it's just layering of the journey. Then if you can go back and start really, you know, seeking like, what is the fire? What's the hole? Right? Like what, what drives me and what am I missing? And it's like, if you kind of get those two right, it's like an overarching roadmap to the layering that's beneath it, you know, if you put a business in the hole, like you're going to be dissatisfied. That's what I did. Cause then I sold it, now it's gone. Now I'm depressed because there's something missing, right? If you put, and I know that this is a tough one, if you put your children in the hole, it's like all of a sudden it's like, if the, if your children are all, you have meaning, all of a sudden it's like, and then they move out and then they go get married and then they go do their own thing. It's like, you find so many people that are lost, empty nesters that struggle with life because the children were the meaning that it's the same thing. It's like, you can't put those pieces of layers into the, into the wrong positions. So you get the fire and you get the whole, you get the, you know, kind of the, what I'm missing and what I'm passionate about, right? Then you, it's easier to architect this journey and succession planning because then it's like, all these pieces are easier. If you go back, it's like point number one is like, replace yourself. You know, it's like, well, if all of a sudden you being the dentist in the chair, isn't the meaning. It's like, well, yeah, my meaning is something greater. So it's easier for me to put somebody in, right? Like it's easier to put focus on things that don't have emotional baggage to them. And so, you know, I feel like the greater meaning, the PS of all of this, the five points of the tactical things you got to go back and do, the PS is really the guiding light along the pathway. In my experience and looking around and going through life and what I've seen and observed, I think most people are, that journey you just laid out is holistic or from beginning to end. I think most people are focused on paying the next bill and that's sort of where their journey is. Right. And then it's like, repeat, repeat, repeat, repeat. It's a rinse and repeat life. And that's what happens and people get into these ruts. It's like, I feel like life to many people is like getting on an expressway. I got to take a 10 hour drive and you get there 10 hours later. And if you said, how much consciously do I remember about that drive? And you realize, like, wait a minute, I was an autopilot. I didn't take in anything. I had a podcast playing in the background or I took phone calls or I talked to whoever's in the car with me. And it's like, you realize, like, wait a minute, I didn't focus on the drive at all. That's life. It's like, we literally just going through and we're allowing the stimuli of whatever's in the moment to create the experience. And so the drive wasn't the drive wasn't the miles they were putting on the car. It was the conversation you had with your spouse or it was the phone call you took or it was the podcast you were listening to or the book on tape. It's an audible book on tape. That's all. And but it's like you, you, Elvis and the experiences are like those, you know, pieces that are inserted a long way. If you're not careful, life will be about those pieces that are just inserted that you're not controlling. And it's like, and you have to get above it. That's where the observer becomes such an important part of this experience is because if you don't rise above and go, but what do I want my life to count for? What do I want my life to be? What actually gives me fulfillment, satisfaction, peace, love? Like, what actually makes me feel loved? Like what, what is it that I want to leave on this world? You know, good or bad, one of the conversations I've had with all three of my boys is to try to stoke that. And it may be a little intense, especially when I'm talking to them at four or five like this, but I've asked my boys, each one of them, what impact do you want to make on the world? What are you going to do to make the world a better place? What are you going to do to contribute something to society that no one else contributed? And, you know, I've, I've actually been criticized for doing that because it's like, you know, now you're putting this undue weight on their shoulders and it's like, well, I'm not trying to create a weight. What I'm trying to do is create the observer. I'm trying to create the weight. My life can actually have this, this value that lasts beyond the years that I, you know, walk on this planet. It actually can create lasting greater exponential value. And I want to, I want my life to contribute to that, you know, I don't feel responsible to that, but I want to contribute if it's possible. And so it's like, I've had those conversations with my boys because that's what I want, you know, and I know that that's the essence of the fire in the hole, you know, it's like it all kind of culminates right there. Anything you want to challenge our listener with or even if it's just a thought, a leap, a little. The challenge that I would have for the listener, the viewer is this, if you already know what that is, put it in comments, send it to me in direct message on social. There's something about speaking it. There's something about adhering to it that, that then creates the feeling or the, the experience of it. I want to know what it is. Like, I just told you what mine is. I want to know what yours is. Let me hear it back. Like, tell me in comments, whatever medium you're taking this in on. But I answer a lot of my DMs. So hit me, hit me up on social Eddie Wilson official. And I want to know what it is. I want to know what the fire is. I want to know what is your driving and I want to know what fills that hole, that void inside of your soul. Thanks so much for being a part of the podcast and for listening today. Love to connect with you further and you can connect with me on social media at Eddie Wilson official on any of the social media channels.