How To Set Your Company Up For An Exit
Michelle Seiler Tucker
The Inventive Journey Podcast for Entrepreneurs
How To Set Your Company Up For An Exit
The Inventive Journey
Starting and growing a business is a journey. On The Inventive Journey, your host, Devin Miller walks with startups along their different journeys startups take to success (or failure). You also get to hear from featured guests, such as venture firms and angel investors, that provide insight on the paths to a successful inventive journey.
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the best way to get the highest valuation for your business and sell your business for maximum value is proprietary the 4p is proprietary this is the number one value driver so this can take you from a 5 multiple to an 8 multiple to 10 multiples to 15 multiple this is all proprietary so why am i saying you should start with this because if you get this wrong then you could practically be out of business [Music] hey everyone this is devin miller here with another episode of the inventive journey i'm your host devin miller the serial entrepreneur that's grown several startups in the seven and eight figure businesses as well as the founder and ceo of miller ip law where we focus on helping startups and small businesses with their patents and trademarks if you ever need help with any of yours give us reach out to us and go to strategymeeting.com and grab some time with us to chat now today we have another great expert episode and every once a week we have a great expert on shares a lot of different information and to this week is no exception so we have michelle seiler tucker and uh we're she's going to be talking a little bit about uh generally about mnas and or for those of you that own m a's mergers and acquisitions and we'll talk a little bit of that how to be a bit of a sustainable company how to set up for an exit kind of what things you should or think about when you're going to sell different types of buyers how to get top dollar and whatever else that might come up in the meantime so i'm sure we'll have a great our conversation with that welcome on the podcast michelle thank you thanks for having me devin absolutely excited to have you here so before we jump into the topic of expertise maybe just give us kind of the listeners or the audience you know one or two minutes is kind of overview as to why you're an expert and why they should uh why they should trust and listen to you i'm not an expert don't listen to me don't listen to anything i have to say that's how i feel sometimes i'm like i've been doing this for a while but i don't really feel i don't know if you ever feel like you're an expert well you know what i think it's it's all about learning right you know when you think you know it all this is when you'll figure out you don't very quickly but okay so a little bit about me um i've always been in entrepreneurship i've always owned different businesses i did get caught and stuck in working for corporate america for a short period of time xerox actually recruited me um from their competitor so i did work at xerox and within six months my nickname became the closer because every time they can close something like well call michelle she'll close it she closes anything it's kind of like give it to mikey he'll either he eats anything so our nickname became the closer and then right away um a supervisor came to me and she said michelle there's a regional vice president position opening up over 100 salespeople she said you'll probably never get it because you've only been here for six months the xerox policy is you have to be here two years before they promote and pleasure you know there's a bunch of other people interviewing for it and i'm like well why and she goes it's gonna be a three-month grueling process and i said well why would i ever waste three months of my time for something i'm never gonna get and she says because of the experience she said you'll learn so much going through this process than you know anything else and i said okay well i'll do it and she's right it was a three-month grueling process you know we had to meet with all the high-level executives do a q a we had to do a q a with them asking them all these questions about their problems and you know what how to solve their problems and come up with solutions and then do a presentation and demonstrations anyway i ended up getting it even though i was told i would never get it so i guess i truly am the closer and um you know then i realized very quickly i hated it i did all this work and newton finally landed it like the odds and i hate it yeah i hate it and it's funny because i hated it plus all my friends were mad at me because i beat them out of the position but what i didn't like about it is you know i always say i always say that business owners if you got a great sales person if you have the closer on your team don't promote them keep them the closer you know because not everybody's good you know a lot of salespeople aren't really good sales people so you want to be careful about that but anyway the reason i hate it is because corporate america you can't really get anything done you're having meetings to schedule more meetings to have follow-up meetings and you really can't solve a problem so it was just too much red tape for me i like to get things done i like to say okay there's your problem devin here's our solution here's what we're going to do we're going to fix this within 30 to 60 days we've got results you know and so i ended up leaving xerox and went in the franchise house franchise consulting franchise development and was partners you know with a few different franchisors and then i kept finding myself saying no all the time no no no and i'm a yes person so you know i always think for the law of the universe law of attraction you need to be yes yes yes right buyers kept asking me do you have existing businesses i don't want to buy a franchise and i kept saying no no no and all of a sudden i'm like yes no i don't but yes i will i'll figure it out i will get you that i will figure it out and that's how i started my mergers and acquisitions firm out of pure necessity to say yes and that was 20 something years ago a thousand transactions ago we've done over 2 000 transactions we've done thousands of valuations i learned very quickly that what steve forbes says it's true that eight out of ten businesses will not sell eight out of ten eighty percent so i'm like oh my gosh if i don't fix them i'm gonna storm to death so that's when i really started fixing businesses growing businesses putting them on a build to sell plan so that they could sell for their desired price tag because like i said 80 don't sell and you know on average get our clients a 20 40 percent higher selling price close 90 i closed 98 i can't say my agents do but i close 98 of all offers i write and um that's my story so i've written three books and my newest book is exit rich which is right behind me in case you forget the title case you didn't catch it no that's awesome and i think that was a great intro now so now i'm even more excited to talk a little bit about mna and how to set things up and how to do it so maybe just diving right into that and appreciate absolutely the intro you know if you were to say so a lot of the audience is startups and small businesses and so one of the questions that i think is maybe a misconception maybe you'll tell me it's a good conception is are startup small businesses should they be thinking about mergers or acquisitions setting up to sell or is that something that you should think about down the road when you're a big company and you're you know you have lots of employees and huge reoccurring revenue kind of give us an insight as to when you should start thinking about that or how you should start thinking about it so i'm going to tell you you should be you should start thinking about that from the beginning because the number one reason that businesses don't sell when they end up in the 80 percent is because they don't think about selling until a catastrophic event has occurred whether that's internal or external internal being health issues partner dispute divorce death you know external covet so you really you don't want to sell when you're in the middle of chaos because you're not going to be able to maximize value so the best time to really think about selling your business is from the beginning of starting or buying your business and really have formulate what i call the gps exit model and i talk about that in exit rich of how to do that from the beginning because so many business owners like i said don't think about it and i had a sweet little lady called me a few months ago and she said oh i really need you to help me i'm like what happened and she said well my husband dropped that up from a heart attack and left me with a mountain of debt and she's probably in her 70s and she said i need you to sell his business she goes i heard about you and so i started asking her questions about okay well tell me about employees processes etc and he had a contractor's business a construction business he had no employees everything was in his head he had nothing written down so everything all the data was in his head he dies the business dies it was nothing to sell and he left it with a mountain of debt so business owners really got to think about long-term setting your family up for success not for failure and i call this a gps exit model if you want me to walk you through it real quick absolutely let's hear it so number one all right so when you want to drive somewhere devin what do you do you pull out your phone you go to google maps and you plug in your i'll i'll give it one time when i want to drive somewhere i asked my wife where we're going and then i put it in the gps after i asked her where we're going then i then i pull out the phone and i i'll either google it the name of the company or the name of where we're going or if i have the address and i'll i'll put it in google that's the best answer i've ever gotten ask your wife smart man that's so anyway you plug in your wife your wife plugs in her destination she plugs in where she wants to go otherwise as she just relies upon you she's going to be driving around in circles same thing or she'll end up in a completely different destination we might have a great time but we won't get where we're wanting to go so and that's what business owners do they don't plan to fail they fail the plan so they don't have a destination in mind so they're just driving around in circles driving up and down the financial heels the hills to end up nowhere to end up ex exiting poor instead of accident rich and um so first things first you got to figure out your destination your end game and i always tell my clients pick a number and they always get hung up on the number and they're like oh i don't know i'm like just pick a number for god's sakes it's like the lottery pick a number you know so let's say you want to sell for 20 million dollars great there's a start you might hit it you might not you know but at least you have a starting point you have an end game you have a desired sales price then what's the destination need to know the model needs to know not the destination what's that gps exit model need to know now it needs to know where you're starting from what's your location what's your valuation do you know that most business owners never get a business evaluation we go to the doctors once a year to make sure our heart's still ticking and we're still kicking we drive our car to the shop but we don't get an annual business valuation checkup that's financial suicide because there are events that increase valuations and invest decreased valuations so you need to know what your business is worth on an annual basis do you know what your business is worth right now devin um depends on which business so um you need to know what every business is worth not just it depends on which business that is true i do have a pretty good valuation on a few of them but i'll probably keep that one off there but uh yeah i i i don't have to say the number i was just wondering if you actually know what it's worth because most business owners don't know so let's say you want to sell for 20 million dollars and you're currently worth five million dollars the next the next step in the gps exit models know your time frame let's say you want to do this in 10 years great the next step the fourth step is know who your buyers are going to be you notice i say buyers not buyer and the reason buyers is because sellers come to me all the time and say michelle i don't need you to put on the market i have the buyer i just need to represent me and i'm like i'm not going to do that because i can pretty much guarantee you that buyer is never going to come to fruition the deal is going to fall apart somewhere and you put all your eggs in this one buyer's basket you have no backup buyers plus if we're trying to maximize price and get you the highest value how can i do that with one buyer have them compete against themselves you know hey if you can get buyer to bid against themselves you're doing great but no i definitely agree so you didn't accidentally one question i'll have just to dive in and not to derail the five and we'll definitely get back to it one of the questions i've had posed from now kind of figuring out your valuation kind of asked what is evaluation some of the valuations are out quote-unquote easier at least that's what they say if it's a product business or you have a recurring revenue or you can see this is how much inventory we have this is our sales trajectory what i hear a lot of times is on service-based businesses to where a lot of times is built up around an individual right so if you take as an example i'll take the law firm that you know miller ip law is an example but there are a lot of others out there is you have one or more individuals or the quote unquote rain makers that have the connections that have the people they've had long-term relationships with they're good at selling and if that person exits whether it's retired leave the business they die catastrophic whatever then it's hard to evaluate the business because a lot of those relationships you're not sure if they will maintain so any thoughts as you're getting into how to evaluate a business on a service side business it's kind of that setup so remember the story i just told you about the woman who's whose husband died from a heart attack there's no value because his business isn't worth anything at all but i'll jump into value in just a second because i want to finish death no fair enough i'm going to control the narrative not you so anyway there's five types of buyers so your listeners really need to understand there's five types of buyers so if you're trying to sell a 20 million dollar company here's who your buyers are not going to be it's not going to be a a first-time buyer if we get and 90 of buyers are first-time buyers because they buy small businesses it's not gonna be a turnaround specialist because they buy distressed assets so it's probably gonna be a peg which is a private equity group and we work with about 3000 of them so it's probably gonna be a peg but they buy based upon platforms and add-ons or it's going to be a strategic slash competitor now i'm going to get into valuations but i'm going to do it when i take you through the six p's because it will make more sense does that make sense and then i'm going to tie how important it is to have a good trademark attorney and a patent attorney but anyway so strategists and competitors will pay the most for a business typically they'll pay the highest multiple because they're buying synergies so what you really have to do is identify those synergies in the business and that drives value and then you have sophisticated and serial entrepreneur and they are industry agnostic they chase ebitda only for insurance taxes depreciation amortization all right so then you need to know well gosh if i want to sell my business for 20 million dollars i know this all sounds simple but it's harder than you think well i'm going to sell my business for 20 million where's my top line have to be gross profit margin most most importantly where does the earnings they either have to be earning preferential taxes depreciation amortization to sell for 20 million you need to ebitda between 3 million and 5 million depending upon your synergies then you need to know well what's the characteristics what's the synergies what are these buyers looking for that they're willing to pay top dollar for and build your business and meet their specific criteria right you want to do all that from the beginning of starting or buying a business because even if you decide not to sell at least you'll have sustainable businesses scalable and profitable because at some point you will want to sell it because i can guarantee you look it used to be that business was handed down from generation generation generation now the kids don't want your business they don't they want to go out there and create their own legacy they want to create their own masterpiece they want to make their own footprints on the world you know they don't want so less than 10 percent businesses are actually um are actually passed on from generation generation less than 10 of all businesses are through an esop which is what you sell to your employees so it's either a percentage of the selling percentages of the business or selling 100 of the business um the last step is the why you got you got to have a powerful why because it was easy to sell a business for 20 million dollars even though devin you've probably done it 20 times but now it's not easy and most people have a hard time doing it so your why has to be power enough to keep you in the game and keep you motivated so if you want we can jump into six speeds and start talking about evaluation absolutely i'm enjoying the conversation i'm learning a ton so let's dive into the six p's so there's six you know there's there's there's six different methods that we use for valuation and um the asset approach discounted cash flow market approach sold comps um few future what i tell future earnings and most importantly to six p's because it's all about the synergies so meaning number one you said well michelle how do you sell service business how do you evaluate a service business well number one the first fee is people so this construction company didn't have any people he had subcontractors he had all 1099s okay so number one is people you don't build a business you build people and people build the business so entrepreneurs have to stop trying to do everything themselves they get a fi they got to focus on their strengths and how are their weaknesses you need to have the right people in the right seat and ask the who question who opens the door who has marketing who underscore customer service who handles dealing with devon and his legal stuff who who does matt who is transportation logistics environmental the clue devon is you should never be next to the who you have to create a business that can run without you so people is the most important thing so service business it's very tough got a dentist that came into us wants to sell this business been in business 45 years no other dentist has three dental hygienists and i said listen i can sell your business but you're gonna have to stay for two to three years he's like michelle i'm done i've worked 45 years i'm done i said well then you can just say goodbye to your business because it's not sellable when you leave the patient's leave same thing with the chiropractor's business we're selling and um when he came to me he's like michelle i have three doctors he said great no problem then i'd start setting up meetings and find out that employers are not going to stay the doctors are not staying they're leaving when he leaves so now he has zero doctors and he's like why haven't you sold by now i'm like i haven't sold by now because you haven't found more doctors you have to have doctors because he doesn't even live he lives in another state from the practice so service businesses are very very tough if you're a lawyer and you don't have other lawyers if you're a dentist you don't have other dentists if your chiropractor a medical doctor whatever it is you got to have a business and not a glorified job many business owners have built their job that they go to work to every day versus a business actually works for them no i think that's that's definitely and i always i like that and i can't remember where he picked up it's one that's out there a lot you should build a business that you can take a month off from and it would still continue on in other words it's not built so much around you that you take a month off and it falls apart and it kind of sounds like that's what you're here or mentioning as well is if you're wanting to sell the service based business you have to have those people that are able to run the business when you're not there able to continue on such that when you sell the business it can continue on without you being there is that a fair summary absolutely and they have to you have to have those professionals so if you're a lawyer devin i hope you have other attorneys i do so i've at least take that box if you're a plumber you need other plumbers you got to have that professional that mean to put you and plumber in the same sentence you got to make sure you have those professionals if you're in a professional type service business because otherwise it is i can sell it because i can you know i can do sometimes impossible but it's never will sell without that owner sticking around for a few years look i got another business that is a fabricator company they do fabrication and the owners told me they've been in business 40 years two partners they're in their 70s and they said honey we can fabricate anything anything you want we can fabricate i said okay where's the pp manual for that and they go what it's all in our head and they have four employees we've been trying to sell that business for a year and the problem is we could have sold it over and over and over again if the business wasn't so tied to the owners so people is number one you will never grow a business without people okay number two is product kevin so when i wrote my first book and i think this is very interesting when i wrote my first book sell your business from one it's fourth in 2013 and did the research and learned that i learned that 95 of all startups will go out of business the first one to five years is the most risky right we all know that that's common knowledge but when i wrote exit rich in 2019-2020 i did the exact same research and learned that the business landscape has flip-flopped before co-vet and most people don't know this only 30 percent of businesses will go out of business now only 30 percent of startups i'm sorry startups will go out of business now so your startups this is a great time for you to go out there and start these businesses however out of 27.6 million companies those businesses have been in business for 10 years or longer 70 of them will go out of business 7-0 so you see how it flip-flops it used to be you've been in business 10 years or longer you're goad and you're going to stay in business forever so now you you beg the question you probably leaned up why is the flip-flop because i'm curious because i always hear the ones you know startups for one to five years is the most risky most of them go out of business so what do you see what is the motivation or what caused that flip flop so here's a reason so you hear about the big the big public companies all the time in the media toys r us in business 75 years goes out of business kmart stein mark pierre one cadaver chocolate closing down 1500 locations gnc closing down 900 locations but you're not hearing about other private companies and these business owners are being forced to sell for opinions on a dollar close their business or file bankruptcy so why is that that why is that that's a bit that's a great question the number one reason for that is what i call aim business owners stop doing aim aim aim is always innovate and market always innovate and market business owners stop innovating toys arrested nothing different in 75 years blockbuster saw netflix all the writing on the wall did nothing set back fat and happy they had the opportunity to buy blockbuster they did nothing ended up out of business you have to innovate because consumers buying habits has changed the way millennials buy is not the way that gen x buys your next buy the way they buy is not the way that baby boomers buy you know millennials care more about the experience than anything else right so whoever makes the easiest for the consumer to purchase products and services is the company that's winning amazon is winning right now because they make it so easy to purchase their products and have it delivered to your house within two days i mean you can practically buy a horse on amazon and have a delivered i would be surprised if you could buy a horse my daughter's trying to have a 10 year old and she's trying so that's so that's why so that brings me to product product is your industry your service you know you have to ask yourself is your industry or product on the way up on the way out is that thriving or dying do you have an amazon and you're at the top of your game or do you have a blockbuster and you're about to go bust and many industries by the way the statistics are way before covet but many industries that were thriving before cobit are now dying and vice versa so if you're in a dying industry that doesn't mean you just go home and you know crawl under your bed and grow up into a fetal position that means that you gotta get creative and align yourself with an expert with a mentor and ask yourself really three transformational questions you know amazon did this back in the 90s amazon asks themselves what business are we in and every business owner should be doing this what business what business are we in and amazon said we're in a book selling business we sell books question number two amazon asks what do we do better than everybody else and they said we do fulfillment better than everybody else so the third question the most obvious question after that is what business should we be in and amazon business yeah and you know those three questions transformed them from a small book seller company to a multi-billion dollar worldwide conglomerate that they are today so every business owner should be asking them questions and you need to here's another p for you need to pivot so you have to pivot and you have to add concrete revenue streams one of the reasons that these businesses are going out of business is because they keep doing things the way they've always done them you're either growing or you're dying there's no in between and you can't be married to your original concept you got to grow from that you're going to innovate okay so let me ask one question on pivoting because and it comes up sometimes people get in the same i just need to stick with it a little bit longer and sometimes that's true hey you get too early it doesn't work out it's not because it won't work but you give up just short of this or the finish line and it's like three feet from gold like three feet from go exactly on the other hand you can also be saying you get so stuck on what you're doing that you never pivot and your business dies because you never actually take take where you opportunities in the market that do present themselves because you're so stuck on where you're at so any id any uh feedback is you how you decide to pivot or when you decide to pivot well i think you know most a lot of business owners don't pivot they stay stuck because when you're in your fog guess what it's foggy so you really need an outsider's perspective to help you see the warning signs and really help you figure out those three questions because those three questions are everything don't you think i mean if amazon would have stayed stuck amazon would be out of business today if they would have kept selling books they would have probably been out of business today so you really gotta gotta get unstuck and and the most important thing is trying to get out of the tactical mm-hmm and get into the transaction get out of the transactional and get into the transformational and a lot of times like i said you need an outsider's perspective to do that and that doesn't mean that you just stopped selling books amazon didn't stop selling books amazon's still sold books but amazon started adding all this other stuff so as a business owner you might still do what you do it's like me i was doing i was selling businesses but then i said i'm like oh my gosh what business am i in i'm in the book selling business what i i mean the business selling business what i do really well and i'm like i know business because i've owned a lot of different businesses and lots of different verticals so i need to start really fixing these businesses so what business should i be in and the business i'm in is really specializing in buying selling fixing and growing companies because i buy companies i flip them and i partner with business owners investing my money time energy and effort so you don't just necessarily give up something but you really should have multiple revenue streams you know that's the problem with like a lot of businesses right now while they're going out of business is because they have one profit center let's say restaurants non-profit center all their eggs are in that basket they have about two to three months of working cat one to three months of working capital and then they wonder why they go out of business you need to have multiple revenue streams and you need to have at least one year of working capital and we need to be smarter business owners in order to weather these kind of catastrophic events you know it's like me i was in new orleans when hurricane katrina happened and 95 of my clients literally went underwater literally and i'm like this taught me one big lesson never have all of my business in one state one city in state so now i got businesses in texas i have businesses you know in different states so to me that's you know you're always asking that question because you should always be growing does that make sense absolutely no i think that that definitely makes sense and resonates and so i think that that's that's a good and i and i like that the idea of you know when you're pivoting it shouldn't just because i mean you hear pivoting a lot in the in the business and it's a bit of a buzzword and it becomes oh we just need to do something different well don't just do just something different just for different saying but it needs to be hey what are we doing to i like kind of the innovating and coming up and and finding out your marketers and continuing to make sure it's got to be strategic you know it's like apple apple computers from steve jobs when steve jobs came back did they have phones back then no they had computers right yep yeah tablets they didn't have phones they didn't have ipads they didn't have the the smartphone they didn't have ipads and they have ipods they didn't have you know all that stuff eye music he came in and innovated you got to innovate and a lot of visionaries are pretty a lot of entrepreneurs are visionaries and they're typically pretty good about innovation but what happens is they get stuck in the day-to-day and then they're working in their business not working on their business and now they have no more creative energy definitely and that's an easy thing to get stuck into in the sense that you have a lot of day-to-day things and you get busy you get caught up and then you never step back and say what is the direction how are we going to continue to do and that's why one of the i think one of the worst industries my biased opinion is a legal industry which has been horrible about now i think they're up and comers i think there are people doing it and even see legalzoom that you know love them or hate them they came along and they did something innovative and different that is causing people to now have to shift and adjust and a lot of lawyers don't like them just because it makes them not be able to do their same thing the way they always did it because now they're having to figure out new ways to compete but i love the idea that you really should be innovating because if you're not doing it somebody else is going to and then it's going to it's going to make it so your business isn't successful anymore yep and the biggest way to innovate too the biggest way to innovate devon is ask your clients ask your clients business owners stop asking their clients business owners stop asking our clients what do you need what do you want how can i better serve you how can i make life easier for you how can i make doing business with you but with us easier for you you know that's what amazon did you got to start asking your clients what do you need what do you want because business has changed so dramatically even now so even more because of after covet you got to ask those questions right because clients needs have changed yep no definitely agree and absolutely we've had a great conversation i would love i would love to have probably another hour's worth of conversation then we would have an awesome time and listeners would probably say okay we've heard enough of mma so as we start to wrap up the podcast i do want to hit on one question i always ask the enemy each expert episode um which is if you're if talking to a startup in small business you're to give just one thing one thing that they could start to implement start taking away today that they could say hey there's a lot of things we covered a lot of things we chatted about and they can't you know don't get overwhelmed start on this one thing what would that one thing be well so that's you know number one you buy exit rich that's the one thing and you go through the whole book because we didn't even make it through the six p's we made it through two b's you know yeah but now they got a reason to buy the book so it worked out great well i'm going to answer that question with telling you about the fourth p because since you're an attorney and you specialize in patents and trademarks i think this is the most important because i was trying to answer your question i was answering questions about valuation so the best way to get the highest valuation for your business and sell your business for maximum value is proprietary the 4p is proprietary this is the number one value driver so this can take you from a five multiple to an eight multiple to ten multiple to fifteen multiple this is all proprietary so why am i saying you should start with this because if you get this wrong then you could practically be out of business so this is probably even before people okay so proprietary there's six pillars i'm gonna make it quick number one is branding you got a brand you know the more well-branded you are the more i can sell your company for as long as the brand is relevant in the mind of consumers nobody's paying any money for blockbuster the most valuable brand in the world is we've been talking about it i'll go with apple but i don't i'm worried i'm going to say the wrong one no you're right go with your first instinct apple is the biggest brand in the world most valuable brand 249 billion dollars that's not included in accounts receivables inventory assets real estate ebitda that's just a brand alone number two is trademarks here's where most business owners get this wrong and that's why i said if you're starting your business get this stuff right from the beginning trademarks trademarks are huge but most business owners will go go get a trademark in their state and then they never check the federal database and isn't it important for them to get a federal trademark devin absolutely i 100 agree on that one because if they've been in business for years and years and years i've seen this happen to business owners where they've been in business all of a sudden they receive assistant assist letter right and they have to stop using that company name now they'll hire an attorney they'll throw lots of money at it and most of the time they'll lose yep and then they have to start all over again and you have to re-brand you've been in business for multiple years you've put in a terrible customer base i don't know what you charge to get a federal trademark but my attorney charges me between 1500 to 2 000. so spend the 1500 or 2 000 get a federal trademark not just on your company name but your usp unique selling propositions anything that is important to you like exit rich i'm getting a trademark on the st six fees the st gps exit model your podcast we actually have a business we're selling that has like 12 different products and they all have federal trademarks and each product is is exclusive to like rouses and krogers and different grocery store chains so trademarks are huge patents are huge yeah if you want shark tank every single investor i mean i sound like a broken record every single investor asks every investor the same question you have a pattern on that you have a patent pending do you have a utility patent so patents are huge contracts are big too manufacturing contracts franchisor contracts distribution contracts any exclusive contracts the most valuable of all are your client contracts that have reoccurring revenue subscription models but here's a mistake to contracts and devin could probably help you all out with this absolutely most business owners forget they they don't have this let me tell you something i've never found a business owner that actually has this in their in in their contract we're selling a 70 million dollar company right now ebay has over 12 million dollars no 17 million 17 million dollars transferability clause that this contract is transferable upon a new entity because 99.9 percent of all cells are asset sales not stock sales and if the buyer refuses to do a stock sell and your clients won't sign a transfer to a consent to transfer then your deal can fall apart so crosstalkts.drives and have that transferability clause in your contracts from the beginning hmm no i love that and i think that's definitely makes sense and definitely i you you're speaking my own language i i like profession well that's why i wanted to answer your question because i'm telling you you got to do that stuff in the beginning if you don't do the stuff in the beginning not only will you lose money you could lose your business and then you're going to have a really hard time selling it databases are the other thing i wanted to mention real quick because facebook paid 19 billion dollars for whatsapp and whatsapp was making how much money i don't know if it was profitable was it never they were hemorrhaging hemorrhaging hemorrhaging hemorrhaging but they had a billion users buyers pay for synergies you know so celebrity endorsements are big um any type of econ we sell a lot of e-commerce businesses you know anytime you can get those top three spots on etsy wayfarer amazon any of that's huge radio radio endorsements with celebrity endorsements are huge because they can only endorse one vertical at a time otherwise they completely lose credibility so anyway proprietary there's six p's but proprietary isn't one you must start with even before you you hire people i love that and i i and you're talking about but even beyond just patents and trademarks so just thinking about what makes you unique what is proprietary and differentiating about you and your business yeah and then that's when you get into patents or trademarks and building around it but even starting with that what makes what is our unique selling proposition what's different what's proprietary about us that we can protect is definitely a great place to start well we have we have covered so many funding i would love to have it back on at some point just because we didn't exactly i think it'd be great to have you back on and we'll definitely have to lighten that back up but as we wrap up at least for today's episode we touched on a little bit you have the book if people are wanting to reach out they want to learn more they want to be a customer a client an investor a purchaser of your book a your next best friend any or all of the above what's the best way to reach out find out more and get in contact i have lots of business but i can use some friends so first things first they need to go to exitrichbook.com i just want to say a couple of things about exit ridge my book was endorsed by steve forbes which is huge kevin harrington original truck and shark tank wrote the forward sharon lecture's my co-author who wrote richard poured out of robert kiyosaki she's a financial literacy expert a cpa and the advisor to many different presidents so you can accurate rich comes out in june but you don't have to wait till june you can go to exitricebook.com now for 24.79 which is less than it is on amazon yay so 24.79 we will email you the digital download immediately plus we'll ship the hardcover to your doorstep for anybody who lives in the u.s outside us is more shipping of course and then we'll give you a lifetime membership into the exit rich book club where if you like what you're hearing here there's more video content me doing deep dives and different strategy plus documents documents to run your business documents to sell your business so we have example employee handbooks non-competes organizational charts sample letter of intents purchase agreements due diligence checklists closing docs all these documents if you went to an attorney like devin it would cost you over 30 000 to recreate all of these documents they're there for your review and download so for 24.79 you're getting the extra rich book plus all the documents plus a 30-day free membership and two club ceos which is an entrepreneurial mastermind where we ask those transformational questions so we can help business owners build a sustainable scalable and win a ready sellable business well that is definitely a great value great way to follow up find out the rest of the or the six ps and we'll have to have you back on so we can finish that six piece discussion i definitely encourage people to check it out and you said exitrichbook.com and um definitely a great way to connect well go ahead i was just gonna they could also text michelle to 888-526-5750 all my social media pops up follow me connect with me linkedin and uh my main website is soldertucker.com all right plenty of great ways to connect and definitely encourage people to connect up a lot of good information a lot of things to think about as you build as you start to build your business um to make sure that it's uh on a trajectory for assess in the short term and in the long term well thank you again michelle for coming on it's been fun it's been a pleasure now for all of you that are listeners if you have either your own expertise to share or your own journey to share we would love to have you on the podcast feel free to apply just go to inventiveguest.com and let us know and we'd love to hear from you also two more things as listeners one click subscribe and the podcast players so you know when all of our awesome episodes come out and two leave us a review so new people can find out about us last but not least if you ever need help with your patents trademarks or anything else just go to strategymeeting.com we're always here to help thank you again michelle it's been fun it's been a pleasure look forward to hopefully having you back on again in the future and in the meantime good luck with your journey thank you devon it was a pleasure thank you for having me