WEBVTT
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My name is Carrie Richardson.
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I work with Fox and Crow Group, and this is season one of the newly launched WIN.
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And today with me is David Reid, who is the author of Getting to Exit.
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David formed Epic Information Solutions in Winnipeg, Manitoba, my hometown, in 1995, and exited from that business in 2015 after selling in 2013.
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David, thank you so much for joining us today.
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It's really great to see you again.
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I think it's been, oh, eight or 10 years since the last time we had the chance to sit down in person.
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So tell me what's been going on since then.
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Spent the last 11 months writing this book, and that's been pretty busy, but really spent the last 10 years after exiting my business just before I turned 50, enjoying life, traveling the world, getting my kids launched, building a new cabin, doing things that I just couldn't do if I was still running the business.
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You sold your business before the age of 50.
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Why don't you share a little bit about what you were able to achieve with Epic before you started living the life that we all envy?
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In 1995, Windows 95 was coming out.
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We were living in a Unix world, doing Unix work, selling Unix machines and big iron at the time.
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Then Y2K hit, and then the Y2K fallout hit.
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And we evolved from what was a development company, specializing in ERP software to starting to do Windows and Windows Server and professional services.
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A few years later, this MSP thing came up where this idea of moving From non-recurring revenues to recurring revenues.
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We were right on the front end of that, and for many years we were the only ones in our marketplace offering that type of, service to our clients.
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We grew that business but continued to do our enterprise business at the same time.
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I was about 40 years old and sitting at the cabin and thinking and I came to the conclusion that, I wanted to sell my business by the time I was 50 and, wasn't thinking about exiting as much as just selling the business as a means to that end.
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And for enough money that I'd never have to work again.
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That was the objective, and to do it by the time I was 50 so I could do a bunch of things that I couldn't be doing while I was growing the business.
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And I figured out a number for that number, and then I figured out the gap, and I said, Holy moly, that's a big gap I gotta fill," right?
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And one of the first things I learned, I spent a lot of time learning, was exactly how to value my business.
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And so at the time, I really quickly understood that selling gear was not a great valuation return, that building a reoccurring revenue stream was going to be a much better return.
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And so I set out on the mission of doing that.
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I actually decided at the same time I was gonna sell to a strategic buyer, and I had picked the local telco in our market as being my ideal buyer because, well, we have the same market, same customers.
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We're a great add-on to phone and internet, right?
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So That's what I set out to do.
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And lo and behold, eight years later, we had been working at growing the business.
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We were about 110 people, and, and a probably good about 60% of our business or maybe a little bit more was MSP and the rest was enterprise solutions, which all fit really well with the local telco.
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And, I get word that IBM's closing their data center.
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We should build a data center.
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That'd be a great idea." But then it's like, wait a minute, that's not in my plan.
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That'd be another 10 years in the business.
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I'll be 55 or 60 before I get out of this business.
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That's not the plan.
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But maybe this is a great opportunity to go talk to the telco.
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So I went and because I had built a relationship with the telco CEO, I call him up, I go over there, and we have a meeting.
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I go,"Great opportunity.
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We should build a data center together." And he goes, funny you say that.
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We want to build a data center, but we don't partner very well." So I go,"Well, you buy us, and I'll build it for you." And he goes,"That's a great idea." Sure enough, we closed the business, and 10 months later, selling to that telco in eight years instead of 10 years was my plan.
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Show off.
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at the time it was still pretty early.
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That was 2013.
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That's pretty early in the MSP selling game, a lot of MSPs hadn't really transacted yet.
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And at the time, I think we sold for, just over 8X, for a business that was not 100% MSP.
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I think we did okay at the time.
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We actually did really good at the time.
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Those multipliers got better over time, but, it was great.
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And what I got back was exiting by the time I was 50 and having 10 years to do things with my family and personally that I just couldn't have done if I was still growing the business.
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I have so many questions.
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I think I was starting my business as you were exiting yours, walk me through how you built- your plan for exiting?
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At the time I didn't realize it, but I was actually building a framework.
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I was building a process that made sense in my head, but I hadn't really fully articulated it, which I now do in my book, and I call it a nine-step framework to an optimal exit.
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And step one really is about figuring out your why.
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Why do you wanna exit?
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Like, what's, after exiting your business?
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When the business is no longer there, when you're no longer going to work every day or thinking about it every day.
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Just because you don't go to work doesn't mean you don't think about it as a business owner, right?
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What are you gonna do with your time?
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And so answering that question first was really important because then it helped you do the next part, which is figuring out, so what do I need to be able to do that?
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And the need can be a bunch of different things, but the key parts of it are certainly money and when.
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Like, when would you need to exit to be able to do those whys?
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If your big why was to climb Mount Everest, maybe exiting at 65 is not a good idea.
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Maybe you need to do that sooner, right?
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If that's such a big thing on your list to do or whatever the case may be.
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Well, if you think about your own framework, your why was discovered at the cottage at 40.
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Yeah.
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Your exact why, what was it?
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It was really to be able to get time back to say,"Wow, I need...
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If I could get all this time back so that I could really invest in my family." I think business owners know when you are growing your business, you are, disproportionately thinking about your business and spending time on your business.
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And you're making lots and lots of sacrifices.
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You're making sacrifices for your health, you're making sacrifices with your spouse, you're making sacrifices with your kids.
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And I came to the realization that that couldn't go on forever, and if it went on too long, I might lose those things.
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And so I had decided that was what really important.
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My kids were still in, you know, grade school and high school, I said,"Boy, if I could get out by 50 or if I could really free myself up in my 50s, I'd really be there for when they're going to university, when they're launching their careers, when they're launching themselves into the world." That would be a very good time to be able to have that kind of time.
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And also a good time to make sure I correct my health and travel was, something that my wife and I had really started to enjoy and so we wanted to travel the world and see interesting places You can't take 60 days out of a working calendar to bugger off, you know.
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At least most people can't.
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I certainly couldn't.
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What's your next step?
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How much money do I need to never have to work again?
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And it's a hard calculation, by the way.
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It's a hard question to answer, but it's gonna be one of these thumb things.
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You're not gonna be exact, but you're going to guesstimate what it is and it sets a target for you and then you back calculate that into, so what do I need to sell the business for to get that number, given taxes, given debt, given all the other things that get, modified.
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That was your holy moly moment.
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So the third step is the way you're going to exit, and this, you know, a dozen different ways to exit and more so.
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But it could be everything from exiting through selling to employees or management or family, which would be a legacy play, because legacy's really important to you.
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Or it might be selling to a buyer like seller because you're trying to do a quick exit, or you might be doing a strategic buyer because you want to maximize your valuation.
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Every way has different constraints, and it has different attributes to it, and understanding which one is the one that you want to use, the way you want to exit, understanding that allows you to build the business the right way.
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What would you need to consider for a legacy exit, that you might not need to consider if you were going to exit to private equity?
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Legacy exit comes with cost, and that cost is evaluation.
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Generally, you're going to get a lower evaluation, and it's gonna take longer to get your money in the bank because typically management and employees, and family members for that fact, don't have the money to buy you out.
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Legacy really has a lot of tricks to it.
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Understanding how you're going to go from close to exit is a really important piece of that puzzle.
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You might get trapped in the business a lot longer than you think because it's really hard to let go when you still have half your money, not in your bank account yet.
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Or when your kids are asking you for help.
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Or kids are asking for help, or you're just telling them what to do because- The gap is so big in their experience between you and them, right?
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And when I was thinking about the way I would sell my business, I really thought about would my kids wanna take it over.
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And at the time they were like, you know, in their teens or younger.
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It's like, oh my God, by the time they take over I'll be like 70 years old.
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Forget it.
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I'm not hanging on that long, and the risk of them wanting to do it was pretty high.
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Maybe they don't even wanna do it.
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And so I decided o- I, I looked at all those legacy issues, and it's very romantic, right, to sell to your family or your employees, but, it's not necessarily a high, high profitable exercise.
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So what is step four?
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Step four is called, understanding your gap.
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So it's like, okay, now I know what I need to sell the business for.
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What could I sell it for today?
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Do you even understand how to value your business?
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And so when you think about where I am today, where I need to get to, and then the time, the how much time you wanna do that in, You can easily calculate what's your compound annual growth gonna be, average growth to be to achieve that.
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And boy, if it's like 25% growth year over year to get to the target, I don't think you have enough time.
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You're not gonna be able to do that, right?
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Unless you have some kind of magic wand.
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Understanding that gap really grounds you in understanding how big a challenge you have ahead of you to grow your business to the point where you can get the number that you need to get to.
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You mentioned you had a moment where you realized that you had to get from X to Y, and it was a significant amount.
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What are the steps that you, put in place so that you'd be able to achieve that in eight years-
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Well, number one was the peer groups.
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I was in peer groups at the time.
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That was by far the most valuable thing I ever did in my business, was being in peer groups, whether that was an industry-specific peer group or non-specific peer group.
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Both are good for different reasons.
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Every business owner should be in a peer group.
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You can shout them out.
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I know we met when I was interviewing for Vistage.
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What other peer groups have you participated in?
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Which other peer groups would you recommend?
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Yeah, so I was in Vistage at the beginning, or Tech in Canada, and I found that was really good as you're growing your business because you're sitting around the table with business owners in the same community, the same marketplace, so you're having those kind of conversations.
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You're doing general business conversations.
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I call it, that's where I got my MBA, you know?
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MBA hard knocks was through that organization.
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Then later on, I moved into, Mastermind.
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I did a TXA program for Ingram Micro, and I found that program was now I'm sitting around the table with guys just like me, and it was about optimizing the business.
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It was about fine-tuning the business in our domain, and having that domain knowledge was awesome, right?
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It was just so good.
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And it also allowed me to get exposed to other deals that were happening, right?
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And so it really exposed me to understanding better about how was the deal going to happen and the steps through the deal.
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So that was really important.
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The other thing that was really important was really getting myself out of the business in the sense of, well, working on your business, not in the business.
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And what I mean in the business, I mean being part of the sales team, being operational, delivering services.
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If I had to move from being the number one biller to being a zero biller, from the best sales guy to zero sales guy,
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Tell us a little bit about how you evolved your sales organization to exit for the amount that you wanted to.
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Because we had an enterprise business and a MSP business, we had to separate those two things.
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Asking my enterprise resale and professional services guys to sell reoccurring business was not gonna work.
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It doesn't work.
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And so, evolving the sales team to be focused on net new customers and to be more focused on doing what they do really well.
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If your listeners haven't read the book called The Machine, I would highly recommend reading it.
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It really does change the way you think about sales and moving from the sales guy owning the customer and doing everything from prospecting to closing to a different model where you split that up into multiple people doing the full sales cycle.
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It was the bane of my existence, the sales team.
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It was the hardest thing, frankly, to get working By far
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What did you try that, didn't work, and what eventually did?
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Really early on in my time, I promoted my best sales guy to sales manager.
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That really didn't work.
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Oh, yeah, I know.
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I wish someone told me about that lesson.
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Would you have believed them if they had?
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I think I would have if it was told in the right way, especially if it was told by someone that had done it, because this gets done over and over and over again, and for whatever reason, we don't seem to learn, but it's a cardinal sin to do that.
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So I'll just say right now, you heard it from Dave Reed.
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Subject matter expert, and not Carrie Richardson invested in you buying sales training and, fractional sales management.
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Yeah.
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Finding good sales manager, that was hard work, and, I'm a pretty firm believer that the best sales manager is not actually a very good sales guy, not someone that crushed their quota every year.
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We've got a couple of more minutes, and we don't have- enough time to go through the rest of the steps, so you guys are all just gonna have to buy the book now if you wanna know how it ends.
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Clearly it ended well, and he's had 10 years to write it.
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You know you did a great exit when, 10 years later you have no regrets.
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I'm happy for you.
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I am always happy to hear that people worked hard, built businesses, got the value that they wanted, and rode off into the sunset.
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Thank you for coming back to share your knowledge with the rest of us.
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It is much needed in the industry right now.
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I appreciate that.
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A lot of businesses are gonna be for sale in the next number of years than ever before.
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But I also think there could be a big push to sell businesses because of the threats of AI and other types of threats out there.
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A word of warning for business owners just because you have a 8X business today, that may not be the case tomorrow.
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It might go up.
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It might go down, too.
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Planning those things and really being aware of what's happening in the marketplace is really important.
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Dave does offer professional services for companies that are planning their exit, dave, is there any other advice you want to leave us with before we say goodbye today?
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If you haven't thought about your exit plan, today is the day you should start thinking about it.
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It's not a two-year plan.
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It's not a three-year plan.
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I had 10 years.
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I think it's five-plus years.
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If you're thinking about exiting, it better be five-plus years you're thinking about it in advance.
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That's the best advice I can give, and find someone to talk to about it.
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If it doesn't come to you naturally, then fine.
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There's tons of information out there about exit planning and figuring out your valuation of your business.
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You can find more at gettingtoexit.com.
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You can buy my book there, and I have all sorts of resources, too, to help you do your exit planning.
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Thanks very much, Dave.
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Thank you, Carrie.
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Enjoy the rest of your summer.
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Thank you.
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You too.
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You bet.
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My name is Carrie Richardson.
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I work with Fox and Crow Group, and this is season one of the newly launched WIN.
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And today with me is David Reid, who is the author of Getting to Exit.
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David formed Epic Information Solutions in Winnipeg, Manitoba, my hometown, in 1995, and exited from that business in 2015 after selling in 2013.
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David, thank you so much for joining us today.
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It's really great to see you again.
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I think it's been, oh, eight or 10 years since the last time we had the chance to sit down in person.
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So tell me what's been going on since then.
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Spent the last 11 months writing this book, and that's been pretty busy, but really spent the last 10 years after exiting my business just before I turned 50, enjoying life, traveling the world, getting my kids launched, building a new cabin, doing things that I just couldn't do if I was still running the business.
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You sold your business before the age of 50.
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Why don't you share a little bit about what you were able to achieve with Epic before you started living the life that we all envy?
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In 1995, Windows 95 was coming out.
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We were living in a Unix world, doing Unix work, selling Unix machines and big iron at the time.
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Then Y2K hit, and then the Y2K fallout hit.
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And we evolved from what was a development company, specializing in ERP software to starting to do Windows and Windows Server and professional services.
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A few years later, this MSP thing came up where this idea of moving From non-recurring revenues to recurring revenues.
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We were right on the front end of that, and for many years we were the only ones in our marketplace offering that type of, service to our clients.
00:02:52.114 --> 00:02:56.383
We grew that business but continued to do our enterprise business at the same time.
00:02:56.723 --> 00:03:13.024
I was about 40 years old and sitting at the cabin and thinking and I came to the conclusion that, I wanted to sell my business by the time I was 50 and, wasn't thinking about exiting as much as just selling the business as a means to that end.
00:03:13.753 --> 00:03:15.923
And for enough money that I'd never have to work again.
00:03:16.313 --> 00:03:23.573
That was the objective, and to do it by the time I was 50 so I could do a bunch of things that I couldn't be doing while I was growing the business.
00:03:24.403 --> 00:03:31.263
And I figured out a number for that number, and then I figured out the gap, and I said, Holy moly, that's a big gap I gotta fill," right?
00:03:32.263 --> 00:03:38.804
And one of the first things I learned, I spent a lot of time learning, was exactly how to value my business.
00:03:39.003 --> 00:03:53.003
And so at the time, I really quickly understood that selling gear was not a great valuation return, that building a reoccurring revenue stream was going to be a much better return.
00:03:54.524 --> 00:03:56.364
And so I set out on the mission of doing that.
00:03:56.793 --> 00:04:07.883
I actually decided at the same time I was gonna sell to a strategic buyer, and I had picked the local telco in our market as being my ideal buyer because, well, we have the same market, same customers.
00:04:08.233 --> 00:04:12.003
We're a great add-on to phone and internet, right?
00:04:12.793 --> 00:04:15.605
So That's what I set out to do.
00:04:16.086 --> 00:04:21.086
And lo and behold, eight years later, we had been working at growing the business.
00:04:21.086 --> 00:04:34.396
We were about 110 people, and, and a probably good about 60% of our business or maybe a little bit more was MSP and the rest was enterprise solutions, which all fit really well with the local telco.
00:04:34.836 --> 00:04:38.376
And, I get word that IBM's closing their data center.
00:04:38.425 --> 00:04:39.365
We should build a data center.
00:04:39.365 --> 00:04:42.216
That'd be a great idea." But then it's like, wait a minute, that's not in my plan.
00:04:42.225 --> 00:04:44.656
That'd be another 10 years in the business.
00:04:44.656 --> 00:04:48.536
I'll be 55 or 60 before I get out of this business.
00:04:48.536 --> 00:04:49.216
That's not the plan.
00:04:50.036 --> 00:04:52.725
But maybe this is a great opportunity to go talk to the telco.
00:04:53.136 --> 00:04:59.716
So I went and because I had built a relationship with the telco CEO, I call him up, I go over there, and we have a meeting.
00:04:59.716 --> 00:05:00.716
I go,"Great opportunity.
00:05:00.776 --> 00:05:03.995
We should build a data center together." And he goes, funny you say that.
00:05:04.006 --> 00:05:21.635
We want to build a data center, but we don't partner very well." So I go,"Well, you buy us, and I'll build it for you." And he goes,"That's a great idea." Sure enough, we closed the business, and 10 months later, selling to that telco in eight years instead of 10 years was my plan.
00:05:22.505 --> 00:05:22.915
Show off.
00:05:24.555 --> 00:05:26.135
at the time it was still pretty early.
00:05:26.135 --> 00:05:28.255
That was 2013.
00:05:28.276 --> 00:05:35.355
That's pretty early in the MSP selling game, a lot of MSPs hadn't really transacted yet.
00:05:35.355 --> 00:05:43.466
And at the time, I think we sold for, just over 8X, for a business that was not 100% MSP.
00:05:43.515 --> 00:05:44.846
I think we did okay at the time.
00:05:45.195 --> 00:05:46.865
We actually did really good at the time.
00:05:46.925 --> 00:05:49.536
Those multipliers got better over time, but, it was great.
00:05:49.586 --> 00:06:02.195
And what I got back was exiting by the time I was 50 and having 10 years to do things with my family and personally that I just couldn't have done if I was still growing the business.
00:06:03.216 --> 00:06:05.075
I have so many questions.
00:06:05.975 --> 00:06:16.442
I think I was starting my business as you were exiting yours, walk me through how you built- your plan for exiting?
00:06:17.072 --> 00:06:20.382
At the time I didn't realize it, but I was actually building a framework.
00:06:20.391 --> 00:06:31.601
I was building a process that made sense in my head, but I hadn't really fully articulated it, which I now do in my book, and I call it a nine-step framework to an optimal exit.
00:06:32.591 --> 00:06:35.711
And step one really is about figuring out your why.
00:06:35.812 --> 00:06:37.122
Why do you wanna exit?
00:06:37.351 --> 00:06:39.281
Like, what's, after exiting your business?
00:06:39.281 --> 00:06:44.961
When the business is no longer there, when you're no longer going to work every day or thinking about it every day.
00:06:45.512 --> 00:06:48.661
Just because you don't go to work doesn't mean you don't think about it as a business owner, right?
00:06:50.062 --> 00:06:51.081
What are you gonna do with your time?
00:06:52.611 --> 00:07:04.041
And so answering that question first was really important because then it helped you do the next part, which is figuring out, so what do I need to be able to do that?
00:07:04.721 --> 00:07:11.201
And the need can be a bunch of different things, but the key parts of it are certainly money and when.
00:07:11.502 --> 00:07:14.872
Like, when would you need to exit to be able to do those whys?
00:07:15.632 --> 00:07:23.062
If your big why was to climb Mount Everest, maybe exiting at 65 is not a good idea.
00:07:23.111 --> 00:07:25.341
Maybe you need to do that sooner, right?
00:07:25.361 --> 00:07:28.882
If that's such a big thing on your list to do or whatever the case may be.
00:07:28.942 --> 00:07:35.521
Well, if you think about your own framework, your why was discovered at the cottage at 40.
00:07:36.111 --> 00:07:36.341
Yeah.
00:07:36.341 --> 00:07:37.992
Your exact why, what was it?
00:07:38.771 --> 00:07:46.242
It was really to be able to get time back to say,"Wow, I need...
00:07:47.151 --> 00:08:01.731
If I could get all this time back so that I could really invest in my family." I think business owners know when you are growing your business, you are, disproportionately thinking about your business and spending time on your business.
00:08:01.921 --> 00:08:04.762
And you're making lots and lots of sacrifices.
00:08:05.012 --> 00:08:11.301
You're making sacrifices for your health, you're making sacrifices with your spouse, you're making sacrifices with your kids.
00:08:12.891 --> 00:08:21.312
And I came to the realization that that couldn't go on forever, and if it went on too long, I might lose those things.
00:08:23.151 --> 00:08:25.762
And so I had decided that was what really important.
00:08:25.771 --> 00:08:47.562
My kids were still in, you know, grade school and high school, I said,"Boy, if I could get out by 50 or if I could really free myself up in my 50s, I'd really be there for when they're going to university, when they're launching their careers, when they're launching themselves into the world." That would be a very good time to be able to have that kind of time.
00:08:48.422 --> 00:09:08.091
And also a good time to make sure I correct my health and travel was, something that my wife and I had really started to enjoy and so we wanted to travel the world and see interesting places You can't take 60 days out of a working calendar to bugger off, you know.
00:09:08.101 --> 00:09:09.372
At least most people can't.
00:09:09.892 --> 00:09:10.861
I certainly couldn't.
00:09:11.841 --> 00:09:12.692
What's your next step?
00:09:13.231 --> 00:09:17.822
How much money do I need to never have to work again?
00:09:18.322 --> 00:09:20.182
And it's a hard calculation, by the way.
00:09:20.231 --> 00:09:23.422
It's a hard question to answer, but it's gonna be one of these thumb things.
00:09:23.422 --> 00:09:41.521
You're not gonna be exact, but you're going to guesstimate what it is and it sets a target for you and then you back calculate that into, so what do I need to sell the business for to get that number, given taxes, given debt, given all the other things that get, modified.
00:09:41.721 --> 00:09:43.231
That was your holy moly moment.
00:09:44.251 --> 00:09:52.771
So the third step is the way you're going to exit, and this, you know, a dozen different ways to exit and more so.
00:09:53.221 --> 00:10:04.111
But it could be everything from exiting through selling to employees or management or family, which would be a legacy play, because legacy's really important to you.
00:10:04.751 --> 00:10:18.521
Or it might be selling to a buyer like seller because you're trying to do a quick exit, or you might be doing a strategic buyer because you want to maximize your valuation.
00:10:19.802 --> 00:10:33.932
Every way has different constraints, and it has different attributes to it, and understanding which one is the one that you want to use, the way you want to exit, understanding that allows you to build the business the right way.
00:10:36.567 --> 00:10:43.168
What would you need to consider for a legacy exit, that you might not need to consider if you were going to exit to private equity?
00:10:45.067 --> 00:10:48.817
Legacy exit comes with cost, and that cost is evaluation.
00:10:49.337 --> 00:11:06.977
Generally, you're going to get a lower evaluation, and it's gonna take longer to get your money in the bank because typically management and employees, and family members for that fact, don't have the money to buy you out.
00:11:07.867 --> 00:11:10.128
Legacy really has a lot of tricks to it.
00:11:10.418 --> 00:11:16.878
Understanding how you're going to go from close to exit is a really important piece of that puzzle.
00:11:17.008 --> 00:11:26.227
You might get trapped in the business a lot longer than you think because it's really hard to let go when you still have half your money, not in your bank account yet.
00:11:26.577 --> 00:11:28.327
Or when your kids are asking you for help.
00:11:28.697 --> 00:11:38.230
Or kids are asking for help, or you're just telling them what to do because- The gap is so big in their experience between you and them, right?
00:11:38.299 --> 00:11:47.120
And when I was thinking about the way I would sell my business, I really thought about would my kids wanna take it over.
00:11:47.889 --> 00:11:51.939
And at the time they were like, you know, in their teens or younger.
00:11:52.450 --> 00:11:56.549
It's like, oh my God, by the time they take over I'll be like 70 years old.
00:11:56.559 --> 00:11:57.259
Forget it.
00:11:58.529 --> 00:12:03.919
I'm not hanging on that long, and the risk of them wanting to do it was pretty high.
00:12:03.960 --> 00:12:05.360
Maybe they don't even wanna do it.
00:12:06.200 --> 00:12:19.710
And so I decided o- I, I looked at all those legacy issues, and it's very romantic, right, to sell to your family or your employees, but, it's not necessarily a high, high profitable exercise.
00:12:21.309 --> 00:12:22.899
So what is step four?
00:12:24.299 --> 00:12:27.299
Step four is called, understanding your gap.
00:12:27.939 --> 00:12:32.220
So it's like, okay, now I know what I need to sell the business for.
00:12:32.220 --> 00:12:33.470
What could I sell it for today?
00:12:34.860 --> 00:12:37.210
Do you even understand how to value your business?
00:12:38.649 --> 00:12:55.110
And so when you think about where I am today, where I need to get to, and then the time, the how much time you wanna do that in, You can easily calculate what's your compound annual growth gonna be, average growth to be to achieve that.
00:12:55.529 --> 00:13:01.159
And boy, if it's like 25% growth year over year to get to the target, I don't think you have enough time.
00:13:01.159 --> 00:13:03.850
You're not gonna be able to do that, right?
00:13:03.899 --> 00:13:06.129
Unless you have some kind of magic wand.
00:13:06.480 --> 00:13:18.309
Understanding that gap really grounds you in understanding how big a challenge you have ahead of you to grow your business to the point where you can get the number that you need to get to.
00:13:19.474 --> 00:13:25.724
You mentioned you had a moment where you realized that you had to get from X to Y, and it was a significant amount.
00:13:26.323 --> 00:13:31.843
What are the steps that you, put in place so that you'd be able to achieve that in eight years-
00:13:31.894 --> 00:13:34.604
Well, number one was the peer groups.
00:13:34.604 --> 00:13:35.953
I was in peer groups at the time.
00:13:35.953 --> 00:13:45.583
That was by far the most valuable thing I ever did in my business, was being in peer groups, whether that was an industry-specific peer group or non-specific peer group.
00:13:46.043 --> 00:13:47.573
Both are good for different reasons.
00:13:47.984 --> 00:13:49.644
Every business owner should be in a peer group.
00:13:50.394 --> 00:13:51.234
You can shout them out.
00:13:51.234 --> 00:13:53.514
I know we met when I was interviewing for Vistage.
00:13:53.874 --> 00:13:55.994
What other peer groups have you participated in?
00:13:56.014 --> 00:13:57.754
Which other peer groups would you recommend?
00:13:58.313 --> 00:14:14.933
Yeah, so I was in Vistage at the beginning, or Tech in Canada, and I found that was really good as you're growing your business because you're sitting around the table with business owners in the same community, the same marketplace, so you're having those kind of conversations.
00:14:14.933 --> 00:14:17.073
You're doing general business conversations.
00:14:17.234 --> 00:14:19.494
I call it, that's where I got my MBA, you know?
00:14:19.583 --> 00:14:22.624
MBA hard knocks was through that organization.
00:14:23.354 --> 00:14:26.793
Then later on, I moved into, Mastermind.
00:14:26.793 --> 00:14:37.543
I did a TXA program for Ingram Micro, and I found that program was now I'm sitting around the table with guys just like me, and it was about optimizing the business.
00:14:37.543 --> 00:14:44.644
It was about fine-tuning the business in our domain, and having that domain knowledge was awesome, right?
00:14:44.653 --> 00:14:45.783
It was just so good.
00:14:46.333 --> 00:14:52.628
And it also allowed me to get exposed to other deals that were happening, right?
00:14:52.827 --> 00:15:00.187
And so it really exposed me to understanding better about how was the deal going to happen and the steps through the deal.
00:15:01.288 --> 00:15:02.487
So that was really important.
00:15:02.587 --> 00:15:11.908
The other thing that was really important was really getting myself out of the business in the sense of, well, working on your business, not in the business.
00:15:11.908 --> 00:15:19.307
And what I mean in the business, I mean being part of the sales team, being operational, delivering services.
00:15:19.487 --> 00:15:25.878
If I had to move from being the number one biller to being a zero biller, from the best sales guy to zero sales guy,
00:15:26.408 --> 00:15:32.357
Tell us a little bit about how you evolved your sales organization to exit for the amount that you wanted to.
00:15:33.498 --> 00:15:39.737
Because we had an enterprise business and a MSP business, we had to separate those two things.
00:15:39.827 --> 00:15:49.038
Asking my enterprise resale and professional services guys to sell reoccurring business was not gonna work.
00:15:49.498 --> 00:15:50.317
It doesn't work.
00:15:50.807 --> 00:16:01.378
And so, evolving the sales team to be focused on net new customers and to be more focused on doing what they do really well.
00:16:01.748 --> 00:16:07.447
If your listeners haven't read the book called The Machine, I would highly recommend reading it.
00:16:07.857 --> 00:16:24.998
It really does change the way you think about sales and moving from the sales guy owning the customer and doing everything from prospecting to closing to a different model where you split that up into multiple people doing the full sales cycle.
00:16:25.528 --> 00:16:27.597
It was the bane of my existence, the sales team.
00:16:27.607 --> 00:16:34.399
It was the hardest thing, frankly, to get working By far
00:16:35.250 --> 00:16:39.240
What did you try that, didn't work, and what eventually did?
00:16:40.700 --> 00:16:44.559
Really early on in my time, I promoted my best sales guy to sales manager.
00:16:44.629 --> 00:16:45.689
That really didn't work.
00:16:46.179 --> 00:16:47.220
Oh, yeah, I know.
00:16:48.299 --> 00:16:49.990
I wish someone told me about that lesson.
00:16:51.189 --> 00:16:53.200
Would you have believed them if they had?
00:16:53.689 --> 00:17:06.140
I think I would have if it was told in the right way, especially if it was told by someone that had done it, because this gets done over and over and over again, and for whatever reason, we don't seem to learn, but it's a cardinal sin to do that.
00:17:06.509 --> 00:17:09.549
So I'll just say right now, you heard it from Dave Reed.
00:17:10.779 --> 00:17:18.480
Subject matter expert, and not Carrie Richardson invested in you buying sales training and, fractional sales management.
00:17:19.759 --> 00:17:20.299
Yeah.
00:17:20.850 --> 00:17:34.299
Finding good sales manager, that was hard work, and, I'm a pretty firm believer that the best sales manager is not actually a very good sales guy, not someone that crushed their quota every year.
00:17:34.400 --> 00:17:42.990
We've got a couple of more minutes, and we don't have- enough time to go through the rest of the steps, so you guys are all just gonna have to buy the book now if you wanna know how it ends.
00:17:43.960 --> 00:17:47.069
Clearly it ended well, and he's had 10 years to write it.
00:17:48.420 --> 00:17:54.319
You know you did a great exit when, 10 years later you have no regrets.
00:17:59.104 --> 00:18:00.173
I'm happy for you.
00:18:00.203 --> 00:18:09.584
I am always happy to hear that people worked hard, built businesses, got the value that they wanted, and rode off into the sunset.
00:18:11.044 --> 00:18:14.763
Thank you for coming back to share your knowledge with the rest of us.
00:18:14.953 --> 00:18:17.364
It is much needed in the industry right now.
00:18:18.104 --> 00:18:19.064
I appreciate that.
00:18:19.064 --> 00:18:23.943
A lot of businesses are gonna be for sale in the next number of years than ever before.
00:18:25.374 --> 00:18:34.574
But I also think there could be a big push to sell businesses because of the threats of AI and other types of threats out there.
00:18:34.574 --> 00:18:43.243
A word of warning for business owners just because you have a 8X business today, that may not be the case tomorrow.
00:18:43.584 --> 00:18:44.153
It might go up.
00:18:44.153 --> 00:18:45.804
It might go down, too.
00:18:46.104 --> 00:18:50.074
Planning those things and really being aware of what's happening in the marketplace is really important.
00:18:50.124 --> 00:18:59.453
Dave does offer professional services for companies that are planning their exit, dave, is there any other advice you want to leave us with before we say goodbye today?
00:19:01.885 --> 00:19:07.885
If you haven't thought about your exit plan, today is the day you should start thinking about it.
00:19:08.066 --> 00:19:10.415
It's not a two-year plan.
00:19:10.415 --> 00:19:12.135
It's not a three-year plan.
00:19:12.145 --> 00:19:13.135
I had 10 years.
00:19:13.185 --> 00:19:14.885
I think it's five-plus years.
00:19:15.586 --> 00:19:20.306
If you're thinking about exiting, it better be five-plus years you're thinking about it in advance.
00:19:20.385 --> 00:19:24.296
That's the best advice I can give, and find someone to talk to about it.
00:19:24.415 --> 00:19:26.215
If it doesn't come to you naturally, then fine.
00:19:26.215 --> 00:19:31.796
There's tons of information out there about exit planning and figuring out your valuation of your business.
00:19:31.806 --> 00:19:34.855
You can find more at gettingtoexit.com.
00:19:34.905 --> 00:19:39.506
You can buy my book there, and I have all sorts of resources, too, to help you do your exit planning.
00:19:40.546 --> 00:19:41.605
Thanks very much, Dave.
00:19:42.445 --> 00:19:43.036
Thank you, Carrie.
00:19:43.036 --> 00:19:43.915
Enjoy the rest of your summer.
00:19:44.036 --> 00:19:44.826
Thank you.
00:19:44.826 --> 00:19:45.096
You too.
00:19:45.786 --> 00:19:46.086
You bet.
