In this episode, host Elizabeth Ledoux is joined by Steve Denny, a co-founder of Innovative Business Advisors. Steve is actively engaged in merger acquisition activities in all kinds of industries. He’s also developed some tools that business owners can use to grow their profitability and enterprise value. Tap or click the play button below to listen to: Navigating Business Transitions: Insights from a Merger & Acquisition Expert.
In this episode, Elizabeth and Steve discuss the importance of preparing for your transition and building a team that can take over your business operations. Steve shares information about the books he’s written on buying and selling businesses. He also emphasizes the need for business owners to have a plan and a bigger purpose in life to fulfill before transitioning out of their business.
Connect with Steve Denny and Innovative Business Advisors:
Steve on LinkedIn: https://www.linkedin.com/in/steven-denny-iba/
Steve is the author of “You Don’t Know What You Don’t Know: A Step-by-Step Guide for Getting the Most from the Sale of Your Business” and “You Don’t Know What You Don’t Know: Building a Million-Dollar Home Staging Business and Selling It for Top Dollar.” Get Steve’s books on Amazon: https://www.amazon.com/stores/Steven-Denny/author/B08ZH72S8J
Connect with Elizabeth Ledoux and the Transition Strategists:
Elizabeth on LinkedIn: https://www.linkedin.com/in/elizabethledoux/
Transition Strategists on LinkedIn: https://www.linkedin.com/company/transitionstrategists/
Subscribe to “The Business Transition Roadmap with Elizabeth Ledoux” on your favorite podcast player:
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Get Elizabeth Ledoux and Laura Chiesman latest book, “It’s A Journey: The MUST-HAVE Roadmap to Successful Succession Planning”: https://amzn.to/3oq2LQv
This episode was produced by Story On Media & Marketing: https://www.successwithstories.com.
Navigating Business Transitions: Insights from a Merger & Acquisition Expert Transcript
Steve Denny: Unless the business is on fire, and it’s a 911 situation, almost always, you know, the seller will say to us, we want to make sure all our people are taken care of right? Nobody, nobody gets laid off. There’s no change of benefits. There’s there’s no change in their compensation, we want to make sure people get taken care of.
Elizabeth Ledoux: Welcome to the business transition roadmap. My name is Elizabeth Ledoux. And through my years, I have seen how communities thrive. When business succession and transition are done. Well, me and my team at the transition strategists have been helping business owners develop and implement transition strategies for over 30 years. And on this show, we want to help you by giving you the roadmap to a healthy business transition. Let’s get started. Hi, everybody, and welcome back to the business transition roadmap Podcast. Today, I am just so excited to welcome Steve Denny with us. He is a co founder of the innovative business advisors and he co founded it in 2018. He’s our he’s the Managing Member. And their focus is they’re actively engaged in merger acquisition activities in all different kinds of industries. And they’ve been doing that for the last 14 years. He also has developed some really specific tools that are able to be used by business owners to assist them in growing their profitability, and also in growing their enterprise value. So, Steve, welcome. And thank you so much for being here with us today.
Steve Denny: Well, thank you, Elizabeth, it’s an honor to be with you, you got a great firm and excited to be here.
Elizabeth Ledoux: Thank you. Yeah, you’ve you’ve got an amazing firm as well. And Steve and I have known each other for many, many years. And we have worked together on a few different projects up to and including some valuation type work as well. So I know Steve, very, very well. And I’m glad that he’s here to share some of his insights into business transition, specifically in the merger acquisition side. So when you go through business transition, sometimes you’re going to do an internal kind of a transaction, which could be to an employee, a family member, you know, somebody, it could even be a partner, you also have the option of going out and exploring an external sale to a third party. And so that’s really where Steve’s going to give us some thoughts and enlighten us a little bit on merger and acquisition. So, Steve, tell us a little bit about yourself.
Steve Denny: Yeah, thanks. It’s, you’re absolutely right. My partner, Terry and I, we always say that we’re here for business owners who can’t find the exit door, right, if they don’t have somebody internal or a family member, to hand the keys to, they generally call us and we help them find somebody outside of their circle of influence that, that that works well. So as you said, we’ve been doing this for about 14 years. We really love it. We we love serving small business owners, Terry and I have done a lot of business in that regard. We’ve both done a lot of acquisitions in our past in that regard. And Terry is a certified valuation analyst and runs our business valuation arm of the organization, and he loves doing the valuation side of it. And we love teaching valuation, because most business owners don’t really realize that, you know, there are many factors that go into what is the overall worth of a business. And we really, we really do get a lot of satisfaction out of teaching business owners how to grow meaningful value in your business over time.
Elizabeth Ledoux: Nice, nice. Yeah, and it is interesting how many business owners either don’t know their value currently. So they they actually don’t know, current value and also what they would like it to be, so that they can build that and have some goals. But it’s hard to value a business at times, because it’s not. It’s not like you can go buy 10 of them, and they’re all identical, like you would a cup or a spoon or something like that every business is unique. And so the valuation strategies are really important to be able to give a good value to what they have.
Steve Denny: Yeah, it’s fascinating. I’ll give you a quick story just two weeks ago. And as you know, one of the things we like to do is not just, you know, prepare the valuation, but actually meet with the business owner and go through it in detail. So they really understand you know, what are the factors that led into their current valuation and then what can they do to move the move the bar, and a couple of weeks ago, I met with these ladies who were referred to us from Another client in the same industry. And they were basically a startup, they’ve been in business for almost four years now. And they were very interested to see what their value of their business was. And as we believe it’s in a business owners best interest to do so at least every couple of years, right? It’s kind of like doing a physical for your body to do a physical for your business, make sure you’re, you know, you’re healthy and moving forward, and all the right ways. And any event went in and met with them. And they, they really have an amazing company, these these ladies have done a marvelous job of building it the right way. And they’re, they’re less than a million dollars now in revenues. And everybody wants to know, what’s the number, right? That’s what’s my number. And when I told them the number, they both got real silent. And actually one of them started crying. And I said, Okay, I’ve clearly touched a nerve here. Tell me tell me, you know, what’s going on? And they said, Oh, well, we, you know, we expected it to be, you know, several million dollars. And basically, their idea was they thought that their business was worth a multiple of the revenues. And I said, No, it’s really not. And, you know, so you’ve got kind of a false expectation there. And then we walk them through how their business was built. And I said, you know, you, and they felt much better about it. I said, at the end of the day, aren’t you glad you got this now, rather than when you were close to retirement or wanting to exit, and found out that there was this, you know, seven, seven figure gap between what you thought it was worth and what it’s actually worth. And, of course, now they know, you know, what it’s going to take to build it where they want to go. And they felt empowered, coming out of that, and knowing that they can get to their get to their journey, but it wasn’t going to be quite as easy as they thought it was from, from some knowledge from, you know, cocktail conversation that they picked up someplace. Yeah,
Elizabeth Ledoux: right. Right. Yeah. And I think that many business owners don’t know. And, you know, even in some of the work that we do in our firm, as we help owners try to figure out their what their journey is going to be. Just because you think there might be somebody who wants it internally. That’s not always true. And so I always like this strategy of having merger acquisition person available for you, and also actually understanding what the value truly is, so that you can have better conversations, and also do better financial planning for yourself personally, which is really important.
Steve Denny: Yeah, really important. Yeah.
Elizabeth Ledoux: So um, you interior writing a new book? And that’s pretty exciting. Yeah. Yeah. It’s called the entrepreneurial trap. Is that correct?
Steve Denny: Yes, yes, we have, we have a series of books called called, you don’t know what you don’t know. And that’s actually the fifth in our series, we call it the entrepreneurial trap. And there are there are a number of things that trap business owners in their business and don’t allow him to, to get the value that they want, and, you know, live the life that they had dreamed after their business. So right now, there’s not, we don’t think there’s a good resource out there that lays it out. So Terry, and I are in the process of putting that pen to paper and, and we expect that that will be published some point before the end of the year.
Elizabeth Ledoux: That’s exciting. That’s exciting. And you not only do you have the book series, but you also have a whole program around. You don’t know what you don’t know. Yeah.
Steve Denny: Yeah. Call it CEO, number two, CEO, dot coach. So it’s all about moving from being the chief everything officer in your business, to becoming the chief executive officer in your business.
Elizabeth Ledoux: Yeah, yeah. We should we probably all could use some tips on how to do that. Because many times you’re this chair, yeah. The CEO, your everything, everything officer.
Steve Denny: Yeah. Yeah. And there are many aspects of that we learned from you, because you had a wonderful program in that regard, as well. So
Elizabeth Ledoux: thank you. So tell us a little bit about what did What are the five keys were in the entrepreneurial trap?
Steve Denny: Well, you guys are the the business trans transition roadmap, folks. Right? Yeah, might be helpful for your audience, to share what what we think of as the five keys to a successful transition. And in addition to that, I thought I’d also share maybe one of the secrets that we’ve learned. So transitions, even friendly transition. So again, you know, two thirds of the transitions have happened between family members or key employees in the business or potentially friendly competitor, somebody that the business owner knows And, you know, we would consider those to be friendly transitions. And then, you know, a third of the transitions, which is the main focus of our work are typically between buyer and sellers that don’t know each other. But the process is exactly the same. So generally, the process begins with some form of an agreed price. And we think it’s always better to have the business aspect of it worked out in its entirety before you get into a due diligence period. And the due diligence period, obviously, is the is the nuts and bolts of the transition. So we see there are really five stages of the due diligence. And the first thing is that typically, sellers get completely overwhelmed. They’re astounded with how much work and information they have to supply in a due diligence period. So it’s one of the first things we do when we engage with sellers, even before we really begin to market their business, as we acquaint them with, you know, here’s what a due diligence periods gonna look like. And this is the information that normally you’re going to have to share. So now all you have time, and there’s no, you know, sense of urgency and deadline, begin to assemble that information and put it into, we either put it into a virtual data room or some some form of a shared data vault that people can access. Yeah, allow them to begin to gather that up front and try and take some of that overwhelm away from the process, if you will. So
Elizabeth Ledoux: I think you’re right, I think that the owners do underestimate the amount of work that’s going to go on in the sale. And while by the way, they’re doing that, they also have to keep the business running well, and continue to grow it the same way that it’s been grown, and, you know, keep all the people and do all the other things with the customers. And yeah, that business has to continue on forward while they’re doing this. So it’s just added.
Steve Denny: And many times they’re doing it without their staff knowing what’s going on. They’re trying to keep the, you know, the process confidential. So that kind of puts another, you know, dimension into what they’re trying to accomplish, particularly when they have to go to people in their organization and say, Hey, can you run this report for me? Or can you give me these details and so forth? Right?
Elizabeth Ledoux: Yeah, yeah, absolutely. Yeah, they don’t have their team around them to support them the way that they usually might. So. Yeah,
Steve Denny: so that’s the first thing I think, generally, you know, the sellers are overwhelmed by the amount of work that goes into it. The next thing is really the legal ease. And there, you know, the lawyers, typically, you’re gonna have lawyers on both sides, we highly recommend that yet the buyer, both buyers and sellers have have their own attorneys, because, you know, the attorneys job is to protect their clients, right? And, but occasionally, those guys will go overboard, or those folks will go overboard, and, and they will endanger a deal we’ve seen, I’ve seen deals blow up because the attorneys couldn’t agree. I’ve seen deals where we’ve had to fire attorneys and get other attorneys involved to help one party or the other reach the goal that they wanted to reach. But those are the exceptions, those are not the rules, you know, generally. That’s why I think it’s always in the in, in both parties best interest to have a facilitator, you know, an intermediary like ourselves involved, or you guys involved in managing the process for them, it keeps, keeps everybody moving in the same direction, if you will. And occasionally people need to be reminded that, you know, we have an objective here and there is there is a goal line that we all want to cross together, right? Yeah, but they definitely learn, you know, what reps and warranties are all about, and most, most sellers don’t, don’t have to spend a lot of time dealing with those kinds of things on a on a normal day to day business and business perspective. So it’s a new level of learning for a lot of sellers in that regard.
Elizabeth Ledoux: Yeah, definitely. Definitely. Yeah, just for many I think it’s their first time through and it’s hard to go sell your business to somebody you don’t know You know, sometimes we’re working more on the internal side and you’re working on the external side, but it’s just hard to put that the your wonderful business that potentially you found it with all the moving parts and all the people that you care for in somebody else’s hands that you really even at the end of the transaction process. Don’t know all about them.
Steve Denny: Yeah, it’s it is a key thing and and as As they begin to work together, the buyers and sellers in those situations, they they do get to know each other. And, Elizabeth, it’s rare, but I, you know, we just recently had a situation literally two months ago where one of our seller said, I can’t sell to that person we’ve got, we got to stop this process. Wow, those things happen. You know, and, and we honor that, I think I think it’s important that they make that determination as early as possible, right? Because the sellers are looking to leave a legacy here. And they want to be proud of what they have what they’ve accomplished, and they, they want to see the business to continue to flourish. And you know, and do well in the future. So, if they’re not 100%, comfortable with it, I love this. I know, you know who Dan Sullivan is, he, he has this phrase called by the buyer, and I just I just adopted, I think it’s, it is so meaningful to what you and I do for a living, you know, it’s important that sellers really do by the buyer in the process rather, and and that changes their mindset about how they approach the transaction.
Elizabeth Ledoux: So instead of selling, then they have they’re evaluating that buyer and deciding if that buyer is the right one, first and foremost for them.
Steve Denny: Yep. Yeah, one of the other keys that we see that, you know, that we’re always on the lookout for is buyers that also want to retrain in the due diligence period. And they say, Well, we’ve discovered this. So geez, we should, we should get a discount on the price because of these things that we’ve now learned, right. So that’s one of the things you want to be, you want to be on the lookout for we we think it’s important to be as open and upfront and honest as possible. I always tell our clients, we want to tell buyers, the good, bad and the ugly. And I’ve never seen a business that didn’t have a little bit of all of those things in it. You know, we try
Elizabeth Ledoux: to think our businesses are perfect, but hey, sometimes there’s a little bad and a little ugly.
Steve Denny: And it’s and it’s nothing to be ashamed of, as I said, I’ve never seen a business to didn’t have some elements in each of those areas. So it just is what it is, you know, right? So but be upfront about it. And the more you’re upfront about that, the more you’re able to guard against this retraining. And, you know, we always say we, this has been known from the very earliest part of the discussion, no, we’re not going to, we’re not going to consider any discount here. You just because you de emphasize that during the process doesn’t mean that we shouldn’t be taking, taking a haircut as a result of that. So
Elizabeth Ledoux: yeah, I think of that as like, I don’t know where this came from in my past. But, you know, there are two kinds of there’s either the auction where you have a couple of different buyers, right and through a merger acquisition from that’s kind of the strategy is to maybe get more than one buyer, more people interested. And then you have the auction and in an auction, the price usually goes up. Then there’s the garage sale. And the garage sale is somebody comes in and says Hey, I like that bike. And look, it’s beat up and it’s got some dents in it, I’ll give you less. So I’ve kept that with me for years, just the idea of Do you want to go to an auction with your business? Or do you want to go the garage sale? Where are you going to sell it?
Steve Denny: Yeah, auctions are a lot more fun. Yes, and
Elizabeth Ledoux: a lot more rewarding as well.
Steve Denny: Yeah, and that kind of takes us to the next one, which is, you know, the the thing that we look out for first and that is what we call the emotional overload, right? So it’s, it’s, it’s really funny, I have not been through a transaction where I haven’t seen this happen. But at some point in time, it dawns on the seller that you know, this is real, this is actually going to happen. And there’s a little bit of seller’s remorse, there’s a little bit of that my babies leaving the house for the first time and they become very emotional about the process and begin to rethink whether they can really let go. And we we, you know, we’ve gotten to where we’re from the very first point of accepting a letter of intent accepting an offer in a transaction or negotiating with a you know, with a family member or a key person to to put together a term sheet if you will. We begin to start edging educating our clients about this process to prepare them for it. But we’re not the we’re not the greatest at that we haven’t gotten to where we’d get in people completely way from experiencing it yet that would certainly be a goal. But then I don’t know whether it’s attainable, but
Elizabeth Ledoux: I don’t know if it’s a real thing. Yeah, I truly don’t know if it’s attainable. Because there, I was gonna ask you, you know, do you think of it as there are so many emotions in there? Do you think of it as sadness? Is there fear, you know, not only fear for themselves, but maybe fear for others, which I think is even stronger, as a business owner, because people care about their team and all of the other, you know, the whole community that that business serves. So what do you think? What are some of the emotions that drive that emotional overload?
Steve Denny: I think it’s all the above. In the vast majority of transactions, I mean, unless, unless the business is on fire, and it’s a 911 situation, almost always, you know, the seller will say to us, we want to make sure all our people are taken care of right? Nobody, nobody gets laid off, there’s no change of benefits, there’s, there’s no change in their compensation, we want to make sure people get taken care of, and in a lot of transactions, you know, we, we, sometimes we have to put on what we call the golden handcuffs, if there are key employees in the business, we have to, we have to make it worth their while to stay for a while in a transaction. But generally, you know, as a general rule, I say, a lot of sellers, if they have, particularly if they have a nice exit, you know, they’ll share a portion of that with their employees, and in kind of an exit bonus, or, you know, some type of a big party or, you know, parting gifts I’ve seen, you know, a lot of different things done in that regard. But I think part of it is the people because it’s it is kind of like they’re losing part of their family. And part of it is, if they the big thing is if they haven’t figured out what they’re going to do afterwards, that’s the biggest issue, it’s they begin to think about, you know, what is life going to be like without getting up and going to the office every day? And yeah, and that, I think is, is, you know, if there’s any one factor that’s weighted heavier than any other, it might just be that one.
Elizabeth Ledoux: Yeah, brings to mind a story on my site, because, and, you know, for years, I’ve had a program called the Pathfinder, Steve, you’re familiar with that. And it’s basically you know, you’d take an individual and help them to create a six year plan with their 18 month growth curve, and you know, what they’re going to be doing, and it’s great. If, if people can do that, before they leave, something like that doesn’t have to be that program, but actually have a strategy for themselves, kind of to leave, and then you know, what’s next, and even maybe doing some of that, what’s next before they actually exit the business, so they start to practice it, because your behavior is to go to that office. And I’ve been working with a gentleman recently, he sold his business, he did really just a great job of selling in his 50s. So not super old, and not super young either. But really is, you know, experiencing some sadness, some depression, and even some things going on with the marriage, because he’s not happy and thriving and fulfilled and excited. And he’s home and, you know, wakes up and doesn’t really know what’s next. And so it’s kind of interesting. And we’ve been doing some Pathfinder work. And the one thing that he didn’t realize he was going to lose, or all of the relationships and the fun of visiting with his clients and the fun of solving problems. And it’s some of that soft stuff, you know, that you really, you may not value, you don’t evaluate that you’re like, Oh, well, I won’t have the liabilities and I won’t have the responsibility. And I won’t have to deal with all of those kinds of things. But you forget about the fun of just enjoying life.
Steve Denny: Yeah, and how stimulating that can be if you’re, if you’re a problem solver, for sake of example, right? Yeah. Yeah, we call it the day one plan. And I think you were so wise, that Pathfinder program, you know, in the process of writing this book, Terry, and I just recently discovered some research that if, if you experience what’s your client experience, if you don’t have a purpose that’s bigger than you, you know, for? What are you going to do the day after the close? Chances are, you’re not going to be on this earth 10 years from now. So you know, it’s it’s really, really important psychologic lead to have that and, and yeah, I’ve seen it many times too if somebody doesn’t have a good plan for what they’re going to do next, it seems like they kind of go through this stages of grief. Right, the seven stages of grief and and they experienced that.
Elizabeth Ledoux: Absolutely. And wow, that’s incredible. I mean, just that, that thought, because I know that that’s a study that we talked about earlier. And it’s kind of frightening. It’s, it is important to be fulfilled in your life.
Steve Denny: Yeah, you’re supposed to have it all at that point, right. Now money is no object, you’ve got time. You’ve got freedom to be able to do what you want. But unless you figure out what is that, that I want to go do and have a purpose against it, it can be it can be a real challenge for your life.
Elizabeth Ledoux: Absolutely. Yeah. So preparing for the handoff is the fifth
Steve Denny: part to prepare for the handoff, that’s it’s a key thing. And it really has three dimensions to it. First and foremost, with the employees, right, you want to you want to do the handoff in a way that, that honors the employees. But more importantly, gives the employees confidence that you have selected the right person, and allows the employees then to basically withhold judgment for a while, right, because change, people don’t take change very well as you and I know, and, and they’re going to be very, very weary of being introduced to the new boss. So you know, the employee, part of it is really important. Secondarily, the customer, part of it is really important as well, and particularly if the business owner has been one of those that’s been very involved with the customers over time. And we always recommend that that’s done on a on a face to face basis. So get out and introduce them. And, you know, the the buyer and seller kind of got to walk into those meetings, lockstep together, you know, ARM and ARM and, and it’s got to be that that whole scenario of, you know, along the lines of I’ve selected this, this buyer, and I’m confident that he’s going to take this or she’s going to take this to the next level. And I want to make sure that, you know, you guys get to get that relationship started on the right foot. And to let you know that I’m going to be around for a little bit of time to make sure that it’s that’s in play. And then finally, the last folks are the suppliers. And sometimes there are key suppliers, where those where those relationships have built up over time. And if there are key suppliers, I always again, recommend, these are the these are very, very important handoff meetings, and they should be done in person as much as possible with all parties. It’s a key
Elizabeth Ledoux: thing. That’s great.
Steve Denny: So a lot of people think we’re gonna go to this signing, and we’re gonna have the signing ceremony. And then what right, I say well spend a lot of time upfront planning how you’re going to do the rollout with your employees, with your customers and with your suppliers and the first 30 days are kind of like a road trip, you know, you’re gonna you’re gonna spend the first few days with your employees getting everybody settled in, and then you’re gonna take it on to the roadshow with your customers. And then while you’re out and about doing the same thing with your suppliers, and really making sure that you do have that smooth handoff and, and transition.
Elizabeth Ledoux: Yeah. And you know, what’s great, Steve, that I am just thinking about right now, is that a lot of those principles, it doesn’t matter whether you’re going to what type of a sale, whether its internal or external, right, that emotional overload happens, preparing for the handoff, that that needs to happen in any way, no matter which way you go. And some of these apply, maybe not as much as the reps and warranties, but your new internal buyer might want some of those too. So yeah, yeah. So that’s incredible. All right. So hopefully
Steve Denny: those five keys will be helpful for folks as they’re, as they’re beginning to think about at some point in the future. But one thing for sure, Elizabeth 100% of business owners are going to transition.
Elizabeth Ledoux: I know I know. i Yeah, vertically or horizontally. We’re all going. But yeah, so how about just really quickly if you could list the five keys, just one after another, so the listeners can have that. And then I want to hear some of your secrets and something that you’d like to leave our audience with.
Steve Denny: Very good. Well, the first one is be prepared for the overwhelm. You’re gonna be a little overwhelmed by the process. So, you know, buckle up, there’s going to be a lot of work to do. But with with a good advisor and leader helping you you’ll get through it and you’ll get through it successfully. Secondly, Is the legalese you know, be prepared, the attorneys are both going to stake out some positions, you’re going to learn some new terms and things that you’re going to need to put in, put in your side of the equation to protect your interests. But but, you know, just get yourself in the Learning Zone for that, because it’s, it’s going to have to happen. Be prepared for the buyer to potentially try to renegotiate a little bit during the process. So watch out for a retraining type of things that happen, and don’t, you know, try not to hide anything in the process be as upfront and explicit as possible. And that really helps you guard against those retraining scenarios. Also, be prepared your, the, the emotional side of your brain is going to kick in at some point during the transition process. And, you know, be on the lookout for, when that begins to happen, you are going to begin to become somewhat fearful, and, and, you know, you just need to be aware that it’s coming. So don’t let it surprise you. And then finally, you know, prepare diligently for the handoff and be very, very intentional about the handoff, with your, with your employees, with your customers and with your suppliers. And if you if you do all those things, you know, I think you’ll have a very successful transaction, and a very successful transition, and everybody will get what they want out of it, which is, you know, what everybody’s looking for. And that for sellers in particular is, is really important. Because, you know, if you if you ask them to list what are the things they want most out of a transaction, you know, sure money’s in there some point but we’ve we find that rarely, money is the number one thing they’re looking for, really what they’re looking for is legacy and peace of mind. And the fact that the, you know, something that they built is going to go on and be sustained, you know, long after they’re gone. And that’s an important consideration. And so the transition is really the time where you make all that really live and and we encourage folks to work with professionals like you guys to make it happen.
Elizabeth Ledoux: Well, thanks. So what is your best kept secret,
Steve Denny: the best kept secret, one of the one of the key points that typically can be a point of contention is, you know, buyers buyers biggest fear in the transaction is that the sellers are going to disappear the day after signing, you know that they’re gonna sail off into the sunset, and then the buyers are gonna go walking around the business, and they’re gonna find that closet door where all the skeletons are hidden. And so they always walk around with a little bit of this fear. And so what they try to do is keep the buyer involved in a transition process for longer than typically a buyer wants to be involved. And we see this again, and again, but but frankly, the secret is that from a seller’s perspective, even though they’re anxious to move on, particularly if they’ve hit the emotional wall, and they’re right, they want to get beyond it. The secret is that, you know, they look forward to transitions and working for the new owner, like they look forward to a root canal. The bottom line is, it’s not going to last as long as whatever you agree to, generally speaking, the new owner, you know, just wants to go get over their fear threshold that you haven’t hidden anything from him and everything’s the way they thought it was. And, you know, 99 times out of 100, we see the new owner, you know, at about halfway into the, into the consulting agreement following the sale, you know, look over to the seller and say, Hey, thanks, I got it from here. long as you agree to answer my calls in the future, you know, I don’t need you coming into the office anymore. So the sellers get to exit typically earlier than they think they do.
Elizabeth Ledoux: Well, that’s a great secret for everybody to know. Yeah. Which means preparing for your transition is important. And making sure that that business actually runs quite a bit without you maybe not completely, but that you’ve built that good. That team and it’s ready to go and yeah, and that it, I think of it Simon Sinek who wrote the infinite game. And I think about that, and you know, I think of sports teams, like the NFL or whoever the game just keeps going on. It’s just that the players change and the owners change. So the players change the owners change and the game continues. And yeah, if you if you try to think about your business being that way, then and building it that way. It’s kind of put your you put yourself in the position where your best kept secret could come true.
Steve Denny: Absolutely.
Elizabeth Ledoux: Come to Alright, Steve, how about tell us a little bit about your books and where people can find those and Then I’d like to ask you one thing that you want to leave the audience with today.
Steve Denny: Yeah, so our books our series is you don’t know what you don’t know. And you can go to you don’t know what you don’t know.com And, and our books are prominently featured there. And we’re in the we’re in the process of book four and five at the same time. So we’re on our plan is to release one or two a year. Each year, we’ve got several titles out there, but they’re the first couple are primarily are regarding buying and selling businesses. And the third one is specific to an industry, the real estate staging industry. And then the fourth one coming out is focused solely on franchise businesses. Their franchises are a little different than then than the rest of private companies out there. And then the fourth, the fifth one is the entrepreneurial trap, right? What are the what are the traps, what are the things to look out for as a as a business owner, so the the one, the one kind of extra bonus that I’d like to leave out there, particularly for the business owners that are listening to this is, the most important thing is have a plan. You know, as as we said earlier, 100% of business owners are going to leave either horizontally or vertically. As you said, the other way to leave is standing up on your own terms, but do so with a plan with a bigger purpose in life that you want to fulfill. So be leaving that to head off to the next sunrise, if you will. And, you know, I would encourage you to focus a lot of time on figuring that out. And don’t wait until you start a transition to begin to think about it get that figured out before you before you begin working on your transition. And I think you’ll find that things will probably work out better than you expect.
Elizabeth Ledoux: Nice, nice. On I’d like to well, when Steve, thanks so much for being here. And I have known Steve for many, many years. And so if you are thinking about just exploring the idea of a merger acquisition, which would be an external sale, I know that, Steve, gosh, I would trust you and refer almost anybody to you to just have a phone call. He is a wonderful person and would be happy. I’m sure to speak with yourself. Yeah, just just yeah, I’ve enjoyed working with you over the years, Steve, and I can’t thank you enough for the time today. So thanks.
Steve Denny: It’s been my pleasure, Elizabeth, you know how much I love working with you guys, too. So many more years to come. Right.
Elizabeth Ledoux: many more years to come. That’s right.
Steve Denny: Outstanding, thanks, again, appreciate the opportunity to come on your podcast and share some of the things that we’ve learned over the past 14 years.
Elizabeth Ledoux: Wow, they’re so valuable. And that’s what this is all about is to help people really understand and do a great job and keep our communities healthy and thriving forward. It’s my mission.
Steve Denny: Amazing job at that.
Elizabeth Ledoux: Thank you. Thank you for listening to this episode of the business transition roadmap. If you’re listening to this and you find yourself wanting to go deeper into these topics and start the process of putting together your transition strategy. I’d love to offer you a free initial strategy session with my team, where we’ll help you to explore the future transition of your business, head over to www dot transition strategist.com To schedule a call. Thank you again for listening, and I’ll see you on the next episode of the business transition roadmap.
The Business Transition Roadmap with Elizabeth Ledoux
How do communities thrive? When businesses experience healthy growth and transition. Join CEO of The Transition Strategists, Elizabeth Ledoux as she and her guests identify what makes a successful business transition roadmap. If you know you want to transition or exit your business “one day”, today is the right day to start planning. This show will give you the roadmap.