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Ep. 82 - Why Every Entrepreneur Needs an Exit Plan: Insights from Tracy Gunn

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In this episode, we dive into one of the most crucial aspects of entrepreneurship that often goes overlooked—exit planning. Join us as we sit down with Tracy Gunn, a seasoned business owner who successfully managed multiple ventures, including candy stores and restaurants, before transitioning into an exit planning expert. Tracy shares her personal journey, valuable insights, and practical advice on how to prepare your business for a successful exit, whether through sale, transition, or professionalization.

We explore the emotional and strategic aspects of exiting a business, the importance of knowing your business's worth, and the steps you need to take to make your business attractive to potential buyers. Tracy’s story is a cautionary tale and a source of inspiration for all entrepreneurs looking to secure their financial future and achieve their long-term goals.

Stay connected with Tracy and learn more about exit planning through her various platforms:

Tune in to gain essential knowledge and start planning your business exit strategy today!

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Stoy Hall, CFP®:

We have another fun one, ladies and gents. This one, though, is probably one of the most important things as a business owner that you need to do. You need to plan for and you need to do it now. Wherever you're at in your business, you need to do it now. And that is exit planning. With a business owner, I've got Tracy gun on. I'm really excited about this. I told her off camera that I'm excited for a multitude of reasons. Again, everyone should do it. We don't really talk about it much. And then, my own uncle is ready for it as well. So I'm here to learn along with all of you. I just get to ask all the questions. So without further ado, Tracy, thanks for being here. And why don't you tell us your story and where you came from, what you got going on and how you're currently sitting in a candy shop in North Carolina. so much.

Tracy Gunn:

Totally. Refer to it as my cautionary tale, right? That I feel like as a business owner, I was running four successful businesses, meaning they weren't in the hole, right? They weren't making me millions, but they were like most business, like 99. 9 percent of us, right under a million. And I had four of them and I was managing them all. Two candy stores, two restaurants, one humongous restaurant that kind of put me over the edge. And my daughter had a grandbaby, which is why I'm in North Carolina. And I was like, all of a sudden I looked around the bar one night at 1 a. m., the band's packing up, my staff is grumping, and I was like, I don't want to do this. This is not fun anymore. I don't want to do this. And then, all of a sudden, I was like, I'm done and so I contacted a broker and was like, okay, I'll just say, oh, no biggie. That's what everybody's like. They're going to sell their house. They think I'll just say, same for business. We think I'll just hire a broker. Everybody will want my job that nobody wants. And which is scary in itself because you have to show them your books, you have to show them everything you have to show them behind the curtain. The part we don't want anybody to see. And I hired a broker. He was someone I knew had no personal grudge or anything. And he was like, don't bother, just liquidate everything. And I was broken. Like I cried, I had a moment and I was like, are you kidding? Like I've been working for that at that time, it was like 14 or 15 years. For this big exit thinking someday this will not just pay for myself, but pay me back and you're telling me it's a no go. What? And I had to think about it and I had to think about number one, why does he think that it's not worth anything? Which I had never thought about what makes a business valuable before. I just had never thought about it. It was valuable to me because it was paying for all my things and it was growing, but it wasn't valuable to him. And why? So I had to learn about what that meant. But also I had to figure out, is he right? Is he right that there's nothing worth salvaging here? And if he is, what do I do about that? Do I just, am I burnt out enough that I think I'm out of

Stoy Hall, CFP®:

here?

Tracy Gunn:

Set the match, watch it burn, break off the pieces or could I do something about it? And I think as entrepreneurs, we're like, how can I pivot? How can I fix this? And this was pre COVID. So this was before I got my real pivot muscles going, this was like, I'm just in it thinking, what do I do? And so that's what happened. And so I gave myself, I set myself a date, like a deadline, which Number one, most important thing to do. And second, I backed into it like, okay, what can I fix to make this valuable? What can I fix to make this? Attractive to somebody and that's what I did and that's how exitable was born this business that I'm doing now because I realized gosh, why didn't somebody tell me this stuff? Like why didn't I know this I'm smart running for businesses How dumb could I be but I didn't know and the thing is Almost nobody knows what their business is worth. Almost nobody knows what makes it valuable or not. They have some ideas and they don't know that they need to plan ahead. They just think, oh, somebody will buy it. But that's not true.

Stoy Hall, CFP®:

No, it is not a

Tracy Gunn:

very long story. No,

Stoy Hall, CFP®:

it wasn't very long. It was great. It was fantastic. No, a lot of people don't know. And we do this when we're working with business owners, younger business owners who are just getting started. And it's not an age thing, right? The young business itself is you need to think about. Your exit, what you want it to be. We don't have to plan for it per se yet, but what type of exit do you want? Do you want it to be a transition or do you want to be bought out? Because from a a book standpoint or even a value standpoint, those can be two different things. And you need to be able to structure your business that way. When we talk about exit planning and I know that's like the marketing term that we all use, but really all we're talking about is like, how do you leave your business? How, when you're done, what can you do and how do you do it? When you first did that and went to a broker. Besides, basically stripping down naked and saying, here's all my stuff, judge me, we'll judge everything I have. Besides that point, where were you in terms of the structure part of your business? Was it like all over the place? Was it easy? Like, where were you with the business structure itself?

Tracy Gunn:

So I was very blessed. I, think of God blessing me, sending me an angel. When I first started my first business, my candy store, somebody handed me the email within the first two months. And so I never again, never really thought about it. I was like, I could do this, right? I stepped homeschooling. My kids all went to school. I was in this life transition with my kids. Ex husband, it's just, it was complicated and I wanted to build something that was mine, right? And I got to control. I never thought about do I want to own a business or do I want to run a business? Two different things. But very rarely do we think about that. And thankfully Lisa gave me a book and I knew from the beginning, I didn't want to be the candy lady behind the register. It's fine. I love my customers. I love to see them grow up. 18 years later, I've seen them all right. However, I just knew that would not be attractive for me long term, right? I like the start the 0 to 1, not the 1 to 10. And so I knew going in I would have to do a lot of those technical things at first. So the goal would be to get me out to systematize and figure out how it could run without me. And what they would have the same experience without, right? And so from the get go, I always set it up with that in mind. And when you always have that time at the beginning where you're figuring it out, right? Where you know you're going to have to be in all, right? So the goal is to get yourself out of it, right? To not be Tracy driven. And so when I had all four, the only reason I'd be able to have four businesses is that other people were working. I have 42 staff at my highest. It's a lot of stuff.

Stoy Hall, CFP®:

It's a lot.

Tracy Gunn:

And and not the easiest step, right? Restaurants and retail are, you're talking like low level, not skill, but like just lower level income, because often restaurant industry, everything you could possibly think bad does happen. If you've seen the bear, that TV show, it really symbolizes exactly what most restaurants are like, and the insanity of the staff and just all the things. I wouldn't be able to do that myself if I was just dependent on me. So I had systems in place. But I didn't, I was the engine that was pushing everything. I was the octopus making sure everything got touched, everything was moving forward. And that's the piece for me that I think where I had the gap, right? When we talk about setting the exit plan, yes, it is how do you want to leave or what is, I also look at it like, what does the finish line look like? Like you go on vacation, you don't get on the plane and not know where you're going, right? You spend all that money and make a plan and you don't know where you're going, right? Same thing in a business, like you don't spend You know, a decade working in a business and not have a clear sense of where you're going. And yet most of us are just like, we're like that way. West, not LF. North. Forward. Forward and more. That's usually our thought, right? More money, more customers, more profit, and that way. And we'll try a thousand different things to make those things happen, but not because we haven't

Stoy Hall, CFP®:

pinpointed like the destination by pinpointing that destination, it filters everything,

Tracy Gunn:

right? Like you mentioned about do you want to have a transition? Do you want to sell? I'll give an example, like I had a gentleman I was working with and he had 3 businesses. He actually had a really good system, right? He was working minimally. So that was, that's a great place to start to sell, but he, for each business. The model was going to be different to exit because for his 1, that was an oil company. The people that we're going to buy that are other oil companies. They don't care about his systems. They don't care about they, what, you know what they want his customers. That's all they want. And he in turn also wants his customers taken care of after 40 years, right? His exit is very different than somebody who's like a Brent. Let's say it was a guy who was just buying his first company and he was buying an oil company. He cares about the system. Do you see how that's different? And what you work on and improve. Is going to be different depending on what the exit looks like. When we do the exit planning, we talk about what is the destination look like? What's the target? What's the number you need to leave with? And how do you get there? And there's a lot of different ways to do that. Sometimes that's by acquisition. Because you put a few businesses, like a few candy stores together is worth way more than one by itself, right? The multiple's higher. I don't even have to improve profitability. I just have to put them together and it's worth 4x instead of 1x. So there's all kinds of strategies about that. When you think about that exit, you're thinking, gosh what do I want? And even as a new business, you should be thinking, What does this look like in 20 years? Do I even want to be here in 20 years? Do I want to have 20 or do I want to have one? When you nail those things down, all your decisions remove shiny objects because you're filtered by what you've already decided. But by not deciding at all, you don't have a filter. So everything's just coming in and you're in a thousand directions. Sorry, I might've gone off track there, but I think, for me, I had my systems in place. I knew I didn't want to be there all the time, but they weren't making enough to hire somebody full time at each.

Stoy Hall, CFP®:

And I think what you, that's what I had

Tracy Gunn:

to work on.

Stoy Hall, CFP®:

Yeah. And the important part you said there was you knew you didn't want to be in it. And so let me ask you this, when you're thinking about exiting and being at, either selling a trade, it doesn't matter if the business owner is still in it, doesn't that make it much harder to sell or to transition or to exit?

Tracy Gunn:

Yeah, I look at, so when we coined this term exitable, which isn't really a word, but it so defines exactly what it is, right? Like the business should be exitable in order to be transferable and sellable. And the litmus test is, could you go away for a month and not have it be a disaster, right? Okay, so it's not a disaster. Does it stay the same? Does it increase? Maybe you're the problem, right? That's certainly possible, right? But could it continue without you? Because nobody otherwise The reality is most people are not going to buy your job because it's really not a job. I'm sorry. It's really not a business if you're working in it full time, right? It's like a full time job for

Stoy Hall, CFP®:

you. Absolutely

Tracy Gunn:

right now, you can fix it, meaning you could get somebody else in there, have less profitability and now professionalize it, meaning you're not running it. You're just directing right from the overhead. Totally, that's a different scenario. Lots and lots. Oh, gosh, I hate to throw just percentages around, but, the stats are only 1 in 10 listed businesses sell. Maybe 2 in 10, depending, right? You've got 12 million baby boomers who are ready to sell because they're done, they might have been done a few years ago, but then COVID, so they had to pivot. Some of them never came back, right? But if only 1 in 10 sell, why, right? Is it because it's not really a good business? Is it because there's a problem with the broker, which certainly is possible. Is it because I didn't prepare? More often than not, it's because it's not really a solid business that transcripts well. That's

Stoy Hall, CFP®:

usually.

Tracy Gunn:

And I think out of the 12 million business baby boomers, they've all worked themselves like myself, where I got to be comfortable doing the things I was doing. Handling the things I chose to handle and delegating the rest. But I still was handling and that's. So we make our lives more comfortable. We make our prison more comfortable,

Stoy Hall, CFP®:

put some

Tracy Gunn:

cushions and some bed. Yeah. But it's still a prison. It's

Stoy Hall, CFP®:

still

Tracy Gunn:

can't, it's grown up around you, probably despite you and trapped you. And fixing that can be really easy depending on the exit, but recognizing that's what you have, like the hardest conversation to have with an owner is that you don't have Not only is it really not worth anything, right? Because that's another hard part, right? Because values are low, right? If it's if you're making less than 200, 000 in profit. It's probably only worth out 200 it's probably a 1 X. Yeah, right because people the multiples you're banking on the profitability of the business. And so you're involved. the likelihood that without you it will be profitable is lower. So it's a lower multiple, just the way it is. Now you can fix that, but like the reality is most of us think our business is going to be worth all the name and this and that. But like the reality is it's only worth what it's going to bring in.

Stoy Hall, CFP®:

Right.

Tracy Gunn:

And the higher the confidence in the to higher the value, based on your profits. And fixing those things. You can do it. You just have to know what to do. Most people don't even think about it enough to know to do.

Stoy Hall, CFP®:

We talk about mindset a lot in our podcast, whether you have to have the positive money mindset or from a personal perspective, like you need to make business decisions within your own personal finances, all of this is around a mindset, talk to us about your specific mindset change, and then maybe a story from a client's change when you recognized. This isn't sellable. It might not be worth what it is. How do I overcome my own, initial defense mechanisms and be able to move forward to recognize that, Hey, I need to change my mind because it's not where it's supposed to be.

Tracy Gunn:

And that's where I get back into the setting the date thing. There's just some, it's that's the theory about like you get engaged and you look at your ring and all that. But until you set a wedding date, and book the hall. Are you really getting married or is it just fantasy, right? Once you set that date, all the crap that has to get done between now and then has to get done. And that's why setting the date. And so for me setting the date, really like I gave myself an exit. I was like, okay, by the end of this year, this was in like July of 2019 and I said, by Christmas, like by the end of the year, I'm done. So I can fix this. And let's see what I can fix right to make it more attractive to make it easily transferable to make it more profitable, all those things. And for me, once I set that date, I was like, okay, I could do anything for 6 months. It wasn't so painful anymore. I wasn't so resentful and frustrated now. I had a very different. So it was like putting on exit glasses, right? It was like, okay, I'm not looking at all the possibilities. I'm looking about what gets me right. I've got the date. If the countdown has begun, what do I need to get done between now and then? And that's how, for me, that shifted everything for me. That's setting the date. I know it sounds really simple, but it really changes your perspective on what you're doing. It narrows it automatically filters. And and some of that is not just, okay, I want to be out of this business, but some of that is what do I actually want? Maybe I want to do something else, maybe, what people are selling, there's a lot of reasons people are selling, they're burnt out. Maybe they're getting a divorce. Maybe they're have grandchildren, want to be more around them more like that happened for me. Maybe they just have a new passion project. There's a lot, there's health where I just am opening my candy store. The lady that I was supposed to take over her space, she got cancer. I'm She, so she couldn't run her business anymore. She was a solopreneur. And so they had to do this whole like lease, like termination through the courts and whatever. But that happens. And so people are exiting, they aren't as I sell, they're exiting for all different reasons. Maybe it's just not making enough money and they're tired of trying, right? For all those reasons, knowing what you actually want versus what you have is a part of that, right? And that's the motivator that for me, that's the mindset. It's every once in a while, someone will come to me, especially my hometown and say, we have this beautiful restaurant. You should open it. You should take it over. And for a minute, I'm like, Ooh, an opportunity. Shiny. And I look and I go see it and I get all excited and I dream about all the things it could be. And then reality, my goals remind me, remember how you said you wanted to travel the country and not be tied to a place? It's Or an insane business. Remember that Tracy? A profit like a business that has low margins, remember, and crazy people. Remember that? Yes. Okay. Nope. Thank you very much. I'm on my way. But it keeps me, even if I get off track a second, what I have already determined for myself holds me back. Cause it doesn't align with what I really, and that is part of that whole mindset things. Like when you realize this is not what you want. Figuring out what you actually want is different and I'll tell you when I started to make changes, especially my big business. I had a 6500 square foot restaurant. It was like a the bar sat for it was big. We did weddings for the hotel. We had our own private catering room. We had live bands. We had a bar 40 it was. A lot and when I decided. That I was just going to do this within a month or so. I didn't hate it as much anymore because I got rid of the things that may be crazy. And at that point, cause I had given myself six months, it's like month two. I was

Stoy Hall, CFP®:

like,

Tracy Gunn:

Cause I had gotten myself out of a lot of the things I had figured out some things that were not working, that were making me crazy all because I was thinking, what can I get rid of? What can I give to somebody else? Whether it's turning on my customer loyalty program and having a customer list or, training my kitchen manager to do the liquor inventory or whatever it is. All of a sudden those things were off my list and not only made my business more valuable, more profitable, like Managing the liquor, finding fit, made me more profitable, which made it more expensive, right? Made my more valuable because I was more profitable. So but again, only because I was thinking about that, did that even come into mind. I would have just kept going and adding things and trying to figure out the new, the next event. And then I have another gentleman, Jim, that we worked with, and he was thinking, he came in thinking, I'm going to start on my staff in breaking down. What do you want? What do you need? What is the number you need to reach getting out of this? He realized that they probably number 1, weren't going to be capable of doing it. Because he was still in it and then he thought, gosh, I'm going to keep my, I'm going to keep the business. Meaning the real estate. So he still have income from that. And then he realized that he thought about, growth through acquisition. I think he changed his mind about it, but then he actually wound up finding a buyer for the business with some seller financing. So he can sell it for higher. He has longterm, he saved some taxes. So like he came into it thinking, yes, I want to be done. And this is the easiest way I could just say, here you go. But he realized, wait a minute, that doesn't I want expert, I want this much more for it. So again, just by setting the date and figuring out what he wanted, he was able to filter and work towards it. It starts in the mind, right?

Stoy Hall, CFP®:

Yeah, absolutely does. What's a realistic date, right? Obviously we all can set a date and go at it, right? But is six months? Is 12 months, a good enough time frame for all the things you got to do? And then we'll follow up and talk about all the things that you need to do. But what is a realistic date for people that are listening going, Oh, I can get this done in six months. Now it depends on the business and I get that. But what would be realistic? Yeah.

Tracy Gunn:

For myself, I gave myself six months because I thought I could do this six months, but no more. I had to set something realistic for me. Because the nice thing about setting a date is that it can change. You're the boss. If all of a sudden, half of the things that annoy you disappeared, six months doesn't seem so long, does it? You're like I could do this another year, maybe. And now you're doing it with intent. So the way we work with people is we help them figure out what they want and not just I want to hang out with my grandkids, but what number do you need to get? And how can we get you there? Are you close? It's, we call it bridging the gap. And then we lay out the, we call it the opportunity roadmap, of fixing your basic stuff. That maybe. Should be there, but aren't because you've just figured it out, right? All of us are just figuring it out as we go, right? Fixing the basics and then what can it be value adds? What could help grow it and whether that's growth by acquisition or streamlining the product line or raising prices or all those things, right? And to do that, like you can start there and then you back into it. So six months, like I found a buyer in three months. And he approached me in my bar, he'd always dreamed of owning a bar. He was a customer at my counter. I had been talking about having grandbaby. I want to go, because I talk a lot, right? And I was just schmoozing it up. And, after a couple months, he was like, would you sell it to me? And I was like, heck yeah, right? I went from nobody wanting it. And give it up to somebody actually wanting it for money. Sure.

Stoy Hall, CFP®:

Absolutely.

Tracy Gunn:

Absolutely. So it can happen really fast. It just depends what your goals. And I don't even think it's just your goals. It's what you need. Cause again, when we talk about the 12 million boomers, like they don't have a retirement plan. This is it. So that makes it even more important for them to dive in to getting this crap fixed and. Enhancing the value so they can get the number. Cause I think after running a business for 20, 30, 40, 50 years, you should get paid, right? But that the exit. So I had another gentleman, Don, he had really five businesses. If he had been running it for 52 years, which is think about that.

Stoy Hall, CFP®:

Easy. Yeah.

Tracy Gunn:

And he was an importer for like motorcycle pieces that they create that. So you've manufactured the imports. He had retail locations, he had wholesale and he had e commerce. And he was really running low. And he recognized, crap, I'm not going to be able to do this in 6 months. For him, that was not realistic, because he had too many working pieces, it was fresh off of COVID numbers were down. So what did he do, is he really figured out what pieces would be the most valuable, and he focused on those, and carved off the others, and just sold them, let them go. So there's a lot of different strategies, but the goal is to figure out what you need as well as what you want. And those 2 things can be the same. And if you are somebody who is,

Stoy Hall, CFP®:

Yes. Let's just start a little bit different. So you had mentioned a timing. It was six months for you. Really it's about your needs and wants. And I want to throw something into that is they can be the same, but also you need to be realistic as well. And that's where I believe having a team in this atmosphere. And I'm going to ask you this, cause I don't know your process, but having a team to help you understand what your true needs are. So therefore, if your wants are drastically out of line We can fix that. If not, maybe they're the same. But what I mean by that is making sure you do have, your accountant and your planner and everyone in place for your personal side, because that's what it comes down to, right? When you exit, it's now all personal. There is no business. So that's what I feel like with the needs and wants you got to be realistic as well and make sure it just fits whatever. So talk us through exitables process and what people need to do prior to coming with you and then what that whole thing looks like.

Tracy Gunn:

And actually, honestly, we do a lot of free workshops because this, there's such a huge knowledge gap on this subject. Like we talked about, like most people haven't even thought about it. They dream someday, right? Someday, but they really have no idea what makes their business valuable. They have no idea what it's worth and they don't know what the process is and they don't even understand often that their business is not sellable. They don't understand any of those things, right? So there is we have to bring them along a step at a time, right? They just have in their mind that they want to sell, right? Or they want to retire. They have no idea that all these things Our problems, right? It's they don't even know they have a problem, right? They just think, what up? Oh, I'm going to sell next year. I'm going to sell like, oh, okay, sure, sure you are, right? You're going to beat the odds, right? And by having these calls with them where they can ask questions and show them or talk about that. So thank you so much for being able to share this is that it's raising the awareness that they have a problem to be careful. And it feels sad to say, Hey, you have a business, you have a problem, but you do. That's what business ownership is. It's solving millions of problems all the time. But one of them is that you have a problem. If you ever want to sell or exit now, when I say exit, that could be, that you just make it professionalized and you just keep the checks. And you don't have to show up anymore. Like how many business owners would still want to sell if they fixed all the things and they didn't have to be there ever, right? So that's getting exitable, right? That's not a bad gig. But for some, they just want to be done and move away and not think about it ever again. Now that is a different exit. And so our process is usually we have to educate on the front end about, How do you value your business? I think every business owner on the planet should know what their businesses work. It's not a hard formula. I do a very basic one, like a down and dirty of like your profitability. And your multiple, if it's under 200 is one. That's it. If it's a little over, then maybe it's two. But it's just your profit from last year. Now you could tweak that. You could fix that. There's some add ins that you can, make the profit higher. But also, if you're working in it, you got to make your profit lower because you got to pay someone to replace you. So there is some wiggle room. But the down and dirty is, what's your profit? That's probably what it's worth for most business owners, right? I'm not talking about big multi million dollar different conglomerates, right? I'm talking about like most owners who are never hitting a million dollars a year in revenue. They're going to be 1 X, right? Everybody should know what their businesses work, right? It just grounds them in reality. And then from there, so we help them do that. We help them to figure out an estimate of what. What would your ideal date be? Because you can decide that. You can create that. There's none that's too short or too, like we have some people like yesterday. I'm like that's harder for me to do. But right? It's six months. That's not too short. Three months, not too short. Now, if the business is highly dependent on you, that's going to be a little bit harder. You're not going to get as much for it. But if you're flexible and open to creative financing, you probably can get your number. Because if you are flexible on terms then you'll probably get your price. And it's just marketing for that and fixing some basic things. So our process in general is to educate on the front end so that they understand they have a problem, right? Because we think it's the most important part, right? They just don't know. And then once they do, we're like, do you want help figuring out what you want? So then it's figuring out what you want, setting the date, understanding what the value is, and then what are your opportunities, right? Now, part of the setting that the target is. What do you need your business to be worth? If you need to walk away with 300 grand and it's only worth 100 we have a little bit of work to do. You either have to just be realistic or you have to professionalize. Because if you're professionalized, you could 3 4x it, right? Now, you won't make a lot of profit that year. However, if you professionalize, it probably is going to grow because, new fresh blood in the mix, right? So that's the process. And then from there we take them on, we do more of a group training where we bring them through the process for a year at a time just to get them to their exit. And keep them accountable, right? We, it's not just about information. It's about understanding what you can do and how you can figure out, like, where are the opportunities? It's taking an assessment of what your business is right now. For example, for myself, I didn't realize I didn't have a customer list at the time, right? I knew, I was walking around, I had, a texting program that I was paying for, but I turned on my loyalty program. I trained my staff to offer a free appetizer to sign people up. And within a month, I had a 5, 000 person list, knowing what they bought and how much they were worth and how often they came in. And that took a month. And all I did was turn the button on. It didn't cost me anything, but I never thought that it was important. I didn't for whatever reason, I just didn't think about it. So I just turned that on. Now, all of a sudden, I had a list. I can predict how often Joe was going to come in and what he was going to buy every time.

Stoy Hall, CFP®:

Yeah,

Tracy Gunn:

right. Which makes it more valuable, right? So there are things you can do. One, but you often don't know them until somebody points it out, right? And the nice part about our process, you don't have to do it by yourself. You don't have to be, finally, you're at a level in your business where you don't have to be the one to save the pennies, right? And do the hard learning and trial and error that you could just follow a proven process and

Stoy Hall, CFP®:

get to the goal.

Tracy Gunn:

That's the perk of not being brand new, right? When you have to do everything.

Stoy Hall, CFP®:

Yeah, do you need a business broker? Like how important is that aspect? Say we've done that we've got the process We've cleaned it up to a degree of which we want it or whatever it is Where does the business broker come in and do you need

Tracy Gunn:

and again for some? So one of the stats I used before 1 in 10, right? Sometimes 2 in 10 don't sell there was a listed Businesses. So keep in mind, those are not the ones that are off market, right? Those are not family acquisitions. That's listed. So the broker doesn't have a great track record. We'll just say that. Let's just say half of it is on the business, right?

Stoy Hall, CFP®:

Yep.

Tracy Gunn:

But an honest broker would just say no thank you to the business if it really wasn't sellable. But mostly what happens is brokers will list it, they'll do a thing, right? They'll do a write up, and then they just wait for somebody to call. Most brokers are just waiting, right? And so the broker, if you feel more comfortable in that process, and you really want to lean on somebody's expertise. Great, make sure you hire somebody who sold more than 1 a year. Because keep in mind, they're going to take 10%.

Stoy Hall, CFP®:

Yeah, absolutely.

Tracy Gunn:

So they're going to take 10%. They're basically you're going to the other part. I was interviewing a broker and I just want to understand the the mindset, the way that they see it is that they're protecting you, the owner from the buyer. They're protecting you, their job and their mind is to keep you. But my belief is that if you got a buyer and seller together to sit down and have a meal and discuss the business and the possibilities and why you're leaving and all the honesty, you'd have a deal just like that.

Stoy Hall, CFP®:

Absolutely.

Tracy Gunn:

So the broker's in the way, like they're building the wall. And for some people, that's what they're comfortable with. And that's fine. But understand that is their mindset and that's their job. Legally, they're there to protect you from them.

Stoy Hall, CFP®:

And will often kill the deal. Some people call them deal killers.

Tracy Gunn:

If

Stoy Hall, CFP®:

you don't have a broker, how do you find a buyer?

Tracy Gunn:

There's lots of ways, like mine was sitting at my bar talking about it, like I've shared with all my staff. I didn't want to be like, Hey, by the way, I'm out of here. I told them that I would figure out something that I'm giving myself six months to improve things. It explained why I was making things better for them, easier for them. Delegating have systems. So it wasn't so based on me. Okay. Which actually in the end was better for them, right? Cause they just had to follow the system, right? Some of them got promotions, some of them had more responsibilities, so they made more money. But I was very open about it. Not everybody feels comfortable and that's okay. There are tons like this, buy, sell, you can list your own. What's it called? Oh gosh, it's escaping me. There's a ton of them now. And because there's so many that are on the market. That are going to be on the market, they're popping up all over and really, there's whole, booms like Cody Sanchez, who's talking about buying boring businesses, old school, like businesses that have been around forever because there aren't enough buyers. That's the other reason, right? We talked about not being a good business. We talked about the broker. The final one is there's not enough buyers. There are not 12 million people. Ready,

Stoy Hall, CFP®:

ready to pony

Tracy Gunn:

up and buy these builders, right? Each generation's getting smaller. They actually had Cody Sanchez actually recently had a listing about they were giving away businesses for free in Japan because they didn't want to see it go away. They didn't have anybody to buy. Because that's the most, I think it's the most harmful piece of this whole puzzle is that once the business liquidates. All value just disappears 50 years of value, right? In a community, right? Serving customers and manufacturing, like all the things just evaporates.

Stoy Hall, CFP®:

Yeah,

Tracy Gunn:

and I think that's going to be really detrimental to our country. Not to mention to the owner. To their community, right? To all of the people in that pond that the ripple will affect. And so if you could sell and find a buyer, which I think you can, especially if you've prepared and most people haven't you're good to go. Because you know the things now, right? There's millions who don't. Yeah. But you can find them everywhere. There are tons of listings between Facebook and social media and, biz by sell and flip up. That's the other one I was thinking of, there's tons of interest, but you could use a broker too. I mean, it's just really about being educated about the process and you're shifting. Like we talked a little bit about mindset, you're shifting from growing right and surviving to exiting. It's. Just as simple as that's like turning a different direction and that's what you're thinking about. And so all of a sudden you'll see buyers everywhere because buyers are everywhere because they're people.

Stoy Hall, CFP®:

And I'll add whatever industry, service, whatever your business is Have colleagues, have masterminds, whatever you want to call it, but the more, and network with probably makes it a little easier to when you're going to exit. Make sure you're doing that. All right. As we leave this off, what is one simple thing that you want to leave? These business owners who are thinking about exit planning or even new ones who are building and structuring for an exit at some point. What's one thing you want to leave with them?

Tracy Gunn:

Sorry, I couldn't hear. Say, ask me the question. The rain, they have the door open. The rain is loud.

Stoy Hall, CFP®:

Oh, all no problem. What is one thing you want to leave these business owners who are listening with? That are either thinking about exiting now or building their business at some point to exit. What's 1 thing you want to leave with them?

Tracy Gunn:

I just think it's be aware. The biggest thing is be aware of where you're the direction you're going. Nobody, like I said, nobody sets off on a plane. It's a destination unknown. Oh, they do, but how do you know if you have enough gas to get there, right? Know where you're going. Take a minute. We're so busy. We're so in everything, juggling, solving problems, getting through the day, and then we have a whole life hopefully outside of family and this and that, right? And vacation and statuses and health concerns and you just took one hour to jot down some What does the end look like? What's, I'm running a marathon. What does the finish line look like? What's important to me on the other end of that? Everybody's different. Some want a big paycheck, but others don't. Others just want to be done. And that's okay. Like I had a client who had a big catering business that was 35 years old. It was family run. He had made lots of money, but it was post COVID. So all of his numbers were low and he had zero interest in building more. He didn't want to fix it. He didn't want to wait for him. He was cool. He set the date and he's I'm just going to close her up. I was like, but you could have somebody come in from a culinary school. You can

Stoy Hall, CFP®:

let them earn in. You could do all these things. I don't want to. Thank you. Do you need me to sign? Sorry, yeah, there you go. Thank you. So I'm so sorry.

Tracy Gunn:

So let's go stop a 2nd. I was saying that they need to see this. What happens? Entrepreneurship, your brain goes, tell me where we were again.

Stoy Hall, CFP®:

You need to be aware ultimately, right? You need to be aware of where you want to go, what you want to do, and that's what you wanted to leave everyone with. And that's probably the definition of exitable, right? Being able to figure out what you want and your needs and make that happen. And ultimately this part of a business is one of the most important things to think about. So like you said, take that hour. Figure it out. Use resources, right? Go talk to you. That's what this podcast is for. Ultimately is for us all to have resources to, to achieve those things. And really come talk to us, right? That's, I ask everyone who listens, just comment. We are here to help. All my guests are the only ones that I vet out and say, Hey, we're here to help. And they're going to help you, right? They're not going to charge you an arm or leg. Sometimes it's just a little bit of guidance. That's all we need. And Hey, everybody reach out to Tracy at exitable. Obviously we'll have all our socials and everything, but ultimately figure out what you want to do. Be aware of how you need, how you want to exit and you can get it done.

Tracy Gunn:

Yes, absolutely. You did that better than I did. Good job.

Black Mammoth:

The preceding program was sponsored by Black Mammoth. Any awards, rankings, or recognition by unaffiliated third parties or publications are in no way indicative of the advisor's future performance or any individual client's investment success. No award ranking or recognition should be construed as a current or past endorsement of black mammoth. Information regarding specific awards, rankings, or recognitions is available on the Black Mammoth website, www.black mammoth.com. All investment strategies have the potential for profit or loss. Investment strategies such as asset allocation, diversification, or rebalancing do not assure or guarantee better performance and cannot eliminate the risk of investment losses. There are no guarantees that a portfolio employing these or any other strategy will outperform a portfolio that does not engage in such strategies. This broadcast should not be construed by any client or prospective client as a solicitation to affect or attempt to affect transactions and securities or the rendering of personalized investment advice due to various factors including changing market conditions. The information discussed in this broadcast may no longer be reflective of current positions or recommendations. While information presented is believed to be factual and up to date, Black Mammoth do not guarantee its accuracy, and it should not be regarded as a complete analysis of the subjects discussed. The tax and the state planning information discussed is general in nature, and is provided for informational purposes only, and should not be construed as legal or tax advice. Listeners should consult an attorney or tax professional regarding their specific legal or tax situation. Past performance is not indicative of future results.

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