In this episode, Frank interviews business acquisition expert, Marty M. Fahncke, a veteran of almost $500 million in business sale transactions over the course of 25 years.
Frank and Marty also announce that they are co-authoring the book, Boomer Sells The Business, along with an accompanying workbook.
At the beginning of the interview, Marty shares five reasons why every business owner should have their firm in “sale-ready condition” even if they have no current or future plans to sell it.
He then lists the seven things you must do to move your business from its current state to a position where it can be sold for the highest price, and shares why you need to get started on those tasks as soon as possible.
At the end of the video, Frank and Marty share how you can register to receive free paperback copies of the book and workbook when they are published later this year.
Simply send an email to book@BoomerSellsTheBusiness.com and include your mailing address and phone number (in case the shipping company needs to contact you).
If you have ever wondered how much you might be able to sell your business for, or how you could make it worth many times more than it currently is, book a 15-minute call with Marty M. Fahncke by accessing his private calendar at:
https://calendly.com/adventurist-marty/free-consultation-boomer-sells-the-business
What follows is an AI-generated transcript of our entire conversation. Please excused any typos!
[00:00:00] Marty M. Fahncke:
I started buying and selling businesses over 20 years ago, almost 25 years ago, when one of the earliest business that I started was acquired. And that would led me down the road towards mergers, acquisitions and buying and selling businesses. Since that time I’ve done almost 500 million in deals and I’ve taken ownership in I don’t even know how many businesses.
So Westbound Road, my company was started to buy and sell businesses. And then that eventually led to advisory to help others buy and sell businesses as well. So that was all great, but how is that a mission? It’s not. Here’s what happened is more and more I have been seeing, especially since 2020, I’ve been seeing more and more business owners who for various reasons are deciding to sell their business and they come to me and say, Marty, I’d like to sell my business.
Would you like to buy it? Or can you help me find a buyer? And I look at the business and I realize that. It is not sellable.
[00:01:05] Dude Walker:
And now it’s time once again for the show that gives glorious voice to 25 million business owners across the fruited plain. Radio Free Enterprise with Frank Felker.
[00:01:21] Frank Felker:
Thank you, Dude Walker. Yes, indeed. I am Frank Felker. Welcome back to Radio Free Enterprise. My guest today is Marty Fahncke, Acquisitions Advisor at Westbound Road, calling in from Olathe, Kansas. Marty Fahncke, welcome back for your third visit to Radio Free Enterprise.
[00:01:43] Marty M. Fahncke:
They say the third time’s the charm, Frank.
So hoping this one’s a home run.
[00:01:47] Frank Felker:
You’ve been nothing but charming in your previous appearances, Marty. I can testify to that. To our viewers and listeners, I want to let you know that today’s episode is going to be a little unusual because Marty and I are announcing that we are joining forces to co author a book titled Boomer Sells the Business, a step by step guide to cashing out and living large.
It’s a how-to book for Americans, American business owners in their 50s, 60s, and 70s who have been running their small business for decades and now are considering retiring. It’s also a great book for any business owner of any age who is considering the idea of realizing the value that they built in their business and maybe move it on to try something new.
In this podcast, we’re going to explain. Why it is so important that you have your business sale ready, even if you have no current plans to sell it. Marty’s going to make a very strong case for that. And then we’re going to tell you what you need to do, the seven steps you need to take in order to move your business from where it is now.
To that sale ready condition. Now I’d like for you to stick around to the end so that you can find out how you can get a free copy of the book and the accompanying workbook and Marty, with all that having been said, tell us what your mission is at westbound road and. How it relates to this book that you and I are writing.
[00:03:24] Marty M. Fahncke:
Thanks Frank for that introduction. I’m so excited to work on this project with you. And it truly is a mission. I started buying and selling businesses over 20 years ago, almost 25 years ago, when one of the earliest business that I started Was acquired. And that would led me down the road towards mergers, acquisitions and buying and selling businesses.
Since that time I’ve done almost 500 million in deals and I’ve taken ownership in, in, I don’t even know how many businesses, so Westbound road, my company was started to buy and sell businesses. And then that eventually led to advisory to help others buy and sell businesses as well. So that was all great.
How is that a mission? It’s not. Here’s what happened is more and more. I have been seeing, especially since 2020. I’ve been seeing more and more business owners who for various reasons are deciding to sell their business and they come to me and say, Marty, I’d like to sell my business. Would you like to buy it?
Or can you help me find a buyer? And I look at the business and I realize that it is not sellable. Here’s a shocking statistic. Only 15 to 20 percent of businesses that are put up for sale on the market will actually sell. Only 15 to 20%. So that means 80 to 85 percent of businesses We’ll not sell. The owners have to turn off the lights and walk away.
And the really sad thing about that is that the majority of those owners thought they had a business that was worth a lot of money. They thought they had a business that was going to sell. And many of them planned to use that income from that business sell in their retirement. And then they find out it’s not sellable.
There’s no value and they’re in big trouble. And I am here working with you. To prevent that from happening to as many business owners as we can possibly reach.
[00:05:20] Frank Felker:
That’s great. And that’s a very strong mission. And I think this is why you and I we just our wavelengths are in sync with each other about, it’s all about helping business owners.
And I’ve written extensively about this in my I have a book called Unlocking the M Cube where I talk about how business owners should start with the end in mind. At some point, you should, throughout the life cycle of your business, you should be focused not only on current income and increasing sales and so forth, but what sort of an asset are you building to sell.
The true entrepreneur can see themselves as separate from their business. Their identity is not entirely tied to it. And at some point, They see themselves selling and moving on. Now, that was a great explanation of what you do and how you came to this point. What about your contention that every business owner, irrespective of their intention to sell the business today or in five years or ever, why is it so important that they have their business in sale ready condition?
[00:06:29]
Marty M. Fahncke: Yeah, absolutely. And I have been preaching this message out there quite a bit, and I really want people to take it to heart because I see a lot of times for people. I don’t have any intention of selling my business. Why should I even care about any of this? Let me give you a story. So most people will buy or sell or start one business in their entire lifetime.
However, most people may buy or sell multiple homes in their lifetime. And so I’m going to relate this story to selling a house because a lot of people can relate to that. So when you decide you might have a house and you’ve lived there for several years and you decide, maybe we need something bigger or we need something smaller or, Whatever the case may be.
And so you decide you want to sell the house, you bring in a professional, they commit and they say, all right, here are the things you need to do to sell your house. And it’s called staging, right? And so they might say, you need to put some, some fresh paint in these rooms. There might be some landscaping.
There might be some decluttering certainly. And even all the way down to, baking fresh baked chocolate chip cookies when the buyers come through. So it smells really pleasant. Now, it is not uncommon in that scenario for a homeowner to decide they want to sell their house, get it all ready to sell, and make it appealing to buyers, and then they look around and go, Oh, wait a minute.
This actually isn’t so bad. We’ve fixed all those little Things that we’ve been living with for a long time. And it’s all spruced up and bright now and maybe we’ll stay. And it is not uncommon for homeowners to just decide to stay. It’s a similar situation with your business. If you are in your business right now, and you’ve had it for a really long time, you may have.
No interest in selling, but if you were to prepare your business for sale, to make it appealing to a prospective buyer, or let me rephrase that to a prospective new owner, then you as the current owner can have a fresh new look at the business. And a whole different attitude towards it. If you clean up the things that need to be cleaned up in your financials and your operations and put in the processes and procedures that need to be done to make the business so that it would be appealing to someone else, it’s probably going to be even more appealing.
To you we’ve had scenarios where business owners who are working 50, 60 hours a week in their business, and we help them over a period of time, get the business ready to sell. And one of those is to get the owner out of the day to day operations. And we’ll talk about that a little bit later on, they’re making, let’s say, 150, 000 a year and working 50, 60 hours a week.
When you do all of the steps necessary to sell your business. You might be working 20 hours a week and guess what’s going to happen. Your profit margins are actually going to go up because it’s going to be running so much smoother and so much more efficiently. So you’re going to be making more money and working less.
And again, you may look around and say, heck, why would I sell it now? Great. That’s exactly what we want for you is to have a great thriving business that isn’t. Killing you and driving you into an early grave. Now that’s the positive side. Please go ahead. Why you should have your business ready to sell. Yeah, Frank?
[00:09:36] Frank Felker: No, go ahead. I thought you were coming to a close there. Please go ahead.
[00:09:41] Marty M. Fahncke:
No, that was the positive side. I’m gonna talk about the negative side. And the negative side is what I call four D’s and a B. Alright, the four Ds are divorce. disease, debt and disagreements. And the B is burnout.
Those are the reasons we have people calling us every single day saying I need to sell my business. Note the word I just used need not want. It is burnout. Very common to be trucking along in your business and everything seems fine. And something happens, life happens. And all of a sudden you find yourself needing to sell your business.
Divorce is obvious. Disease is really common. We we just had a business that we just sold a close on a few weeks ago. Where it was a great thriving business. They were doing millions of dollars in revenue a year and some things happened and two of the founders who were family members got cancer at the same time.
And it decimated the business and we wound up selling it for. pennies on the dollar because they were not prepared. Their business was not ready for sell. And but they had a timeline that they had to hit and there was nothing we could do about it. We got the most money we possibly could for it, but it was less than it would have if they’d have been ready.
So divorce, disease, debt, financial ramifications, inflation is going rampant right now. Taxes are getting higher. There’s a lot of reasons. We just had a, I just had a potential client call me the day they’re in a lease in a downtown metropolitan city that has an 8 percent annual increase in their lease payment.
They have a 15 percent profit margin in their business. Guess what? At month 23, they have no profit in the business. And that’s what happened to them. They’re about to go out of business simply because of their lease payments. So things can happen financially that can prompt you to have to sell your business.
Disagreements is the fourth, the partnerships. A lot of businesses have partnerships, whether that’s a family business with family partners or outside partners. Unfortunately. Related to divorces. Bad partnerships can be as bad as a divorce in a business and necessitate a sale of all or part of the business.
We see it all the time. And then last, but certainly not least is the B burnout. We see a lot of business owners. Who contact us and say, I’ve had the business for seven years, 10 years, 12 years. And all of a sudden I have just hit a wall and I am burned out. The scary thing about the burnout thing is that once somebody is burned out, we notice a very rapid decline in the business.
The revenue start going down. The employees start getting unhappy profits go down and all of that impacts the valuation of the business. So if you are experiencing burnout or you’re even close to experiencing burnout you really need to think about selling immediately because waiting will probably cost you a lot of money.
So the four D’s and the B are more reasons why you should always have your business ready for sale, even if you don’t plan on having it. So we don’t plan on having a fire. But we have fire insurance. We don’t plan on getting into a car accident, but we have we have car insurance. You don’t plan on wanting to sell your business, but things may happen that will force you there and you want to be prepared.
[00:12:55] Frank Felker:
Another thing that can happen is something like the pandemic something completely out of the blue that nobody saw coming. Another thing that can happen is technological revolutions. Three times my businesses have been, I think, decimated by be a little strong, but certainly strongly negatively impacted.
I was in the printing business and along came CD ROMs and then the internet. I was in the com business. And along came the com bubble bursting. I was in the real estate business and along came the financial crisis. And you need to be prepared for that and perhaps take a step away before that type of thing happens.
You made the analogy to buying and selling homes. I have a very close person to me who owned a home and a hurricane In in Florida, and they just dodged a bullet with Hurricane Ian. So many of the homes all around that were completely, the whole place was like a flat top, but not their home. And they rebuilt or repaired, and then they decide, you know what, we love this house, we’ve lived here for 20 plus years, we’re selling.
We’re moving on, and it just makes sense to be prepared and everything you’ve just said, particularly relative to burnout. I know I’ve seen it many times. I’m sure you have as well. They don’t, the owner doesn’t show up to work till 11 o’clock or noon. They mope around, they don’t do the things they need to do.
And that type of negativity is contagious. And and as you say, so they’re not marketing as actively, they’re not out there beating the bushes, looking for business, things just start winding down. And before you know it, The value of your business is not nearly what it might have been. Now, before we move on to how you move your business from where it is today to sale ready condition, I’d like you to speak to what it is that the valuation of your business is based upon it.
Before you answer that question, I’m sure you would agree that many business owners think. Oh it’s our top line sales, or we got a million dollars worth of equipment on the floor, or we got a 10 year lease on this space, or whatever it is. What is it actually that you wanted to use the expression new owner instead of buyer?
What is it that they’re really looking for?
[00:15:28] Marty M. Fahncke:
Yeah, absolutely. And actually we’re going to talk about the seven things I recommend you do to get your business ready for sale. And this topic is number six. Because for the most part in general, businesses are valued based on the profit. There’s a hugely broad misconception out there that businesses are valued based on revenue, and that is simply not true.
The case, certainly revenue is important and if a business doesn’t have revenue, it’s not a business, but the valuation is generally gonna start with profit. And then from there you’ll start to look at asset values, like you mentioned, equipment or inventory. Real estate, obviously if it’s, if it owns real estate, the real estate value, et cetera.
But in general, the simple answer is profit. And we’re going to talk about that much more aggressively a little bit later on, because I see a massive mistake that a lot of business owners make that I want to, that I want to touch on when we get to our seven things to look at to get your business ready to sell.
[00:16:28] Frank Felker:
I apologize for jumping the gun on that one, Marty, but it was top of mind for me because it’s an important topic and one that most people do get wrong.
[00:16:38] Frank Felker:
And there’s a thing. And if you, if what I’m about to say Dear viewer, listener you’ve never heard before. I strongly suggest you Google this expression, net present value.
A projected future income streams. And basically what it means is let’s say you’re making a hundred thousand dollars profit per year over 10 years. That would be a million dollars, but because of what’s called the time value of money, you’re not getting a million dollars today. That million dollars over 10 years is worth, let’s say, 500, 000.
I just thrown a number up in any event. That’s what in essence, an entrepreneur or a new owner or a business buyer is most interested in. What type of profits income am I going to be able to generate with this asset, the business that you have? Okay let’s move on then. Let’s start with the seven things every business owner needs to do to get themselves or get their business from its current state to sale ready condition.
What’s number one, Marty?
[00:17:41] Marty M. Fahncke:
All right. These are not in any particular order of importance or timeline. They’re just the order that I put them down in. They’re all important. They’re all critical. So I’ll start with the first one, which is your financials. We see time and time again where businesses have financials that are either inaccurate or incomplete.
Or just an absolute mess. Entrepreneurs and especially small business owners are notorious for flying by the seat of their pants with regard to financials. And, they basically run it by if there’s money in the bank at the end of the month, then it must’ve been a profitable month.
You can not. Can not run your business that way. If you’re going to have a sellable business and if you’re going to have a business that’s worth even owning yourself, you want to have your financials in order. Make sure you have a bookkeeper who is keeping your, all of your accounts payable and your accounts receivable into some sort of a system like a QuickBooks or whatever you want to use.
But you should always have your financials in clean clean order, understand your financials, know what your profit margins are, both gross profit and net profit. Understand how your capital expenditures are impacting your financials and know what your financials look like in the past and in the future.
Make projections, understand what your business is going to look like this year, next year and the year after. That’s a tall order. Again, most business owners don’t have this in place. But it really isn’t that complicated. If you aren’t a great numbers person, hire somebody who is, it will be one of the best investments you will make in your business.
Number two is what we call an operating system or what, not what we call an operating, what is called an operating system. Do not confuse this with a piece of software. When we think operating system, we think like windows or something like that. An operating system. Is a business operating methodology that lets you do everything from creating processes and procedures and standards and documents to hiring, firing your marketing efficiencies, everything else.
And it’s a it’s an entire system. There are a couple out there that we’ve used in the past very successfully. There’s EOS, which is the entrepreneurial operating system. There’s the gazelle system. There’s the scalable operating system. Take a look at all of those and find one that fits. But it’s really a everything from meeting rhythms to outlines of templates of planning and strategizing.
So for example, this is a document my business partner and I called the 90 day game plan. Every three months we get together and we write this document out. It’s our, we go look at the past 90 days, the present, the future, and then we have what’s called our focus five, which is the five things we want to achieve in our business.
to make the biggest impact. So again, it’s not a software, it’s a system. And if you have an operating system in place, it’s going to make your business so much smoother to operate, so much easier to operate. And most importantly, so much better for a new owner to be able to take over and step right in and operate easily and profitably.
Number three thing you need to do to get your business ready to sell, and it’s tied to an operating system in most ways is what we call owner exit. And when we say owner exit, that doesn’t mean the sell of the business. That means the owner exiting themselves from the day to day operations of the business.
There’s a saying from one of my mentors, Ryan Dice, the more valuable you are to your business, The less valuable your business is. What does that mean? Think of it as an old time wagon wheel with the hub in the middle and all the spokes going out to, to support the wheel. If you as the business owner are the hub and all of your team are the spokes and everything surrounds you, everything has to go through you.
That is a business that is probably not sellable because you are the business. All of the things that are in your head are the business. And so you need to work on exiting yourself from that business so that it is not dependent solely on you. If you’re working 50 to 60 hours a week in your business, it’s, it may be a non sellable business.
So you need to exit yourself from the business. Part of doing that is implementing an operating system so that all the things that are in your head. Can go out and be documented and procedures built and processes built in your team can be hired and trained so that they can do the things for you without you having to be present every single day.
The fourth thing to look at is identify a buyer and build your business to suit them. So for example, let’s say you have a plumbing business and you are thinking maybe we’ll sell in a couple of years. Who is going to buy that plumbing business? There’s a couple of different options. There’s an entrepreneur who maybe a plumber now who has a business and then they’re one guy in a van and they’re, they have, visions of growing their business and you’re planning business has three or four plumbers and it’s, you’re planning a business.
You as an owner are above the business, right? You’re no longer out, unclogging drains. You are running the business not out in the field. And so that entrepreneur looks at you and says, I want to be like you. And instead of trying to grow their business, which can be really hard, they buy your business.
That’s one type of buyer and entrepreneurial buyer. Another type of buyer may be what we call a strategic or roll up buyer. There are national organizations of plumbing national chains and brands that are out gobbling up and buying plumbing businesses to acquire until they have a local presence in every metropolitan area and under a national brand.
That’s another kind of buyer that’s called a strategic buyer or a roll up buyer. Identify who you feel you would want to sell your business to and start to build, understand what their needs are, what are their desires, what do they want to buy and build your business to match them. It’s going back to the house analogy.
If you wanted to put your house on the market if somebody, you identify that somebody wanted to buy a house with purple walls, You wouldn’t normally think I’m going to paint my house with purple walls, but if you knew beyond a shadow of a doubt that the perfect buyer out there really wanted purple walls, you’d paint the walls purple.
And it’s a similar thing here. Every buyer or buyer segment has specific things they’re looking for. And if you can start to understand what your future buyers is wanting, then you can start to build your business toward that. Now, number five is to understand your valuation target. One of the toughest.
Jobs I have, and I have to do it almost weekly. I do it weekly. I was gonna say almost daily, but I do it weekly is to talk to a business owner who needs or wants to sell their business. They have a number in mind that they believe it’s worth the value. When we talked a little bit about this before and then I have to break them the news that it’s not even close.
They may think it’s worth 2 million and I may look at it and say, there is In no world possible is it worth 2 million. It’s worth 400, 000. I hate that conversation and unfortunately I have to have it all the time. So I highly recommend that you get evaluation of your business now. So you understand where it is now and you can do the steps to get it where you want it to be.
So the problem is a lot of people call me and say, I want to sell my business, next month and there’s no time to fix anything. And the value is the value. But if you contact earlier or start the process earlier, there’s more time to fix it. Bullet point number six or step number six. I have bullet points on my notes right here.
Step number six is the one you talked about, profit. So a business is valued primarily based on the profit or cash flow. How much money is it actually making? There’s a variety of reasons for that. One, you mentioned that the cash flow, the other big reason is debt. If most buyers of a business have to use debt to buy the business, whether it’s S.
B. A. Loans or other types of financing, they have to fund the acquisition. If the debt service of of the business acquisition is more than the profit of the business that can happen, right? So you have to have a high profit margin in the business in order to make it sellable. And here’s something else, a big tip.
Listen up. This is really critical. Many business owners operate their business and their financials for tax mitigation, meaning they’re trying to minimize their profit as much as possible by stuffing as much stuff into the business to make it look like they’re not making as much money in order to minimize taxes.
Fine. That’s one way to do it. The problem is we’ve had many business owners who’s called subs and I want to sell my business, it’s doing 2 million a year, but I’ve got a great tax mitigation strategy, so it shows no profit whatsoever. How much is it worth? And that is a really tough proposition.
On most business transactions, it’s a three year look back. So if you’re thinking about, if you’re currently in a tax mitigation strategy and you’re doing everything you can to minimize your profits, to minimize your taxes, you may want to start thinking about changing that. You want to maximize your profits.
You can’t make the same money twice. You’re either going to make the money by saving on taxes. Or you’re going to make the money by showing profit and selling the business and gaining it that way. But most people are trying to have their cake and eat it too. And and it’s sad when I have to have that conversation with people that have a, an unprofitable business on paper, they’re making money, but on paper, it’s unprofitable.
Guess what? On paper, it’s also not valuable. And then the last bullet point that I want to talk about, number seven is prepare. Early three years is optimal. Again, I mentioned why three years look back on financials, three years, look back of history at a business is standard in the acquisitions game.
Most people are going to look at three years, especially. In 2024, when, at the time of this recording, 2025 2020 didn’t count. 2020 was an anomaly. The COVID year and even 2021 to some degree, things were so weird for so many businesses. Some had a crazy high record revenues and something, and of course, the PPP and EIDL and all that.
Some had horrible years. So those years are ignored. But the last three years, of your business is what is key. And so if you have, if you start preparing now for a sell in three years, all of the things that I just talked about and many more are going to be in the best shape possible when you get ready to sell.
So number one, clean up your financials. Number two, install a business operating system. Number three, exit yourself as the owner from the business. Number four, identify the right buyer and build your business to suit them. Number five, understand your present valuation and the valuation you want to get when you sell.
Number six, focus on profit. And number seven, start at least three years in advance. So hopefully that was a lot of information, but we’re going to go a lot deeper in the book.
[00:29:04] Frank Felker:
Yes. And I did not interrupt you. I have so many, things I want to say, but, and also questions I want to ask. But I just felt you were on a roll and that was all fantastic information.
And everything that we need to know to move ourselves from where we are to that sale ready position. So I would like to now touch on through them one at a time. Number one was get your book straight. Is that correct? Correct. Financial. Okay. And so I liked how you talked about tax mitigation and yeah, we don’t pay any taxes because we don’t have any profit.
Nobody wants to buy no profit because as we’ve discussed, profit is what people are buying. Another thing that I’ve seen is that a business owners will take benefits or, go so that are off the books or, literally go so far as they’re. taking cash that they’re not recognizing as revenue.
And that’s great. And maybe it helped you build the house that you’ve got and everything, but, you can’t sell that. You can’t, pull the buyer aside and whisper in his ear and say Hey, guess what? We take five trips to Tahiti every year and it’s all on the business, that kind of thing.
So you need to make sure that all your off book Transactions are put on the books. You refer to it as an operating system and the expression I’ve always used is an operations manual. And I use the example of what you get. If you were to spend however many millions of dollars it costs to buy a McDonald’s franchise, just so you can work 70 hours a week and make 160, 000 a year.
But they do have a book, everything you do from the moment you unlock the door and turn on the lights until you turn off the lights and lock the door. And that’s the kind of thing you’re talking about, right? As you mentioned, how you hire, fire.
[00:31:01] Marty M. Fahncke:
Yeah, exactly. If you were to buy, man, I have to steal that from you in the future, Frank, because that’s actually really brilliant.
Like, all of this, every step of every process has been figured out how to do it best. And it’s replicatable, right? And that’s what you need to have in your business. And so I don’t like to call it a manual or a book because people And picture a literal manual in a book, which I’m talking about something even more, like I said, it even involved I guess they’re in the manual, we talked about like, how often do you have, team meetings?
How long are the TV? What are the agenda for the, I guess it all is in there. Yeah that’s actually a really good example is a franchise operations manual. If somebody was going to buy your business as a franchise and you just hand it on books that here, go start the exact same thing. That’s what they really need.
It’s brilliant. Yeah.
[00:31:47] Frank Felker:
And then that’s, the turnkey business,
[00:31:50] Frank Felker: Here’s the key, here’s the book, have fun. And there’s a company or a resource that’s called the manual that I would recommend people look into. Everybody has different ways of working. You may not like the way they do things, but that is their mission is to help you write what I call the book.
And so that’s that. That’s phenomenal. Now, when we talk about cleaning up the books or putting together, cleaning up the the financial books, and putting together the operations book, do you find that Did you get pushback from business owners about that? Yeah, it sounds like a good idea, but it also sounds like a lot of work, Marty, and I’m not sure I really want to go through all that.
And so two questions on that. Do you hear pushback and if, and when you do, or whether you do or not, can you help people make it easier for them to get these things done?
[00:32:45] Marty M. Fahncke:
Yes. The answer to the first question is yes, certainly. And and it depends on their timing. Again, if they’re calling me and saying, I have to sell my business now.
The no, there’s no time to install an operating system and create that book. It just, it’s not gonna happen. Their financials should be in order. And we actually have a accounting partner accounting firms that will take over their financials and clean everything up. It can take.
Sometimes a month or two to do all of that. But we absolutely recommend that happened. And we’ve got resources to do that. If somebody is contacting as well in advance of their cell a year or two or three, which is optimal. There’s plenty of time to do all of that in. I don’t get a lot of pushback from people who are contacting me that far in advance because these are people that have figured it out, right?
They’re contacting saying, how do I get the most money for my business when I’m ready to tell me and I’ll do it. And if they’re contacting me that early they’re big enough planners and they understand well enough to know that, yeah, if they’ve got to start. Creating the playbook or creating the operating system now, and it’s going to be a lot of work, but it’s going to pay off in the end.
Then I get a lot less pushback. The pushback I get is from people who like, is it have to sell? And I say we can’t, we’ve had some businesses. We’ve literally had to walk away. We’re like, your financials make no sense. They’re an absolute mess. We have to have them proper, or we can’t sell your business.
We’ve had some who’s I, they are what they are. You have to do what we won’t even have
[00:34:09] Frank Felker: to deal with them.
[00:34:10] Marty M. Fahncke:
Yeah, we don’t. And then we have others who we say, look, you’re, your financials are a mess. We’re going to have you go to our accounting, partner accounting firm, let them get everything in order and then we’ll put you on the market.
Which we get pushed back on. I need to sell now, not in two months. Like I can’t sell a business that the financials literally don’t add up. It’s just, no buyer’s going to buy it. And if they do, they’re going to come back and sue you later because something wasn’t right. So don’t break.
[00:34:36] Frank Felker:
Yeah, that’s what you need. Yeah. And also, a fire sale, you’re not going to get the best price. You, in fact, you’re going to get a very poor price. Exactly. Okay. I don’t remember which number it was, but I believe you referred to it as exiting the owner. Was that the expression? Number three
[00:34:52] Marty M. Fahncke: owner exit.
Yep.
[00:34:53] Frank Felker: Okay. So one of the things that I talk to business owners I consult with about is I’ll ask him honestly, how many days a week they work. And I’m sure you hear it. I work every day, thank God it’s Friday. There’s only two work days left till Monday. And they just, anyway, they feel compelled, whatever, for whatever reason, that’s what they’re doing.
And it’s part of what they see as their role as an entrepreneur is to be hard working and more hardworking than, some schlub that’s a clock and a check on a nine to five job. But What they don’t understand is exactly what you said, that they, what they really doing is in the the e myth is they’re just managing the business.
They’re, they really bought themselves a job. They’re not an entrepreneur. And so what I encourage people to do is take a long weekend once a month and then take an entire week off. Now, of course that requires you to prepare. your people and your systems and all that jazz people and processes to be able to do that, which means empowering people and giving both responsibility and authority.
Anyway, we could spend a lot of time on that. But the ultimate thing, in my opinion, is if you can take one full week of vacation every quarter, Then you are now at least very close to the point of being able to to exit or sell the business and I’ll let you respond to this after I tell this great story, I know a really successful entrepreneurs, great American dream story came to the U S as an immigrant, a hundred bucks in his pocket, blah, blah, blah.
Now, he’s got a multimillion dollar home services business that’s actually being franchised. And they are selling these things like hotcakes anyway. He told me, or I overheard him telling somebody else that he had everything set so well that all he had to do was come into the shop at nine o’clock every morning and yell for a half an hour.
And then he could go home.
He’s almost there, but not quite. He was kidding. He’s not a yeller. And he’s got people that worked for him for 15 years because he’s totally focused on his employees and his customers and everybody knows it. And that’s why his business does so well. But anyway, so what, how would you. Any thoughts about like phases we could go through from working seven days a week, a hundred hours a week to four vacations a year to, showing up at nine o’clock and yelling for 30 minutes.
[00:37:39] Marty M. Fahncke:
Phase one is believing it. You touched on it earlier. People, entrepreneurs believe that if they aren’t working 50, 60 hours a week, they aren’t an entrepreneur. They have to believe that their business can operate without them. And that’s often the most difficult phase, because if they can’t get there, then they can’t do the steps to get them where they need to be.
So you’ve got to believe that your business can operate without you. Now when we’re talking about that, I want to make it clear, we’re talking about an actual business with employees and team and infrastructure. If you are in a solo entrepreneur and you are the only person in your business, and you are the only source of revenue.
That obviously right now certainly can’t work your way out of the business and also, by the way, that’s a business with almost no value because if you stop working, the business falls apart. That is not a business. I am talking about businesses that actually have some sort of team infrastructure.
So the first step is getting them to believe it. The second step is understanding those steps. How? And we always say that the ultimate the ultimate scenario is you should be able to take a month on a deserted Island with no internet, no phone, no nothing, and you get 15 minutes once a month.
to log online and check on the status of your business and make any impact. And so you should have a dashboard that you can pop up and instantly with red, yellow and green. And we actually implement these in our businesses. Red, yellow and green. You pop it open. You look, if it’s all green, you close the laptop and you go back about your business.
If it’s yellow, that tells you that there’s something that’s not quite right. You need to, maybe go in and twist a dial or ask a question or poke something. And if it’s red that means, hey, something’s seriously wrong and we need to we need to fix it. And so from point A of 60 hours a week to, Point Z of 15 minutes a month, which is the ultimate goal.
There are a lot of steps in there, but I generally recommend starting with bringing in some help there are coaches for EOS or coaches for gazelles. There’s coaches for scalable who can come in and get everything set up for you and help you through that process. It’s not a very easy thing to do.
Self serve you usually need to. to put you through that. But again, first step is just believe it can be done.
[00:39:59] Frank Felker:
We’re going to need to zip through my last two or three points here and then get to telling people how they can get a copy of the book. You mentioned roll ups a company that’s going across the country and buying up plumbing.
Companies and that kind of thing. This is something that people really need to be aware of and find out what the status is in your industry. Is your industry currently hot for roll ups? And what is it that type of buyer is specifically looking for? A large company that knows how to acquire it. A company like yours and has done 100 deals just like you in the last five years could be somebody you want to deal with.
I’m sorry. We’re not going to have time for us to go into that, but perhaps we can do that in a follow on book. Absolutely. Also, you talked about how people always believe that their business is worth more than it is. It’s been my experience that generally for each owner in the business, we’d like to get a million dollars.
That each one of us would like to walk away with a million dollars. And generally that’s not going to happen.
[00:41:06] Marty M. Fahncke:
And then the last, I did have one business owner last year, by the way, who told me how much he wanted to sell his business for. And I, and it was, I vividly remember this because I said, that’s way too cheap.
I can get you twice that. Wow. He was like, oh, okay. And I did get him twice that, but that’s one in the last five years that I’ve had, actually was like, oh yeah, your expectations are a little bit too low. I was going to say that
[00:41:29] Frank Felker:
I’ve never heard anybody that happened.
[00:41:31] Marty M. Fahncke:
He gave me a great testimonial too.
[00:41:34] Frank Felker:
I bet he did too. And then the last thing is you talked about three years. There’s three year look back. Let’s start today. Let’s start maximizing profits. Let’s start writing the book. Let’s start doing everything that Marty recommends. And those three years are going to go by fast. Even if you are starting to feel burned out or what have you, if it’s important enough to you to walk away from this endeavor with a big chunk of change to allow you financial, if not independence, a lot of freedom and choices about what you’re going to do next.
Three years is a worthwhile investment. So Marty, let’s talk about I want to just tell people I’m sorry. One last thing, maybe on any of those things I just talked about, roll ups three years or what have you, before we go to how people.
[00:42:28] Marty M. Fahncke: I think we’ve pretty much covered it. I think I think that. I have kind of word vomited a ton of information. And if you’re listening to this right now, you’re probably feeling a little bit overwhelmed. So I think I’ve probably covered everything as best we can. I think we’re going to get into a lot more detail later on in the book and the workbook and in future interactions.
I know that there’s lots of people that have lots of questions after hearing all of this and you’re going to talk about how we can help them out.
[00:42:55] Frank Felker:
Great. Okay. All you need to do is to send an email. To book@BoomerSellsTheBusiness.com. And obviously that will include your email address. I would also be excellent if you included your shipping address.
And your phone number if we end up, I’m not sure how we’re going to ship them, but then certain shipping companies like to have the phone number in case there’s some problem with the shipment. And and we’ll send you the book when it comes out. And right now as we’re recording this, it’s the day before Independence Day.
It’s July 3rd, 2024. And we’re looking to have the book come out in Late August or perhaps mid September of this year. But you can go ahead and register there now and we’ll get you the book when it comes. And then the last thing is Marty I know that you in some cases, obviously you consult to people about selling their businesses.
Would it be all right if I put a link in the show notes and Whether it’s on Facebook wherever somebody YouTube might be seeing this video where people could schedule a meeting with you at no charge.
[00:44:07] Marty M. Fahncke:
Absolutely. My step number five of how to prepare your business to sell is to understand the current value and then how that relates to you, your needed value.
So the best way to understand the current value is yeah let’s get together. We can put some, a rough valuation together for you free of charge. You need to know what that number is so that you know how to plan for it and happy to do that or answer any questions you’ve got from from this interview.
So yeah, go ahead and put a link on there. You can get on my calendar. We’ll start with just a 15 minute brief chat and then I’ll give you the information you need as best I can. And then from there we can decide. If we work together longer term or if you just needed that and that question answered, happy to do that as well.
I just, again, I’m here to serve. My mission is to just get the wheels turning and get people thinking about what this looks like for their life, as far as exiting their business. And I want to be able to provide that service to the community of listeners and readers.
[00:45:03] Frank Felker:
That’s great. And I can tell you folks, because I’ve known Marty for quite a period of time, he means what he’s saying.
He really is committed. To helping you get the most for your business. And I am the same way relative to helping you in every aspect of your business, because I feel I’m, entrepreneur through and through it’s in my blood, I literally have been doing this since I was 15 years old, which makes it 50 years now.
So I love you guys. And we, Marty and I both want the best for you. Marty Fahncke, thank you so much for joining me again for the third time on Radio Free Enterprise.
[00:45:40] Marty M. Fahncke:
Ah, thanks for having me here. Frank has been an absolute fantastic opportunity and I am so looking forward to working with you to literally change people’s lives and make them better.
It’s great. I’m very excited.
[00:45:51] Frank Felker: Thanks again to Marty. And thank you for joining us. Until next time, I’m Frank Felker saying, I’ll see you on the radio.
[00:45:57] Dude Walker: He’s the kind of guy who finds microeconomics fascinating. But go ahead and listen anyway. Radio Free Enterprise with Frank Felker.
