Exit Strategy Tips for Independent Retail Business Owners with Former Founder Gina Schaefer

What does it actually take to sell a $55 million business you built from scratch? In this episode, Gina Schaefer breaks down everything: ESOPs, succession planning for independent dealers, finding the right buyer for your business, and why she chose employee ownership over private equity. If you have ever searched "how does an ESOP work," "when should I start succession planning," or "how to exit a small business," this episode answers all of it. Gina covers how to build your exit strategy lifeline list, what to look for in a business broker or attorney, and the three things every independent dealer needs to get in order before they sell: their numbers, their visuals, and their people.

What you'll take away:
- How ESOPs work and why employees do not need to have money to buy your business
- The three buckets you need to get in order before you sell: your numbers, your visuals, and your humans
- Why your business broker may never tell you about the ESOP option — and who to call instead
- How to build your exit strategy lifeline list starting today, no matter how far away your exit feels
- What Gina learned buying five businesses from other owners — and how that shaped how she sold her own

Watch the episode on YouTube: https://youtu.be/_iSFBM85CD4

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I'm Stefanie Couch, the founder of Grit Blueprint. I grew up in a third-generation building supply business. I've worked inside dealers, distributors, and manufacturers. I built Grit Blueprint to solve problems I saw in our industry.

Grit Blueprint is a visibility, media, and growth partner for manufacturers, distributors, dealers, service providers, and leaders in the building industry.
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Transcript

How to Know When It Is Time to Sell Your Business

Gina Schaefer 0:00

I grew into being able to manage a $55 million business. I decided 13 years in that I wanted to probably stay for 20 years. And I thought that was a good long run as a CEO. We then seriously started talking about it and planning it at 15 years. Okay. When you decide you're going to sell your business, you have to find a buyer that aligns with what the business is. Keep a list of who your lifelines are, who's your attorney, a business broker, and then figure out if their skill sets align with selling a business. You should know what kind of exit strategy options there are. And I didn't know anything when I started this process. I mean, I had to figure out like what is a private equity company and how do they work. If I build this business to the skies, is it going to be viable to find an outside buyer? Basically figure out what your options are.

Introducing Gina Schaefer and Her 55 Million Dollar Hardware Business

Gina's Best Wild Travel Story: Treadmill on a Cruise Ship in Antarctica

Stefanie Couch 0:45

Welcome to the Grit Blueprint Podcast. I'm your host, Stefanie Couch. This is a spot where leaders talk about the stories, strategies, and systems that win in the building industry. We unpack how leaders and brands build their reputations and become unmistakable. Welcome to the Grit Blueprint Podcast. I am your host, Stefanie Couch. I am coming to you live from the floor at the Denver Market of Do it Best and True Value. I'm here with Gina Schaefer. Welcome to the show, Gina. Hi. This is your third podcast with me, maybe? Maybe. Yeah. We're uh we're making a habit of this. Yeah, we're good. And I love interviewing you because I just love you. But today we're going to take a different spin on topics. We're going to talk about something you know a lot about, and a lot of people are thinking about in their businesses, exiting and secession planning. Yep. You actually just spoke at the market about this topic. So we're going to kind of keep this a little bit more narrowed down. I feel like we could talk, you know, for hours, but I do want to start with a fun question. So you've been traveling like crazy, just came back from a whirlwind trip. What's your best wild travel story from one of your recent trips?

Gina Schaefer 2:04

Oh my gosh. My best that you didn't ask me to prepare for that one. My best wild travel story. Um, I have a fun travel story that was in the wild, if that helps. Uh, I was on a treadmill on a cruise ship in the Anarct in Antarctica, um, and we hit a lot of rockiness. And so I had to hold on really, really tight. Now, I don't know if that's what you were going for, but the cool part about that experience is that there were whales jumping. It was a glass, the gym was glass, and there were whales jumping outside. So there was a lot of wild going on in that scenario. And I was exercising. Go figure.

How Gina Schaefer Built 15 Hardware Stores From One Location

Stefanie Couch 2:37

I mean, that I was going to say, you do like to walk though. You just usually do it in the city. So the treadmill part threw me for a loop. I love any story that involves animals. You know that's okay. I like that story. All right. You have a chain of hardware stores for maybe someone listening. Tell us a little bit about a few cool hardware stores and just give me a snippet of your background uh because I want people to understand the context of how big of a business you built and what type of business there is now.

Gina Schaefer 3:04

And it started with one store. Started with one store, 2003, in a neighborhood called Logan Circle in Washington, D.C. Uh, I opened my second location in 2005 and then one a year for 10 years after that, adding, subtracting. Um, my husband joined me as my business partner. We have purchased five stores. We're going to talk about succession planning. We were actually the succession plan for five store owners. Wow. Um, so that's a really cool perspective. We've built 11 from scratch. We've closed two that didn't work. We have 300 amazing teammates. Some of them are co-owners now, which I think will also come up. About $55 million in revenue, which is amazing. A pretty good size for a small business. Yeah, I'd say pretty good size. Um double nickels is your number this year. Yeah. Why did I not put that together? I turned 55 this year. I'm big on the double nickels. Um thanks, Stefanie. Yeah, we're in DC, Washington, D.C., uh, Maryland, and Virginia.

Stefanie Couch 3:58

Amazing. Well, there's very few people in the world that ever build a business that's over a million dollars, actually. And to get to 10 million is even more rare. And to get to 55 million, well, you are one of a kind, my dear. Thank you. So I love your perspective, and you've been a great mentor in my business so far and just a dear friend. I want to ask you a question about you opened your first hardware store in 2003, Logan Circle. Now you've got 15 hardware stores, 55 million, and you're no longer the CEO and you've sold this to your uh employees. Yep. Was there a moment in your business where you're like, holy cow, you looked around and this is something a whole different animal than what you started? Where was that moment, or was it just so gradual that you just didn't really realize it?

Gina Schaefer 4:42

You know, I talked about this in my workshop today because when you decide you're going to sell your business, you have to find a buyer that aligns with what the business is. And when I opened the first year, we had like 12 teammates. We did $650,000 in revenue. And I think what you're insinuating is yeah, it's it was gradual. I grew into being able to manage a $55 million business. I do remember some inflection points, like at $25 million, my husband and I sitting down, actively talking about whether we could get to 30 and then 35. And he's like, Why can't we get to 50? I was like, we can get to 50. Yeah. So there were inflection points along the way. Yeah.

Stefanie Couch 5:18

Yeah. You just turn around.

Gina Schaefer 5:19

And then all, yeah, all of a sudden you're like, holy cow, we're big.

Buying Frager's Hardware: A 100-Year Legacy and Buyer-Seller Alignment

Stefanie Couch 5:22

I'm waiting on it. I'm waiting on the turnaround to be. Holy, holy cow. You're going to get there. You also have had a lot of experience, like you said, five stores that you were the secession plan for someone else. One of them was Frager's in Capitol Hill. Uh, a hundred-year history in that store. So a real legacy. It wasn't just another location. What made you say yes to taking that on? And once you said yes, was it what you expected? Was it harder than expected? Because that legacy piece is a real interesting thing.

Gina Schaefer 5:54

Yeah, you know, the Frager's name was built into the seller's contract. He wanted me, which we happily did, uh, to pay for it and to keep the name as part of the legacy. He was not from the Fragers family, but he had been the owner for like 40 years, and that was very important to him. And we gladly said yes. Yeah. And so I think when you think about buyer-seller alignment, that kind of legacy play comes in. I handwrote him uh an anniversary card when he had been an owner of the business for like 30 years. And I said, When I grow up, when we grow up, we want to be Fragers hardware. And I signed it from my staff, our team. And he kept that handwritten note. So when he was ready to sell, he called me and he said, We've never met. I had never met him in person.

Stefanie Couch 6:36

Wow.

Gina Schaefer 6:36

He said, I still have that note. Will you buy my store? How long was that between you writing and him selling? It might have been seven years.

Stefanie Couch 6:43

Wow.

Gina Schaefer 6:43

Oh, it was at least seven years, Stefanie. It was actually, I probably wrote the note in 2004, 2005, and we bought the store in 17.

Why Handwritten Notes Can Change the Course of Your Business

Stefanie Couch 6:54

I know we're talking about secession planning, but you write handwritten notes a lot. I do the same thing. I I really just cherish the notes you send me. What made you want to do that for him? And what what was like the thought in your brain? And what did you expect out of it? Maybe it was nothing.

Gina Schaefer 7:10

Tell me about that. You know, I didn't well, I didn't expect anything at all. Um, although it is fun when you get a thank you note for a thank you note. Yeah. He that store was a member of a different co-op. And I believe co-ops, there's principles that guard that govern co-ops, and principle number six is cooperation among co-ops. And I I just wanted to know him as a member of another cooperative. But you know what's what it's like when you're building a business and you're growing and you're wearing all the hats and you're exhausted. Yeah. I didn't have time to go meet him.

Stefanie Couch 7:40

Right.

Gina Schaefer 7:40

Um, and it didn't matter. I I put my my words, my sentiments out into the universe, and you know, decade later or whatever, they came back to me. So cool. Shocking. Yeah.

Stefanie Couch 7:51

What did you think when he when he called you?

Gina Schaefer 7:54

Well, I'll tell you, uh, my husband was in the room and I hung up the phone and he said, You've got the worst poker face ever. If somebody wants to sell you their business, you need to play it cool. I've never, I was so excited. John was like, his name was John. He said, Do you want to buy fragrance? And I was like, Absolutely. You're Mark's like, you didn't even take a breath. Oh no. He's like, Calm down. Oh. Which I feel like you could probably relate to. Yeah.

Stefanie Couch 8:18

I just a little.

Gina Schaefer 8:19

I mean, it sounds vaguely familiar. Yeah. I might be half excited about things. Maybe it took about two years to make the deal happen after that. So it wasn't, I didn't say yes and then done deal. It took about two years, but I was thrilled to be asked. Yeah.

How to Build a Business Past 10 Million Dollars

Stefanie Couch 8:34

Let's talk about the two years. Yeah. So what happened between, hey, do you want to buy the business? I own the business.

Gina Schaefer 8:40

Yeah. Um, we basically did it on a handshake deal. And once we shook hands and agreed, John wanted to make sure that all of his ducks were in a row. And that meant making sure that the legal documents were fine. Bregers had burned down a couple years prior and it was operating in a temporary location. And he was negotiating a deal. He had owned the property that had burned. And so he was negotiating a deal to sell the property. And part of that negotiation was the new owner being required to put a hardware store in. Thank goodness, because it would have been so expensive to lease in that space. And so he needed to, he needed to line a lot of stuff up. Okay.

Stefanie Couch 9:15

Yeah. Yeah. Very cool.

Gina Schaefer 9:16

Yeah.

Stefanie Couch 9:17

Well, I'm currently scaling my business. Ben and I are three and a half years in. Nice. Uh, you've been with me pretty much through the last two years of it. You were a client of ours and and still are, and we've been friends. What advice do you have for Ben and I as we continue to build like maybe year three to five?

Gina Schaefer 9:34

What would you tell us? Well, I would say one thing that I've already seen you do that I'm really impressed with is adding to your team. You know, one of the pitfalls of business ownership, leadership is trying to do everything. And I think when you start a business, you have to. You can't afford to hire somebody. Yeah. You make a bad hire to start with because you have to, you have to kick a lot of tires. Um, and I've been really impressed with the way you've been adding to your team. Now, I might get a visual that, you know, the behind the scenes look might be very different, but for me, that's what I see that you're doing.

How to Afford Your First Real Team Member

Stefanie Couch 10:05

I definitely hope we can continue. We've got some great team members for sure, and it has made an exponential difference in allowing me to do the things I really want to do, but also what I feel like I'm the best at. And even Ben, you know, he loves doing media and some of the things that he really likes doing and is very good at, they allow us to do this. So that's a big unlock.

Gina Schaefer 10:23

It's nice when you can you can use your skill set and you can be surrounded by people who want to do the things that you don't want to do, and they love it. Yeah, right. The very first teammate that we promoted, um, she was a sales associate in our housewares and lawn and garden department. And the store was teeny tiny, but you know, she had a big role. And we wanted a buyer. We we wanted to afford an official buyer. Yeah. And we raised our key prices by like 10 cents because we sold so many keys that we knew we could afford to give her an actual salary with a 10 cent raise on keys. And so we got really creative to try and figure out how we were going to actually pay for her. How many keys did you sell to get 10 cents each raised? Thousands of keys. Wow. Thousands and thousands and thousands of keys. Now she was, you know, we needed to, we needed to bridge the gap between what she was already making, but yeah.

When Should You Start Planning Your Exit Strategy

Stefanie Couch 11:08

I love that creative thinking on that. Very smart. All right. You talked about people starting their exit strategy, but most people start it way too late. Yep. You have a principle that they should start it when they open their store or when they're, you know, starting the business, which I think is a little bit of a pipe dream. Like it's pretty hard because you're just trying to survive. Like you're you're dreaming of that massive exit strategy, but it seems so far away. Uh, what point did you and Mark really sit down and start thinking about like, do we want to sell? How do we want to sell? How many years out are we from this? Like, when did you really start thinking about that?

How to Find the Right Attorney, Banker, and Advisor for Your Business Sale

Gina Schaefer 12:05

I started talking about it after 13 years. I had decided in uh 13 years in that I wanted to probably stay for 20 years. And I thought that was a good long run as a CEO. We then seriously started talking about it and planning it at 15 years. Okay. Yeah. When I gave the the conversation, the workshop this morning, one of the practical things, because I don't think it's realistic to do it from the beginning. I mean, we're not tech startups that we're going to try to unicorn and exit in two years. You're building, you're building a life and a brand and a legacy for yourself. You can't do that overnight. But one of the things that I did suggest that is extremely practical is keep a list of who your lifelines are, who's your attorney, your broke, a business broker, um, you know, you're going to have an accountant and CPA, but some of these other folks that you can call on and then figure out if their skill sets align with selling a business. You might have the best attorney in the world for a slip and fall, but they might not be able to help you sell a business. Yeah. So fill that fill that blank on your sheet. And then do you like that person?

Stefanie Couch 13:05

Yeah.

Gina Schaefer 13:05

Do you trust that person? Do you have an accountant who's constantly doing creative accounting? Maybe you're helping them or letting them, but when you go to sell your business, you don't want creative accounting. You want the cold, hard facts, the right ones, right? Um, and so I think those are things you can do from the beginning that really get that don't have a lot to do with uh planning the exit. It's just kind of prep work.

Stefanie Couch 13:28

Where do you find a good attorney, banker, insert context here? Where do you find those people if you don't have one? Like you have the great accountant that does your taxes every year and keeps you from a slip and fall on the attorney side, right? Where do you find these people? How do you know you can trust them?

Gina Schaefer 13:45

Um you kick a lot of tires, you ask a lot of questions, you can't be afraid to talk about what's going on in your business, meaning you have to tell people what you need or they don't know. Yeah. Um, many people, regardless of how small the community is that you live in, for example, belong to a chamber of commerce. That's a resource. Have a banker, that's a resource. Should at some point in their life start working with a certified financial planner, that's a resource. And all of those people might give you a referral that they it's not the final answer, but it gives you someone to interview. Yeah, have a network. Don't take the first referral.

Stefanie Couch 14:19

I love that.

Gina Schaefer 14:19

Yeah.

What Is an ESOP and How Did Gina Find Out About It

Stefanie Couch 14:21

This episode of the Grit Blueprint Podcast was sponsored by Do it Best Group. Do it Best Group is the largest co-op in the world, and they help independent hardware and lumber yards all over North America win. Do it Best offers services, products, and people that can help you win long term. They are the champion of independence. Well, you had a lot of options, and there are so many different ways to sell a business, to exit a business. You know, a lot of people have family, family that takes over. There's private equity. Yep, there's selling it just to an individual or maybe a few individuals, all traditional routes. But we both talk a lot about the eSop model. I I love this model because you have people who are already invested in the business as people who work there who actually purchase the business. But it's kind of complicated if you've never heard of it before. It's like, well, how does an hourly employee that maybe is making, you know, $50,000 to $100,000 a year, they don't have millions of dollars to give you. And I've heard a lot of people say that, well, I don't want to give away my business, and that feels like giving away my business. So talk a little bit about how you decided that Aesop was an option, was the option. And I know you had a visit to a brewery that spurred that all.

How Employees Buy a Business With No Money: ESOP Financing Explained

Gina Schaefer 15:41

So I was in Fort Collins, Colorado at the New Belgium Brewery, which was an Aesop at the time. It's it's since sold to private equity. But um, I had a tour guide who was like 22, and she was bouncing off the wall, so excited to tell those of us on the tour that she owned the brewery. And I remember thinking, there's something that I'm not getting. Like she never mentioned an eesop. She just kept talking about how she was an owner. And so, and we didn't want to interrupt the tour to ask non-beer questions. And so we went back, um, we went back to our hotel that night and we did a little research and we realized that they were an Aesop. In the meantime, randomly, I was on a virtual panel with a gentleman who's very, very experienced in Aesops. And I called him and I said, I just don't understand how this young woman became an owner of the brewery. Walk me through the process. And the very first thing he said was, employees don't put in any money. And honestly, Stefanie, that was it. I was like, that's like the one key piece I needed because I knew I wanted my legacy to be somehow related to this employee ownership, community ownership. Um, you know, I love the co-op model. What does that look like? Could it could that look like for us? And once I found that out, we were off and running.

Stefanie Couch 16:50

Okay. So technical question. I have no money. You want money for the business you've built. How the hell does that work?

How Employees Become Owners in an ESOP

Gina Schaefer 16:57

Yeah. So I like to think of it as a big circle. I went to the bank and I got a loan. Let's uh, well, let's $55 million business. Let's say it was valued at $25 million. I went to the bank, the bank gave us a loan, which we then loaned to the business to pay us out. Yep. And so the business is paying back that loan. Okay. We sold 30% to start because it would have been too big of a nut for the business to handle. Right. Um, does that answer your question? Yeah.

Stefanie Couch 17:22

And how so how do people eventually, do they ever give you any money? What how does that work for the person like on the floor selling paint? How do they become an owner?

ESOP Shares, Valuation, and Employee Rights Explained

Gina Schaefer 17:32

So you create a trust and the trust owns the business on behalf of the employees. Um, it's really like a 401k, like a ret uh qualified retirement account. So um, if you go to a company and you're working for a 401k, there are qualifications for you to join. So to join our ESOP, to become an owner, you have to work with us for a year and you have to have worked a thousand hours, and then you are automatically an owner, unless you're under 21. We have an age limit. You hit that milestone and you get a letter from the CEO saying, welcome to the ownership team on this company, and you are an owner.

Stefanie Couch 18:04

And what kind of rights do they have?

When Can Employees Access Their ESOP Funds

Gina Schaefer 18:06

So they have rights to the value of the shares. It doesn't change their management status, it doesn't change their day-to-day pay. Unlike the stock market, eSops get valued once a year. You pay for a professional valuation, and the value of the stock determines how much um the employees get into their account, like a 401k, essentially. And it stays that value until the next year. So if it's valued at $5 a share in 2025, 2026 could be up or down. I mean, it's a whole different, whole different ballgame. You cannot be an owner in an Aesop if you don't work there. So if you are terminated or you quit um or retire, we have to buy you out. Okay. And you get that money from your um ASOP bucket and hopefully you roll it into another qualified retirement plan so that you can continue to build equity and generational wealth wherever you go.

Stefanie Couch 18:59

And they cannot draw for from it until when?

Why Business Brokers May Not Tell You About ESOPs

Gina Schaefer 19:03

Well, they can they can take it with penalties like a 401k when they leave. Yeah. Um, to date, in the last three and a half years, we have paid out over $3 million to our teammates who have left. Yeah. Which is a big deal for us. And I, you know, it's life-changing for some people. I want it to go into a retirement account. Yeah. But if it doesn't, you know, people have used it to pay off educational loans or buy a house. Um, those are possibilities.

Stefanie Couch 19:25

And is it like a 401k where if someone's still working there, that it just the idea is that hopefully they don't take it until they leave and retire? Correct. Yeah. Okay. Yeah. Well, that makes sense. Yeah. Uh it's definitely a good option. What do you think is one of the best things that maybe people would miss about this as a secession plan option? Like, why do people, more people, not do this?

Best ESOP Resources for Small Business Owners

Gina Schaefer 19:48

Well, I can answer that in a couple of different ways. If you if you go a traditional brokerage route, you hire a business broker to help make a marriage for you, that broker doesn't make a commission on an Aesop. And so if they even if they know about it, it's not in their best interest to tell you about it. Now, this is not to disparage brokers because I think when you are creating your exit strategy, when you're doing the research, you need to look at all the options.

Stefanie Couch 20:11

Yeah.

Gina Schaefer 20:12

But a broker won't make a commission on it. And so they might not tell you about it.

Stefanie Couch 20:17

So if you need someone to help you with this eSOP model, but obviously a business broker may not be the person to do that, then who would you do?

Why Co-ops and ESOPs Share the Same Values

Gina Schaefer 20:24

Yeah. Um, there are some really amazing resources. There's one called the EOXN Network. Um, it was started by a man named Steve Sorkin who is create who has created centers, state centers. I think these are up to like 14 states now. Their sole mission as a nonprofit is to educate business owners on eSOPs. They will give you all of the free resources you need. It's fantastic. Um, I gave a keynote at the one in Ohio. I'm getting ready to give the keynote at one in Alabama. Really great resources. There's also uh two big eSop associations, the National Center of Employee Ownership. They do fantastic conferences, they bring in service providers, you can interview them on the spot. That's where we found our consultant, it's where we found our trustee. Uh, and then there's an eSOP association, same thing.

Stefanie Couch 21:06

And these resources can help you with each step of the way. And then there's obviously financing and things like that. When I was spoken at the ESOP Association, there were banks and CPAs and everybody that that really knows this. So find someone that knows that world because that'll help you, I'm sure, on the right path.

What Makes a Co-op Like Do It Best So Powerful for Independent Dealers

Gina Schaefer 21:22

Well, this goes back to the, you know, creating your lifeline list. Not everybody's bank understands e-sops. Not everybody's bank understands co-ops. When we started banking with National Cooperative Bank, it's because they really understood co-ops. And then fast forward, we found out oh, not only do they understand eSops, but they love it. And they were completely happy to fund our exit.

Stefanie Couch 21:41

We're here at Do it Best True Value, which is a the largest co-op in the world. What is the value of a co-op? Why do you love them so much?

Finding Your Successor: The Hardest Part of Selling a Business

Gina Schaefer 21:51

Well, I mean, I just I love the shared resources. I love the services that the the co-op provides to the the members, I love the camaraderie among the members. And maybe the most personal for me is that I love small businesses and I love beautiful main streets that are vibrant with small family owned businesses and legacies and co ops, particularly hardware stores. I mean, that's our stomping ground. Yeah.

How Gina Found Her CEO Replacement Inside Her Network

Stefanie Couch 22:18

It's a beautiful thing. It is. I love there's nothing that makes me happier than a hardware show. I've been coming to them since I was very little. And there's I'm looking around right now. There's some little girls out there that, you know, aren't much bigger than I was when I was there first time. It's a beautiful thing, and it is kind of America. Like it's that American dream. It's a really, really amazing thing. And co-ops like this allow that, I think, to continue where they can compete without having to have 20 stores or 50 stores to do business. They can be a one store, you know, street and just kill it. Yep. Yeah, exactly. Yeah. Well, I want to talk about what you've said a lot of times could have been the scariest part of secession was finding your successor. So you had an amazing role. You're an inspirational leader. You had a lot of people that worked for you for a long time, were selling the business. Everything's going to be different because Gina's not going to be there every day. How do you fill those shoes and what did you do to go about that?

What Makes a Great Successor for a Hardware Store Business

Gina Schaefer 23:19

I got so lucky. I mean, I I always say that nothing is luck. You know, you have to really put in the hard work. But for me, it was the relationship building and a relationship that I had built with another hardware store owner. And I, it was kind of like, what's it called? Like your holy grail. Like I took him to lunch and I said, What do you think about becoming the CEO to replace me? And I he could have said anything. Like, I don't know what I would have done if he had said no. And I remember the look on his face. He was like, Wow. Like he was shocked. Um, he said, I'll think about it. And he called a couple days later and he said, I don't need to think anymore. I think it would be great. Now that all sounds fine and dandy, and it was perfect for me, but for my team, and I I think you need to have a lot of alignment between the buyer and the seller and all your constituents. And uh my team knew him. He was a single store, so he didn't have three buyers, he didn't have an inventory professional on his team, he didn't have an HR. Like, you know, you have people that could dabble in that kind of stuff for him, but he wore a lot of hats. Yeah. But he knew my team because if he needed HR advice, he called my HR manager. So they knew and they liked him. That was the important part. He wasn't this nameless, faceless coming from the outside. Um, that was really meaningful.

Stefanie Couch 24:35

Yeah, that's a big deal. I don't I don't know how many people could replicate that. But tell me a little more about him. So he he was a his family had a business. Yeah. And he was a legacy of that business in that one store.

What Was the Hardest Part of Handing Over the Business

Gina Schaefer 24:48

Yeah, that well, the family has owned, I think, four stores. Uh, one of them we purchased. Okay. So we purchased one of their stores when they wanted to sell it. So and he's like you, I mean, he grew up in the business. He started working at his dad's hardware store when he was like 11. Um, so he knew hardware really, really well. Yeah, I'm sure that made the transition. And he also always wanted, he always really wanted to be part of a bigger organization. Um, and he hadn't grown yet. So this was an opportunity to really be able to do that.

Stefanie Couch 25:15

Yeah.

Gina Schaefer 25:15

Yeah.

Three Things to Do Now to Prepare Your Business for Sale

Stefanie Couch 25:15

What was the hardest part of handing over the reins?

Gina Schaefer 25:19

I lost my office. I that's like the silliest answer, but I really dislike working from home. We have a very small office space. So now he has my custom-made, really cool desk. Um, so that's kind of a silly answer. The hardest part for me was leaving the people.

Stefanie Couch 25:34

Yeah.

Gina Schaefer 25:34

Hands down.

Stefanie Couch 25:35

I mean I've been to one of your stores and it's such a great energy and it's a fun place. Uh, I actually got to ring up some customers. It's super fun. You do have a great team. Well, for the owners in the room who feel like they're years away from this, maybe they're thinking about it a little bit or or it's like the last thing on their mind. Yep. What are two or three things that you would say, like just start doing this now? You mentioned finding the people, the the banker, the lawyer, the what uh what's one or two other things that you might say? Like, think about it now.

How a Peer Group Can Help You See What You Are Missing in Your Business

Gina Schaefer 26:06

Well, I think you should know what kind of exit strategy options there are. And I I didn't know anything when I started this process. So I I mean, I had to figure out like what is a private equity company and how do they work? If I've built this business to this size, is it going to be viable to find an outside buyer? Uh basically figure out what your options are. Yeah. And the uh today I shared pros and cons of what some of those big options are. So start there, um, create that lifeline list and look at it once a year. If you're if you're 15 years out, it's good, you think your bank, your banker might change in 15 years, your attorney might change in 15 years. Um, and then the third thing that I suggested, there were three buckets that I um I think also need to align. And is it your numbers, your visuals, and your humans. So the numbers, if you've been doing creative accounting, you got to figure that out. Start doing it right. Visuals, I I mean, you've all seen this happen over and over again. You get tired or you get complacent. You don't want to renovate. You don't want to go through the hassle of a reno in your store and the plumbing department. And the next thing you know, you've got old inventory, low margins, outdated software. And so make a commitment to keep that stuff top of mind. You don't have to do a renovation every year. But like I have a peer group and they come in and they tell us where our warts are. Like they cried. I cried the first time they came in because they were like, this is what stinks and this is unattractive. I was already making a lot of money. Like I could tell them what I was doing well. I needed an outside set of eyes to tell me where I sucked.

Stefanie Couch 27:40

Where did you find that group?

Gina Schaefer 27:41

Well, I they were my they were an ace peer group. And so um the ace co-op has a group called the Progressive Ace Leaders. It's the youngins coming up in the business. And when we aged out at around 40, six of the other retailers and my husband and I formed our own group so that we could keep getting better.

How to Make Your Business More Valuable Before You Sell

Stefanie Couch 27:56

Okay. So you just a group of other people who aren't in your store every day seeing the same thing that you see. I that's a great idea. Yeah. And I think it is important for business owners to talk to each other because you are in your little bubble, you miss things that are big opportunities and also big things that are hurting your business. That that's a really great tip.

Lightning Round: Overrated Tourist Spots and Best Meals

Gina Schaefer 28:15

Yeah. One of the things, if you don't mind if I interrupt, um it's kind of like when you buy a house and you don't repaint the kitchen before people come in and buy the house. Buyers don't want to visualize, they don't want to use their imagination. So, to the extent that you can eliminate the imagination part, you might get more money. Your business might be worth more. Breakers, when I bought it, John was so smart. He was tired. He was ready to retire, but he knew it was going to cost a million dollars to move that business back to the old space. He discounted the cost of his business by a million dollars. Because he knew he took all that imagination out. Yeah, yeah. Very wise advice. Yeah.

Stefanie Couch 28:53

And I think for people who are not inventive, they don't know what needs to be done, ask for help. The co-ops are a great opportunity because they have all these people that that's all they do. That's it. And they see stores all over the US, so they can give you some ideas and help you do it. It's a pain in the butt, but it's worth it. Like you said, you either pay now or you pay later. Right. Um, discount it later, I guess. Yep. All right. Are you ready for the lightning realm? I think so. All right. What's the most overrated tourist place you've ever been to?

Gina Schaefer 29:22

This was such an easy answer for me. I think that Rome, somebody's going to get mad at me. Rome is so full of overrated tourist spots. The Trevi Fountain, the Spanish steps. There is nothing. I love Rome. There's nothing attractive about the Spanish steps. So I'm going to stop there before I keep babbling. Those are it. Okay.

Stefanie Couch 29:42

The best meal that you've had in the last year, what was it and where was it?

Gina Schaefer 29:47

You can say dinner with me last night. Dinner with you last night was awesome. That barada. No, I just got back from a seven-country tour in Asia, and I had this bowl of soup called Laksa when I got to Singapore that blew my mind. I had never had it before. It has a coconut base, it had some tofu in it, it had the right amount of spice. Um, and I'm pretty sure I had it at breakfast. It was incredible. Okay.

Stefanie Couch 30:11

For those of you out there, if you're in Singapore, check it out. What is the most spontaneous thing you've ever said yes to?

Fill in the Blank: Grit Is Life

Gina Schaefer 30:21

Uh there got there's gotta be more than one. But the first thing that came to mind is I drove across country with a friend about I had already started the bit. No, I had it must have been 20 years ago. But here's the funny part. I don't drive. I can drive, I have a driver's license, I'm a good driver. But we were out at a bar and she said, I'm I'm moving to LA and I need someone to drive with me. And I was like, Oh, I'll go. And then I woke up sober the next morning and I called her and I said, Do you want to find someone who's actually willing to drive with you? This is funny because I always say that I stopped driving 12 years ago, but it's been longer. Wow. So that was spontaneous. You're going to be driving again soon. Maybe, maybe. But that was really spontaneous. It was so much fun. She didn't care that I wasn't driving. I was I was the entertainer. Imagine that. All right. If you could live in any city in the world for one month, where would it be? I can't answer that because there's so many. I want to live in Tokyo so desperately. I love Brazil, so I would live in Rio.

What Gina Is Most Excited About Right Now

Stefanie Couch 31:18

Uh Tokyo is the first thing you said. Tokyo is a very good thing. I feel like that's your gut instinct.

Gina Schaefer 31:23

Right now it's Tokyo. All right, fill in the blank. Grit is blank. Oh, grit is life. It's how we go through life. It's what determines whether we're going to be lucky or successful or happy. All right, I've got two final questions.

Stefanie Couch 31:37

Okay. They're not lightning rounds, they're regular questions. Okay, good. What's the thing you're most excited about right now that has nothing to do with the other part of your business? Because I know you have a lot of really cool things going on.

What Gina Schaefer Is Most Proud of After 55 Years and 55 Million Dollars

Gina Schaefer 31:48

Um, I'm working with a new nonprofit based in Salt Lake City, Utah, that I'm most excited about. Like it really became a passion project for me. Uh, and I feel like it's been it's been almost three years since I retired, and I was looking for something like that. What is it? Um, it's called Rasa Legal. It was started by a young attorney after she uh graduated from law school to help expunge people's records. You know, we have a we have an employment issue in this country, we have hundreds of thousands of people, in fact, it's many millions, that have a criminal record that they shouldn't have anymore, and it it impedes employment. And so she helps expunge their records. That's awesome. Yeah. All right.

Stefanie Couch 32:26

You built a $55 million business, you wrote a book, you've done a million other things that are so cool. When you look back so far, 55 years in, 55 million and 55 years in. What are you most proud of that has nothing to do with money?

Gina Schaefer 32:44

All right, this is the first thing that came to mind. This is kind of like a lightning round, as a matter of fact. Uh, with no prep. I hired a very green young um former foster child years ago, and I am still friends with that person. We text on a daily basis. He doesn't work for me anymore. Um, but I love him dearly, and I'm very proud of the relationships that I've built long term with a lot of people that I might have never met. Yeah. You're a Hallmark relationship builder.

Stefanie Couch 33:15

Oh, thank you. I cherish the relationship that we've built. And uh, we are actually getting to see each other twice in one 30-day span. So uh who knows? We might be doing this again in a month in Vegas. Uh, maybe at the casino table. Let's do it. They let you film podcasts while Camera Blackjack. This is spoken like a person who doesn't gamble because I don't know. I do. You do. She maybe I'll just be your lucky charm. Okay. Well, thank you so much for joining me. I I hope that if you have questions about secession or you're not thinking about it, that maybe this just spurred one little idea for you because I wish uh really that you know my family business had a thought of some things before we were ready to exit and we could have been maybe a little bit more prepared for what was coming. I know as a daughter of a legacy business, I wish I was more educated, and I think that I could have been. So thank you for joining me on the podcast, and I'm always excited to talk to you. And I hope you have a great market. It's exciting, there's buzz everywhere and uh people everywhere. So go enjoy the show. Thank you. I'm going to. And we will see you on the next episode of the Grip Blueprint. Thank you for listening to the Grit Blueprint Podcast. If this episode helped you think a little differently about how to show up, share it with someone in your building world who needs it. If you're ready to turn visibility into growth, then head to gritblueprint.com to learn more and book a call to talk to us about your growth strategy. Until next time, stay unmistakable.