5: Reverse Engineer Your Business with Dave Pennington

New Episode Alert! 🚀 Dive into the latest episode of the Randi Lynn Show where we sit down with business strategist David Pennington. Discover the secrets to 'Reverse Engineer Your Business' and learn how to build a company that's not just successful, but also ready for a seamless exit when the time comes.

David shares invaluable insights on why investing in yourself is as crucial as investing in your business. Are you using your time and skills in the most impactful way? Find out how to maximize your business's value and ensure it thrives beyond your involvement.

Don't miss out on these game-changing strategies! Full episode released today - link in bio. 🎧

#BusinessStrategy #Entrepreneurship #InvestInYourself #BusinessGrowth #RandiLynnShow

Transcript

SPEAKER_00 0:01

Welcome back to the Randy Lynn Show. Today's episode is one that honestly a lot of people don't want to think about, but they need to. Because building a business is one thing, but being able to walk away from it on your terms with real value, that's a completely different game. I'm sitting down with David Pennington, business exit strategist, advisor, and someone who's spent decades helping others not just grow, but actually position their self and their companies to sell what they're truly worth. And here's the reality: a lot of business owners pour their entire life into something. And then when it's time to exit, they either can't or they leave a massive amount of money on the table. So today we're getting into what maybe what most people are doing wrong and how to build something that gives you freedom, not just something that owns you. So, David, I am so excited to have you here. Thank you so much for being here.

SPEAKER_01 0:50

Um I'm delighted to be with you, Randy. I'm looking forward to our conversation.

SPEAKER_00 0:54

Yeah, perfect. So I want to start here. What's a real situation, situation you've seen where someone's maybe built something incredible and then they're about to retire and they're like, I don't know what to do. Like, did you can you give maybe a share an example of that? And then Yeah, sure.

SPEAKER_01 1:10

I mean, you know, it it varies for different people. There's no question about that. I'll I'll tell you a story that I bumped into. I'm in a little rural area on the coast of Maine. Okay. I don't really do b business with anyone in my area. It's all away, you know, from here because they're small, it's a small town. And but I was I was talking to uh a gal who kind of runs a business development center in the area, mostly for you know really small businesses. And um uh she was telling me about a plumber in a town nearby who is kind of the plumber. You know, he's everybody wants to use this plumber because he's just well known, they like him, they trust him, he does good work, but he's a solopreneur. Okay, and he and he's getting up in years, and she says, you know, I I was thinking about him as you were talking. She says, you know, he's probably a couple years away from just shutting the door. And and and when when she said that, I I like, I just paused, I said, Wow. I said, Does he have any idea how much money he's probably leaving on the table? Because in his mind, he is the job, he is the worker, and he hasn't thought beyond, okay, I'm gonna work and work and work, and then I'm gonna stop working, and then I'm gonna close it down. And I said, you know, if he just found a younger guy who maybe had his license already but wanted to grow, and he took him under his wing for a couple years and really taught him his way of doing it, connected him with all of those different people that want to use him, he could not only sell the company to this younger guy, but then he could also finance the sell for the younger guy. So he'd get a price, his price he wants to get, he would get the interest off of that, he would spread out his tax liability over a period of years, and he could retire with a really nice package rather than just shutting the door. And I think that kind of thing happens all the time for people.

SPEAKER_00 2:55

Uh, it's so does because I know when I first started talking to you a little bit, um, that's that's me. I'm starting this brand and it's the Randy Lynn brand. And it's one of those things like, will my kids maybe get in and will not? But I guess I really don't have an exit plan. And I don't think people do. I think we'll people build it to live off of, and then literally they probably don't start thinking about it until it's almost too late. They're like, I'm gonna retire and I just don't know what to do because it's it's not too late. But they also they're in that mentality, maybe, of like, I'm ready to be done. I just I don't care anymore. But how much money is that like losing? Like they're losing so much money.

SPEAKER_01 3:34

Yeah, a huge amount. And really, you know, I don't really do work with startups per se, but I give advice to startups from time to time. And I always tell them, you actually want to set up your business, not for where you are now, but for where you want to be when you finish. Okay. So sort of look out and vision, okay, when I get this company really built and everything's working, you know, maybe an org chart, you know, all the things that you would think about that you want, what's it gonna look like? And once you do that and you get clarity in your mind, then you reverse engineer back to where you are now, and and what happens is you already have a target in mind, a destination in mind. I'm here, I'm going there. It helps you in a lot of ways. One of the ways it helps you is it keeps you from taking rabbit trails because you'll have opportunities that come up, and then if you don't have a destination in mind, you say, Well, maybe I'll try that. And that, you know, that sort of takes you away, and then you come back and say, Well, that didn't work. And then you go down the road, you do the same thing again. But if you have clarity about where you're going, it helps you make decisions right now in real time, and it keeps you on track, so you will eventually get to where you want to be, and then you're not you don't really have to change a lot because you set it up to actually sell it or pass it on to your kids or whatever it is that you want to do, but you did it from the beginning. Okay, so much better way.

SPEAKER_00 4:52

So, what happens if someone is listening to this, one of our viewers, and they're like, Okay, that sounds great, but my business has been around for 15 years, and I'm not looking to retire yet. But when would be the next best time to start? Would you say like literally now?

SPEAKER_01 5:07

Yeah, literally no. I mean, the idea is, you know, everybody thinks you can just do it overnight.

SPEAKER_00 5:12

Right, there's no way.

SPEAKER_01 5:13

It's not usually, I mean, you know, to unravel you from the business, you know, it's not going to happen in six months. You know, it may take a couple years, maybe even three years, depending on your level of involvement and what you do and your skill set and a bunch of other things. So the idea is if you think about it, whether you're selling it or whether you're scaling it, it's about this, it's the same kind of organizational structure you need to have so that when the time comes to sell, you know, you're going to make some adjustments, but it's not going to be huge because it's already operating in a way that is very valuable and very sellable. Uh, one of the things I do with business owners, I have an assessment where if they want to know the value of their company, it will give them a pretty good estimation of what their company is worth. It's based upon eight metrics. And those same eight metrics that actually help you position your company to sell it are the same eight metrics that position your company to scale it. They're the same thing. Okay. And I'll just give you one for example. One is called hub and spoke. The idea behind that is this to the degree that your company is built on you as the owner, the value goes down substantially, and the sellability goes down substantially. Because nobody wants to buy a business that's built upon the owner because they're concerned that when the owner goes away, the the customers are going to go away. And and that's why often in a buyout, you'll see this happen a lot. Hey, we want to buy your business, we'll pay you this, and they kind of discount the price, but we need you to stick around for a couple years.

SPEAKER_00 6:47

Yeah, all the time I hear that.

SPEAKER_01 6:49

I don't want to do that. I want to I want out, you know. Well, the reason why you have to stick around for a couple years is because you didn't structure it raw properly.

SPEAKER_02 6:57

Yeah.

SPEAKER_01 6:57

So you don't want to wait until you get there to do it. And there are ways uh that you can do this. You can kind of do it over gradually over a period of time where you're kind of backing out little by little, and you're de you're getting the right people, you're developing those people, and then it's really operating uh not entirely without you, but mostly without you. And then that way when you get ready to sell it, it's it's kind of an entity of a in and of itself. And it doesn't, it does it's not dependent upon you, it's not dependent upon your personality, your skill set, or all the rest. You've really taken the time, for example, uh having good SOPs for different categories like marketing sales or whatever it might be, or even your financials are in order. A lot of times that's a big uh problem because we're a little sloppy, you know, we don't we're not worried about it. But when you get ready to sell, guess what? The buyer's worried about it. And and the one of the best uh ways I can tell you to think about it is this most people, when they get ready to sell or are thinking about selling, they're looking at it from the standpoint of the seller. Okay. And I understand that because you build it and you've developed it, had blood, sweat, and tears, and you have a lot of value and emotional connection and all the rest of that. But you really need to be thinking about it and looking at it from the standpoint of the buyer.

unknown 8:13

Yeah.

SPEAKER_01 8:13

And uh in fact, I didn't know.

SPEAKER_00 8:14

It does make sense. Yeah.

SPEAKER_01 8:17

I asked the question, this video, I said, Look, if if um if you didn't own your company and you were not the one you know running your company and not the one who built it, would you be interested in buying your company as is?

SPEAKER_00 8:31

Oh, that's a great question.

SPEAKER_01 8:32

And like, you know, you know, because oftentimes the answer would be not really.

SPEAKER_00 8:39

So that's a hard question. That's a question that you that's like those truths. You have to ask those questions, and people sit back and they honestly have to reflect on their business. Um, there's a lot of structure probably missing in these businesses when you go into them. Um, even CRMs, I find that they're messy and things like that too, like all the data. So, wait, question. Tell me a little bit about yourself. Like, who are you? What's your background? How did you get into this?

SPEAKER_01 9:04

Well, uh, believe it or not, pen coaching and consulting is actually my third, uh, I'll call it my uh my uh third business or my third uh career, might be a better word.

SPEAKER_00 9:14

Okay, yeah.

SPEAKER_01 9:15

Um originally, believe it or not, I have a lot of uh strong background in ministry. I did a lot with church church kind of work, mostly larger, so it was more administrative, you know, where we would have uh a good-sized congregation, a private school that we also oversaw. And I mean, I was involved with organizations that, you know, there might be uh three, four, five million dollars, you know, in like annual budget. And um, so a lot of administrative. Then I I I had a career, I would call it, in uh in private education. So I've been a head of school of four or five different schools, executive director of a state school, uh, a state group with 37 schools in it, uh, on a national board, president of the group, all that kind of thing. So I've done a lot of different things through the years, adjunct prof. And then the last 10 years, um, I kind of merged. I went through training and got certified and all that as a coach. But I just really took all my experience of running organizations. I've just always been good at kind of I I say getting the right people on the bus, getting them in the right seat on the bus, and then really developing those people. I found that I don't care what you do, uh, if you know how to get the right kind of help and you invest yourself in the people that are helping you, what happens is the organization just really begins to grow and begins to flourish. So much of the time we try to do much more than we should ourselves. And we carry the load of the business on our backs, which tends to kind of wear you out. And it also limits you. Uh I can't tell you how many business owners I bump into all the time, that they are the ceiling of their company. Everything's bumping up against them. They can't grow anymore because they can't handle anymore. Yeah, it's fine that you need to kind of restructure and and get the kind of help that you need.

SPEAKER_02 11:01

Yeah.

SPEAKER_01 11:01

So that's my background. And then I've been doing this with coaching and consulting about 10 years now. And had clients in about every industry you can think of.

SPEAKER_00 11:10

You know, that was my question. Like, who are your clients? Um, what are like if someone's listening, who is your target audience? Who is your who's your target client?

SPEAKER_01 11:19

It's it's basically I'm I'm kind of focusing on what I what's termed the silver tsunami right now.

SPEAKER_02 11:25

Okay.

SPEAKER_01 11:26

Um and that's a phrase that's being used. That's what's happening in business, a lot of small business owners are boomers. And they estimate in the next five years that uh somewhere around 10 trillion with the T dollars are going to change, is going to change hands because they're going to sell it, they're going to pass it to their kids, they're going to close it, and something's going to happen. Okay. Because they're aging out, basically. And um, so that's kind of where I'm focusing. But people that have been successful in building a business and um, you know, they have assets and resources and name recognition and customer client base and all that kind of thing. And they just need some help guiding, you know, guiding them to help position themselves so that their business has high value and it is also very sellable. Um, you know, a lot of MA people, when you go to them, they're they're in, they kind of take action in the what I call the transactional part. You know, they will help you sell it, find a buyer or whatever, but they don't really help you prepare to get it ready to sell at a high value. So I kind of come in before that and help position you so when you finally get ready to sell it. And sometimes you you actually have buyers yourself, you know.

SPEAKER_00 12:36

Okay. Great. Well, that is true. You said too, like someone who I mentioned to you that maybe I'm like, maybe down the line, my daughter would take over. And you said that you still need a plan. I never really thought of it.

SPEAKER_01 12:46

Well, it's a different plan, though. Okay. Okay. For example, with you, if your daughter would take over, all right, in number one, you want to begin thinking about okay, what would she need to know? What she would she'd be able to do in order to run this company. Because a lot of times kids will work in your business, but they only work in one little sliver of it. They understand this part, but they don't understand the whole picture. Right. And so you have to kind of take the time, and it can take a couple years where you're positioning her, getting her, for example, does she should does she know fine finances? Does she read a balance statement or a PL statement or all those kind of things? Does she understand how you know how your company works? And all right, has she had to ever deal with personnel? I mean, you know, if you run a business, you can't deal with personnel. You're you're you're not gonna be happy because half of your business is dealing with personnel or more. Absolutely.

SPEAKER_00 13:36

Yeah, yeah.

SPEAKER_01 13:37

So all of you know, so you have to think strategically about if your daughter's gonna take it over. That's a different plan than if you're going to sell it, you know, because it it's not the same transition.

SPEAKER_00 13:49

Right. So how soon would someone, or what time frame would someone, let's just say someone is planning and selling and they're starting to think about it. When do they contact you? At what point? What's the best time?

SPEAKER_01 13:59

Well, unfortunately, usually they contact me too late. Uh, you know, they want to sell it tomorrow.

SPEAKER_00 14:03

That's exactly what I'm thinking is that people are like, we haven't moved. I want to, I'm ready to do it. And now what do I do? So if someone's listening to this, they're like, this is something I eventually want to do, when should they contact you?

SPEAKER_01 14:14

At a minimum two to three years.

unknown 14:16

Okay.

SPEAKER_01 14:17

Before you're ready to train. And sometimes what happens is um, you know, we're we kind of think transactionally, all right. I want to sell it, which means I'm just gonna sell it someone. Well, that might not be the best way for you to exit.

SPEAKER_02 14:30

Yeah.

SPEAKER_01 14:30

I like to use the term exit options versus just selling the business. Because, for example, uh, you can become the silent owner, where you're the funder, if you want to think about it, but but you're not working in the business anymore. But you spend maybe the next three years preparing, you're gonna get a general manager or CEO, whatever the title is. You're gonna kind of get it all structured and working, all the SOPs built out and everything like that, all the metrics where you can measure what's going on, and then you're going to step out of the day-to-day, but the business is going to continue on and just gonna be a cash cow for you for years to come. And you don't want to have to sell it.

SPEAKER_00 15:09

I love it. Yeah, so you realize there's that is that option. People just think I want to retire, but that doesn't mean that your business necessarily has to go away either. You know?

SPEAKER_01 15:20

I'll give you another option. I have a client right now, he's a printer, and um he uh he's early 50s, so I mean he doesn't have to retire, but he's been at it for 20, 25 years, he's kind of getting tired, and he's going to sell his business to a couple of his employees.

SPEAKER_02 15:35

Okay.

SPEAKER_01 15:36

He doesn't he doesn't really need the money, so he is going to finance the sale for him, for them. So he's gonna get his price, he's gonna get the interest on top of his price, he's gonna spread out his his uh tax liabilities over a period of maybe 10 years or so, and on top of that, he's really been smart because his printing business actually is housed in a a building that own that he owns in another LLC.

unknown 16:03

Wow.

SPEAKER_01 16:04

And part of the deal is going to be they have to continue to lease the the building from his other LLC, so he's going to get that benefit from it as well.

SPEAKER_00 16:12

Wow.

SPEAKER_01 16:13

And so he's positioning himself. So he's going to have now money coming in every month. They're buying out the business. He's going to be paying, he doesn't owe much on his building, but he's going to pay his building off, which that'll give him liquidity that he can use to borrow against if he wants to start another business. And we're talking about what do you want to do once you retire or what you once you transition.

SPEAKER_00 16:32

Yeah. So it's crazy because now you have my mind all over the place because I talk a lot about investments, investing into multi-units or whatever, whatever that may look like, right? But now you made me think about too, even though I grow my business personally and I invest in myself, I never really thought that like there is so much opportunity actually in investing reback into your business. It's when you think of investments, a lot of times people think, like I just said, I'm gonna invest into some kind of other other cash flow, whatever, other than my business. But really, now after talking to you, it's crazy how much really investing your business can pay off almost maybe even more than investing in some other.

SPEAKER_01 17:16

Okay. It's very I I I I function like a non-equity strategic partner. Okay. So I don't have any equity in people's company. But I kind of get in the ditch like a partner would. And I I laugh sometimes because I tell people, look, you got to talk to someone. You can't just talk to anyone. And let's be honest, your spouse is tired of hearing about it, you know, because it's kind of all you think about.

SPEAKER_00 17:38

It is so true. Right. You're at home and you're like, I just want to talk about the food we're eating or our vacation. You're like, no, I know about business and this, and you just go down this rabbit hole. It's on your mind. It's always on your mind.

SPEAKER_01 17:51

It's always on your mind.

SPEAKER_00 17:52

You know?

SPEAKER_01 17:53

So I become a sounding board, uh, you know, and because I'm not emotionally engaged in the business, I can I have an objectivity that I bring to the table. And I can probe and question and and push and and all those kind of things so that you really get clarity about, okay, what do you really want? Because I think sometimes we don't know what we really want.

SPEAKER_00 18:14

Right.

SPEAKER_01 18:15

And and once you want, and then once we decide on what you really want, then we put together a plan, you know, whether it's a three-year, five year, ten year, whatever amount of time is needed, to actually uh position yourself to fulfill that that goal. Okay. And then one of my uh tasks really sometimes becomes like, wait a minute, you said you wanted to go here. What are you doing over there? Come back over here.

SPEAKER_00 18:39

Hold them accountable.

SPEAKER_01 18:40

Yeah, and keep them on track, you know. And that sometimes is it winds up being the biggest challenge because often entrepreneurs are you know, they're like, you know, shiny objects and you know, you know, uh, you know, squirrel, squirrel. And I'm like, come back over here, come back over here.

SPEAKER_00 18:54

That is me. Yeah, that's the entrepreneur. You know, you're you're like, yeah, exactly. I always say I'm I'm like we're focused on something, I'm like, oh yeah, what the squirrel do, or like something, exactly my analogy. So wait, what I really like, and this is this may be irrelevant, but like when I'm talking to you, it is so natural and comfortable. And I think that is really good for the audience and for your clients to hear because you're you you could tell you have so much passion behind here. You genuinely care. Not only are you knowledgeable in it, but you genuinely care and you're easy to talk to. Um, I won't go into because again, I don't know if they're they listen to my podcast, but there's someone that I work with in my business who helps me with my um finances, I would say, or part of my finances, I guess. Um, but she yells at me all the time. She talks down to me and yells at me, and I'm like, she's so good that like I take it, but I'm like, I do not like it. I don't like being talked down to. And um, even though you're helping grow, you have this like confidence to you or in your education, you know, you're you're very easy to talk to, though, which is very uh it's just it's it's great, it's refreshing because I don't think a lot of people are like I care for I care for people and the way I look at it, look, it's not about it's not about me, particularly at this stage of my life.

SPEAKER_01 20:08

You know, I've kind of done my thing and I've been successful here and there and whatever. And and my I mean, I'll tell you what motivates me. I have three objectives, okay? One of them is freedom, freedom financially, freedom uh geographically, where I could live kind of you know where I want to live within reason. I'm not trying to live, you know, really high, but but the idea is I've got some freedom to move around. Uh the second one is impact. Okay, I really love impacting leaders. Uh because here's what I found. I call it the pebble in the pond concept. It's like throwing a pebble in a pond. When you do that, there's a ripple effect. Okay. So I know if I can impact the life of that leader, he or she will then impact everything with everyone within that organization. And so it's kind of like multiplication for me. I mean, I'm having uh a massive impact by impacting just really the leader. And then the third one for me is generosity. Um, I like to give the organizations and um I'm I'm a grand granddad now, so I have seven grandchildren. And one of my goals is um uh I'm not gonna help with college. I want the parents to do that, their parents to do that, but I want to provide a down payment for their first home when they get married and they're ready to buy their first home, and they're all young yet. But but the idea is when that time comes, I'd love to, you know, I mean, 100 grand or something like that per grandchild, you know, yeah. That would just help them get a little bit of a leg up in life so that they're not struggling so much. So that's really what motivates me. But I've always been about people, about developing people, about helping people, encouraging people. And that's probably what you sense uh, you know, because I find when I make it about others, make it about business owners and leaders and not about me, that that connects and resonates with people because I mean, frankly, uh sad. But it's true. Um, a lot of times you don't have people who really care that much about you, you know.

SPEAKER_00 22:06

You don't. Yeah. It is crazy. Well, even the business that I'm in, I'm again real estate, but also life insurance. And it's crazy how many people are like transactional with people, with that. Like you're dealing with people's finances and their life, but you're not really caring about the person, their history, their reason beyond it. It's just transactional. So it's like that is our world though.

SPEAKER_01 22:26

You know, so well, and and frankly, a lot of times when you lean in and you take a vested interest in people, you you, you know, it's it doesn't all surface immediately. It takes a little time to really understand their heart and what they're really wanting. Sometimes they don't even understand what they want.

SPEAKER_00 22:44

Right.

SPEAKER_01 22:44

But once you have that clarity, then I think you can help them better. You know?

SPEAKER_02 22:50

Yep.

SPEAKER_01 22:50

You can if you have a product, you can sell the right product or whatever it is or a service. Because a lot of times, you know, it takes it takes some time to get to know people, they have to trust you, they have to open up with you. And um, you know, and it just I find that, you know, because each situation is different, you know, some want to pass it on their kids, some want to sell it, some want to whatever. I like the variety. I like the challenge. And it's kind of like a puzzle for me. Okay, all right, you know, you want this, so if we did this or if we tried that, or what about this? And you know, you begin putting all the pieces together, and of course, there it's sort of a co-creating with each other. And then they finally will say, That's it. That's that's what I want. That's what I want to do. I say, okay, let's put a plan together to get there, you know.

SPEAKER_00 23:37

Yeah. How long are you typically with someone then? If someone hires you, how long? Yeah.

SPEAKER_01 23:42

Um, you know, um, it's never the minimum I engage is six months, you know, and I sometimes when people are a little nervous and they want to make sure you're com they're comfortable working with you, I always say I have a six month minimum. Yeah, but I've had clients um as long as about three years. Um, so it just depends on what's needed. Yeah, and it depends on what I'm doing, because it's not all about, it hasn't always been about exit. This is a newer, you know, I went through some training and got certified evaluations and acquisitions a while back. So before I was working with more what I would call leadership development.

unknown 24:15

Okay.

SPEAKER_01 24:16

And uh, and then just scaling your company through organizational structure and learning how to build teams and develop news teams and that kind of thing. So I'm still doing some of that, you know, and uh I like doing that because it's kind of natural for me. Uh and it really ultimately is also part of really getting ready to, you know, to exit too.

SPEAKER_00 24:35

Right. And what you just said too, I'm like that makes a lot more sense because I could tell when someone actually has an exit plan and if it's a little bit earlier in their business, they meet that would I would assume that that would make them very comfortable and then also more excited to continue to grow it. And I would feel that they probably would like to have you around because you're the one who helped them go there. And it's just that it's just this big cycle.

SPEAKER_01 24:59

Yeah, it's kind of a journey. I mean, I love it. You take a journey with people. And then for me, the I would say the real fulfillment is to see you reach your goal, see you, you know, you know, experience what you've been working for.

SPEAKER_00 25:12

Yeah, I love it so much. I mean, I can literally talk to you so many questions. I I actually went on your uh LinkedIn though, and I have a question for you. You talked about the gain framework. Are you comfortable with sharing exactly what that is? G-A-I-N.

SPEAKER_01 25:25

Yeah, basically it's a framework I came up with, and it was kind of a pattern that developed as I worked with clients, and I just turned it into a framework. So it's an acronym. So the the G stands for generate freedom. Um, you know, when people start businesses, you know, they want to make money, you know, but that's usually not the main reason they're starting a business. What they really want is they want freedom. They've been in corporate or they've had a bad boss or two or three or four. And, you know, I'm tired of all this. I just want to do my own thing. I want some freedom. But if they don't structure their company properly, they really don't gain that freedom. What they gain is a job. Okay. Absolutely.

SPEAKER_00 26:04

And a job that overtakes their life, to be honest.

SPEAKER_01 26:06

Controls you, you can't take a vacation, you can't, and even if you're on vacation, you're on your phone, you're on your laptop. Absolutely. Whatever. Okay. So what I do is I step in, I always start with the owner, because uh, I usually say, look, um, you're working, you know, you own the business, but you're working in the business, some too. So what's your secret sauce? What do you love doing? What are you really good at doing? Now, believe it or not, some people know automatically, and some people will go, well, I don't know. I mean, I kind of like this, and I kind of like this, and you know, they're not clear about what their, I'll call it their zone of genius is. I have some assessments I use to help them kind of clarify that and understand, and and really understand, okay, what am I really good at? What do I really love doing? And I try to align them, that's the word I use, 80% of the time where they're working in their zone of genius. I'll give you an example. I had a small computer service guy that I knew, and I was chatting with him. I said, Well, you know, tell me a little bit about your company. You know, I said, You kind of have, you know, business development or sales, and you have operations. Which one are you? He says, Oh, I'm sales. Without any question, I'm sales. And I said, Well, tell me about it. He says, Look, I'm not trying to brag, but if I get before people, I close like 80% of everybody I talk to. And I said, Wow, you know, 80% close ratio, that's pretty impressive. You know, that's that's kind of high. I said, What about the operation side? He says, No, not my thing. I hate it, I'm terrible. I said, All right, be honest right now in your company. What amount of time, energy, and focus are you putting toward sales versus operations? To my surprise, he came back and he said, I am 85% operations and 15% sales. And I'm like, I don't get it. You kill it in sales and you hate operations and you're doing 85% operations. So I just paused and I said, Well, how's that working for you? Literally his head drops. He says, It's not. He says, Right now I hate my life. I'm not sure how much longer I can continue this. I'm just exhausted. And I said, Well, what would happen if we could find you someone in operations who would handle most of all of it? You know, you know, there'll still be a few things you got to do because you're the owner, but uh, he can handle 80% of it at least. And we got you out of operations and got you back into sales. I said, What would that do for your company? He paused, he thought about it for a minute, he says, You know, if I did that, he says, I'd double my company in 18 months. So, long story made short, found his operational guy, he got back into uh sales, he got into some government contracts, and his company just took off. Okay. So they're the owner who was misaligned. Okay. So that's the G, uh, generate freedom. And look, when you do what you like doing and what you're good at doing, it energizes you.

SPEAKER_00 28:48

100%. I agree with that.

SPEAKER_01 28:49

When you do what you don't like doing, or even you're kind of mediocre at doing, it depletes you.

SPEAKER_02 28:55

Mm-hmm.

SPEAKER_01 28:56

So you you know, you gotta kind of be aware of your energy. What energizes you, what depletes you. And you want to be primarily in what energizes you. Now, once you do that, that moves on to the A, which is a symbol, what I call a complimentary dream team.

SPEAKER_00 29:11

Okay.

SPEAKER_01 29:11

And so once we get the owner aligned, then there's gonna be some gaps. And I say it this way, believe it or not, there are actually people that love doing what you hate doing. And they're really good at it. And you need to find those people and get them on your team. Now, sometimes they're already on the team, they're already on the bus, they're just not in the right seat. So they need to be reallocated.

SPEAKER_00 29:30

Yes, yes, yep.

SPEAKER_01 29:32

So the idea is you want to find people that have strengths in areas of your weakness that complement you. And I usually encourage a business owner to work for what I call three direct reports. You can have up to five if you're really good. Most of us aren't that good, so I always say start with three. And um, and you want to give over, think of it like a vertical or a division, like it might be marketing, it might be sales, it might be deliverables, it might be the financials, whatever you know, that you don't like doing, you know, you're you want to give that over. Okay. And they're gonna be really good at it. That leads me to the I, which is ignite growth. And here's where growth really happens, and most people don't see this. I mean, this is like a blind spot to most people. We think when we get the right people in the right seat and we get those competent people there, our work's done. We're we're we're done. No, I say your work is just beginning because what you then want to do is you want to lean in and you want to really work at developing those key people exponentially. Uh sometimes it's getting them the right equipment, it might be getting the right training, it might be uh supporting them in some way. But the idea is you want to stretch now, there are some people that will that will rise on their own, but they're really kind of rare. You want to you want to help them grow and really I mean, think of in baseball, if they get up to the plate, they're hitting a triple or a home run run every time they get up, okay? I mean, every time they back. When you do that, it it just super ignites growth. And then that leads to the end, which is navigate to scale, if that's what you want to do, or to sell. And so either one, you're gonna work on some of the same things. I talked about this report earlier, you might find this interesting. Um, the report gives you a valuation of your company, okay? And and um one of the there's different options, but the one I like most is all right, you're here's your company, here's what it's worth, based upon industry standard, you know, that kind of thing. Okay. It has uh eight different metrics, and it has these little toggles, and it gives you a score from zero to a hundred in each category. Okay, and so you can actually touch the toggle, you can slide it up, and as you slide it up, the value of a company, like let's say you're a 43 and you can get it up to a 70 or 80, the your your the the it just starts rolling over the value of your company starts to go up. And you think, boy, if I did that, my company would be worth this. And if I did this, my company would be worth that. And so it guides you what you need to work on to scale your company and also to position to sell your company. So it's really kind of a neat report. And I think owners get excited about thinking, man, I know now I know what to work on to really improve my company, to really grow my company and to position it to sell.

SPEAKER_00 32:09

I love it. It's crazy because I'm sitting here thinking, like you're talking, and I'm like, okay, I am a coach, but I don't I I don't coach, like I coach my real estate brokers and also my clients on on banking. Um, but I I know the importance of a coach, and I'm sitting here thinking, oh my goodness, I want to hire you as my coach. It's crazy. Um, and I know it's it's already 32 minutes into this, but I would love to continue talking to you. But question if someone's here feeling the way I feel right now, like I want to continue talking to you, but like we are out of time, what is the best way for them to get a hold of you? Because I'm I'm sure you're gonna be getting many people reaching out.

SPEAKER_01 32:46

I mean, easiest way you can go to my website, it's pencoachingpen coaching.com. Or frankly, if you just want to email me, Dave at pencoachingpen coaching.com. Um, the way I work, now I don't take a lot of clients, just so you'll know. I'm kind of I'm kind of very picky, I'm assuming. This is my third career. I'm not, you know, I want to make some money, and I already told you what my objectives are with my grandkids and stuff. Love it. I don't want to do the 70, 80 hour, I don't want a big build, big um, you know, so I'm selective in the number of clients I take. And uh, you know, there has to be, I'll call it some vibe. You know, I have to feel like, I mean, you know, if you're gonna work with someone for 12 months or 18 months or 24 months, you kind of want to like them. And you kind of want to feel like, you know, I'd like to work with this person. 100%. Or it's like, no, I don't think so.

SPEAKER_00 33:33

Or it actually drains your complete energy too. I was that's why I stopped a lot of my one-on-one coaching. I was just getting clients in and in, and I was just taking whatever booked on my appointment, and I was like, oh my goodness, I am exhausted. By the end of the day, I'm exhausted because I wasn't surrounding myself around the right people.

unknown 33:48

Right.

SPEAKER_00 33:48

Even though I was coaching them, it was exhausting.

SPEAKER_01 33:50

Well, and you know, some people, I mean, they make it hard to coach them. And I'm like, look, dude, you're paying me good money and I feel like I'm chasing you all the time, and uh, this just isn't working, you know. So you know, so that's important to me, and uh, you know, to have the right clients, a limited amount of clients, because my approach is very customized, and and I I invest myself in the people that I coach and in their companies and in the, you know, so for me, it's more than once again, it's more than just about making money, it's about the impact and and really the results that they're wanting to get.

SPEAKER_00 34:28

And yeah, and you can feel that when you we are talking. That's where I'm like, you're very unique. Um, that's amazing.

SPEAKER_01 34:34

So that's the best way to get up with me, you know, just David and coaching. And so I like to have a conversation, understand what you're wanting, understand a little bit of your history, you know. I don't try to help everybody. Some people I'll say, well, look, you know, that doesn't quite align with what I do, but I probably know someone, you know. Uh but if it does, then we just talk about you know an arrangement. And like I say, I I the minimum arrangement is six months, you know, and and sometimes I'll suggest six months because I think I would like to work with them, but I'm not exactly sure I want to work with them. Well, start out once you dive in.

unknown 35:06

Right.

SPEAKER_01 35:07

You know so it's a place to start, but often, you know, I find when the ones I really click with, the ones I'm really able to help, um, it's not uncommon to have, you know, a couple years of an of a relationship and see them take the journey and get the success that they're really, you know, wanting to achieve.

SPEAKER_00 35:25

Yeah, I love it. Okay, so really quick, what I always end my shows with this. What is one tip of advice that you would give the listener listening? Like, what is something that you would like to end this with?

SPEAKER_01 35:37

Like, I think the the thing I would say if you're a business owner, business owners invest in equipment, they invest in facilities, they invest in personnel, they invest in marketing, they invest in everything. You know what they don't invest in? They themselves. Yeah. And think about it, you're the key to the whole organization. Okay? Yep. And and often we're doing stuff we shouldn't be doing because somebody needs to do it and I can do it, so I just do it, but it's not the highest utilization of who you are. I'll give you one quick story here before we end. I had a this has been a while back. I had a guy who was kind of a techie kind of guy. He owned a really high-tech business, smaller firm, you know, because it was really unique. And when I first started working to it with him, I said, Well, tell me a little bit about what you do. And he says, I do this and this and this, and I do all the financials. And I said, Really? I said, you know, he's the owner. I said, You do you do payables, receivables, payroll, all that? He says, Yeah, I do all that. And I said, You like doing that stuff? He said, Not really. And I said, Are you good at doing that stuff? He said, No, not really. I said, Well, how much time does it take? He says, about eight to ten hours a week. I said, Okay. So I'll say his name was Joe. It wasn't Joe, but I'll just say his name is Joe. I said, Well, Joe, let me ask you a question. If I looked at your salary package and your benefit package, and I got an idea of what's an hourly rate really to take care of you, what would it be? He paused, he thought about it for a minute. He says, Uh, I'm about a $250 an hour guy. I said, Okay. I said, Look, I've got a deal for you. I want to do your financials. I'll do payables, receivables, payroll, I'll do all that stuff. It's it's only going to take me 10 hours a week, and I'm only going to charge you $250 an hour. What do you think? And he paused and he just started laughing. He says, I guess I'm really paying that, aren't I? I said, Yeah, you really are. You realize you could get a bookkeeping $35, $45 an hour, maybe? And it probably wouldn't take him or her 10 hours a week because she actually knows what she's doing. And I said, Here's the real kicker. What could you do as the owner if I could give you back 10 hours every week of your life? What difference would that make in your company? And it was just a paradigm shift for him because he hadn't thought about the he was trying to save money, but he was trying to get it.

SPEAKER_00 37:54

Oh my goodness, I love that. Yeah, that is so accurate. Um, yeah, we're gonna end on that, which I can continue talking forever. Um, but seriously, thank you so much for your time. I like I said, I learned so much, and I'm sure the listeners have you too. So uh yeah, thank you guys for listening to another episode of the Randy Lynn Show. Thank you, Dave, for being here, and yeah, we'll talk to you later.