The Everyday Millionaire Show
The Everyday Millionaire Show
Breaking Free: Building Valuable Businesses Beyond Yourself - Justin Goodbread (Full Podcast)
Justin Goodbread opens a window into the hidden world of business exits, revealing why 80% of entrepreneurs never successfully sell their companies despite having most of their net worth tied up in them. From his first landscaping company at age 15 through multiple six, seven, and eight-figure exits, Goodbread shares the counterintuitive strategies that transform businesses from jobs into valuable assets.
Whether you're just starting your entrepreneurial journey or considering your exit strategy after decades in business, this conversation will fundamentally shift how you view your company's potential value and legacy.
Welcome to the Everyday Millionaire Show with Ryan Greenberg and Nick Kalfas. Alright guys, welcome back to another episode of the Everyday Millionaire Show. We're here with Justin Goodbread, coming from Tennessee. How are you doing, justin man? I'm good. How are you Good? Good, saw your bio. Pretty impressive stuff with some of the uh business dealings that you've had. Can you give us kind of like an elevator pitch on who you are and where you're at sure?
Speaker 2:uh, born and raised in south georgia, I started my first business when I was 15 scaled it sold it. Started another one there, 22 scaled it sold it. Now. Businesses later all started and sold for six, seven, eight figure exits. The company who acquired my last one. They said, hey, good bread, come be the CEO. The president of this national firm Took that firm from mid eight figure valuation to a nine figure valuation in 19 years and then walked them through a transition. So that's kind of the business journey. But outside of that man, I'm a dad, I'm a husband, I'm a country boy at heart, born and raised on a dirt road, live on the gravel road in East Tennessee with a beautiful spread and I look at the mountains, like to write, like to do a little bit of everything, so I'm hoping we can add some value for the audience today.
Speaker 3:Awesome. What was the first business that you sold?
Speaker 2:It was a landscape company. I mean, who doesn't start over with a landscape company, right? A lawnmower and a truck, that's a landscape company, right. I scaled that thing from zero and we ended up doing pretty well. We had over 40 employees by the time I was 22. And then my wife and I we just got married and we relocated back to Tennessee my wife's half Filipino and we dealt with some racism in the deep south that I didn't like and I didn't want to raise our family around that any longer, and so we relocated after that particular event and came to East Tennessee and kind of set roots down here in the Knoxville area.
Speaker 3:Awesome. Yeah, so that's how I started. Also, I started out with a small landscaping business still have it to this day and then I got involved in real estate. But that's interesting. I'm always curious to learn about people who grow business with the sole intention of selling them.
Speaker 2:Well, actually I didn't grow them with the intention of selling them. It was very unique. The landscape company that was going to be like my dream job, right, I mean, who doesn't want to cut grass on a big commercial mower the rest of their life? I mean that is beautiful.
Speaker 3:But you know god, it is kind of peaceful, though. You have your headphones on headphones and then you're just jamming out on the mower.
Speaker 4:I, too, started a landscaping company. It was my first job at a at a high school, so that was awesome. That was dude. The the season when you're just mowing and the grass is you know the smell of fresh grass I don't know something about it, yeah absolutely yeah, so that I didn't.
Speaker 2:I didn't start to sell them. Just life events happened, um, even the most, even my, my big company that I started, we started from scratch, scaled it, 49 months later exited. And I wouldn't have exited except somebody offered me three times what it was worth. And it was like you know, if you had a piece of real estate and it was three times the appraised value, why in the world wouldn't you sell it? Take the capital, take the funds and then reposition and do something else. Have them some more fun.
Speaker 3:But when you sold that business so obviously the first business, the landscaping you didn't grow with the intention of selling but did that kind of motivate you to buy your next one with the intention of buying it, to sell it.
Speaker 2:No, I never bought a business. I've never been on that side of things. So the next one after moving here to East Tennessee, I came into the world of insurance and built a really big book and then went through a business divorce and as part of that business divorce that you know, if we've been in business for any length of time, that happens and part of that business divorce we ended up selling the book out. So that wasn't intended. My consulting business I started a consulting practice called Dental Management Group to help dentists buy businesses and scale them and sell them. And a national firm reached out and said, hey, good brand, we see what you're doing, we'll pay you this much money. It was ridiculous price, no intention to try to build it, to sell it.
Speaker 2:And then the last three companies I kind of combined into one holding company. It was a financial planning firm, a business consulting firm and a national media firm and the way I orchestrated it was very unique. And a big national financial firm said, hey, we want it and they made a ridiculous price of one on it. I was like, okay, well, I mean, I'd had to work for another two decades to reach this status based on the run rate, so why not sell it? And then the national firm, once they bought me, they said, hey, based on what you did, I'm a pretty major shareholder in that company. And they said, hey, could you scale our company with the intention of selling it? I'm like, yeah, we can. So we were, like I said, mid-eight-figure business.
Speaker 2:I stepped into that president role. The CEO gave me full constraints, full, unconstrained. He said do what you need to do, make this thing valuable, and went to work, got my C-suite involved and we took that company, doubled its value in 18 months and then we had a bidding war based on that. So that one I did end up trying to scale it, to sell it. Now, during that whole process, I've literally coached hundreds of business owners who's like, hey, I'm tired of my business, how do I move the value up so I can liquidate it and go do something else or retire, do whatever else they might want to do.
Speaker 3:Yeah, I feel like a lot of business owners who maybe don't have that mindset. They kind of just let their business go to waste, essentially, and just get out of it without capitalizing on the opportunity to potentially sell it.
Speaker 2:You're exactly right. Here's an interesting statistic. So if you're a business owner, I have real estate. Now I have a real estate business, right. So we all have different types of businesses. But here's an interesting statistic. There's roughly 32 million businesses in the United States right now. Roughly Out of those 32 million businesses in the United States, only 20% of them, more than likely, would transact. In other words, they'll sell that business from their current owner to a child, a key employee, somebody external.
Speaker 2:Here's where it gets sad. Statistically speaking, according to the Exit Planning Institute, which is the leader in this particular field, 80% of our net worth as business owners the chuck of the truck, the landscapers, the HVAC guys, the nurses, the doctors who have nurses, various people 80% of our net worth is our business. So what happens is is that because we're not building our business as an asset to where somebody wants to come in and buy it from us, instead we built it as a job. We end up working until we're literally, physically or mentally dead, and then we're like enough's enough.
Speaker 2:As you mentioned, they just closed the business down, and so therefore, what happens is that business owner who's used to whatever the standard of living is because of their income from the business, plus, you know, paying their vehicle, paying their cell phones or trips, everything else that runs through the business they have to take a major, major pay cut. And so whenever I started seeing that happening and I started teaching business owners it's not hard to scale a business and build it where somebody would want to pay you for it. But, more importantly, as business owners, we got to understand we have this highly illiquid asset that unless we build up substantial type of assets outside the business ie real estate portfolios, and most people don't then you have this business that you're ultimately going to have to make a hard decision Are you going to work till you die? Are you going to sell it and take a pay cut? And that's the reality of the situation. That breaks my heart. It shouldn't be that way.
Speaker 1:What's the number one thing that you would do? You said you doubled the value of a company.
Speaker 2:If that was your intention to double the value of a company. What would be some of the first steps that you'd take? The very first step well, it depends on the size of the business, right? It depends on the size of the business. So if it's the average American small business out there, I would say the very first thing we have to do is get the owner out of the business. And so I challenged the business owner, and we can walk through processes on how to do this, but I challenge them.
Speaker 2:Hey look, my goal is, within the next six months year, whatever the business structure is, I want you to literally not go to work. Turn your cell phone, turn your emails, whatever it may be, turn it off for 30 to 60 days and not go to work. And whenever I say that, their eyes get really big and like you've lost your ever-loving mind dude, are you smoking crack? I'm like no, we've got to get this business where it can operate without you. And so what that forces the business owner to do is to build systems and processes, all that type of language that we often hear from business sense, but it forces them to actually look at their business through the lens of an investor.
Speaker 2:So that's the very first thing that I would focus on. That usually adds more value than anything else in the company. Number two is recurring revenue. Every business can have recurring revenue Every business can. And so how do we find that recurring revenue model and create in the business again while decentralizing the owner, and then from there there's actually 256 metrics that a business can adjust. That moves the value up for what we're talking about.
Speaker 1:Yeah, so do you go in there with a strategic plan on each business? Do they have a different plan in place to scale it or bring it to that new value?
Speaker 2:The process that I like to follow is a little bit more structured than that. Yes, we end up with a strategic plan, but it's more value-centric. So the very first thing we're going to identify is what's the current value of the business? What's it appraised for today? Softwares that can do that, different technologies back of the napkin can determine that value. But then what we're looking for is what's called the value gap. So let's say, hypothetically, a business is worth a million dollars today's value. Well, what is supporting that appraisal? Well, what's supporting it is all the underlying asset quality of the business.
Speaker 2:So how can we adjust the asset quality of the business and move the appraisal up without generating any more revenue? That's what's called a value gap. So, for example, I was talking just today with a lawyer who has a really nice size practice. You could do this with a HVAC company, a landscape company, a doctor, it doesn't matter. What we did is we appraised the business and it came in about 2.1 mil. But if we made some adjustments to the quality of the business, like you would with, like a bond, if you made a better quality, he actually could have a $3.2 million value practice without any additional revenue. So that's what's called a value gap. So what the business owner is trying to figure out how to do is how do I increase my value without having to work harder, because we're already busy, we don't need anything else to do.
Speaker 2:So what the strategy is is identify the value, identify the value gap and then ultimately, to your question. Then you're going to devise a strategic plan. I like that terminology. We're going to use a strategic plan solely focused on driving value, not on trying to get more sales, not on trying to get more clients, not any of that stuff. We're going to focus on getting value, and what happens is is we get efficiency.
Speaker 2:So we were talking about a landscape company. I think we would recognize that the average water hose puts about eight to 12 gallons a minute out of a water hose. What's interesting is imagine if we tried to hook a water hose up to a fire hydrant. It won't work. It'll actually blow the hose to pieces because it cannot handle the velocity or the pressure of the fire hydrant. So the same is true of business. What we want to do is we want to increase the velocity. We want to allow the client experience to speed through that business faster and take all the bottlenecks and the friction out, and once we do that, then we can focus on getting more revenue, more sales, and that's where the magic of value accelerates.
Speaker 1:Wow.
Speaker 4:That was well said. So you know you talk about like the value and adding assets and things of that nature. What are some ways that a business can add those deep assets that you're talking about or that you like to see to raise that value gap?
Speaker 2:Perfect question, love that question. So whenever we look at a value, let's do a little bit of teaching so we can understand where I'm going to head with this, because not all of us deal with value on a daily basis. So value is, in a simplified form, is comprised of two parts. Think of a quarter, heads and tails. You have the revenue component, let's say EBITDA, or let's say earnings or net operating income. There's some sort of a revenue number and then you have a multiple and I'm keeping this super simple for us to deal with through audible type of structure. So the multiple could be two, it could be four, it could be 25, based on the industry. Every industry has a different multiple range. So let's say, hypothetically, the revenue number we're going to use is a million dollars and let's say, hypothetically, the multiple is two. That means that business value is worth $2 million, a million times two. So we want to drive that multiple up. So what's comprising of the multiple? The multiple is consistent upon both tangible and intangible assets. A tangible asset, for example, like in a landscape company, would be the truck, the mower, the blower, it would be all those things that we can actually physically see that appears on the balance sheet of the company, the intangible assets, all the things that makes that company hyper-efficient. There's four key areas of intangible assets in a company.
Speaker 2:You have human capital, structural capital, social capital, and I just went blank. I'll bring it back to that, but let's walk through these. Human capital is how strong is your team? So, whenever we want to improve social quality, we want to have a team that's best in class. We want to have employees that show up on time. We want to have employees that can teach others. We want to have leaders. We want our employees to be able to go to a national conference and speak directly to that national conference as best in class. That is highly sought after.
Speaker 2:We all know how hard it is to get employees. We know that Finding people who know how to work hard to stay true to their word is about impossible today, especially with, as we've seen, some of the younger generation. So whenever a company is looking from the outside in, they say, hey, my goodness, this company has a best in class team. These employees are well-structured and they're well-trained. They're going to add more value to that. You have structural capital. Structural capital is how efficient is the company? So, for example, let's say we want to put a marketing strategy out to hire a new landscaper or new clients for our landscape company. What's that funnel look like? And can I walk that prospective client all the way to a sale consistently with the exact same, repeatable results? That's a structure. Some might call it a workflow or process. Right, so human and structural capitals are typically the two that drive the most values and my brain's skipping me as I'm late in the day here, but I'll bring the other two up as we talk.
Speaker 1:Great. So what do you say to somebody that would argue that the team is only as good as the leader? So what's kind of like the process in figuring out if the team is self-sustainable without the owner of the business operating?
Speaker 2:Typically it's the owner who says that. Typically, and typically the owner who says that has I'm going to be very raw and authentic here has an ego, complex and they're probably the worst part of the business Everything probably. If they say that more than likely they're the problem with the company and they won't relinquish control. So it's an ego and it's lack of leadership is what that is. The reality of the situation is that, yes, you may have bad apples on the team or you may have team members which are not performing at the level to which the company could perform at, but they're not going to improve above the leadership capability of that company. So in a business there's eight areas of business. Planning is one of them. We've talked about strategic planning. The second big key is leadership, and you have to have the business owner designed and skilled in such a way that they're backing themselves out of that business every single day. So when I'm talking with a business owner who thinks that way and that's typically where it comes from what I'll typically do is walk them through a series of exercises. So, for example, at the end of the day, as we're driving home exhausted, tired, whatever your job has been doing, pull your cell phone out, go to chat, use an AI, whatever you want to use and just dictate exactly what you did that day, everything you did. And then, for that particular day, you've got to find one item you're not going to do tomorrow and you're going to relinquish that item, and after a period of 30 days, you're going to come up with 30 tasks that you are doing. That's probably not your hourly rate or your hourly level that you need to hire somebody else for. And so whenever you start looking at it from the owner position of how can I take what I'm doing and how can I shift it to somebody else, two things are going to happen. Number one is you're going to move your mindset and, as the owner position, you're going to move your mindset up to where you take on the jobs within the company that truly require the pay which you're making. Most of us work beneath our pay grade as owners. So that's the first thing it's going to do. The second thing it's going to do is it's going to force you or the team to identify the areas of the company that they need to build systems around to make sure you, as the owner, have the team structured for their maximum efficiency. So whenever I hear that, it's typically that the owner is the problem. Typically the owner views himself as the patriarch or matriarch of the business, to where they know everything, and that is sad.
Speaker 2:I'll give you a real life example. When my coach was pushing on me during my growth of some of my companies, he told me he said good bread, you can sell ice to an Eskimo. You got to quit selling. Quit selling your business. You need to have a sales guy. Okay, quit selling your business. You need to have a sales guy Okay, or sales gal. So I can remember putting up structures in place.
Speaker 2:It took us about 90 days to build out the sales scripts, all the different type of syntaxes for our particular avatar. And lo and behold, lo and behold, the biggest client in my history called in and I committed that I was not gonna take any more calls. Guys, I gotta tell you I'm sitting here on the desk. I'm sitting in the office, on the desk floor, on the floor in the sales guy's office, with a whiteboard about the size of a piece of notebook paper and a little eraser board and as he's on the phone, I asked him to put on speakers so I can help you Now I'd already trained him for 90 days. But I'm sitting on the floor and I'm like okay, the client asked this question. Here's your answer.
Speaker 2:He looked at me about two, three minutes in that call and he looked at me with daggers in his eyes. I'm like pissed off, like I'm going to rock your world, gabriel, if you don't get out of my office. Like I mean, he was ticked, he turned his chair, turned away from me and I'm like how dare you? Sorry, dog, I'm the one who trained you how to do this. I've been trying to make sure you're successful. This is a six-figure deal. It's a big deal. It could pay multiple people's salaries. We got to land this thing. We got done. He landed the sale Clients happy was with us for five, six years.
Speaker 2:When he got done, he hung the phone up and he turned around to me and he pointed his finger at me. I'll never forget it, guys. He pointed his finger and he said good bread, you ever do that again, or if you ever doubt my abilities, my resignation will be the next thing that follows. Now, this is a top stud of an employee. I'd already invested time and energy into him In that moment, what he was saying and what we ultimately discovered is is that my ego and my self-centeredness was the problem that fell into multiple areas of the company and my coach ended up saying hey, goodbread, you're being self-centered in sales. Hey, goodbread, you're being self-centered in sales. Hey, good bread, you're being self-centered in product design. Hey, good bread, you're being self-centered in management. And ultimately, by releasing and backing out of that, that drove the value of the company super high and it became an asset that somebody wanted to buy.
Speaker 4:Nice, the control for the listeners out there that are in this position, where they're, it's just them, they're the owner operator. How do you coach them into getting to that position where they can relinquish that control and getting through the fear mindset of like, how can I afford an employee?
Speaker 2:Yep, yeah. So it's not the employee and it's not the business owner here, it's the. It's the way in which you're processing business. So here's business 101. If we want to scale our companies, we need to have one person to whom we can serve and to whom we can serve best. We call it an avatar.
Speaker 2:I like to shoot my bow and arrow, so this is a picture that I think most of us recognize if we've seen the Olympics or seen people shoot a bow and arrow. When I pull my bow back and I have that arrow knocked, I'm looking at the bullseye of the target. My dad taught me this little statement. He said aim small, miss small. And so if I'm aiming at that bullseye of the target, the wind may blow my arrow off, but it's not going to miss by much because I'm aiming at something so tiny.
Speaker 2:We see this in the Olympics with our Olympic shooting team, what most business owners do, and this is where we fall so quickly in business and this is where we run through what's called the valley of despair. We run into this turmoil as we go out and work with anybody and everybody who will fog a mirror. That's how it typically starts. That's how I started when I was 15 until my coach at that point said time out, you're going to have these problems. What I've learned to do is I've learned to say who is the best person, put a face with it. Who is the best person that I can serve? It may be if we're in the landscape, we're using that as an example, because that's kind of we all have a little commonality there is. It may be a neighborhood or a house type. It may be, you know, on a golf course and each house you know is a quarter acre lot and we know that we're going to mow and blow and deal with the irrigation and prune the shrubs and put down mulch. That's our bread and butter, our core type of a client. If we focus on that type of client, we would probably then avoid the 17-acre mow. We wouldn't probably want to go mow 17 acres because it wouldn't be as efficiently. So in every business we have an avatar type that we want to use. Here's where the magic happens.
Speaker 2:I'm coming to your question now. The very first thing is, before we ever go and worry about our processes, our marketing or our sales or even employees, which is part of operations we have to make sure our entire company is centered to deal with that client, that particular avatar, which means that our operations has to be set up to make sure that whenever we see that avatar, they know that we can solve their problems, they know that we can deliver best-in-class service better than any of our competition. That's the operations side before we've hired anybody. The second thing we have to do is we have to make sure our communication when it comes to selling that individual. So, whether it's walking up to a door and saying, hey man, I'm cutting your neighbor's yard, let me explain to you why I'm the best person to mow your grass. Or let me explain why I'm the best person to mow your grass. Or let me explain why I'm the best person to fix your AFGAC. Or I'm the best doctor there is because you are my identical, you're my ideal avatar. So that's our sales process. And then we have to make sure we understand the way in which they buy and make decisions. That's our marketing side. It could be one-to-one, it could be through social media, et cetera.
Speaker 2:Okay, so once we have our structure built for our company, then what we have to do as business owners is make sure that anybody we hire is equipped to serve that avatar. So the very first person that we would hire is our direct opposite. So if I'm going to use a DISC model, we can use a Myers-Briggs. We can use 16 personalities, we can use whatever type of personality profile you want to use, but for DISC, most of us have seen that now, at some point in our life, I'm a high dominant person, which means, as you can tell, I'm a driver, I drive and I move forward really fast. The opposite person to me is my wife. She's not a driver. She's a little slower than me in terms of her drive and passion in life, but she's really good at checklist. I'm not. She's really good at coming in and writing down organizational structure. So the very first person that I would want to hire is someone directly opposite my personality profile. Typically it's a spouse or a significant other or the people we're attracted to in our relationships, the ones that we would probably consider our mates or our life companions. So that would be the very first person we would hire.
Speaker 2:And then, as we build the team, what we're trying to do is to balance the personalities within that team. See, what most of us do is, first of all, we don't know who we're going to serve and we haven't built the company to serve them through our operations, our sales, our marketing. And so then what we do is we go out and we find the people who are just like us because we like them. They may be boisterous or they may be loud, they may be detailed, whatever the profession is. We hire people that are identical to us because we understand them, and all we've done is we've taken that merry-go-round or that balancing thing that we're trying to balance, and we've tilted it ultra-heavy to one side and now the company's on operation efficiently. So the way that we solve the employee problem is making sure that, number one, the business is built for that specific avatar, and then number two, is making sure the team is weighted to serve that avatar specifically.
Speaker 1:Awesome. So you've built and sold multiple businesses. What would you say? The hardest part of the exit is oh Lord.
Speaker 2:Well, it's like taking it's. It's like having a birth and a death in the same time. It's like hearing fingernails on a chalkboard. It's one of the hardest things you'll ever go through in your life. I'm not exaggerating. That's your baby, if you will, and you've got people from the outside trying to uncover the skeletons in the closet. They're trying to find out why they shouldn't pay you what you think the business is worth, and so there's tricks along the way. That's why you need a really good team of experts around you to help you in that area. The single hardest thing is emotional control. I'll explain this. So I'm the guy I literally teach at the Exit Planning Institute. I'm one of the faculty members and we train attorneys, cpas, financial advisors, business coaches how to help their clients through their own discipline, scale and exit their companies. I love teaching that, but I'm the guy who's teaching it and I'm selling my company that I started from, you know, 49 months previously. It reached an unbelievable value and I'm sitting here going holy cow. What am I going to do now?
Speaker 2:Because we all see our business as almost like a baby of ours. We birthed it, we went through hard times, we think about it nonstop. We're up at night. It's literally a passion and we like it and it's fun. It's literally a passion and we like it and it's fun, it's exciting and it's sexy and it keeps us motivated and it gives us something to release in. And other times we want to choke it and it's like I'm done. You went throwing the towel and you know self into the sunset. So it's this bittersweet relationship.
Speaker 2:Guys, whenever I signed that final sales document, it was 11 o'clock at night and I was expecting there to be like pomp and circumstance, like the fireworks go off. I mean, I was expecting the angels to open up in heavens and sing the hallelujah chorus. Obviously, that didn't happen. It was opposite. It was actually the opposite. I pushed literally enter on my phone, document signed and instantly. Did I just mess up? Did I just screw this thing up? I just literally walked away from a business that I knew everything about. That's selling rapidly. Holy cow, justin, you lost your ever-loving mind. That is the hardest thing.
Speaker 2:Now it's quickly overcome whenever you look at the bank account the next day. Quickly overcome, okay, but in that moment it is stinking hard. It's the emotional identity that we have that we look at this business and we end up knowing everything about it.
Speaker 1:It's hard for us all right, I know um, we have another one in a couple minutes. You guys have any more questions?
Speaker 4:nick chase um, I think if, if someone, just real quick, if someone is wanting to start from scratch, justin, and they want to scale a business and they're thinking how in the world could I scale a business to sell it, what are the first two or three steps and what mindset do they need to have?
Speaker 2:Yeah.
Speaker 2:So let's do a mindset first. Henry Ford made this amazing statement. He said if you think you can or think you can't, you're correct. We know what the Ford emblem is today.
Speaker 2:The mindset is, first of all, is that you have to be willing. If you're going to start and scale a business, you have to be willing. As our coaches perhaps said to us as athletes in our high school or college days leave it on the field. You got to be willing to go bankrupt. You got to be willing to face humility. You got to be willing to lose everything for your dream, everything. And without that tenacity and that vim and vigor, you're going to get blown away and the winds are going to hurt you. So that's the very first thing I would say.
Speaker 2:Now, if I'm going to build a house, what would we do? We would go to an architect and he would draw us a house plan that's very detailed, that's laid out everything for us. The same is true for business. Oftentimes we're business owners because we see we're at a W-2 job or maybe we just sold a company and now it's like we're going to go out and start and we see this entrepreneur journey that's overly glamorized on social media almost falsely. These days it's like it's all good, no bad, and we all know that's a farce. We all know how painful business is. So the very first thing I would do and candidly I'm doing now as I'm restarting a coaching business teaching business owners how to rapidly scale.
Speaker 2:I'm restarting a coaching business, teaching business owners how to rapidly scale, as I spent the first six months of this journey working with my coach, who's helping me build that architectural drawing to look at who specifically is the avatar? How specifically do we reach them? What specifically do you need to design operations? We had this concept and we know kind of where we're doing. This is powerful. Here's why, whenever I did this with my firm that scaled in 49 months, we did a pro forma in place before we ever launched the company and, guys, that one exercise put an additional million and a half dollars in my pocket.
Speaker 2:Whenever I got to the closing table, I had three different firms there that wanted to buy the company and I said, guys, let me show you something. Your values are too low. All three of your values are too low. Here's why, 49 months ago, here was my pro forma projection and presently, today, we're only $30,000 off on total NOI, net operating income. We're actually $30,000 above what I projected, which means that my forward projection for the next four or five years is spot on the money.
Speaker 2:You need to throw another million and a half dollars on the offer. The money you need to throw another million and a half dollars on the offer, and they did, because I did the planning on the front side before I just went out haphazardly and tried to, as I often say, charge hell with a water pistol. It allowed for greater return on the backside. So if you want to start a business today, find just somebody who can help you craft a good, solid strategy that can help you put together the frameworks which you move forward. I'm not talking about some academic business plan from some Ivy League education. Just screw all that. I'm talking about real world knowledge that you can say here's how you would rapidly scale a landscape company, here's how it works. And then, once you make the decision, man, burn the boats and charge hell with a water pistol. Get out there and bust it. Make it happen.
Speaker 3:So if you're scaling a business with the intention to sell it, should you try to exit it as the owner during that process, or should you just wait until you're ready to exit it?
Speaker 2:The best time to sell a business. So we all have seen this proverbial J curve in our head, right? So a J curve turns into an S curve and what that means is is when we start a business, we're going to go through the valley of despair, which is where we end up regretting what we did and do. We make a decision and all of a sudden the business turns and it starts growing in profits and revenue and et cetera, and then it begins to grow exponentially. It just happens in the nature of business, mostly because we outlast our competition and we get better at our job. This is kind of what happens. But then at some point we're going to go into atrophy. So the J curve turns into an S curve. We can kind of see that in our mind's eye as I'm trying to communicate this.
Speaker 2:The absolute best time to sell the company is when it's in the rapid growth phase of that area, before it starts to turn over long before. So typically, whenever we're identifying it, we want the owner to begin backing out of it first and show that the business can operate without the owner present, and then we want to sell it while it's still in rapid expansion mode. Why? Because it causes the multiple to be much higher during that exponential growth phase than it does when we go into atrophy. And where the devastation is is most business owners wait until that.
Speaker 2:Business curves until they now feel tired or they feel weary. And the buyers, they're sharks, man, they know what they're doing. They're going to be like no man. Okay, I know you think it's worth a million, so we're going to do these little fancy things like put ad backs and claw backs and earn outs and all these other things in place to make it, because we don't think you're going to be able to do this, neither can't do you. Honestly, we're not going to pay you what you think a business is worth, and it ends up hurting the value. And so it's very devastating for business owners if they don't plan and exit properly, scale properly and exit properly.
Speaker 1:That's good advice. All right, justin, we appreciate your time today and insight. We'll be in touch with you. Know posts and all that collaboration stuff through your social medias. Can you give us kind of how people can get in touch with you? Where can they find you online?
Speaker 2:Absolutely so. I love connecting with people on Instagram. I live my life now openly on Instagram, so I'm the only Justin Gerber in the world you can recognize me as an ugly skint head, ball-headed guy. It looks like you can find me pretty easily. So find me on Instagram. And for those business owners out there, we actually offer a free strategy call. For those business owners who are like dude, I got to get out of this thing, I'm stuck, I want to scale this thing at eggs. And we have a free strategy call. You can go to justingoobreadcom and our team will hop on them. We can help you, we can serve you, we will Awesome.
Speaker 1:I appreciate that. Sweet Thanks, Justin. Thank you, Justin.
Speaker 2:Hey guys, y'all rock it out, y'all do good work. I love listening to you guys. Thank.
