Founder's Story - "Exit Rich" and Create Wealth Day 1 | Episode 43 with Entrepreneur and Author Michelle Seiler Tucker

Episode Date: January 6, 2021

Michelle Seiler Tucker is the author of EXIT RICH: The 6 P Method to Sell Your Business for Huge Profit and the Founder and CEO of Seiler Tucker Incorporated. She has sold hundreds of businesses to date and currently owns and operates several successful businesses. She is a leading authority on buying, selling, and improving businesses, as well as increasing business revenue streams. A formidable force in her industry, Michelle closes 98% of all offers she writes and, on average, obtains a 20 to 40% higher selling price for her clients. Her remarkable track record proves her persistence and dedication to creating win-win situations for both her buyers and sellers. She has appeared in Forbes, Inc., CNBC, and Fox Business (starts at 8:35 minutes). She has also been a “celebrity judge” on “Pitch Tank” alongside Steve Forbes and Whole Foods CEO John Mackey.  She lives in New Orleans. Please rate, review, subscribe, and share with a friend who will be inspired. Visit KateHancock.com for insights into guests and future episodes. Today's episode is sponsored by Anchor. Make sure to check out Anchor.fm and see why we love to use them as our podcast hosting. --- Support this podcast: https://podcasters.spotify.com/pod/show/ibhshow/supportOur Sponsors:* Check out PrizePicks and use my code FOUNDERS for a great deal: www.prizepicks.com* Check out Rosetta Stone and use my code TODAY for a great deal: www.rosettastone.comAdvertising Inquiries: https://redcircle.com/brandsPrivacy & Opt-Out: https://redcircle.com/privacy

Welcome to Inspired by Her, the podcast that will give you the inspiration, motivation and tips for success from some of the top executives, CEOs and influencers from around the globe. With your host, serial entrepreneur and named one of the most influential Filipina in the world, Kate Hancock. And we are live. Hi everyone, this is Kate Hancock for the Inspired by Her podcast. And today I have Michelle Tucker. Hi, Michelle. Hi, how are you? I'm doing fantastic. I love the back backdrop, Exit Rich. Thank you, Exit Rich. And it's Michelle Seiler Tucker, just to clarify for you. Yes. Yeah. Okay. Everyone, Michelle is the author of Exit Rich, the 6P method to sell your business for huge profit and the founder and CEO of Seiler Tucker Incorporated. Now she has sold hundreds of businesses to date and currently owns and operates several successful businesses. And she's the leading authority and buying, selling, improving businesses as well as increasing business

revenue streams. Michelle, I'm so excited for you to be here. Thank you. Thank you for having me. I'm excited too. Yeah. So Michelle, tell me what was your journey like to get where you are? Well, I've always been an entrepreneur. I always had the entrepreneurial spirit. And I always say, either born with it or you're not. Entrepreneurship is not for everybody. But I did kind of get stuck in the corporate America, working for Xerox, a Fortune 500 company.

And within six months, my nickname was a closer. A closer. So every time somebody couldn't close a deal, they would bring me in. And then within six months, they promoted me to regional manager and overlooking 85 salespeople. And I just missed entrepreneurship. I just really did not like working for corporate America. So I ended up transitioning into franchise sales, franchise consulting, franchise development. Then I transitioned into selling companies and learned very quickly that eight out of 10 businesses won't sell. So if I want to eat, I better fix them so they are sellable. So I really specialize in buying, selling, fixing, and growing companies. Love it. Now, in this current times, what kind of business do you look for?

There's a lot of businesses for sale right now. There are a lot of businesses for sale. Our sweet spot are typically the larger businesses that sell for $10 million and up. And there's a lot of small businesses, restaurants and, you know, businesses that are not doing very well for sale. The businesses that we really specialize in have a higher EBITDA, which is earnings before interest taxes,

depreciation, amortization. And we have probably 25,000 buyers. So there's more buyers for good businesses than there are good businesses to buy. So we really specialize in, you know, manufacturing, distribution, healthcare. We're industry agnostic. We're more focused on the EBITDA because the higher the EBITDA, the more buyers we can bring to the table. Yeah.

Now tell me, what was the biggest multiple you've ever acquired, business, or exited? You know, I can't remember because my company, I've sold over 500 businesses. My company has sold over a thousand. So I just really can't remember. But on average, we do obtain a 20 to 40% higher price for our clients than the business appraises for. And when we have a business that has an EBITDA of a million and up, we're typically able to create a bidding war. So one of the last deals that we did was in South Louisiana. It was appraised in a $9 million range. We had about 550 buyers. We had a strategic that really wanted to buy the business. So they gave us an offer of $15 million for 70% of the company. It was 65% higher than what the appraised price was. Love it. Love it. Now, how do you get that company into that being acquired with over 40%?

What's your strategy? Strategy. What do you mean over 40%? You said, companies that you've sold, they tend to be acquired at 40% higher selling price. 40 to 40, yes. Yes. So tell me. What's my strategy? So there's a few strategies. So in my book, Exit Rich, I really take the business owner through the whole process from

the day they start their business or buy a business to planning their exit. You should plan your exit from day one of starting your company. And then I take them what's called the journey through the six P's. If they could build their business and run their business in all six cylinders, then their business will be successful. So what I do is I work with my clients to make sure that they have people in place. If they don't have people in place, I help them get people in place, have people in place, have management, make sure that's the first P is people. Then I want to make sure that their product is in a thriving industry, not a dying industry. Like

right now, restaurants are dying, not thriving. So we want to make sure that they're thriving, not dying. Then we look at their processes to make sure their processes are efficient, productive, and designed with the customer experience in mind. And then we look at proprietary. Proprietary is the highest value driver. You can get a higher multiple if you have IP, intellectual property. And intellectual property is a brand. I mean, the Coca-Cola brand alone is worth $85 billion. And that's without cashflow assets inventory. Apple is worth over $350 billion. So we try to help them build their brand. We also want to make sure that their name, they have a federal trademark. There's six different pillars of proprietary, so I'm not going to get into all of it. But we also want to make sure that

they have patents in place, trademarks. If they have contracts, client contracts, vendor contracts, manufacturing contracts, we want to make sure those contracts are transferable. If they're not transferable, then it can kill a deal. And then the fifth P is patrons. We want to make sure that our clients have a diverse clientele base and that their clients are not aging out. And then the other thing we look for is to make sure the business is profitable because if it's not, I always say profits is never the problem. It's always a symptom of not operating on one of the other five Ps. If you don't have the right people in place, you're going to have a profit issue. If your industry is dying, then you're going to have a profit issue.

But the way we're able to get 20, 40% more is because we help our clients function on those six P's, the solid chunk or six P's. Plus we figure out really quickly, what's the synergies, what's unique about this business. What's, what's this business, you know, why is this business for something like that company? I told you that I sold for 65% more, 60% of the revenue was in BP. The buyer that bought it was a strategic and he had a similar product, but he could never get the BP contract. So we knew that was a big synergy and somebody was willing to pay for that. So we really look for synergies and we know our buyers and we know what our buyers are

willing to pay for. Buyers are willing to pay more for brand. They're willing to pay more for client contracts Buyers are willing to pay more for brand. They're willing to pay more for client contracts. They're willing to pay more for databases. I mean, Facebook paid $19 billion for WhatsApp and WhatsApp was hemorrhaging money. So we can typically create a bidding war by bringing 300, 400, 500, 750 buyers to one deal,

creating a bidding war. And whoever wants those synergies the most is the one that's going to outbid everybody else. I love it. Amazing. Now, why small business owners and entrepreneurs should be thinking about exit strategy for day one? Majority of entrepreneurs don't. Yes. And listen, and that's why eight out of 10 businesses don't sell. It's because they don't think about it. And Steve Forbes, he gave us a testimonial for Exit Rich. And he says, the problem is that business owners never think about it until a catastrophic

event occurs, whether it's external or internal. Right now, you have an external catastrophic event called COVID. And so business owners don't think about selling until they have to due to a catastrophic event called COVID. And so business owners don't think about selling until they have to due to a catastrophic event. But the problem is when that happens, Kate, the business is typically trending downward. And the best time to sell your business is not when it's failing, it's when it's going great and it's going up. So the best time to sell is when the business is doing well. And so the problem is business owners will get burned out. I mean, people suffer a multitude of reasons, burnout, retirement, health issues, divorce,

partner disputes, death of a partner, but they never really planned the exit. And they'll come to me and say, Michelle, I want to sell my business for $20 million. Well, great. Let's see. Do you have a $20 million business? And their business is maybe worth a million? And I'll ask him, how did you come up with that price? And they always tell me, well, that's what I need to retire on. Or that's what I need to get out of debt. Or that's what I need to send my kids to college. You know, the buyer doesn't care about your needs. The buyer cares about value to them

and how it's going to improve their quality of life and kind of put their business to the next level. So owners never think about that. It really is, Kate, the biggest mistake that business owners make is they never plan their exit. And I don't know if you know this, but most people don't know this. The business landscape has changed dramatically. It used to be the 85 to 95% of businesses would go out of business in the first one to five years, right? Yes. Startups were at great risk. Well, when I wrote Exit Rich in 2019, I did the research again and I was shocked. It's now only 30% of startups will go out of business,

only 30%. So startups have a huge success rate, but guess what? Out of 27.6 million businesses, those businesses have been in business 10 years or longer, 10 years or longer, 70% of those businesses are now going to go out of business. You hear about the big box stores like Toys R Us, Kmart, JCPenney's, Steinmart, GNC. But what you're not hearing about are all the private small companies on every street corner, in every city, in every state across our great nation. These companies are dropping like flies. And the reason for it is it's the blockbuster syndrome. Blockbuster saw Netflix, but they did nothing. They didn't innovate and they didn't market. And the number one thing that businesses don't do is aim. I call it aim. Always innovate and always market. And that number one thing that businesses don't do is aim. I call it aim, always innovate

and always market. And that's why these businesses are going out of business. So that was before COVID. Now a business is shutting down like every 40 seconds I heard. Yeah. It's horrible. Well, they said the paranoid companies always win because they keep on changing, adapting, and innovate. Well, you got to. I always say the companies that win are the companies that make it easiest for the consumer to do business with them, like Amazon. Amazon makes it so easy for us to do business.

We can pretty much buy anything on Amazon from anywhere on the road and have it delivered to our house within two days. Absolutely. And you go to another platform that takes two weeks and it's so hard to get a hold of them. It just happened to us. Oh my God, our fridge stopped working during this COVID quarantine and we waited for seven months so we got this delivery guy and i can we can't even get a hold of them for two days wow and i was like this is the reason why amazon is killing it yep amazon is killing it because they make it easy for you to do business with them and that's why i said you know so companies, they design their processes based upon their business, not based upon the customer's experience. And you really should design your process with the customer experience in mind.

And that's what Amazon has done. Yeah. And I've heard when you have a strongest, best customer experience, your multiple get higher. Your valuation is like really awesome. Yes. Your multiple is much higher. Your valuation is like really awesome. Yes. Your multiple is much higher. I mean, the bottom line is if people will just build a business like a business and, you know, focus on their entrepreneurs, need to focus on their strengths, higher their weaknesses. They need

to work on the business, not in the business. And they need to grow the business to, to function on all six P's, all six cylinders, then the business will be valuable. But so many business owners don't do that because they get stuck in a day-to-day operations. Absolutely. It's so important to work above the business, not in the business. Right. And that's what Exit Rich is about. Exit Rich is all about building a sustainable business that's scalable and when they're ready, sellable. And it's all about planning a sustainable business scalable and when already sellable and it's all about planning your exit the right way yeah immediate steps for scaling and preparing a business for a profitable exit even in this time

what yeah so immediate steps number one get extra rich when is it already available now? Well, here's the deal. Because of COVID, we did have to push the launch date back till January. However, if your listeners go to exitrichbook.com, that's exitrichbook.com, they can buy the book for $24.79, which is less expensive than it is at Hudson or Barnes & Noble or Books A Million, and it includes shipping.

And what they get immediately, Kate, is they get a digital download. They get access to the free book membership, so they get all the additional bonuses, video training, downloads, et cetera. Plus they get a 30-day membership into Club CEOs where I do hot seats, masterminds, and Q&As. Then when the book comes out in January, it's shipped to their doorstep. Love it. You made it so easy.

So they can go to extrarichbook.com. But just to give your listeners some quick things that they should do is, number one, they should get their business evaluated. It's funny because we always make sure we get a checkup on our car, right? We get our car checked up, our tuned up. We get our health checked up, but nobody ever gets their business checked up. So they need evaluation. They need a business checkup. They need to see where they're starting from. And then they need to figure out what their end game is and what their timeframe is. Yeah. And I think majority of entrepreneurs, what I'm seeing is we, we focus in growth and not really checking the bottom line.

It's all about the net profit, how much you really left for you. Right. Right. And like I said, profits are never the problem. They're always a symptom. So they, you know, and you'd be surprised how many business owners really don't know how much money they're making. symptom. So they, you know, and you'd be surprised how many business owners really don't know how much money they're making. They have no idea the financials are a mess. So that's another thing we do is we come in and help them strengthen their weakest peas. And then we also help them get their financials in order to know exactly what that business is making. Yeah. Love it. Now the average net profit across the board is seven, 11%. Is that correct? So what, what kind of business that you, what is your sweet spot

for net profit when you go and scale a business? Yeah. So I don't really look at net profit from my sweet spot. I'll look at EBITDA. It's always about EBITDA or needs to be franchise depreciation. I look at EBITDA and then we do what's called normalizing the financials. Normalizing the financials means that we're going to add back all those personal expenses. So if a business owner is, you know, running meals and travel and entertainment and church donations and contributions and kids college or whatever they might be running through the business, we're going to add all that back. Plus, we're also going to add back non-recurring. Non-recurring is,

let's say that you lease a building and you had to get a new AC and that cost you 20 grand. We don't buy an AC every month or every year. So we normalize the financials to get to the true EBITDA of the business. Love it. Because buyers buy based upon EBITDA. They do not buy based upon gross profit margin or gross revenues or even net profit. They buy based upon EBITDA. Love it. Now, how do you objectively evaluate your business worth? How do I go about that? Yes. Yeah. So we really have some proprietary methods when it comes to valuations. I've been doing this for 20 years, thousands and thousands and thousands of valuations. We really look at the business as a whole. It is based upon the numbers, but it's based upon more than just the numbers. It's based upon how long the business has been in business. It's based upon how well branded they are back to the IP. It's based upon, is our business based upon location loyalty or brand loyalty? And then

we also take a look at how many people do they have? Do they have a management team? Can the business run without the owner? If the business can run without the owner, then that drives value and it brings us more buyers because buyers want to buy a business, not a job. So we really look at the six Ps, which are people, product, processes, proprietary, patrons, and profit. We value the business based upon those six Ps. And then we look at industry standards. We look at sales. We look at business comps. And we also back into it and make sure that whatever the price is, it's going to meet the buyer's sanity check.

Because all buyers have a buyer's sanity check. Because all buyers have a buyer's sanity check that they put their mind through, and we make sure that it's going to meet that buyer's sanity check. However, we also know that buyers will overpay. And buyers will overpay for synergies. So we try to pinpoint what those synergies are during the valuation process. A lot of times, Kate, we will go to market without a price. Because if I have a business that's doing really, really well, and the EBITDA is over a million, I know I'm going to get a lot of buyers.

And if I go to market and say the price is 20 million, then I've set the tone for what the price is. I don't want to set the tone. I want the market to tell me what they're willing to pay for these synergies. Love it. Love it. Love it. Especially like their competitor, they want to acquire. Like you said, they're willing to pay more. They're willing to pay more. It's all about what the value is to the buyer. And it's so important when a business owner wants to sell to align themselves with an mergers and acquisitions expert. I'm a mergers and acquisitions mastery intermediary.

It's very important to do that because if you don't, then you might be dealing with one buyer and I guarantee that one buyer is going to fall apart. The deal will fall apart and you have no backup buyers. With us, we always have backup buyers and backup offers wow wow so do you build a system of like a list of all buyers in your we have we have a data yeah we have a crm um with with a database with all of our buyers and we probably have over 25 000 buyers wow and michelle you're literally one that's doing this M&A and such that it's such how inspiring that is. Like it's normally a male dominance. Like you're like just doing it for 20 years. It's like amazing. I remember the first M&A conference I went to, I walked in and I think it was all men. It was like a sea of gray, gray hair. And it was me

and one other lady. And that was probably over 20 years ago. Now when I walk in, it might be 10% women, five to 10%. It's still a very male dominated industry. Yeah. I actually just signed up for a mastermind on how to acquire businesses. So I love it. Like I'm looking at businesses right now to acquire, but in a smaller scale. I'm practicing. Wow. Now, Michelle, tell me about your family.

Is anyone in your family is an entrepreneur? Where'd you get that? So, well, my husband, my husband is a chiropractor and we own multidisciplinary clinics, MDDC clinics. I actually own several different companies. So I don't just sell businesses. I buy businesses. I will partner with a business owner, put up my money, my resources, my skill sets, core competencies in which to build that business. So it's sellable. And I've done that many times. Not really. I mean, my father was a little bit of entrepreneurial.

My mother wasn't. I think it's just something I always wanted. It's something that's ingrained in my brain, I guess. Love it. Now, where is that drive coming from? What was the motivation behind it? I always, you know, I don't know. That's a good question. I always, always just feel like, you know what? Life is special, right? Life is a gift and why waste it?

Why waste the gift? And I always want to do more, be more, help more people, help more business owners, save more businesses. I always want to do the best that I can with my life because I feel that life is a special gift. Love it. Now, knowing what you know now, what would you do differently? I don't know. I started earlier. Doing M&A or what? Yeah, I don't know. What would I do differently? You know, maybe, you know, I've had a few investments not pan out, but I think that's normal. You know, so has Warren Buffett. So I've had a few investments not pan out. I've, you know, hired the wrong marketing people a few times and, you know, but I never, I don't like to have a review mirror.

I don't like to look backwards. I don't like to have regrets. You know, I say, gosh, if you made a bad investment, guess what? You made the money once, you'll make it again. Yeah, absolutely. Now what's the big, hairy, audacious goal? What's my big goal? Well, my big goal is for Exit Rich to sell over 15,000 copies and make the New York Times bestsellers list. My co-author for Exit Rich is Sharon Lecter, who wrote Rich Job Poor Dad with Robert Kiyosaki, and she writes for the Napoleon Hill Foundation for Think and Grow Rich. So I would love for Exit Rich to become a New York Times bestseller. That's my next goal.

Now, Michelle, top five advice for any aspiring female entrepreneur. Female, okay. I think it's whether you're female or male, really identify your core competencies. Identify your strengths because so many people focus on time management and not energy management. And I think it's imperative to focus on energy management. Because you can wear yourself out doing stuff that you can really delegate to somebody else. So keep a journal for 30, 45 days. And document everything in that journal that you do on a daily basis.

And then put it into categories. So A type category is those things that only you can do, Kate. It's something that you can't delegate. It's your best. It's your core competency. You do it better than anybody else. It's like me writing my books. I've written several books.

I tried to hire a ghostwriter. It was God awful. It was terrible experience. So I cannot delegate writing books, but I can delegate writing prospectuses for businesses. So you got to identify your A goals. So those are core competencies only you can do. Then those B goals are things that you can do, but you can also delegate. Okay. So for me, it would be writing SIMs, client meetings, writing up LOIs. I can delegate that. Yeah, I'm good at it, but I can delegate that. Your C activities are the activities you absolutely 1000% should not do. You shouldn't spend any time in it whatsoever.

And you got to figure out what your worth is. If your worth is 20 bucks an hour and you can hire somebody for $10 an hour to go grocery shopping or clean your house or do this or do that, then do that. Because those tasks, those C type activities suck the life out of us. They're energy zappers. So that's one of my biggest piece of advice to women, because women get stuck in this trap of having to be all, do all for everybody. You know, we have to do everything for our business. We have to do everything for the job or do everything for our spouse or do everything for our children, you know, do stuff for the school, do stuff for the church, do things

for the PT. I mean, it just, it's never ending. So I always say, really focus on what your core competencies are and know your worth and delegate the rest. Love it. I love it. Love it. Now, Michelle, how do you want to be remembered? You're asking some good questions. I'm going to copy some of these for my podcast. I think I really want to make it be remembered as somebody who made a difference in people's lives. You know, someone who came in and really cared about their business and

didn't want to see this business owner have to sell for pennies on the dollar, close their business, or even worse, have to file bankruptcy. Because when they file bankruptcy, they don't only lose their business assets, they lose their personal assets too. Because most business owners commingle funds. They mortgage their house to support their business, or they sign a personal guarantee, which pierces the corporate veil. So I like to be remembered for really my entrepreneurial spirit, caring about business owners and their family, and trying to help save one business owner at a time. I love it. Wow. That's really... And as a great mommy.

How old are your kids? I have one child. She's nine. She turns 10 tomorrow. Wow. Wow. How's the online school doing? Actually, she's back in class. She started class last week. We were doing online for a little while and I do have a nanny and that's what I'm saying. You got to know your core competencies. You got to know your worth and you got to know what you can delegate and what you can't. I mean, of course, she's my precious and you never want to delegate her, but I'm not a teacher, you know, so we need to know our strengths, but she's back in class and she just loves it. Is there such thing as balance to you? How do you balance family and business?

Yeah. You know, I've heard people, you know, I've heard people say, Oh, you have to have balance. You have to have balance. I've heard other people say there is no such thing as balance. I mean, for me, you know, I work hard, play hard. I do make sure that my weekends are free from work to spend with my daughter unplugged. That's her time to do whatever she wants to do. I do make sure that when I do get home unplugged and do whatever she wants to do, spend quality time with her. And then we take probably five, six, seven vacations a year, you know, and I've never missed her first day of school. I've never missed a play. I've never missed a sporting event. I've never missed a dance recital because those are my priorities. You know, I had a big closing in Houston and I pushed the closing back. I said,

no, that's my daughter's first day of school. And I said, well, that's our closing. I said, I don't care. You'll wait a day. So I think you just have to find that you know what balance is for you i don't know if there's any such thing as real balance but what it is for you i just think you have to set quality time for your spouse quality time for your children and and make it happen unplugged meaning that you can't be with your child and then be on a business call. Yeah. Yeah. Yeah. Now, does it ever happen? Where's the best spot, vacation spot for you? I don't know if I have a best vacation spot. And it seems lately like all my vacation spots have been torn up by hurricanes.

You know, like I really like St. Barts and they are still devastated from the last hurricane. I really, I like Cancun and Cancun is getting hit right now as we speak. My husband took us to Amsterdam a couple of years ago to see the tulips bloom. And that was probably one of my favorite trips. We also renewed our vows in Ireland and that was a great trip. And we got married in Jamaica. So. Love it. Love it. And Michelle, where can they find you? Where can they um what's the social handle and the website so um they can everyone can go to my website at seilertucker.com and that's s-e-i-l-e-r tucker t-u-c-k-e-r.com they can also go to exitrichbook.com

i can't wait to get your book. I might need a signed copy. Well, I am trying to figure out a way how I can sign the copy. So if anybody goes to extra rich book, right book.com right now and pay 24 79, that includes shipping. So that's going to be less expensive than the retailers. Plus you get all these bonuses and then the book gets shipped to you. And I am trying to figure out how I can put my signature in those books. I love it. Michelle, thank you so much. Thank you for having me.

It's so much fun talking to you. Thank you for having me. Thank you. Are we done? Thank you. That was good. We're done. Thank you so much.

It was so much fun. I love your accent. Where are you from? I'm from the Philippines. The Philippines. You know, that's one place I haven't been. Oh, you have to go. I have a boutique hotel there.

I hear it's beautiful there. It is beautiful. It's just a long flight. Yeah. Yeah. I bet it is. Yeah. Well, thank you so much.

I am honored for you to be in my podcast and I'm going to share the link to my eo friends and when and so when does this podcast come out it's gonna come out in two weeks in two weeks yeah you let us know will you send us a link yeah i will send you a link perfect perfect and you're gonna put on social media facebook and all that everything perfect yeah bye thank you so much. Thank you. Wonderful. Bye.