Exit Timing, Marriage in Business, and the AI Advantage

0:00We track, we actually have a CEO scorecard where we track all of our companies, all of the revenues and all the profits every single month. So that way we know what came in and then we apply time that way and we also can replicate it in another company. So we could take it and look at your company and say, okay, you made this amount of revenue in it and this amount of this. What did you apply or what could you differently for the flywheel to drive in more revenue with your time? Because usually there's three things we do in a business that are going to drive in revenue. Everything else we do is a waste of time. Well, let me speak on that right the multiple business thing because I've got a lot of different businesses. Many people watching this show either have or want to have multiple businesses. But then you hear the advice of like, hey, focus on one thing and all that stuff. What do you guys think? Oh, I'll say that. Yeah, I think that when you have a business that runs like, you know, we talk about delegate everything, but sex, if you want to have a business that it fully runs without you, then you can start other businesses. But so if you have a business that in the beginning that you're starting the business, it takes a lot of and that's why I tell everyone,

1:07never, ever buy a business from scratch because the analogy I give people is, yeah, I tell people, if you think about when you start a business, it's just like a plane. The amount of energy it takes for a plane to take off is about 10 times the amount that once it's, you know, in the air. So the same thing is true when you're building that business from scratch, yeah, it takes so much energy to get that business going. So if you're running the business and it's in the first few years, the first two years, there's so much work to get that business going off the ground, you should only focus on one thing and one thing only. Once that business has a CEO in place, you shouldn't be the CEO. Once you put the someone else as a CEO, someone else is a CEO, someone else is the CFO and it fully runs without you, then you can start venturing out into other things. But until then don't because it will start, then you, it just will start falling apart.

2:07So I can give you a spin on that. I'll give you a different dynamic. So the way I look at it is I'd rather have 25% of 10 companies than to have 100% of one. And so now this is a double edge sword because now I don't have to be there. I don't have to operate it. I get a cash flow based on what they do. So I give input and it drives up. So those three key KPIs, they start growing that revenue goes up. Great. It businesses don't well. Challenging part. You now have a partner, right? The first side years 100% on you. You've got to do all the work. You go do it. You take your foot off the gas to work on the next thing. No one's there to hold it unless you do like she said, put a manager or CEO in the other side of this with the partners. You can have it. You bring them in and you let them run it and go drive it. But if they don't follow your lead or they don't do the things now, you have a division because now they're not driving the KPIs. And now you're not there driving it every day, right? You're here 40 hours a week and they're there 40 hours a week and you're not. Now they're upset with you, right? And so you have that challenge as well. How many companies you guys own? We did have 16, but no, now we're down to 11. So we sold a couple and then there's ones like when we're looking at that CEO, a scorecard, it's time,

3:12very of energy. The market will tell you whether that business makes sense or not, right? So if we run a fund and people are not investing in it, but they're putting money over here into another company, we're going to put the energy over here. We're not going to keep doing the flywheel. In this case, the business brokerage is just expanding rapidly between business brokers coming in, the businesses coming in, the sellers coming in, all of that happening. It just makes the most sense. We are 100% owners of it and we can drive that really, really rapidly. More businesses are going to sell in the next five to seven years than the history of America. And so that's why our phone is blowing up. That's why we're looking for people who want to learn. I told Ryan, I said, we can't copy our, your job as a CEO is to like take yourself, put yourself on the copy machine and copy yourself and just keep copying, keep copying. And we can't copy ourself faster. Fast enough. Right. So we're recording everything, we're getting everything done, but our phone is literally blowing up with businesses who want to help us. And by the way, we'll link to it down below too, but if somebody does want to work with you guys,

4:15where do they go? What's the downside? If they want to work with us, it's canzel.com. If they want to become a business broker and help businesses and learn that, we teach you how to do that. And that's join canzel.com. How do you spell canzel? So C-A-N-Z-E-L-L.com. Okay, so canzel.com, if they want to sell their business or buy a business, join canzel.com. They want to become a business broker with you guys. Got it. Yeah. So you talked about partnerships. And I think this is really important because you guys are married and you guys are business partners too. We were joking because you're like, dude, this is awesome. I get to work with my wife every day. I'm like, yeah, I don't know, man. It could be, it could be tough on a marriage, man. Like I know that there's some great couples that work together. My wife and I personally, on the business side of things, we haven't really worked together too much, but like on the nonprofit side, we love working together and growing it. Then I have partners and other things like Brian and I were partners in the education

5:16space. We did tens of millions together. And now we're partners on the podcast and other stuff, but this guy's a headache. So I can see that. Yeah, it's very much like, how do you maintain a good partnership in business? Especially if you're married. I'll go for it. So ultimately, it's no different business partnership is a marriage. And so I mean, a marriage has its pros and cons. There's differences between you and your wife. You have to find a way to appreciate the differences. Meaning, I know the things she brings to the table that are different than me. I want to go drive in revenue. She wants to market. And so there's different things that we have strengths at and we have to value those. So it's just taking on the role. It's no different than at home. So at home, she handles certain things and I handle certain things. That way, we roll well with those. Figuring those things out. There's nobody I know better. So if I went into partnership with you, I got to learn you. I already know her. So it's really, really easy. It doesn't mean there's not problems, but there's going to be problems with me and Brian are partners because we're going to look at things differently. Right. So I don't have to let that roll over into the household.

6:17At the same time, there's a huge intimacy level of the fact that we're in business together and that nobody wants her to win more than me. Right. And so she can go partner with somebody else. And she can partner with me. She's seeing she'd feel a lot safer partnering with me than with somebody else or she has to do it all on her own. And I think that's the dynamic that you have. He goes like this. He got this means saying your lane. Is this me? Well, he changes it. Sometimes it's like this. Yeah, I'm saying you're like, she likes to get in my lane because she's just, but you know, because you've been together so much. Well, she know what he can, he could go like this and you know, she knows, she knows because she's just a type A personality. I call it a lian from the blind side because she just wants to go in and like control all the pieces of it. Yeah, yeah. It's definitely there. So but again, I know why that's why I did the corporate model because I have, I like to be more in control and he's more like that. And smile. You guys are ready to make a living. Sandra Bullock is coming. And that's right. There we go. So yeah, I just, I know, I know she's, she's going to come out of her lane. I already know that. So then I have her back in the lane. I'm not in smile and move on because the relationship is more important than the business.

7:18Right. The businesses are project of together, right? Like, I mean, one of the things we did at home was we created a podcast room together. So we designed it together and picked it out together. Yeah. So you want to do those things together. Instead, you can end up if you're not careful doing everything apart. And I just, I prefer this than that. We build other things apart. So there were different conversations versus now we have the same goal. Got it. And we put both of our strengths together. Yeah, I think what you're really talking about that I think most marriages and partnerships fail at is proper communication and expectations from the beginning. You know, I remember, we've been married almost 13 years now and before we got married, we got married young too. I mean, my wife was 19 when we got engaged. And we just had that talk of like, hey, what are our dreams together? What are our goals? What do we see ourselves doing roles wise and all of these things? Because if we're not aligned on that from the jump, once we get into this thing, it's probably going to be a lot of chaos. And even in business, I have multiple partnerships and it's like, hey, here's what I'm going

8:20to do. It's really good at marketing and coming up with ideas and all that stuff. That's pretty much all I want to do. All right. Like, I don't want to operate. I don't want to deal with the sales team. I don't want to deal with this. I'll just worry about marketing and product and you guys. You guys are. I call it, I call it, have you, when you go to Mo's, you know how it says welcome to Mo's M O E. I say marketing over everything. So if you can nail the marketing piece, that's my favorite part. It always has been always will be. At any time, any of our team members aren't doing the marketing side. And one of the biggest things I did wrong with my last company is we spent so much money on marketing and sales and we were booming. And then as we grew into 20 states, we had to take a lot of that marketing budget and we kept moving it to operations. And our COO at the time just kept pulling money off of marketing and marketing because she was like, well, we're growing into all these, you know, 20 states and this one needs this and we need new operations for this.

9:23And so that was a big mistake that I allowed happen is that I removed some of the money from marketing and I had we had sold the business earlier. And that's what I tell people all the time. It's just such timing. It's such a big thing that like don't wait because with AI, like I have a guy right now, he's got a $12 million business. I told him I said, had you called me two years ago before AI hit, we would have been able to get you three times the amount of money. Yeah, multiple times we're insane. Yeah, but now, so if you've got a tech company, you've got to call us right away because that multiple is going to go down and down and down and AI is disrupting so many different businesses. Yeah, can I ask someone to have that? So ultimately people pick the wrong time. I waited too long to sell. Like I felt like I wanted me to sell so we could do what we're doing right now. Like I feel like that's all part of a purpose. But I should have done it sooner because when you sell, it needs to be when you think I don't really want to sell.

10:24For example, we have a guy we're talking to right now. He said, well, we grew 40% in the last year. He's like, you know, I don't really want to sell. I said, that's the best time to sell because you can sell on projections. Yeah, yeah. So you sell the higher multiple. If you wait until it hits the peak and then starts coming back down, then they're going to buy on that projection. And so this is really important because when you go to sell, you want to be able to be like, I don't need to take this offer. If you get to the place where you're like, I have to take this offer. You just left all those chips on the table. Yeah, let me give you two quick stories of guys in my M19 group for my golf group. Our average business is doing about $10 million a year in revenue in that group. And two of them sold at, well, one sold at the right time, one sold at the wrong time. So the first guy, he sold in like 21, 22, a chunk of it at a $300 million valuation. And he sold like a third of it. So they got a hundred million bucks. He took some chips off the table, the rest is in the company. And literally he was on this podcast and he was saying like, dude, we could be worth zero,

11:26you know, with AI because AI can automate and take all of the things that we use. They're tech. And he's like, you know, that's where we're at. We could be zero or we could be billions. There's no in between, basically, with where we're at. But he got those huge multiples a few years ago during that time. And he didn't want to sell because, you know, they're on this trajectory. He had to take all the stuff, but he clearly made the right choice. Yeah, exactly. Second guy, no, his name is Jesse Burrell. He was on the podcast recently. He had a tech company in real estate called Batch Leads. And the first time he came on the show, they were valued at nine figures. Huge margins, huge revenue, all this stuff before 2022 in the real estate market dipped. And all of a sudden, real estate market dips, they lose a bunch of users. Their turn goes up, recurring revenue goes down, all this stuff. Had to dig themselves out after a couple of tough years. And then, you know, basically hit a plateau and they still sold and got a good chunk of change. But nowhere near what they were worth. And so just to reiterate this point, man, picking the proper time to sell is so important.

12:33I think from what I've heard from them and other members of ours is like, when you don't want to sell, that's usually the right time. Exactly. That's where I keep, I keep saying that over and over. But it's hard because it sounds like somebody is like, I have a vested interest in telling them to do that when they're going to bring it to us to we can sell. Yeah, because you make money when they sell. Yeah, but I know what it's like to be on the other side of it. I'm like, no, I don't want you to lose money and I want you to do it now. Because then you can take it, you can go put it into capital funds, you can go buy into multiple other companies, you take those shifts, all the tail. There's so many more options. Most of the mentors I've had had exits, right? Because if you don't have the exit, then you essentially are, you're the pro player that doesn't have something to do later, right? And they lose their name and their value, they can't create a new business model. And so this is the same with them in the business that they don't have the money, they can't create a new business model after. And I think that, you know, before the show, we kind of talked about how, you know, God crushes us like grapes to make us into fine wine. And there isn't an entrepreneur that I know

13:35that hasn't truly, truly gotten crushed at some point. And you don't know when that crushing is going to happen. And it's for our benefit. We all hate it, but, you know, it's to make us into fine wine. And I think that the biggest problem is, is that sometimes you don't know when that's going to happen. And so people don't take enough chips off the table when it's the right time kind of like you said. You don't know when the real estate, you don't know when that crash is coming. If you're in this industry, who knew that AI was coming, you know, like the way that it espasses it is, right? So it's like, you don't, you never know. So it's smart to take some of those chips off the table. You know, you can know though, right? So most people don't do this. And I even think it's believers get up in the morning, get in the Bible and pray. And you will get clarity on the right time. You'll get clarity on the next steps. And it may not even look like what you think it's going to look like. And we see that in story after story. But ultimately, they don't spend time trying to pray on it, trying to figure it out and trying to navigate the answers to whatever that is.

14:40Because if you do that, you will get the clarity on whether it's time to stay, time to go, whatever the next season is. And it may not make sense to everybody else, but you'll know that's the divine advantage we get. And we should be the head and not the tail leading and doing that. And then having those stories, success stories over and over. And I think to the point is when she's talking about the grapes getting crushed and, you know, things going bad. And it's usually because we pull away from following the right path of whatever it is we're doing. You know, one of the things I love about, you know, your business model and your cultures is like you're serving others. Like you're not going to go wrong serving others because that's a set up that you're rolling. And it doesn't matter what business you open, that's going to roll into your next business model.